Investor mindset from the viewpoint of a HotShot.
In the ‘80s and ’90s, I was a wildland firefighter on the ZigZag Ranger Station HotShot crew. As a firefighter, heading out to a new fire somewhere in the US was exciting. No matter how many fires I had been on, preparing to deploy always got my adrenaline flowing. Each fire brought new experiences, new places to visit, and new unknown opportunities. It also meant new dangers to avoid and I believe the same can be said for crypto investing.
It was fun to get excited about a new fire and most of the excitement occured during preparation, mainly gathering and organizing my gear. The anticipation of travelling to a new forest and not knowing what to expect always got my adrenaline flowing! What’s interesting is I’ve experienced similar feelings in my crypto investing. The adrenaline flows during bull markets!
After arriving at the fire, all us firefighters spent lots of time sitting around waiting for the crewboss to get the lay of land and the fire. Then he and the squad bosses had to decide the best approach for fighting the fire.
HotShots and Investors – Crypto Lessons from a Firefighter
As HotShots we were put in the most difficult situations that required the most experience and fortitude. As crypto investors, we are the hotshots of the investment world! To be successful in crypto requires a great deal of experience and fortitude!
When it was time to face the fire, we marched quietly in single file. During the long hikes to the head of the fire, I would ponder our safety training called LCES. It had been drilled into me before every fire season. And for good reason. It was proven to save lives. The crewchief always told us, NEVER go near a fire unless your LCES is in place.
Now I tell you, NEVER go near a crypto investment unless your LCES is place. This simple safety protocol will protect you and your assets in good times and bad. So what exactly is LCES:
LCES – Lookouts, Communications, Escape Routes, Safety Zones
It starts with a LOOKOUT. The lookout is aways watching the fire, paying close attention to its direction and speed, then relays that information to basecamp.
Someone at basecamp then shares the COMMUNICATION with the fire crew. The squad bosses on the firecrew all used hand-held radios to receive the communications from the lookout. If the radio batteries failed, lives could be lost if the fire shifted directions.
The E and S of LCES stands for ESCAPE ROUTES and SAFETY ZONES. There were times on a fire when things went very, very wrong. Those were the times when it was imperative to have an escape route that led to a secure safety zone.
1988 Yellowstone Fire – LCES Saved My Life
I was on a firecrew at the 1988 Yellowstone fire, where my squad was nearly burned up when the fire shifted directions. We lost contact with our lookout because our squad boss’s radio batteries went dead. This crew was inexperieced and many got very emotional and disoriented and didn’t know what to do when the radios didn’t work. As the most experieced person on that crew, I emphatically told everyone we need to follow the escape route to the safety zone immediately!
Minutes after arriving at the safety zone, our escape route and the draw we had been protecting, went up in flames. Even our safety zone was surrounded by fire. But we were safe. And at the safe zone we connected with other fire fighters that had to retreat.
BULL AND BEAR MARKET LCES
So what do you do as a Crypto investor to protect yourself and your assets when the adrenalin is flowing during a bull or bear market? First, define your L – C – E – S. Second, follow it!
L = Lookout – Unless you have time to do all your own economic and investment research, it’s imperative to find experts you can follow. People who understand the economy and crypto markets will give you early warning signs if the health, direction and speed of the economy or markets is changing.
C = Communications – Now that you are listening to your lookouts you’ ll probably need assistance interpreting the information and/or applying it specifically to your investment situation. This is a good time to study and learn as well as work with a coach or teacher. Communications is about applying what you’ve learned to your crypto life to know when it’s time to buy, sell, hold, or wait.
E = Escape Routes – Once you start investing markets are constantly changing. It’s very important that you have an investing plan so that when things get crazy you know what to do. The escape route is defined by your risk tolerance. Decided early what your risk tolerance is and your investment strategy is, then stay true to your decision. If you follow your risk tolerance and investing strategy escape route you’ll mitigate your losses and your stress, which may save your portfolio when things blow up.
S = Safety Zone – As crypto investors, I believe our safety zone is our ability to control our emotions and calmly use our knowledge of the technology to smoothly perform the necessary transactions to stay in alignment with our escape routes. When in a dangerous or unknown situation we should already know the technology well. This will allow us to do what needs to be done quickly and nimbly without cumbersome negative emotions, like fear or uncertainty or doubt.
Crypto Lessons from a Wildland Firefighter
As fire fighters, fear was our greatest enemy. If we allowed fear to enter our mind or body, we might forget our training and make a bad decision that could cost us our life or the lives of our crew members. In crypto markets, operating out of fear or FOMO or FUD might also lead to making bad decisions for our portfolio, causing us to lose money, or worse, lose faith in ourselves that we can be successful.
I recommend re-visiting your investment plan regularly and make adjustments to your strategy if needed. Quantify your progress by tracking your transactions with a spreadsheet or other tool. Bottom line. Commit to memory your LCES plan – Lookouts, Communications, Escape Routes, and Safety Zones – then stick to it.