added by Ajinkya Wadhwa · updated 2y ago
Speculation: A Game You Can’t Win
- Once again, you buy an asset for $1,000 and then sell it for $10,000, making a 10x return. But what if a few months later, you see that the asset crashes and plummets down to $1?
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- And when that happens, you get hit with a heavy tax that is emotional rather than fiscal: Regret.
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- In the end, a healthy relationship with money stems from how grateful you are for what you have. The constant pursuit for “the next big thing” is a clear indicator that what you have isn’t enough, and it’s worth considering if any amount ever will be.
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- As I’ve said before, financial freedom isn’t about money, it’s about attention. The less you have to think about money, the more free you actually are.
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- It is for this reason that speculation is a game you can’t win. On one hand, there’s the burden of regret resulting from selling too early (or from selling too late at a realized loss). On the other, there’s the schadenfreude you embody by selling right on time. Whichever path the asset ends up taking, there’s a mental tax to be paid on top of any ... See more
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- But the thing about highly speculative assets is that they have the potential to do crazy things. Within weeks, their prices can soar to levels that you once thought were unimaginable, revealing that the peak you initially guessed was nowhere near accurate.
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- Let’s take the opposite side of the coin here and see how it plays out ethically.
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- Well, not really. If you think about it, it’s actually quite sad.
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago
- To be happy that you made money on something that crashes is a form of schadenfreude : a German word for taking pleasure at another’s misfortunes. It’s arguably the lowest of all human emotions, especially if it’s directed toward people that just want better lives. Yet schadenfreude is exactly what we’re embodying when we’re elated that our 10x ret... See more
from Speculation: A Game You Can’t Win by Lawrence Yeo
Ajinkya Wadhwa added 2y ago