Feb 26, 2023·edited Feb 26, 2023Liked by Mark Helfman
Great update Mark. Lots of ideas to absorb and questions to ask myself where I stand.
One thing I'd like to suggest (in reference to the opening example of facts about college) is that maybe there aren't really two sets of facts where based on one's perception you choose one set. I'd argue it's one set of facts that cover the topic in totality, both the upside and downside and it's a matter of risk vs reward and what any one person's risk tolerance is in proportion to the potential reward. And if a person can say with relative confidence that the reward is at least 1.5x - 3x (to each their own willingness for risk) better than the downside outcome, it's a good bet to take.
Since we can't really know any outcome of a complex system with 100% certainty, all we can do is look at the most amount of factual data we can realistically handle and then attempt to gain conviction that the outcome we prefer is some probability higher to occur than not.
In the college example, I wouldn't say it's either a good thing or bad thing. I'd say it's both. It's delta neutral at any one point you measure it, until you interact with it and introduce yourself into the system. At that point it immediately becomes a constantly moving target based on one's own choices and free-will choices.
Such that, as an example, for someone with little money and the need to take on debt if they wish to attend college must weigh the likelihood of college providing a better avenue to cover that debt and more vs not taking on the debt and therefore not going to college.
College of course is a tough real world example since applicants are young and inexperienced and as you said, their parents are often in tunnel vision thinking that college is the only way and must do whatever necessary to make that happen, regardless of risk.
Nevertheless, it still applies to my thought that college, cars and crypto aren't a binary choice between two sets of facts, having to pick the one you believe. I suppose I'm saying it's one set of facts and having to tilt towards the ones you believe *most*, but keeping aware of all facts and how they relate to your situational risk vs reward. i.e. I think I'm smart, and will do well in college where upon exit I'll be able to reasonably pay off my debt in a certain time (or not), or "this Ferrari is hella fast and dangerous but I'm an attentive driver and have taken a few advanced driving courses to mitigate the chances of a firey wreck, and most importantly, "I'm going to invest in this blockchain technology that could either change the world or just be another smash and grab money heist from the have-lessors to the already-haves-it-alls-but-wants-moresors because if the preferred outcome doesn't occur I'm only risking capital I can afford to lose".
Yes, attempting to study and learn markets and how to profitably trade in them has had the unexpected result of causing me to view every aspect of life as an exercise in risk/reward ratio, how to manage that risk and how to maximize the preferred outcome. Strangely, it has not resulted in much monetary profits. Did I still win because of the lessons learned? 🤷🏻 I dunno. You'll have to ask my accountant. 😀
I mean, yeah when I invert my portfolio chart and look at it in a mirror with really really dim lighting, I'm doing pretty pretty pretty good. haha.
I'd give you my high profile accountant's name but I only know him as H&R Block Employee #4848003. I call him "Forty-Eights" for short. Yep, we're tight. 😂
Great update Mark. Lots of ideas to absorb and questions to ask myself where I stand.
One thing I'd like to suggest (in reference to the opening example of facts about college) is that maybe there aren't really two sets of facts where based on one's perception you choose one set. I'd argue it's one set of facts that cover the topic in totality, both the upside and downside and it's a matter of risk vs reward and what any one person's risk tolerance is in proportion to the potential reward. And if a person can say with relative confidence that the reward is at least 1.5x - 3x (to each their own willingness for risk) better than the downside outcome, it's a good bet to take.
Since we can't really know any outcome of a complex system with 100% certainty, all we can do is look at the most amount of factual data we can realistically handle and then attempt to gain conviction that the outcome we prefer is some probability higher to occur than not.
In the college example, I wouldn't say it's either a good thing or bad thing. I'd say it's both. It's delta neutral at any one point you measure it, until you interact with it and introduce yourself into the system. At that point it immediately becomes a constantly moving target based on one's own choices and free-will choices.
Such that, as an example, for someone with little money and the need to take on debt if they wish to attend college must weigh the likelihood of college providing a better avenue to cover that debt and more vs not taking on the debt and therefore not going to college.
College of course is a tough real world example since applicants are young and inexperienced and as you said, their parents are often in tunnel vision thinking that college is the only way and must do whatever necessary to make that happen, regardless of risk.
Nevertheless, it still applies to my thought that college, cars and crypto aren't a binary choice between two sets of facts, having to pick the one you believe. I suppose I'm saying it's one set of facts and having to tilt towards the ones you believe *most*, but keeping aware of all facts and how they relate to your situational risk vs reward. i.e. I think I'm smart, and will do well in college where upon exit I'll be able to reasonably pay off my debt in a certain time (or not), or "this Ferrari is hella fast and dangerous but I'm an attentive driver and have taken a few advanced driving courses to mitigate the chances of a firey wreck, and most importantly, "I'm going to invest in this blockchain technology that could either change the world or just be another smash and grab money heist from the have-lessors to the already-haves-it-alls-but-wants-moresors because if the preferred outcome doesn't occur I'm only risking capital I can afford to lose".
Yes, attempting to study and learn markets and how to profitably trade in them has had the unexpected result of causing me to view every aspect of life as an exercise in risk/reward ratio, how to manage that risk and how to maximize the preferred outcome. Strangely, it has not resulted in much monetary profits. Did I still win because of the lessons learned? 🤷🏻 I dunno. You'll have to ask my accountant. 😀
Good points, thank you. You must be doing well enough to afford an accountant!
I mean, yeah when I invert my portfolio chart and look at it in a mirror with really really dim lighting, I'm doing pretty pretty pretty good. haha.
I'd give you my high profile accountant's name but I only know him as H&R Block Employee #4848003. I call him "Forty-Eights" for short. Yep, we're tight. 😂
Ha. I used to work for HRB, be careful what you say :-)
Always informative and intuitive Mark. A steady perspective for an unsettling world.
Thank you!