In the 1968 psychology paper, experiments on horse track gambler was undertaken.
Some were questioned prior to making a bet, others right after it.
Turns out those who made the bet were more confident than those who didn’t yet. Act of commitment itself can be a major fallacy.
Some were questioned prior to making a bet, others right after it.
Turns out those who made the bet were more confident than those who didn’t yet. Act of commitment itself can be a major fallacy.
You see this echo chamber of thinking across Twitter finance, from stocks & venture capital to real estate.
It is very difficult to find an investor who isn’t “talking to his book” and has a skill set of optionality to turn from one asset class to another objectively.
It is very difficult to find an investor who isn’t “talking to his book” and has a skill set of optionality to turn from one asset class to another objectively.
In other words, you don’t invest in multifamily real estate because your grandpa started the family business and you were spoon-fed the narrative.
You allocate capital there because it has the best risk to reward profile vs all other opportunities available to you at that time.
You allocate capital there because it has the best risk to reward profile vs all other opportunities available to you at that time.
Our family business is in luxury real estate and has been doing great for over two decades now.
However, when allocating our capital, we look at each and every opportunity as objectively as possible with as little bias as possible.
Despite our family business expertise…
However, when allocating our capital, we look at each and every opportunity as objectively as possible with as little bias as possible.
Despite our family business expertise…
…if the luxury real estate in our markets becomes too expensive, and therefore too risky,
I’d much rather allocate capital to an opportunity — in another asset class — that has a better upside potential with a lower risk and ample margin of safety (asymmetric bet).
I’d much rather allocate capital to an opportunity — in another asset class — that has a better upside potential with a lower risk and ample margin of safety (asymmetric bet).
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