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Your relationship with Money can be a hack or impediment. Harness your emotions, Maximise your wealth. #MoneyTalkWithL #7amthoughts
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3 Nov 20
Extinction is the norm, Survival is the exception.
Nature is not cruel, only pitilessly indifferent
- Richard Dawkins.
Capitalism is not cruel, only pitilessly indifferent
- Sanjay Bakshi
draws parallels between evolutionary biology & investing.
Black Swan Events will occur & catch us by surprise. When they do, Capitalism shall be pitilessly indifferent.
-ve: Death. Destruction. Extinction.
+ve: New players. Adaptation. Cost cutting. If we resist this or fight it, we risk going extinct.
*It's impossible to avoid the impact of a -ve black swan. No matter how diverse your portfolio, it will get hit.
*Like nature, the market is a Pari Mutuel game (behavior of other players changes the odds).
*To thrive in the long run, you have to suffer in the sh term.
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3 Nov 20
Rupal Bhansali says it so well.
Rules of investing are not just different, they are asymmetric.
In investing, it is not enough to be correct. If there is a consensus there is no payoff.
So not only must you be right, you must also prove everyone else wrong.
So you score no points if you are correct, and the consensus is with you. But you also score negative points if you are incorrect.
Those penalty points are the albatross of investment capital. Which means, you can lose a lot of money if you get things wrong.
Momentum rallies tend to function like ponzi schemes. 🤣🤣
In a ponzi scheme, when money flows in, it tends to become a self fulfilling prophecy. When it flows out, it becomes a house of cards.
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