Here’s the flywheel driving “buy high & sell low” behavior:
Rising prices — especially if they’re quick — suck attention.
No one gave a shit about toilet paper until people started hoarding them during Covid and prices shot up 15.6%.
This happens in all kinds of markets, across all types of media. …
I’m walking down the street. Out of the corner of my eye I spot an attractive person. I don’t want to look like I’m checking them out, so I try to play it cool and nonchalant. I’m so in my head that I trip over a snag in the sidewalk.
I fall down in comical fashion. Desperate, I look across the street at the attractive person.
My hands reach towards them, pleading: “Please…I’m actually quite cool!”
Okay that last part didn’t actually happen, but maybe you can relate to this Seinfeld-esque moment.
Actually looking (paying attention) is more likely…
If you’re that person who puts toilet paper next to the holder instead of taking 10 seconds to install it… you’re a disgrace to humanity.
If you can’t even do this one thing right, you won’t get anything else right. I don’t care that you’re the CEO of a successful non-profit that saves baby seals. Leave your job, abandon your family, and eke out the rest of your life as a vagrant. Might as well quit while you’re ahead.
All because supposedly “How you do one thing is how you do everything.”
How did we get here?
“How you do…
My friend bought some AMC stock at $8 and sold it for $56. Incredible gains. I was surprised at his disappointment:
“If I only had put in my life savings in AMC…I’d be a millionaire now.“
I’ve also ruminated on missed opportunities that seem so obvious now: Google, Apple, Netflix, Bitcoin…
Welcome to Hindsight Bias: the tendency to see past events as having been more predictable than they actually were.
The key to feeling less regret: zoom out look at the past with a different lens.
Instead of blaming our past selves for missing opportunities, we should consider everything else…
In 1929, the American stock market crashed and accelerated the beginning of the Great Depression.
Imagine how folks who lived through that time felt about the economy. Then imagine the stories they’d tell their children about the stock market.
It’s not hard to guess why someone who’s been burned may adopt the belief that the stock market is gambling.
And yet, there’s a cost to holding on to outdated beliefs. I call it financial baggage.
My mom lost most of her 401K in 2000, then again in 2008. It was traumatizing. …
Let’s pretend I’m new to investing. I come across a financial model that the stock market will return 8% per year on average. Based on that statistic, I decide to buy the S&P 500 index.
Then a recession happens and my portfolio craters. I freak out, decide I suck at stocks, and sell my holdings for a loss.
“The S&P 500 is supposed to give me 8% every year. …
Some personal updates. I did an Annual Review Workshop and it was immensely useful to see themes from 2020 and allow new goals to emerge for 2021. I’ll be sharing my Annual Review takeaways next week.
In the workshop I saw the power of Notion, a new productivity tool that could help me organize my life. It feels like Airtable + Evernote all in one. If you have tips specifically around building a writing process (research -> writing -> publishing) in Notion, holla at me.
Speaking of which…I finally solved the email mystery. It’s all about a weird thing called…
Hey there, you look like a million bucks GameStop shares today.
I know you really want to talk about GameStop, full stop.
In a moment, I’ll share with you my layman’s understanding of this week’s frenzied trading phenomena. Geez 2021, not all at once in January will ya?
But first I have to talk about something called the Barbell Strategy. I’ve been marinating on this idea and seeing where it can apply to my life. Investing, relationships, how we spend our time.
Whether you’re single or in relationship, the financial grass may look greener from the other side. In this article, I examine the tradeoffs of both scenarios. Tl;dr? Singles shouldn’t feel too bad, and couples shouldn’t feel too smug.
I never felt more single than in Argentina, 2017. “There will be wine,” they said. “You will be the only single guy on these wine tours,” they didn’t say. I should’ve known that Mendoza would be rife with couples.
“Happiness is only real when shared.”
There’s already the stress of being single. Is it also more expensive being single? …
Skeptics compare Bitcoin to fiat currency, often pointing to price and volatility. The real story is that cryptocurrencies are not a replacement for the dollar, but a part of an alternative financial system.
In 2016, I bought $1000 worth of Bitcoin after my roommate introduced me to the world of cryptocurrencies. He dropped the words blockchain, permissionless and distributed ledger like it was French class. I didn’t get it, but I wanted in on the action.