“There are only two forces that unite men—fear and interest” – Napoleon Bonaparte
“FINANCE DU JOUR: Drawdows >> Returns. If you buy X at 1 & it trades at 1000, then back to 1000, even if mentally. (b). Someone else bought at 1000, ask yourself: “would I buy it here if I didn’t have it?“. If the answer is Nyet, sell. So if it trades back at 2, you lost 998. Fallacy: there is no economic difference (outside of tax) between realized and unrealized. In finance, an opportunity loss (failed to sell at $1000) is never neutral.” – Nassim Taleb (20220811—BTC had fallen then due to Terra-UST) on sunk costs
In short, paper losses are real losses. This is why speculation—especially inflated one—is damaging (see also Li Lu, Ludwig von Mises, and Murray Rothbard).
I think this also explains why dynamic hedging is necessaryrevisit
And would’ve been possessed reward. That’ll explain FOMO.
Next:
Related:
- 2-1c ‘Opportunity costs’ - Look beyond the obvious. See what’s hidden.
- 3-1c3c3a1 Don’t be so attached to anything because almost everything is contingent. Assume no self.
- 3-1c3c4.3 “Be fearful when others are greedy and be greedy only when others are fearful”
- 9-2a3b0.1 ロスは速攻切る。勝ちポジションは徐々に積み上げていく。損益に対して生じる非対称な行動心理を予め計算に入れておくこと。
- 10-2e8 Reasoning about causes and effects is reasoning about variants of the causes and effects. What would’ve happened. How it could’ve been otherwise.
- 10-2e9 Variants do exist in the multiverse - not in the past or in the future, but they literally do exist somewhere in the multiverse!
Contradictory?