Lindy Effect 101

With Bitcoin's return to the spotlight, debates on its long-term viability are raging. Its proponents contend @nntaleb's Lindy Effect says the technology is here to stay.

But what is the "Lindy Effect" and how does it work?

Here's Lindy Effect 101!

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Dollar Cost Averaging 101

Many of the brightest minds in the investing world share one common trait: they recommend dollar cost averaging as an investment strategy.

But what is dollar cost averaging and how does it work?

Here's Dollar Cost Averaging 101!

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1/ Dollar cost averaging, or "DCA" for short, is a simple investment strategy in which an investor splits the total amount to be invested in a given asset across regular periodic purchases.

The regular purchases occur regardless of price, volatility, or economic conditions.

2/ The goal is to remove the complexities of market timing from the process, allowing an investor to build their desired position without concern for external factors.

Its simplicity removes behavioral and psychological biases from the equation.

Let's look at an example.

3/ Imagine you want to build a $10,000 position in bitcoin. You have done your research and believe in the long-term story.

You aren't sure if it will go up or down in the near-term, so you decide to dollar-cost average.

Great decision! How will you do it?

4/ You split the $10,000 up into 20 pieces ($500 each). You could have done any number of pieces, but 20 felt right.

You decide on a weekly DCA, so every Monday, you buy $500 of $BTC, regardless of price. After 20 weeks, you have built your desired $10,000 cost basis position.

Ikigai is a powerful concept for finding purpose and clarity to unlock growth in your career, startup, business, writing, or relationships.

A thread on its meaning and how it can change your life...

Ikigai is a combination of the Japanese words “iki” (or “life”) and “gai” (a term to describe value or worth).

It roughly translates to “reason for being.”

It is all-encompassing - it is not simply about work, money, or success - it is about the full scope of your existence.

Ikigai is the point of balance and harmony in your life and work.

It is found at the intersection of:
(1) What you love to do
(2) What you are good at
(3) What the world needs
(4) What you can be paid for

Importantly, it is at the nexus of passion and practicality.

The concept of Ikigai can be traced back to 12th century Japan, but its exact genesis is unknown.

It gained a mainstream following after Dan Buettner’s famous 2009 @TEDTalks on his research on @BlueZones (regions where people live longer than average).

In his research, Dan Buettner found that purpose and fulfillment led to improved longevity.

Put simply, embracing the concept of Ikigai contributed to enhanced health (mental and physical) and longer lifespans.

The most powerful paradoxes of life:

The Persuasion Paradox

Have you noticed that the most argumentative people rarely persuade anyone?

The most persuasive people don’t argue—they observe, listen, and ask questions.

Argue less, persuade more.

Persuasion is an art that requires a paintbrush, not a sledgehammer.

The Effort Paradox

You have to put in more effort to make something appear effortless.

Effortless, elegant performances are often the result of a large volume of effortful, gritty practice.

Small things become big things. Simple is not simple.

The Wisdom Paradox

“The more I learn, the more I realize how much I don't know.” — Albert Einstein

The more you learn, the more you are exposed to the immense unknown.

This should be empowering, not frightening.

Embrace your own ignorance. Embrace lifelong learning.

The Growth Paradox

Growth takes a much longer time coming than you think, and then it happens much faster than you ever would have thought.

Growth happens gradually, then suddenly.

When you realize this, you start to do things differently.

10 common errors in reasoning that undermine arguments:

Ad Hominem

Latin phrase for "to the person”—an attack of the individual rather than the argument.

Instead of addressing the argument and its merits, the offender attempts to refute the opposition on the basis of personal characteristics.

All-too-common in political debates.

The Sharpshooter

A man fires a gun at a barn wall and then paints a target around the tightest cluster of bullet holes to create the appearance of accuracy.

The offender selects and highlights evidence that supports the conclusion—while ignoring evidence that may refute it.

The Sunk Cost Fallacy

Sunk costs are economic costs already invested in an activity that cannot be recovered.

The fallacy is found in thinking that you should continue on the basis of all that you've put in—with no regard for future costs or likelihood of ultimate success.

The Red Herring

The kippered herring was a smelly fish used to distract hunting dogs while training them to focus on a scent.

"Red herring" is now synonymous with distraction.

The offender distracts from the argument with a seemingly related—but actually unrelated—point.

20 ideas I can’t stop thinking about:

The Feynman Technique

To learn anything:

Step 1: Identify a topic
Step 2: Try to explain it to a 5-year-old
Step 3: Study to fill in knowledge gaps
Step 4: Organize, convey, and review

True genius is the ability to simplify, not complicate.

Simple is beautiful.

Intellectual Sparring Partners

Most of us need fewer friends and more intellectual sparring partners.

Friends are easy to come by.

Intellectual sparring partners are harder to find.

They will call you on your BS, question your assumptions, and push you to think deeply.

Boredom Alpha

Experiencing regular periods of boredom is a competitive advantage.

Your most creative moments come during bouts of boredom.

In the shower, on a walk, at a dinner by yourself.

You’re bored, your mind wanders, and creative insight strikes.

Boredom creates alpha.

Paths Open vs. Closed

Black Lines = paths closed
Green Lines = paths open

We spend too much time focusing on what might have been (black) and not enough time focusing on what may be (green).

Never underestimate the density of opportunity that lies ahead.

(h/t @waitbutwhy)

I am going to be using #bitcoin & borrowing from myself to buy my first rental property.

Want to know how?

Time for a thread...👇🏻👇🏻👇🏻

At the beginning of 2020 I set a goal for myself to accumulate as much #bitcoin as possible.

Now this thread isn’t really about whether or not you believe in bitcoin, but more about how to use leverage and other peoples money (OPM) to buy yourself more assets.

Let me explain...

Step 1 - I took all of 2020 to accumulate #btc and put it on an exchange (Blockfi) that pays me interest on my bitcoin.

Not only have I acquired multiple coins this year, but I’ve created a $100+ gain per month in interest as well (another source of cashflow).

I can now utilize this platform to take loans out against my position (which is in the mid 5 figures.)

Double winning:

I can take a $ amount loan out against my bitcoin and use that to pay the 15% down required on a rental property and allow the bank to pay other 85%.

How I am winning #1:

I am borrowing from myself and a bank to acquire another asset.

That real estate 🏡 will be paid for by someone else and produces more cash flow for me.

I will use that cashflow to immediately pay off the loan I took against my bitcoin.

Crypto trading - some personal takeaways from 2020

Disclaimer: my job requires picking investments, at times with short/medium term view (days-months), many times with a long term view (years).

This is mostly a thread on reminders to myself relating mostly to the former.

Watch out for decisions based on fear & greed

Confirmation bias (ignoring contrary signals), anchoring bias (married to entry, trading PnL), sizing too big on low r/r trades, hesitating to buy cheap assets because "it's fallen/rallied too much".

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Minimize regret

Constantly question whether you have done all you could to maximize returns in the past month/quarter. Review all tools at your disposal (vol strats, momentum strats, fundamentals) but don't Dunning-Kruger yourself. There are no jack of all trades.

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You can't catch them all

Don't regret missing out on a few trades/ investments. Better to win big on 1 high conviction idea then win big on 100 small ones. Be ok with missing out but be ruthless with not learning from it.

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0/ Predictions for 2021:
(This is not investment advice, or any other type of advice. DYOR)

1/ #ETH hits new ATH(s).

2/ #Bitcoin breaks $55K; but BTC YE2021 close is < $30K.
wins!

3/ > 3 billion-dollar crypto IPOs successfully occur (eg CoinBase, BlockFi, et al).

4/ @SBF_Alameda’s ‘off-chain BTC folding’ strategy goes unnoticed; whole crypto ecosystem wins!

Think crypto is confusing?

You're right.

Let's make it easier.

Here's Crypto Terminology 101: 🧵

Altcoin:

Any coin that's not #Bitcoin

Ether (#ETH) is the second most popular coin overall and the most well-known Altcoin.

Ether is the native cryptocurrency on the Ethereum blockchain.

There are thousands of other altcoins, but for now, this is the one to know.

Bitcoin: (#BTC)

The first decentralized digital currency.

Launched in 2009 by an unknown person or organization known only as "Satoshi Nakamoto."

It is the most famous, and most valuable cryptocurrency.

Blockchain:

The core tech behind Bitcoin and most other cryptocurrencies.

An open, distributed, general ledger where transactions are organized into blocks which are then connected using cryptography.

Coin:

A store of digital value that lives on a blockchain.

Some blockchains, such as Bitcoin, use the same name for both the network and the coin.

Stable coins are another type of cryptocurrency which are backed by fiat currency (e.g the US dollar) or commodities such as Gold.