So what are my personal asymmetric bets for the next 5 years?
Now I will not say Bitcoin & Web 3 (The so-called buzzwords in the tech world right now)
Now I don’t know if you watched this movie ‘The Big Short’ if not look up on IMDB – https://www.imdb.com/title/tt1596363/
Here is the short outline of the movie – Michael Burry (Christianne bale) bets against the US housing market and predicts its collapse raising 1 Billion $ from his investors, now this also grabs the eyeballs of other bankers and hedge fund specialists now these men combined creates a fortune by the economic fall down.
Well, this is how asymmetric opportunity works. in simple words, I make small bets which are big enough to give me a high reward. In short a low-risk – high-return game.
The unlimited upside with limited downside. Or at least risk/reward skewed in my favor.
Let me take a hypothetical scenario – If I had invested $1000 into BTC, in 2010, I would be worth 391 million today (Downside will be, me losing $1000).
Now, this is why I moved to Dubai (In a big city I have more chances to make connections or find opportunities/get lucky) than in a small city, where my chances are very slim.
My asymmetric bet now is to basically – learn, grow, create and put yourself in places where randomness increases the probability of opportunity.
Nassim Taleb in his book ”Black Swan’ quotes” Someone with a low degree of epistemic arrogance is not too visible, like a shy person at a cocktail party. We are not predisposed to respect humble people, those who try to suspend judgment.
The point is that there are opportunities in life, especially in intellectual and social domains, where the upside is nearly unlimited but the downside is small, usually just the time or money that you put in.
I have been fond of Venture capitalists, yeah those Mark Cubans of Shark tanks. in venture capital, an investor can lose their 1x money or make 10x times more money invested leveraging is a key here.
Naval Ravikant explains leverage the dating – You can go on as many first dates and learn from the failure which then in turn leads to a compounding marriage (huge return). Entrepreneurship is another form of asymmetric bet which I want to take in the future starting a small restaurant/personal brand is my dream) Leverage is essentially a tool that helps you to produce more with the least amount of effort.
What is not an Assymettry – Lottery tickets cannot be an asymmetric bet as the odds are stacked against me (same reason why I stay away from all kinds of MLM scams) whereas, in the venture business, the odds are in the favor of investors.
Wealth creation is about capturing leverage. look at intellectual and social endeavors where I have potentially a lot to gain, very limited downside. Doing enough of these long-term bets so it pays off eventually. Tools like media, code capital, and labor magnify the impact of our decisions capturing leverage.
– Leverage is a fishing rod rather than a fish.