On... Scarcity

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People want what they can’t get. That in itself is a statement on scarcity. And Supply and Demand.


Supply and Demand is probably one of the oldest rules which applies not only in investing but also in life. Anytime I need to think about something, I can usually tie it back to supply and demand (and Scarcity as a function of Supply and Demand) in one way or another. Being an investor, Supply and Demand is definitely a useful heuristic to guide me. Here are two stories from way back that I can think about Scarcity.


When I was a teen, this must be about the around the year 1998, I was an avid skateboarder. I had not much money back then. I had some, but I spend it mostly on music and skateboarding. I remember having sometimes only one meal per day. And there was this day when we were having lunch at a chicken rice place. I had just enough money for that one chicken rice for that day. And it was the best chicken rice I ever had. I can remember it up until today.  


The other incident was when I have already started working. Back in my early career, I still skated. That must be sometime around 2005 or 2006. After a session of skating, I went to the local café for some food. As I just started working, I was really a penny pincher those days. I deliberated for a long time before I made a decision to order a cup of hot Milo with my food. A cup of Milo costs about AUD30 cents. I had to deliberate about  a cup of Milo. But  you know what, that was the best cup of Milo I ever had.


Now what does that tell me about scarcity? There was nothing special about the Chicken Rice or the Milo. Its just that it was scarce to me at THAT moment. Think about scarce assets in our life, time, property, $BTC, etc. Those things have value because they are scarce. 


In life and in the markets, Everything that is worth having in life is because they’re scarce. 






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