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On... Not All Gambles are Created Equal

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Some people called investing in stocks as gambling. Some people say everything is a gamble. Perhaps we’re getting too deep into the weeds. Does the definition really matter? It all actually sits on a spectrum. On one end, business can be considered a gamble but less risky with more predictable outcomes. On the other end is probably lottery or slot machines, where it is riskier and the outcomes more random. A good way in my opinion to look at it is through the EMV (Estimated Monetary Value). This is because whether it is business or the stock market, it can be quite similar to buying the lottery. Some people may choose to ignore it, but in investing or business, a lot of luck is involved. I used Grok for a very quick look at some scenarios and it calculated a bunch of EMV’s based on some very loose assumptions and historical data. You can compare the results below. The actual EMV values are not as important as they’re not normalized for invested amount. The core comparison is whether it...
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On... My Business Model

 Last post , I wrote that trading should be done like you're running a business. If so, what kind of business would I be running?  The business model that I best want to replicate is a casino business ( see this video , if you want to skip the rest of the blog post ). Most people that I talk to, thinks that investing or trading is a form of gambling. Is trading or investing really gambling? This topic is rather divisive and it depends on who you ask. Well if it truly is gambling, I would want to play the part of the casino, because as they say, the house always wins.  How does the casino make money? By having a positive expectancy.  They don't have to make money on every bet, but over large number of bets, the profit has to be bigger than the loss. In terms of trading, my winning percentage is not really that great but as long as the average winners are bigger than the average losers, that is good enough. Year to date for 2021 ( over 133 number of trades ), my winnin...
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On... the Short Cut

Punk 6529 had a Twitter thread titled " On Making It ". It is a good thread and something that I do think about from time to time. TLDR of the thread is as follows. Live can be divided into 5 levels financially. Level 1 is barely enough to survive. Level 2 is living paycheck to paycheck. Level 3 is living comfortably. Level 4 is Super Rich Level 5 is Nirvana. My personal opinion or net worth range that I apply is as follows. Level 1 - 0 to 1k$. Level 2 - 1k to 100k$. Level 3 - 100K to 10mil$. Level 4 - more than 10mil$. Level 5 is when you're happy with your net worth. This is a very special level because it is not defined by your net worth but defined by your own satisfaction. This is of course a very rough representation of what Punk 6529 is talking about. I have lived my life mostly in Level 3. Grew up in a Level 3 Family when I finally got a job and is pursuing my own career, I was mostly in Level 3. Early in my career, as an ambitious young man, I have considered tha...
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