Best of Web: Speculation Madness, Depression, Buy Happiness, Psychology of Money

Speculation: A Game You Can’t Win

This is an awesome post about investing speculating!

We’re in the midst of a wild market, with people seeking to convert a thousand dollars into a million within the span of months, if not weeks. The only way to do this is to invest in highly speculative assets and commodities – things that use risk as a selling point, and not as a deterrent. And when you’re willing to lose everything in the hopes of gaining your dreams, the way you view those gains changes dramatically.

Here’s the thing about speculation: Realized gains feel like penalties when they’re interpreted as missed opportunities. Walking away with a great 10x return will make you feel terrible if that came at the expense of a future 100x return. If the top turned out to be much further out than you thought, then you can’t help but to be unhappy with the gains you actually did realize (no matter how good they were). This reinforces the dynamic that what you earn is never enough. If making a 10x return turns out to be a painful experience, how does that shape your relationship with money and how you view the world? More importantly, how does that affect your capacity for gratitude? The inability to be thankful for making a solid ROI introduces an entitlement that further distances you from people that are truly in need. How can you connect with the plight of others if you can’t even be happy with something most people would dream to have?

It is for this reason that speculation is a game you can’t win. On one hand, there’s the burden of regret resulting from selling too early (or from selling too late at a realized loss). On the other, there’s the schadenfreude you embody by selling right on time. Whichever path the asset ends up taking, there’s a mental tax to be paid on top of any monetary result, and that’s what makes this such a difficult game to internalize.

When I invest in things, I do so with a long time horizon so market timing is not a consideration, allowing consistency and compounding to work its magic. What I give up on short-term exponential returns is long-term peace of mind, and to me, that’s a tradeoff that simply can’t be beaten. [Same]

 

A Few Thoughts on Depression

One of the best reads about depression. It also goes into how to best help people who suffer from it. I highly recommend it to learn more about it!

1. Depression is not sadness. 

2. Coming out of depression is the most dangerous time.

3. Depressed people don’t need good listeners, a sympathetic ear, or a shoulder to cry on.

4. Depressed people do need human company.

5. Cognitive behavioral therapy really works.

6. Depressed people may need a new “narrative”.

7. Depressed people always need to be vigilant against a relapse.

 

How to Buy Happiness (Responsibly)

The great reopening offers ample opportunity to lift your spirits if you have some money to spare. Here’s how to do it right. Some actionable advice on how to get back to normal…as far as spending your money that is. I need to spend more on experiences and I have definitely been donating more to charities.