This newsletter is sponsored by Blockpit, the tax platform that makes my life as a crypto trader so much easier.My trades were automatically imported after setup and displayed nicely. The tax report was quick and easy to create in the app. I can also track the performance of my assets in the app. With Blockpit, I no longer have to worry about realizing profits or losses in time. SIGN UP HERE and get a 10% discount."Given a 10% chance of a 100 times payoff, you should take that bet every time." — Jeff BezosThe idea of taking bets with asymmetrical upside is nothing new. As I discuss often, poker players will push all of their chips into a pot when the odds are against winning the hand because the "pot odds" favor the move. If you have a 30% of winning the hand, but only have to bet $100 more dollars with the chance of winning $1000, you make that bet every single time.The caveat to Bezos's quote is that you can't make this bet with all of your capital. And an important nuance it is! A poker player might push in all of the chips they have on the table, but they likely only have about 1-2% of their entire bankroll in play.If you put your entire portfolio into a single investment that only has a 10% chance of success, the odds are irrelevant. 90% of the time you will be left destitute.The spirit of the quote is correct, but the context is important. This is why traders ONLY TRADE with a small part of their portfolio, keeping the rest in stronger long term investments. You can make the "Bezos bet" with a small percentage of your portfolio many times over without blowing up your entire portfolio.Never go truly all in on a bet with a low chance of success - rather, risk what you can afford to lose on the chance that the small position becomes a life changing investment.In This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsSafePal Wallet ReviewMark Cuban On The Store Of Value GenerationSEC Report Reveals Guggenheim Wants $500M In BitcoinThe Wolf Of All Streets Podcast Ft. Jonathan ChesterMy Recommended Platforms And Tools
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The Wolf Den #169 - Asymmetric Bets
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This newsletter is sponsored by Blockpit, the tax platform that makes my life as a crypto trader so much easier.My trades were automatically imported after setup and displayed nicely. The tax report was quick and easy to create in the app. I can also track the performance of my assets in the app. With Blockpit, I no longer have to worry about realizing profits or losses in time. SIGN UP HERE and get a 10% discount."Given a 10% chance of a 100 times payoff, you should take that bet every time." — Jeff BezosThe idea of taking bets with asymmetrical upside is nothing new. As I discuss often, poker players will push all of their chips into a pot when the odds are against winning the hand because the "pot odds" favor the move. If you have a 30% of winning the hand, but only have to bet $100 more dollars with the chance of winning $1000, you make that bet every single time.The caveat to Bezos's quote is that you can't make this bet with all of your capital. And an important nuance it is! A poker player might push in all of the chips they have on the table, but they likely only have about 1-2% of their entire bankroll in play.If you put your entire portfolio into a single investment that only has a 10% chance of success, the odds are irrelevant. 90% of the time you will be left destitute.The spirit of the quote is correct, but the context is important. This is why traders ONLY TRADE with a small part of their portfolio, keeping the rest in stronger long term investments. You can make the "Bezos bet" with a small percentage of your portfolio many times over without blowing up your entire portfolio.Never go truly all in on a bet with a low chance of success - rather, risk what you can afford to lose on the chance that the small position becomes a life changing investment.In This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsSafePal Wallet ReviewMark Cuban On The Store Of Value GenerationSEC Report Reveals Guggenheim Wants $500M In BitcoinThe Wolf Of All Streets Podcast Ft. Jonathan ChesterMy Recommended Platforms And Tools