This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above to get up to $3600 in bonuses, and 100% APY on your USDT for this week only.There’s a concept in poker known as expected value, often referred to as EV. Simply stated, EV is the average result of a given play if it were made hundreds (or even thousands) of times.The concept is simple. It is a numerical value that determines the long-term success of your decision-making. For the math lovers: EV = [Probability of winning X What you win] + [Probability of losing X What you lose]When we say that something is +EV it means the play is expected to be profitable in the long run. Whereas a play that is -EV is expected to lose us money in the long run. Let’s say we are flipping a coin as a game. I pay you a dollar when the coin lands on heads and you pay me a dollar when the coin lands on tails. My EV would be 0. If we played the same game, but I paid you $1 when I lost and you paid me $3 when I won, my EV would be positive. As an investor, I should bet the farm and find a way to play this game for as long as possible.In poker, investing, and any real-life decision-making, we want to strive for +EV. The hard part is reliably capturing a +EV.Did you know that any ROI (return on investment) in poker above 0% is considered a success? Or that the pros aim for a 40% ROI, but realistically land somewhere closer to 20%? And a pro doesn’t just rely on EV to consistently turn a profit. There is also positioning, pre-flop and post-flop card betting charts, raise guides, in-game tells, and game selection strategies that pros use to their advantage. Remember, a high-level return is 20%.We can do better.Since its inception in 1957, the S&P has averaged a return of 10.5% YOY. This is considered the benchmark number, effectively the equivalent of 0% in poker. If a simple investment in the S&P averages a 10.5% return, an aggressive or "pro" investor should consider themselves successful if they can outperform this standard.To recap - in a complicated game that requires extensive studying and thousands of hours of practice to find an edge, any return over 0% is considered to be good. In the stock market, simply passively investing in the S&P, which only requires patience and dollar cost averaging, any return over 10% is considered good. Clearly one has a better EV than the other. You’re probably thinking, “but wait! What about cryptocurrency?”You are exactly right to have that thought.Since January 1st, 2011, Bitcoin has averaged a 200% YOY return. To be fair, this number is dropping and fails to accurately depict Bitcoin’s average appreciation when started at a later date, but it still shows that Bitcoin offers far superior returns on a long term basis. Beyond Bitcoin, there are other coins, which are potentially riskier, that have performed even better.In any complex game, you can improve your EV by becoming a master. But increasing your EV doesn’t require mastering a skill set, it can simply be achieved by choosing a better game to play and staying patient. I speak often about playing to your strengths, but a huge part of that is choosing the right game and picking your spot.To me, Bitcoin is that spot.I hope you have a great Thursday. The world is yours.In This Issue:Expected ValueBitcoin’s Buy The Dip Narrative - IntoTheBlockBitcoin Thoughts And AnalysisAltcoin ChartsChart RequestsExchanges Are WinningThe SEC Has Their Eye On NFTsThe Wolf Of All Streets Podcast Ft. John WarrenMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO
The Wolf Den #448 - Expected Value
The Wolf Den #448 - Expected Value
The Wolf Den #448 - Expected Value
This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above to get up to $3600 in bonuses, and 100% APY on your USDT for this week only.There’s a concept in poker known as expected value, often referred to as EV. Simply stated, EV is the average result of a given play if it were made hundreds (or even thousands) of times.The concept is simple. It is a numerical value that determines the long-term success of your decision-making. For the math lovers: EV = [Probability of winning X What you win] + [Probability of losing X What you lose]When we say that something is +EV it means the play is expected to be profitable in the long run. Whereas a play that is -EV is expected to lose us money in the long run. Let’s say we are flipping a coin as a game. I pay you a dollar when the coin lands on heads and you pay me a dollar when the coin lands on tails. My EV would be 0. If we played the same game, but I paid you $1 when I lost and you paid me $3 when I won, my EV would be positive. As an investor, I should bet the farm and find a way to play this game for as long as possible.In poker, investing, and any real-life decision-making, we want to strive for +EV. The hard part is reliably capturing a +EV.Did you know that any ROI (return on investment) in poker above 0% is considered a success? Or that the pros aim for a 40% ROI, but realistically land somewhere closer to 20%? And a pro doesn’t just rely on EV to consistently turn a profit. There is also positioning, pre-flop and post-flop card betting charts, raise guides, in-game tells, and game selection strategies that pros use to their advantage. Remember, a high-level return is 20%.We can do better.Since its inception in 1957, the S&P has averaged a return of 10.5% YOY. This is considered the benchmark number, effectively the equivalent of 0% in poker. If a simple investment in the S&P averages a 10.5% return, an aggressive or "pro" investor should consider themselves successful if they can outperform this standard.To recap - in a complicated game that requires extensive studying and thousands of hours of practice to find an edge, any return over 0% is considered to be good. In the stock market, simply passively investing in the S&P, which only requires patience and dollar cost averaging, any return over 10% is considered good. Clearly one has a better EV than the other. You’re probably thinking, “but wait! What about cryptocurrency?”You are exactly right to have that thought.Since January 1st, 2011, Bitcoin has averaged a 200% YOY return. To be fair, this number is dropping and fails to accurately depict Bitcoin’s average appreciation when started at a later date, but it still shows that Bitcoin offers far superior returns on a long term basis. Beyond Bitcoin, there are other coins, which are potentially riskier, that have performed even better.In any complex game, you can improve your EV by becoming a master. But increasing your EV doesn’t require mastering a skill set, it can simply be achieved by choosing a better game to play and staying patient. I speak often about playing to your strengths, but a huge part of that is choosing the right game and picking your spot.To me, Bitcoin is that spot.I hope you have a great Thursday. The world is yours.In This Issue:Expected ValueBitcoin’s Buy The Dip Narrative - IntoTheBlockBitcoin Thoughts And AnalysisAltcoin ChartsChart RequestsExchanges Are WinningThe SEC Has Their Eye On NFTsThe Wolf Of All Streets Podcast Ft. John WarrenMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO