Time arbitrage.

There are few advantages in life you should seek for. One of those advantages is being ignored, or misunderstood or even further, being underestimated. These are good attributes. First if you happened to be ignored — you can go on to build what you want for a long time without meeting resistance. If you are underestimated — people also give you time for not believing in your ability to execute. But if misunderstood, people tend to avoid what they don’t understand… or worse fight it. In short being misunderstood, ignored or underestimated are better attributes to seek for in the long run.

An example of this phenomenon is in Nomads letters to shareholders, for instance, in the way Jeff Bezos processes certain decisions. Jeff argues that: “Math -based decisions command wide agreement, whereas judgement based decisions are rightly debated and often controversial, at least until put into practice and demonstrate. Any institution unwilling to endure controversy must limit itself to decisions of the first type. In our view, doing so would not only limit controversy — it would also significantly limit innovation and long-term value creation.”

This piece reminds me of this idea — the need to experiment. First, because if you experiment you will learn what works and what does not work and second, it reduces the fear of failing. We view failure as destabilizing, while in fact it should be seen as a superpower. If you can try many things faster through experimentation, you will fail, that is true, but it also opens you up to new possibilities of breakthrough.

Time coupled with the willingness to be misunderstood for a long time will results in you failing but even better, it will open you up for better results. The question then is: Is there value in using both math-based decisions and judgment-based decisions when thinking about what to do?

As an investor, remember that most of market actors tend to weigh the latest information more heavily than older information. They tend to think that markets will always look the way they look today and thus, tend to execute unwise decisions. The time lag that exists between making an investment decision and eventually being rewarded for it is a problem for long term investors, as the brain is configured to learn from immediate feedback. The biological presumption is that cause and effect sit chronologically on top of each other. This is not only untrue, but its widely believed to be the case.

In the end, time is your best friend. The quicker you understand this, the better you are prepared in just about anything.

By writing this, maybe I will learn something about this business of writing, I suppose I’ll get to understand how bad I am, maybe I will be the first to start writing about it or maybe, just maybe, I will fail as a writer.

But you know what? I will stand to be counted among those who tried.

The reality is, there are replete things I won’t get time to try. But those within the realm of my understanding, I shall strive to attempt them and in doing so, I shall learn something.

My closing quote for today:

“Still seek to learn yet care not much from whom.”