Felix Zulauf was a recent guest on the Masters In Business podcast. He’s a fund manager that started in the business in the 1970s. He’s seen just about everything there is to see in financial markets.
When asked what he wished he knew when he started in the business, he had an amazing response.
Quite frankly i’m glad I didn’t know what I know today because I wouldn’t have been as aggressive then as I have been. If I knew all the risks that I know today I would not have done as well as I have done.
Money management is a business for optimists because our system is a fiat currency based system. It’s asymmetric towards rising monetary inflation and rising asset prices. Therefore, a good portion of optimism never hurts.
That’s pretty incredible right? This long time pro just admits that more knowledge and understanding of how things work has been a net negative with regards to making money.
Naive optimism is where beginners luck is born. Last week, I mentioned if you bought a basket of crypto stocks on Monday, you’d be outperforming 99% of everybody by Friday. It was a joke, but it’s also true with these random stocks going up 100-300%.
For example, if you bought this stock called Riot Blockchain you could have been up 130% in 3 days if you just traded the price breakout. People who ‘knew better’ were aware this thing was sketchy and was recently a biotech operating out of a strip mall. But it didn’t matter what you knew. Those who didn’t and just went with price put themselves in one of the best group moves of the year.
Negativity is so alluring. As kids we’re taught a slanted view of revisionists history. Then we go out and learn about how things have become the way they are and the endless injustices out there. It’s only natural to be skeptical and cynical.
We all work so damn hard to find the next big thing and have the sharpest view of what’s going on and beat our competition. It’s easy to get caught up in this intellectual rat race thinking that we have to find things against the current grain to have a leg up. Sometimes the biggest edge just comes in your mindset.