Maxim 5 is the corollary to Maxim 1 (which was “never risk a lot for a little”):
5- Seize opportunities to risk a little for a lot—opportunities where the gain if you are right far exceeds the loss if you are wrong.
If we are observant, we’ll find that life every-so-often presents us with low-risk, high-reward opportunities. If we’ve followed Maxim 1 religiously in the meantime, we’ll be well-positioned to take advantage of them when they arise. But to do so, we have to first recognize them.
Recognizing low-risk, high-return opportunities is not easy because, almost invariably, we’ll be going against the grain of accepted wisdom. Here’s why:
Scientists have proven that humans are not rational actors, though they fancy themselves otherwise. Because they are both irrational and in denial about it, their decisions are usually anchored in all types of cognitive biases. These biases lead to unsustainable extremes in behavior. If you can spot these extremes, you’ll also spot opportunities to bet on their eventually demise.
For instance, one of our most deeply imbedded biases is the herding instinct. When humans are forced to make quick decisions in the absence of complete information, they instinctually follow the crowd. Consciously, we assume that the crowd must know something that we don’t (but it usually doesn’t). Unconsciously, we believe that we are less likely to succumb to an unknown threat if we are hunkered down in the middle of a pack.
This innate herding instinct is the source of most all trends and counter trends, booms and busts, fads and counterfads.
So, one way to spot exploitable, low-risk opportunities is simply to look for extremes in human sentiment, especially the sentiment of the establishment elites. When most all members of the establishment are all lined up on one side of an issue, which happens about once a decade or so, that’s an opportunity to place small bets on the opposite outcome. For instance, given the extreme sentiment favoring Hillary, betting that Trump would win the Presidency was a low-risk, high-reward proposition.
However, recognize that when we’re going against an extreme establishment tide, small bets are all that’s needed. Anything more than a small bet risks catastrophe and may violate Maxim 1. If we’re right, the payoff on a small bet will still be enormous. But if we’re wrong, the loss will be inconsequential.
It’s important to recognize that the establishment will in fact be right more than it is wrong, which means that we’ll lose our small bets far more often than we win them. But...that’s okay. When we’re right, we’ll be very, very right. And when we’re wrong, we’ll only be a little wrong.
On a society-wide level, extremes of sentiment usually manifest as easily identifiable panics and manias. Those are always good times to make small bets that go against the grain (though doing so takes a ton of intestinal fortitude). But Maxim 5 is effective even on much smaller scales. Whether we’re tasked with raising our children, hiring new employees, buying a house, making new friends or...most anything, we must seize most every high-reward, low-risk opportunity to go against the grain.
Well, it would seem that anyone here now at this stage in the CrYpTo game on this platform is going against the grain as the percentage of people especially here in the US are not on board. The numbers are growing with each and everyday pointing out the upcoming herd mentality movement. It is harder for most, who would rather watch the game than do a little studying for themselves, to take the advice of someone else or follow a trend but it's more often than not to their own demise. I think being active in one's awareness is a key success factor in this game we call life. Nice post. I've enjoyed this series very much.
A man is rational when he recognizes himself and admits his mistakes, that making him a mature person as well.
The wise did not become wise only by chance they made mistakes and learned a lot from their mistakes, which give them a large amount of information and wisdom
In my opinion, the opportunities that are difficult and dangerous is what win. the stock market as an example, if you don't take a risk, you wouldn't win.
There is a wisdom in the marketing world that says "the right time brings you the right customer"Time and adventure are key factors in the business world.
btw i posted yesterday a post about some tips can make you a better one feel free to take a look. Greetings
Yea sure this is a wake up call for me. I have always never known when exactly to take certain risks and probably that is why I loose most times but with you posts I think I now know when exactly to take those kinda risks...Thanks man
As they say, look for the things that are needed and few exist
Originally a human animal by nature , Although he has a mind but does not use it, Just follow the crowd As one of the sheep
Thank you for this valuable topic @sean-king
Wow! Such wonderful words of wisdom from you @sean-king.
That paragraph in particular caught my attention because it is even prominent here on steemit. Many do not have a sense of direction but gamble with the ideas of others. It is however understandable when people try to get traction for their contents but it seems not to be forthcoming.
This is a huge exposition. Thank you so much. Though not your usual photography posts, it is full of impact.
Thanks my friend for this wonderful subject that I have seen
If you want to evaluate the opportunity correctly, you have to compare it with your real results. Not with your possible results. Compare them to your current status. Ask yourself: "Is this opportunity a step towards the goal?" If yes, it is worth trying. Deserves to seriously seek to seize it. Why? Because you will approach her from your goal. It may be a small step, but you will soon be closer.
Is not it easy to expect the next chance to be better, bigger and bigger? This is also a healthy indicator.
Small opportunities are often low risk. Meaning you will not lose much if the result is bad. You will have learned that this path will not lead you to what you want. Without significant risk. This is something you can not find in large opportunities, where risk is often - if things go wrong - large, and losses can be huge.
discuss about politics, in got a desire we have to sacrifice a lot, a variety of ways to occupy power!!
When this power is number 1 and will replace the truth become wrong.
a little attempt to will a lot of sacrifice.
Thanks @sean-king for interest topic
wonderful articl is worth reading
If you want to evaluate the opportunity correctly and rationally compare it with your real results. Not with your potential results. Compare them with your current condition.
Ask yourself: "Is this opportunity a step towards the goal?" If the answer is yes,
They deserve to try
And replace the effort to reach them
Because the chance of success will be greater
My friend I am very close to the reputation 47
If you can encourage me
I will not forget your favour
Happy day
you are always the best @sean-king
A very nice post @sean-king, the words you write have a very profound meaning to me. That's what life says, sometimes it does not happen the way we want it to be. But it is a fate, we can not change destiny, because we can only change our lives for the better. With effort, hard work and keep the spirit despite having many challenges.
As long as we are alive, problems always come, whether they are big or small. But all of that we must be ready to face it. Because of all that there will be a way out. In essence, to have something that we want and for us to be successful, it takes hard work and has many challenges. Thank you so much @sean-king for sharing this very helpful words, and hope you have a wonderful day .... :)
Low risk, high-reward investments are the most welcoming in business. Kings have been made from this. An essential attribute of any smart entrepreneur is the ability to sift out these kind of opportunities in the midst of the abundant and channel in the capital there. In less than no time, such an entrepreneur smiles to the bank in constancy
Lovely, it's really great when we take Low risks and get higher rewards. But risk can not be taken away from business, the more the risk the higher the chances of either losing all or gaining all.
Thanks @sean-king
@sean-king, well said and nicely written. I pick up your this 1 line which is worth for me and also a guideline. Thanks a lot king, my appreciations , best wishes and support for you because you always shared quality and perfect work.
As you said, people are irrational in many things, even though they think they are, I think the people should not risk too much , @sean-king
I understand your point @sean-king what you are saying is very true. but I think we should rather strike a balance to it, because there are times when the lot will so be beneficial that you'l be in the "wow" state
Wow very clever words ...
You are great ..the great @sean-king ..
Establishment is the main capital in doing a job, a job done without tampa establishment, causing mental ups and downs. The higher queues are the main mentality of success. People who have a high mentality with one attitude will do one job with many considerations. they never despair of failure, because people with high respect have capital "failure is the beginning of success .. thanks for this useful post, very useful for me for motivation @sean-king
The courage to experiment and achieve is available both in the entrepreneur and in the gambler. Fark often takes the courage from his instinct and luck, and the entrepreneur from his knowledge, experience and knowledge of the product and market.It is often thought that entrepreneurs are better off with gambling. A large part of his work is indexed to take risks, so gamblers and entrepreneurs have similar characteristics. Both profiles are aimed at earning money. In order to make money, they have to take risks. However, entrepreneurs and gamblers have a completely different approach to risk taking. The entrepreneur initiates the profit-oriented intent to expand the enterprise.you are still right. even less risk.
"When humans are forced to make quick decisions in the absence of complete information, they instinctually follow the crowd."
And with that, social media has made it way too easy to follow any crowd you desire.
I've learned a lot from this...Betting in favor of trump would not have cost me a lot but the return would have been enormous..I'll apply this to my day day activity.. thanks for this
I think the lowest risk and high profits in an enterprise is workmanship. ie to sell labor. If you market anything, you can only make a certain profit. but if your business is successful if you sell the service, after a while you can make a profit with zero risk and your own decision. economy and politics are very deep topics. it can be talked in the morning and there is so much information to learn !!!
You are great man, thank you for your blog, and thanks for vote my post💋💋💋💋💋
Oo after a long time ..
It has been long time that are posting . We we're egarly waiting for you ..
Hey Sean, true that! In case your looking to put some bets on artists, allow me to apply with one of my works 🤓 I'll definitely be following for more of your advice.
Chance is still small, but maybe a different work will interest you more? Any favourite animal for instance?
i'd have disagreed if not for your mentioning that each "lot" and " little" are relative, cos sometimes you seem to be giving up your life to acquire uncertainties. I suppose that is instructive in that, constantly compare/weigh the outcome before plunging. quality work, wanna see the relaxation
Your collection approximately life maxims is off to a superb begin. never put it in phrases, however in a manner your "never danger a lot for a touch" has given me some steering later in my life too.
had to learn it the tough manner. we've got this announcing: "if the donkey is just too well he goes dancing on ice". I assume the English equal is "complacency makes you reckless"... and i have risked plenty, pretty much the entirety, for little or nothing really. So, eventually I too got it ;-)
And sure, please.. every person forestall texting while riding. The beyond couple of years I had numerous close encounters with automobiles who's drivers had been paying greater interest to their phone than site visitors... street can get very narrow, even for a motorcycle ;-/
I additionally assume, there are some matters that can not be measured, like our fitness or an excellent dating. They sincerely aren't worth any threat at all :-)
The human thoughts is paradoxical. We constantly hear such maxims, but to listen and do are absolutely various things in real life. We frequently justify ourselves with the aid of the truth that we can take it into practice later whilst we reach some sort of concord within the glide of existence, while we are able to have time to recognition on the little matters. but, simplest those little matters can convey harmony, grade by grade used in existence. thank you for reminding humans of the simple truths they overlook.
authentic, little or extra is depends upon the user or customer of unique element, there may be no fee of cash or gold for specific person who don't need it or he is not giving price to it. the whole thing is depends upon your wondering or what value you're giving for financial and other matters, and all utilities are distinctive from character to person, but we ought to remember the fact that when you have extra than marginal software, it's higher to percentage with those who don't have primary sources or for them for whom the whole thing is scarce. I simply like the points which you have found out, manner sometime we keep away from in reality important matters due to laziness, however it may cause a few terrible situations in future, so constantly remember to take all protection measures. thanks for sharing.
Have a excellent day and stay blessed
I sincerely agree with what you said. you've got very satisfactory reasons. other than them arsimed water lifting pressure. Newton's floor-breaking assembly. these are all random things. humans usually have different things in their lives. maybe even now an invention stands inside the way. we just do not see it. folks that give an explanation for what those differences are are known as inventors. This issue is immortal to the factor. for us to sign a treaty altogether. simply to be extra cautious. we want to note the differences in our surroundings. @sean-king
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thank you.
I agree thoroughly with this.
take a look at our maximum of the innovations and you'll see that maximum of them did now not require tremendous planning but human beings being curious and looking to test the final results of setting or extra things together to peer the outcomes of what it's going to produce.
thanks plenty @sean-king for this super submit. it is pretty educative and eye opening.
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@Resteem performed.
#For instance, one of our most deeply imbedded biases is the herding instinct. When humans are forced to make quick decisions in the absence of complete information, they instinctually follow the crowd. Consciously, we assume that the crowd must know something that we don’t (but it usually doesn’t). Unconsciously, we believe that we are less likely to succumb to an unknown threat if we are hunkered down in the middle of a pack#
Infact these sentences is very important' I wrote similar to this in my post about " The Man Who Cares More for the Favourable Opinions of Others, or One Who Tries to avoid tries to Avoid Giving Offence. Decision should not be made quickly become of the Favourable or opinion of others.
I may want to seek your permission @sean-king to copy some pic from your post for the purpose of art.. there are some beautuful beach pics I throught of draw them out..but need your permission to avoid being flagism.
Thanks.
@davidad
@sean-king help our lives Sir. My people are dying. Take a look please.
https://steemit.com/life/@ambdavid/religion-the-mess-we-are-in
Nice advice , your posts are nice , informative more like how to take some risks that you need to take . I will follow and read your articles , I find something that is interesting on your blog and I really like your posts !