Estimated Reading Time: 5 Minutes (~600 Words)
When I was growing up, my parents would always give me 60 cents a day, with their intention for me to spend 50 cents on food/ anything else, and saving the other 10 cents. I was free to spend in any way I like, but I end up saving 10 cents, and this practice continues till today with my salary. After clocking several years of working experience and some savings, I’ve taken on an interest in financial planning to understand how I can grow my savings for the future. I spent some time studying finance (eg. efficient market hypothesis, beta of a stock) in college, but quickly realised that learned that I only touched the tip of the iceberg.
It was tough to get started, with many content creators on mulitple platforms and products (Robo-advisors, Trading Platforms) to turn to for advice (Not an endorsement, but as a Singaporean I found these personally relevant: The Woke Salaryman on Instagram, Stashaway Market Commentary on YouTube). Earlier this year the subreddit WallStreetBets had the short squeeze of Gamestop (GME), along with cryptocurrency (Bitcoin, Ethreum, Dogecoin) as emerging as a new asset class, which probably made several folks millionaires. How does one parse through all these information, and decide what advice to buy, when to sell, or how to allocate their assets/portfolio? Who should I trust, if I find 2 sources with directly conflicting advice?
Taking a step back, I was thinking about how I made some of my own decisions, and was inspired by this article, Play Your Own Game:
Someone recently asked how my investment views have changed in the last decade. I said I’m less judgemental about how other people invest than I used to be.
It’s so easy to lump everyone into a category called “investors” and view them as playing on the same field called “markets.”
But people play wildly different games.
If you view investing as a single game, then you think every deviation from that game’s rules, strategies, or skills is wrong. But most of the time you’re just a marathon runner yelling at a powerlifter. So much of what we consider investing debates and disagreements are actually just people playing different games unintentionally talking over each other.
Morgan Housel
Similarly, there is a very big difference between a professional trader, a gambler, and a mid-career worker investing in the financial market. Yes, everyone invests to make money, but there is a stark difference between capital preservation and growth. I’ll liken this to an analogy where we compare between a marathon runner, and swimmer and a powerlifter in a gym: even if they are doing the same exercise (to the common person), they do it for different reasons.
Much of what we consider investing advice, debates and disagreements implicitly assumes that the reader understands the game they are playing. Only when we understand what game one is playing, can we then assess the merit of their strategy and actions (and whether we should be following it). Any debate or judgement before that would be unfair and meaningless. This, to me is perspective, and without it, one would find it very hard to persuade and/or convince one otherwise.
In most conversations, I now try to do 2 things: 1) when I speak, I explain the ‘game’ I’m playing (unless the person already has this context), and 2) I try to understand what game others are playing. It might not be easy or intuitive, but it does go a long way in achieving consensus.
When was the last time you sought to understand when a person disagreed with you?
Salted Bites 