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Asymmetric Trades

Unbounded success with limited downside.

Something that takes an hour, but impacts you for life. Unbounded upside, capped downside.

E.g. Typing. It takes around 4 hours to double your typing speed, for free. 4 hours for payoffs the rest of your career. (Better productivity for 90,000 hours.)

(The classic comeback to this: “Voice to text exists”, or “Typing isn’t really that big of a game changer.”)

You’re trading 4 hours for optionality. The typing skills may never come in handy, but your downside has a maximum cap of 4 hours. (Unlimited upside. Any room where a computer exists, you are now in the top 90% of typists. It doesn’t take much.)

Increasing optionality is increasing potential freedom.

What other time trades do you have a limited downside on & potentially massive return? A good book takes years to write, but can be consumed in a matter of hours. Someone already collected all of the experts, condensed their views, and presented them to you in a short format.

Maximum downside of a week/168 hours for a book. (I’ve experienced this downside a lot. But the ‘hit rate’ of quality content within books is higher than any other form of media.)

Upsides of a book that I’ve experienced:

  • Conversation starter
  • Job interview assistance (quoting from a book seemes to be viewed well.)
  • New technique teacher
  • New perspective

I'm trying to see this in more areas, so here are some examples:

  • Buying $100 in Put options on SPY. Will likely expire worthless, but have a 1000x potential return. This is a hedge against my main portfolio. (Main portfolio tanks = options go up.)

Update in 2022 - This is highlighted for me in Taleb’s

. How can we have maximum exposure to upside with limited exposure to risk.

Drafts:

Creation time ≠ Consumption time.

What if I hunt for content that takes the maximum amount of time to create, but minimum amount of time to consume? Probably results in watching rich/well producted Tik-Toks.

Books already used to exist in this medium, 3-5 years to write, potentially 6 months+ from an editor.

The downside of this is that book writers like The School of Life should be prioritized over single-author books in some cases. (Due to more time being invested in the work…1 writer at 365 days, or 3 writers at 200 days. Net days = Higher for a team.) This runs counter to my experience, I find that single author books tend to read the best.