Conviction, Profits, and One Big Question

I’ve spent a lot of time recently lurking Discords, scrolling Twitter, and stumbling through internet wormholes in unexpected ways.

This is where I find my edge…or so I’ve told myself.

I thought it would be deflating to come to the realization that my best skill might be finding and screening information on the internet.

But I’m becoming increasingly convinced that it is a skill that may allow me to create lots of optionality in the future.

Anyway…I think I’ve secretly been building this skill for quite some time. I’ve been early to discovering a whole handful of things…but I’ve always found a way to cap my upside.

It’s like I warm myself up to an idea, build an investment thesis, walk all the way to the edge…and then my fear of heights inevitably pulls me back, keeping me from jumping in.

It’s a defense mechanism.

If the investment soars, I can sink into myself, adding a few jabs to the mountainous scores of self-deprecating remarks I’ve become accustomed to.

If the investment sinks, I can convince myself that I had no edge all along.

I hear you whispering something about process over results…shut up, I know.

Recently though, I’ve started to gain some conviction. I’m more confident that my theses are valid and can be acted on.

Fools gold? Perhaps…it is true that most of my recent endeavors could be characterized as NFT-adjacent, but nonetheless, I’ve actually started taking some bigger chances.

And now…as I’ve started to realize some gains, and create (relatively) sizable unrealized gains, I’m running into a different set of problems for someone seeking joblessness.

How do I walk the line between asymmetric upside and immediate situational upgrades?

Let’s take NBA Top Shot as an example.

Recently I wrote about some of the silly mistakes I’ve made on Top Shot, but more or less how I’ve been able to turn a ~$5,000 investment into ~$80,000 in account valuation. You can read more and make fun of me here.

My approximations were a little off. Here are the real numbers.

The above does not account for outstanding unrealized equity which totals around ~$90,000 at time of writing between my account and equity swaps.

Despite my mistakes, I’ve done quite well thus far, and realized enough to cover my initial investment. I guess you could say now I’m playing with “house money.”

If only it were that simple.

Typically the thought of house money is meant to reassure a gambler…”Hey! You can’t lose! It’s not your money!”

And while technically without depositing again, I cannot lose at Top Shot, I still have a tightrope to walk.

I need to delicately balance the possibility of dramatically changing my current state versus not erasing myself out of an emerging market with lots of room for growth to the upside, which would likely result in considerable wealth gains.

So therein lies the dilemma….and it extends to the rest of my NFT investments, which at present time have climbed to a “healthily profitable” territory.

Where would you draw the line between immediately upgrading your situation, versus leaving enough meat on the bone to relish in asymmetric upside?

As of right now, I’m just biding my time…trying to formulate a more concrete plan.

More to come when I figure it out.