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_{Exploring the downfall of a lucky bet, experience, and forced generosity}

Happy Thursday! Thanks for reading Intentional Dollar — where we look at old money ideas through a new perspective.

What’s inside?

• One idea to experiment with

• Two quotes from others

• Three questions to dig deeper

• Four lines of poetry for the point

Disclaimer: This is not investment advice. These weekly posts represent my simple thoughts, a few quotes, and some questions — for educational purposes only.

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_{One idea to experiment with:}

The Downfall of a Lucky Bet:

Can a winning trade be bad?

The first-order analysis of the winnings suggest good trades don’t hold any inkling of misfortune. 

But peeling another layer back, there is a potential downfall to a good trade. 

When we win a game, our minds don’t automatically regulate our ego and emotional state. We win, we feel good, we think we are good. Maybe we are. But nonetheless, our winning is often attributed to good strategy or good execution. Hardly ever to luck. 

Investing or trading is not too different. 

In this risk game where the outcome is binary (win or lose), risk isn’t solely embedded in the loss. There’s risk in the gain. 

The pocketed winnings incentivize continued repetition of behaviors that originally produced the pot of gold. Our logical minds debate us with the whole “Hey, we made money doing this, why not size-up and make a little more?”

Not to mention, winning trades also balloon the ego. So naturally, more bets are made, more chips are wagered, which means more chance dances with the house odds. Odds that can instantly wipe all those smart gains away. 

As each winning trade produces another ounce of incremental ego, we stumble and ascribe skill where luck was due credit, misjudging our odds on the next play. All this builds a pressure chamber of risk just waiting to explode.

So how do we avoid this?

It’s not true that luck can be eliminated from the trading arena. There are simply too many extraneous variables and talking heads that move markets and positions. 

But a thoughtful post-mortem analysis allows for a sober take of the skill/luck line. Did my thesis play out, or did external events drive this result? The post-mortem is simply a study of your results. Accountants might call it a variance walk, a way to understand what happened between your forecast and actuals.

Each trade leaves a wake of data to sift through. But despite this, we ignore the data on the winners and celebrate the happy outcome. 

We’d be wise to use this post-trade analysis to protect our winnings from our blind ambition.

Winning trades are good. No argument there. But when the winning gets inside us, that good trade could turn bad. 

_{Two quotes on experience:}

Experience teaches the kind of lessons we can’t really know from reading or studying or listening. 

_{Three questions on forced generosity:}

1. If I was handed $50,000 and forced to give it away, how would I distribute it?

2. What hopes would I have for the use of the beneficiary?

3. What underlying values support the method of distribution? Anything surprising?

Which question stuck with you? Questions like these are spotlights for the mind. Reply to this email and let me know which one shined light on a previously dark cave.

_{Four lines of poetry for the point:}

Contact Me:

Content ideas, questions? Reply to this email or reach out to me at [email protected]

Disclaimer: This is not investment advice. These weekly posts represent my simple thoughts, a few quotes, and some questions — for educational purposes only.

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*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
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