The Power of Asymmetry in Life, War, and Investing
Here’s the transcript of the last few minutes of the interview:
“It’s amazing how if you just get up every morning and keep plugging and have some discipline and keep learning, it’s amazing how it works out okay.
I don’t think it’s wise to have an ambition to be president of the United States or a billionaire or something like that because the odds are too much against you much better to aim low.
I did not intend to get rich, I wanted to get independent, I just overshot.
By the way while you’re clapping some of the overshooting was accidental.
You can be very deserving, very intelligent and very disciplined but there’s also a factor of luck that comes into this thing and the people that get the good outcomes that seem extraordinary.
The people who have discipline and intelligence and good virtue plus a hell of a lot of luck.
Why wouldn’t the world work like that so you shouldn’t give credit for the unusual.
A friend of mine said about a colleague of his and his fraternity – he says old George was a duck sitting on a pond and they raised the level of a pond.
There are a lot of people that just lock into the right place and rise and then and there are a lot of very eminent people who have many advantages and they’ve got one little flaw or one bit of bad luck and they they’re mired in misery all their lives but that makes it interesting to have all this variation.”
Very interesting that Charlie acknowledges the concept of luck and getting lucky! This circles back to a conversation I had with a friend some 20 years ago (an old investor who started investing in 1970), where he said:
“All you have to do to win at this game is to be at the table when your turn to get lucky comes around. Just make sure it doesn’t cost you too much money to sit at the table.”
Those words are central to our investing strategy, namely positioning ourselves to get lucky. This is closely tied into the notion of asymmetry of returns.
From a practical perspective, always look at a potential investment and ask yourself “how lucky could I get with this trade?”
Speaking of which…
Asymmetry In Motion
You may be aware of Ukraine’s drone attack on Russian bombers in June, supposedly wiping out 30% of Russia’s heavy bomber fleet.
Now, I know that the media are mostly neanderthals parroting nonsense, but I looked into it, and as far as I can tell (whether the above happened or not), the effectiveness of these tiny little flying death weapons is pretty accurate.
Essentially, it was these little things, which don’t look that different than what you can buy in an electronics store or from DJI.
As mentioned, we are always apprehensive of believing what we have been led to believe, especially with all the propaganda surrounding the Ukraine war (or any war for that matter).
But let’s not get caught up in the weeds. The key thing I’d like to point out here is asymmetry — how something seemingly small and insignificant (costing a few thousand dollars) can have an extreme impact or result (like taking out a multi-million dollar bomber).
With the dramatic advances in AI we are likely to see a proliferation of asymmetric weapons over the coming years. Anyway, we don’t want to get bogged down in discussing weapons of war, rather the main point here is asymmetry. In other words, non-linear outcomes… or in layman’s language, little things having big outcomes.
It is hard to go wrong when you have asymmetry on your side. Because sooner or later you lock onto a big winner.
Consider that anyone investing into this weird thing that geeks were playing with called Bitcoin a few years ago will now appreciate asymmetry:
- 5 years ago: If you invested $1,000 in Bitcoin in 2020, your investment would be worth $10,444.
- 10 years ago: If you invested $1,000 in Bitcoin in 2015, your investment would be worth $421,283.
- 15 years ago: If you invested $1,000 in Bitcoin in 2010, your investment would be worth about $968 million.
We keep highlighting “asymmetric setups” in the Big Five in each Capitalist Exploits Insider publication. Do with them what you will!
Which brings up the question…
When to Cash Out?
Here’s a question we received for our latest monthly webinar:
“Several hedge fund managers — including Kuppy, Ray Dalio, Ken Griffin, Bill Ackman — have warned that the global economy is on shaky ground, with some pulling double-digit percentages of AUM into cash. CapEx’s ethos is to stay the course with a 5–10 year view, riding out short recessions to capture long-term upswings. Under what specific conditions would CapEx shift strategy and take significant cash off the table?”
This was a very good question and one that we get often, albeit different variants of it. We did answer it during the webinar in a general sense, but let us get a little more specific.
Look at your portfolio and ask yourself: is any stock that you objectively feel is too expensive. If so, sell. If not, hold. It is as simple as that.
We say “simple” because when you hear of well-known fund managers putting the “fear of the almighty” up you, it ain’t so easy to hold the line.
Risk, my friends, cannot be eliminated, but it can be managed. So next time some headline hits your screen or someone on the internet yells and screams about the world ending, stop, breathe, and look critically at what you own, why you own it, and what your actual risk with each particular position ACTUALLY is.
Now, if you’ve built a portfolio of companies across sectors, many of which are unrelated to the others and dispersed geographically while all sporting deep value, then the real question to ask is: where else would you put your money?
Editor’s Note: As we’ve explored, the key to thriving in uncertain times — whether in war, life, or markets — is understanding asymmetry and positioning yourself before the big moves happen. But timing and strategy matter, especially now.
We’re at a rare moment in history where massive global shifts — economic, political, and cultural — are converging. If you want to better understand the risks and opportunities emerging from this, we strongly recommend reading our latest free PDF report:
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Inside, you’ll discover:
- What the mainstream media won’t tell you about the crisis now unfolding
- The hidden risks that threaten both your wealth and your freedom
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This is essential reading for anyone serious about navigating what’s ahead. Click here to download your copy today and start positioning yourself — before the pond starts to rise.
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