Why your investment results are determined by the quality of your decisions
Mark Zuckerberg only wears gray shirts and Jeff Bezos doesn't make big decisions after 5 pm. Understanding WHY will make you a better cryptocurrency Investor: Your investment results are determined by the QUALITY of your decisions and judgment.
You can improve these skills
I'm going to share with you one of the most important concepts I've ever learned, along with examples that you could incorporate into you own life.
Let's dive in.
Here's what Mark Zuckerberg has to say about his gray shirt fetish.
"I really want to clear my life to make it so that I have to make as few decisions as possible about anything except how to best serve this community."
The Decision Making is like a muscle.
You can make hundreds of decisions a day.
The more you USE it throughout the day, the weaker it gets. It's much like a battery.
You don't want to exhaust your brain battery in the morning and then make investment decisions afterwards.
Jeff Bezos on decision making:
"We don’t need to maximise the number of decisions we make per day. Making a small number of key decisions well is more important than making a large number of decisions."
Jeff limits the number of high-value decisions to 3 a day. You have to separate the low value from the high-value decisions.
You want to budget as much brainpower as possible towards high-value decisions.
What's the difference between the two?
These decisions don't matter years from now.
For example: What socks should you wear or what to watch on Netflix.
These are high leverage decisions that matter years from now.
For example: Which projects to invest in, or deciding which job to take.
Spend the smallest effort on low-value decisions.
No matter how rational you try to be, you can't make decision after decision without consequences.
Once the brain gets stressed, it starts looking for shortcuts to ease the mental burden.
Consequences of Decision Fatigue
Two things happen when you're mentally fatigued:
You start thinking impulsively. You choose the "easier" option rather than using energy to think critically.
You avoid making decisions altogether, which is also known as procrastination.
Insight: Automate and ELIMINATE as many low-value decisions as possible.
This gives your brain the energy and space to think.
Here are some examples that you could consider to help illustrate.
Work out a set number of days a week, at a pre-determined time, perhaps in the morning when you work out.
Create a simple work out routine with minimal equipment, perhaps use a set of dumb bells, a kettlebell or just use your body weight.
You don't have to think about what routine you will doing
Or what you're wearing to the gym.
Or what time you're going to exercise each day
Eat the Same or Similar Healthy Lunch Everyday
I could give you some ideas but this is supposed to be about investing and not cooking. I'm sure you can find some nice, easy to prepare salad recipes online.
This will also help to simplify your grocery shopping.
Automation and Rules
• Automate as many of your bills as you can
• Consider limiting the nights where you "go out" to Friday and Saturday nights.
• Screens off after 8 pm.
• If you're into Tweeting consider scheduling your tweets
One decision can stop you from making hundreds of decisions.
Does it Get Boring?
I get it, you think you might turn into Patrick Bateman!
You'll get used to it.
"Discipline = Freedom" Jocko.
You need to try to get laser-focused on your goals.
This is resource allocation towards what matters.
Applying These Concepts to Crypto
How can we use this knowledge to become better crypto investors?
Only make big decisions in the morning.
Don't make investments in the evening when you're likely to be drained.
Reduce the number of decisions that you make in crypto.
You can do this through automation and formulas. For example:
Buy ETH with fiat on the 1st of each month. Don't waste brainpower trying to time the market.
Consider various formulas to take profits.
4. Set portfolio allocation targets among your stable coins, low risk, medium
risk, and high risk holding. This takes out some emotions from the process.
5. Only focus on certain sectors of the overall crypto market.
I personally don't do NFT's. This rule makes it easy for me to say no whenever there's an opportunity. You should definitely come up with your own rules.
No antonymous founders
A project has to be over 6 months old before investing. This counters "pump and dumps."
The protocol HAS to be audited before you invest.
Rules can help you narrow your focus.
The whole point of this is to be able to allocate resources towards higher leverage activities such as:
Talking to teams directly
There's only so much time in a day.
Me and my friends had a couple of rules at University.
Don't make decisions if you're drunk
Don't make decisions if you're horny.
DEFINITELY don't make decisions when you're both at the same time.
Learn not to make decisions when you're mentally fatigued.
Investing and Trading are Intellectual Sports
Athletes train their bodies.
You have to train your mind.
Look for every single mental edge possible.
For example, perhaps you believe that eating the same lunch every day gives you an edge, then you should certainly keep doing it.
One More Note
"I'd love to do that, but try doing it with a full-time job and kids!"
I get it - not everyone has options and freedom that some people have.
But these are a variety of concepts that I believe can help you to get to where you want to be.
You should understand the concepts, figure out what fits in with your life and apply what you can.