Lessons From 2023

A look behind the curtain

Let me start by explaining a very simple fact to you: People don’t want to hear the truth.

Everyone wants a shiny shortcut, a hack, and a way to riches with zero sacrifice. This is 95% of the population. If you read a couple of books a year, asked people for critical feedback (which would likely hurt your ego), and recognized your intelligence isn’t as exceptional as you’d like you believe, you would be in the small minority of people.

Let me tell you something, I have had people “advise” me to dramatically change how I write this Substack and to make the path sound less difficult. They say, “No one wants to follow a path where difficulty is promised. No one wants a path where they say they're wrong 80% of the time.”

Well let me tell you something, I have no interest in being part of the 95% of the population. I’d rather set unrealistic goals and fail than live in the delusion that is called mediocrity.

If you are still here and reading this Substack, it says something about you. If you can handle the hard truth, push yourself to the limit, compete at the highest level and win, then we will get along just fine. It’s not for everyone though.

When I think back on 2023, there were so many lessons I learned. Most of them have to do with me being wrong. The more I progress through life, the more I ask people about their errors as opposed to their successes. If you can eliminate the majority of mistakes in your life, you compound your knowledge and wealth at an exponentially higher rate.

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Lessons of 2023:

1. Be the person people take bets on

   1. My 2023 started with the deck stacked against me. A friend of mine took a bet on me that dramatically helped me in my learning and professional journey. At the end of the day, it doesn’t matter if you are starting an entry-level job as an analyst or running billions of dollars, people take bets on YOU. The marketing deck might have cool graphics and a nice outlook but at the end of the day, people bet on YOU. Be the person people take bets on. This requires you to develop exceptional skills through discipline and be trustworthy because you have integrity.

2. Opportunities with asymmetric upside and a positive carry are rare. Always take them!

   1. There were several bets I took this past year that happened to have a positive carry and huge upside. This is rare. Typically if you have a huge asymmetric upside, you have to pay for it with a negative carry. For example, if you are running an innovative tech company, you usually have to operate out of a deficit to have exposure to disruptive technology. When an opportunity pays you to hold it and there is an asymmetric upside, you can size up A LOT more. If you don’t size up in these situations, it will be incredibly difficult to offset your losses.

3. Play the long-term game

   1. I don’t think people understand what it means to be a long-term player. Most people use a long-term time horizon as an excuse for short-term losses. In many situations being a long-term player is foolish. When I think about being a long-term player, it is because there is a hyperbolic discounting curve through time. This means that as you progress through time, the payout exponentially increases. If you are playing long-term games with linear payouts, you aren’t taking advantage of what it means to be a long-term player. For me, being a long-term player means spending years developing knowledge bases and skillsets in markets that most people don’t have the mental fortitude to consistently study.

   2. Many times I see friends make huge gains while I am still trying to figure out a specific market that has yet to move. It is alluring to chase where the returns are currently happening instead of where you think they will occur.

4. People typically give you advice that is grounded in their own experience. Friends who can step out of their situation and give you advice tailored to what’s best for you are rare.

   1. I have a friend who is more successful than I am but he is always giving me advice and book recommendations that have nothing to do with my situation. Just because someone is more successful than you, doesn’t mean they are skilled at communicating how they achieved that success or helping you do the same.

   2. I have another friend who is truly exceptional at understanding other people and seeing things from their perspective. He never dishes out advice without careful thought about how it will impact my specific situation. These friends are rare! Keep them close!

5. The voice of imposter syndrome will always exist in your head and on social media

   1. Earlier this year I sat down with a good friend who is a financial advisor to a lot of high-level people. He has a beautiful family, lives in an amazing house, and is very self-aware. A legit guy. He told me that after 20+ years in this business, he still feels like an imposter and doesn’t feel qualified to be doing what he is doing. To see someone so good at their job still deal with this was eye-opening. It will likely always be a voice in the back of your head.

   2. Basically, everyone on social media will try to beat you down and call you an imposter. Only listen to the people closest to you that you trust.

   3. Even if there was some objective way to determine that you are an imposter, if you are a true professional at executing your own growth plan, nothing should change.

6. Goals are meant to stretch you

   1. I sat down at the beginning of 2023 and wrote down all of the goals I had for the year. I accomplished 25%-30%. I had a lot of failures which were partially due to my own incompetence and partially due to the environment. If you have success in 90% of the things you are doing, you’re aiming WAY TO LOW!

   2. I made more money this past year than I had ever before but still didn’t reach what I wanted to achieve. Be thankful for what is and stay hungry for what can be.

7. Endurance over speed

   1. It is easy to have one productive week. It is easy to work out once. It is easy to read a single book. However, exceptional performance is a result of consistency and endurance, not one good week. It is executing with consistency and discipline over prolonged periods of time that separate professionals from amateurs. I know if I execute consistently at a productive level, then I just need to outlast the people who will eventually quit.

   2. Eventually, it is impossible for anyone to catch you when you consistently operate at a high level of productivity. It is only when you take your foot off the gas that people begin catching up. There is always a temptation to do this regardless of the stage of life you are in.

8. Risk management and analysis are inherently connected

   1. One thing I learned through many errors is that there should be a clear and quantifiable link between your analysis/idea generation and risk management. I have lost a lot of money learning this. Many times people have a disconnect between their analysis and risk management so that their edges aren’t stacked/aligned. This applies to markets and life.

9. Path dependency fundamental

   1. The path you take in a complex system is just as important as the destination. Many times people will say they have a “long-term outlook” to ignore path dependency. In reality, all of us have temporal constraints that can be stretched on the path to any destination.

10. Finally, you can succeed in life but fail in what truly matters.

    1. My personal beliefs and relationship with God will always be tested. The world will try to find your greatest vulnerability and exploit it. At the end of the day, our time on earth can be compared to a short stay at a hotel. We will soon be at the real destination. This is easy to forget but it is a powerful force when you remember it.

    2. I shared in a Tweet that one of the most influential books in my life is called “Don’t Waste Your Life” by John Piper. Every day when I wake up, I think about this idea.

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Conclusion

I hope that you grew exponentially in 2023. As I said above, the path of growth is always difficult.

If there were specific lessons that you learned over the past year, post them in the comments or respond to this email. I always enjoy interacting with you and hearing what you are learning.

We will start 2024 strong with a macro report and a macro webinar (link). Thanks for being part of the journey. The best is yet to come!

Endurance over speed!