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Why is booking a 100 bagger so tough?
Because our ability to think that far into the future is insanely hard. AND it’s new to us.
It was only in the last 500-600 hundred years have we been able to think far in the future. (20+ years)
A thread...
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Because our ability to think that far into the future is insanely hard. AND it’s new to us.
It was only in the last 500-600 hundred years have we been able to think far in the future. (20+ years)
A thread...
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The median time for a stock to return 100 to 1 in a recent study was 26 years. A 20% compounded annual return for 25 years will earn you 100x
However, 20% compounded for just 20 years gets you 40x
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However, 20% compounded for just 20 years gets you 40x
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Back to the history. In medieval times, humans were consumed with their part in society and everyday life. Reaping. Sowing. Disease. War and Peace.
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“There was little reason to believe in long-term change or even improvement in human affairs,” wrote historian Lucian Hölscher in a 2018 essay. “The long-term future, at least in this world, did not exist. Rather people lived in something of an extended present.”
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Things started to change a couple centuries later.
In the 18th century, Louis Mercier published L’An 2440 a futuristic novel about a man who wakes up in the 25th century in Paris. This was completely unheard of at the time. People's idea of what future is changed forever...
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In the 18th century, Louis Mercier published L’An 2440 a futuristic novel about a man who wakes up in the 25th century in Paris. This was completely unheard of at the time. People's idea of what future is changed forever...
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But we - as humans - seemingly cycle between a long term future mindset and what’s to come tomorrow.
François Hartog, the author of Regimes of Historicity, says we’re in the cycle of short term-ism now. It started sometime between the late 1980s and the turn of the century.
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François Hartog, the author of Regimes of Historicity, says we’re in the cycle of short term-ism now. It started sometime between the late 1980s and the turn of the century.
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Hartog calls it “presentism.” Which is defined as “the sense that only the present exists, a present characterized at once by the tyranny of the instant and by the treadmill of an unending now.”
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In @MITTechReviews "Humanity is stuck in short-term thinking. Here’s how we escape", author Richard Fisher mentions it's salience.
Fisher says salience is “a cognitive bias that means people are more likely to imagine the future through the lens of recent events.”
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Fisher says salience is “a cognitive bias that means people are more likely to imagine the future through the lens of recent events.”
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Fisher noted “salience we won’t act on things until it’s too late. Take COVID for example. Or Climate change.
(the intro of this thread is b/c of Fisher's article. All credit to him for helping marry short-term vs long-term thinking of humans)
9/ https://www.technologyreview.com/2020/10/21/1009443/short-term-vs-long-term-thinking/
(the intro of this thread is b/c of Fisher's article. All credit to him for helping marry short-term vs long-term thinking of humans)
9/ https://www.technologyreview.com/2020/10/21/1009443/short-term-vs-long-term-thinking/
So how does this relate to the elusive 100-bagger we all dream of?
We know on average it takes about 25 years. Can we even fathom what 25 years into the future looks like?
Do you even remember what the world was like 25yrs ago?
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We know on average it takes about 25 years. Can we even fathom what 25 years into the future looks like?
Do you even remember what the world was like 25yrs ago?
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Human behavior changes. Technology changes. The world changes.
They move in likely predictable cycles - think @HoweGeneration The Fourth Turning.
But even still, we can’t fathom what 2045 will look like. Only first level thinking Like “robots will take over the world.”
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They move in likely predictable cycles - think @HoweGeneration The Fourth Turning.
But even still, we can’t fathom what 2045 will look like. Only first level thinking Like “robots will take over the world.”
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Plus @dailydirtnap said it best in his Dec 29 recent #Bloomberg op-ed
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https://www.bloomberg.com/opinion/articles/2020-12-29/ignore-all-2021-market-predictions-except-this-one
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https://www.bloomberg.com/opinion/articles/2020-12-29/ignore-all-2021-market-predictions-except-this-one
ShawSpring’s @dennishong also calls it out in his Nov 2020 letter on Optionality. He mentions b/c of how difficult the future is, we just end up applying linear growth models.
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https://files.constantcontact.com/3b2a12b0701/26a3e1f6-a1ba-4aa4-937a-011361abb2da.pdf
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https://files.constantcontact.com/3b2a12b0701/26a3e1f6-a1ba-4aa4-937a-011361abb2da.pdf
As of 2018, the average holding period of stocks was just over 8 months.
How are we supposed to make 100x our money if we’re holding for less than 1 year?
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How are we supposed to make 100x our money if we’re holding for less than 1 year?
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