13/23: We’re living in a time where people don’t believe that they can affect the inputs enough to kink the curve on outcomes. As a society we can’t agree on a vision for the future nor do we believe that our elected officials are working in concert to make our lives better.
14/23: It’s much easier for people to project where the current trends are heading than to imagine a world in which we put our country/world on a better trajectory. Climate? Wealth inequality? Working wages? Human rights? Ability to retire comfortably? Healthcare?
15/23: Without Vision and Control, our society is in a “reduction in grit” cycle. Which leads me back to the original premise that YOLO investing behaviors are directly correlated with this trend.
16/23: The environment: A large segment of society feels that no matter how hard they work or how prudently they invest that retirement is going to be impossible. Causes? Student debt. Housing costs. Healthcare costs. And the boogieman of our government printing money.
17/23: So how irrational is it for this segment to roll the dice on high risk/high return investments? How irrational is it if they have the social proof that other people just like them are doing it? How irrational is it when it’s working?
18/23: The alternative is to find places where individuals can rebuild and focus their “innate grit”. Making more capital available to aspiring Entrepreneurs is a solution for some. Fixing our biggest societal structural issues is important for rebuilding grit in the masses.
19/23: But the concept of YOLO investing is understandable in a world where there’s a belief that tried and true investment advice (allocation across cash, bonds, indexed funds, stocks and real estate) doesn’t result in one’s ability to create financial stability in the future.
20/23: But I fear that many of these investors are going to parlay their recent YOLO successes into YOLO failure. Not all YOLO investments are going to play out in the same way that Bitcoin or Tesla has or that short squeezes are shaping up to become.
21/23: And from there, the downward cycle of “grit reduction” will accelerate because even the promise of YOLO investing will be a fantasy (at least the dollars will have gone poof).
22/23: I don’t pretend to have answers but I would truly like to see the grit cycle pull a 180 and return our country to the days when we felt like anything was possible with hard work and focus. It would be great to believe that nothing but good times were ahead.
23/23: But until then, I fully expect YOLO investing to continue. The crowd will celebrate the high risk/high return success stories and mega-stars in the investment community will emerge. And collateral damage will be brushed under the rug and justified as “part of the game.”