Trade offs and decision-making
Life would be so easy if we weren’t to make any trade-offs . We can have it all. But we can’t.
Tradeoffs are tough because it pushes you to make choices – to prioritize one over the other . It requires critical thinking to assess benefits of one vs the another under uncertainty. Nothing is certain and it puts the accountability of our choices on us.
But it is worth it. It makes you better in decision making .
In investing , it is so relevant. So many times you tend to like multiple opportunities but you cant invest in all of them. There is an increasing temptation to scatter your critical thinking in multiple ideas and take the easy route of enjoying upsides on multiple opportunities and avoid fear of missing out.
But chosing requires one to assess hard and deep on each idea and increases your stake. It makes you a better investor as you are able to asses the opportunity cost of one vs the other.
The abrupt volatility (like in the recent months) provides great opportunities to review the portfolio and consolidate positions in better ones . It is not always easy to let go of some of your long held holdings , but the constant pursuit of simplicity and increasing your opportunity cost is an effort worth striving for .
The hard questions raised during this period will be an intellectual exercise and push our limits. However, such spurts of condensed decision making sometimes advance us more and makes us feel more accomplished than months of routine daily work.