The DeFi Edge 🗡@thedefiedge
Your investment results are determined by the QUALITY of your decisions & judgment.
You can improve these skills.
I'm going to share with you 1 of the most important concepts I've ever learned, along with examples from my own life.
Let's dive in.
The DeFi Edge 🗡@thedefiedge
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 DeFi Edge 🗡@thedefiedge
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 kinda like a battery.
You don't want to exhaust your brain battery in the morning and then make investment decisions afterward.
The DeFi Edge 🗡@thedefiedge
Jeff Bezos on Decision Making
"We don’t need to maximize 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.
The DeFi Edge 🗡@thedefiedge
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?
The DeFi Edge 🗡@thedefiedge
Low Value:
These decisions don't matter years from now.
Ex: Such as what socks to wear or what to watch on Netflix.
High value:
High leverage decisions that matter years from now.
Ex: Which projects to invest in, or deciding which job to take.
The DeFi Edge 🗡@thedefiedge
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.
The DeFi Edge 🗡@thedefiedge
Consequences of Decision Fatigue
Two things happen when you're mentally fatigued:
a. You start thinking impulsively. You chose the "easier" option rather than using energy to think critically.
b. You avoid making decisions altogether aka procrastination.
The DeFi Edge 🗡@thedefiedge
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 from my personal life to help illustrate.
The DeFi Edge 🗡@thedefiedge
/1 My Workout Routine
I work out 6 days a week as soon as I wake up.
I go to my garage and I use 1 Kettlebell.
(Simple and Sinister routine)
I don't have to think about what routine I'm doing
Or what I'm wearing to the gym.
Or what time I'm going each day.
/2 I Eat the Same Lunch Everyday
• a Salad /w Grilled Chicken
• Half an Avocado
• Kimchi (probiotics)
• a glass of water
This simplifies my grocery shopping.
/3 Automation & rules
• I automated all my bills
• I only "go out" Friday and Saturday nights.
• Screens off after 8 pm.
• I schedule most of my tweets
• I travel in business class if the flight is over 6 hours.
1 decision stops me from making hundreds of decisions.
The DeFi Edge 🗡@thedefiedge
Does it Get Boring?
I get it, you think I'm fucking Patrick Bates.
You get used to it.
"Discipline = Freedom" Â Jocko.
I'm laser-focused on my goals.
This is resource allocation towards what matters.
The DeFi Edge 🗡@thedefiedge
Applying These Concepts to Crypto
How can we use this knowledge to become better investors?
/1 I only make big decisions in the morning.
20m meditation.
Go for a walk.
Workout.
Coffee.
I don't want to make investments at 7 pm when I'm drained.
The DeFi Edge 🗡@thedefiedge
/2 I lower the # of decisions that I make in Crypto
I do this through automation and formulas.
• I buy ETH /w fiat on the 1st of each month. I don't waste brainpower trying to time the market.
• I use various formulas to take profits.
The DeFi Edge 🗡@thedefiedge
/3 I have set portfolio allocation targets among my stable coins, low risk, med risk, and high risk. This takes out some emotions of my process.
/4 I focus on certain sectors.
I don't do NFT's. This rule makes it easy for me to say no whenever there's an opportunity.
The DeFi Edge 🗡@thedefiedge
You can come up with your own rules.
Ex.
• No Anon 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 DeFi Edge 🗡@thedefiedge
The whole point of this is to be able to allocate resources towards higher leverage activities such as:
• Researching Projects
• Talking to Teams directly
• Talking to my trading network
• Trading decisions
• Writing
There's only so much time in a day.
The DeFi Edge 🗡@thedefiedge
Me and my friends had a rule in college.
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.
So these days, I don't make decisions when I'm mentally fatigued.
The DeFi Edge 🗡@thedefiedge
Investing and Trading are Intellectual Sports
Athletes train their bodies.
You have to train your mind.
Look for every single mental edge possible. (+EV)
If I believe that eating the same Grilled chicken salad every day gives me an edge, then I'm going to do it.
The DeFi Edge 🗡@thedefiedge
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 the options and freedom I do.
But these are the concepts that have HELPED me get to where I am.
You should understand the concepts, and apply what you can.
The DeFi Edge 🗡@thedefiedge
That’s it for today.
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