Being Early and Being Right

For the better part of a decade, I’ve been looking for ways of getting higher returns on my investments.

About 1 year ago, I heard “we get paid for being early and being right.”

Early investors invest when it is not obvious to every one else how big something can be, when it is risky, when the price is cheaper, when the upside of the business has not been fully realized yet.

Early is a relative. I’ve automatically disregarded opportunities because I felt I missed the boat because something has gone up in value 10x. I was looking to avoid the pain of missing out. This is an emotional response.

I realized I needed to look at these types of sitution rationally. Is there still upside here? Why is the value accumulating so much and so fast? Where is adoption currently? Can I still get value from this?

My mental bias was against jumping on the bandwagon. “Just because everyone is doing it, does not mean I should be doing it.” My new framework is to understand why people are doing some thing. What value are they getting.

I apply this framework to anything I invest time, energy, emotion, attention to. Just because I’ve seen a rise in people doing x,y,z that does not mean that I should automatically disregard it as something pursue.

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