One seed = one opportunity
Many seeds = many opportunities
Farmers plant thousands of seeds because they don’t know which ones will produce food and which ones won’t. Production studios fund a lot of movies per year. Venture Capitalists make dozens of investments. Amazon doesn’t sell one genre of goods. They sell literally everything.
When your livelihood depends on it, you don’t play games. You try to put yourself in the best place for long-term success.
Making one big bet from time to time is a very risky approach. A better approach, I think, is making many small bets all the time. This way, you’re always open to opportunity while having your downside risk in check.
The allure of making the big killing off the big bet lives within all of us. It cozies right up to our ego, impatience and laziness. It seduces them.
But we must say no. We must choose survival over greed. The formula: make lots of small bets, keep the ones that show a gain and get rid of the ones that show a loss.
Most investments don’t produce much yield — either a small gain or loss. Most bets can feel like a wasted effort. But the payoff is in the outliers, the few very large winners that keep food on the table and money in the bank.
Sitting through lots of small losses is the mountain we have to climb in order to get to those big winners.
That’s how nature works. That’s how the markets work.