Optimism requires diversification

🌱 Seedling · 1 min

Being optimistic for no reason is a recipe for disaster, because optimism is always at odds with human stupidity.

If you want to be optimistic (which is desirable), you should shape your environment to promote optimism: most often, this is done by diversifying your portfolio and/or creating optionality so that your environment is sufficiently hedged against stupidity.

A very practical example: investing in index funds rather than trying to outsmart the market.

At the same time, you should also be conscious that Optionality can hinder risk-taking.

References

  • [[selective-optimism|Selective Optimism]]
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