Starting a side hustle business? For "$10k" work of effort it could lead to many times that in revenue in the future.
Ask HN: What are examples of activities/bets with asymmetric upside?
31–40 of 100 posts
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#32Legal insider trading. Prominent example are US Congressmen. Personally investing into specific technologies (e.g. NVIDIA) and then passing legislation to promote those technologies benefits everyone, although asymmetrically.
Insider trading isn't legal. See the STOCK Act, signed into law by President Obama in 2012. I am very aware people will say this is unenforced.
Insider trading is completely legal if registered and reported properly.
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#33Starting a side hustle business? For "$10k" work of effort it could lead to many times that in revenue in the future.
I would add to this, a side hustle business where you learn something new.
Even if the business fails that knowledge will often be invaluable in future jobs, projects etc.
Plus it can really help with feeling unmotivated and stuck in life.
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#34Buying a house in the United States. For as little as 5% down, and low-single-digit-fixed rates over a 30-year term, you can purchase an asset worth hundreds of thousands of dollars and you get to keep all the upside if its value goes up (which is historically quite likely, especially since housing policy in the U.S. deliberately keeps supply low). It's insane leverage, an excellent inflation hedge, and you get to de…
Where’s the huge upside though? You need a roof over your head so if your property goes up 10%, so has every property you’re likely to want to move to when it comes time to sell. You only really benefit if you’re investing outside of your primary residence. What’s more, the risk is huge. In the AMD example, you could lose 100% of your investment. Get things wrong with a house and you’re going to be out way more than…
It’s an asset you buy with 20x leverage with up-only price action supported by government intervention. That’s huge upside.
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#35Asymmetric upside is only really useful if the EV is positive.
Bets "on the inside" in roulette have asymmetric upside, they pay out 35:1.
The problem is that the chance of winning is 37:1 on an American wheel.
This means that the EV is negative: do it enough times and you will lose money.
You should constrain your search to positive EV gambles.
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#36Asymmetric upside is only really useful if the EV is positive. Bets "on the inside" in roulette have asymmetric upside, they pay out 35:1. The problem is that the chance of winning is 37:1 on an American wheel. This means that the EV is negative: do it enough times and you will lose money. You should constrain your search to positive EV gambles.
Excellent and important point
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#37Starting a side hustle business? For "$10k" work of effort it could lead to many times that in revenue in the future.
I would add to this, a side hustle business where you learn something new. Even if the business fails that knowledge will often be invaluable in future jobs, projects etc. Plus it can really help with feeling unmotivated and stuck in life.
Yes I like this approach. One must be careful that the learning something new doesn't become the priority.
For example are you trying to learn a new programming language (that you don't need for it), or make money.
Trying to do both a once is a sacrifice for both.
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#38[deleted]
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#39Here's my favorite example -- in the form of a story. A bunch of friends visits a young guy who recently moved to Las Vegas. "Here's how we get twenty bucks in Las Vegas," he boasts to his friends, putting $20 on the roulette wheel for black. When it comes up red, he puts down a $40 bet, bragging that "I'll keep increasing the size of my bet until I make back my money -- plus another $20!" One time he'd had to double…
This is called a "martingale" betting strategy. It's been extensively studied in probability theory. If you had infinite wealth and the casino would let you bet forever, it would work, but in real life neither of these conditions is true.
Re: Ask HN: What are examples of activities/bets with asymmetric upside?
#40"For example, usually asking someone out on a date has huge asymmetric upside. You might hit it off and end up being in a happy relationship. If not, you'd just be a little embarrassed and maybe awkward with the person afterward." Or it goes so "well" that you get married and they take half your stuff in a divorce.
I guess the asymmetric upside is you asking someone on a date who is extremely successful.
Then it goes so "well" that you get married and then you take half their stuff in a divorce.