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Be wary of imitating high-status people who can afford to countersignal

robkhenderson.substack.com

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Re: Be wary of imitating high-status people who can afford to countersignal

#61

Post by steveBK123 »

PopAlongKid wrote: post #46
sbarre wrote: post #30

Earlier quoted context omitted.

Rich people never want to acknowledge their luck, because it doesn't fit the "self-made" narrative. edit: to please the pedants, I should have said "many rich people", as to not imply "all". My fault.

The "luck" of many wealthy people is that they were born to wealthy parents (Walton family, Gates, etc).

Yes, this is generally underestimated. The closer I've worked with this class the more it becomes apparent in quiet anecdotes that don't always make the official bios or wikis.

Most self-made billionaires came from at least millionaire families. Generally hard working, smart guys with a lot of skill & luck, but they start at a level we can only dream that maybe our children or grandchildren can start from.

I once worked for a billionaire investor who told us how he got started investing when his father offered him the choice at 13 years old: have his birthday party at one of the most famous & expensive hotels in NYC, or take the cash value of that to invest in stocks. The dollar figure seemed to be something like the equivalent of $50k in 2020 dollars. Much like orange man who got "a small loan of $1M from his father", I am sure the $50k given to a 13 year old was not the first or the last paternal investment.

Another firm managing ~$10B there was a guy who unbelievably made it to the C-suite in his 20s. It was never clear exactly what the connection was, but he was some sort of family friend of the founder and worked for him as a teen. He was also related to a big bank CEO.

Re: Be wary of imitating high-status people who can afford to countersignal

#62

Post by manigandham »

sbarre wrote: post #30
TrackerFF wrote: post #27

Maybe a bit OT: The other day I read an interview with a local guy in his 20s that struck gold with crypto, he'd invest something like $20k, and turned it into $40M. He basically went all in on one alt-coin before the marked exploded late last year, and the coin went up 2000x. When asked about it, he of course came up with a narrative that this wasn't just dumb luck. He had had worked hard for those $20k, and he had…

Rich people never want to acknowledge their luck, because it doesn't fit the "self-made" narrative. edit: to please the pedants, I should have said "many rich people", as to not imply "all". My fault.

Many rich people do acknowledge it, because another way to say it is odds or opportunities. And you can absolutely increase the likelihood of getting "lucky" through work.

Re: Be wary of imitating high-status people who can afford to countersignal

#63

Post by 331c8c71 »

steveBK123 wrote: post #47

"An example from Ogilvy Vice Chairman Rory Sutherland: If you’re a top executive, turning up to work on a bicycle is a high-status activity because it was a choice and not a necessity. But if you work at Pizza Hut, turning up on a bike means you can’t afford a car." This tidbit reminds me of a similar anecdote (that my experience aligns with) re: the modern upper class that wearing a $2k Rolex or driving a $70k BMW i…

>$2k Rolex

I thought the cheapest Rolex is substantially more expensive. Am I wrong?

Re: Be wary of imitating high-status people who can afford to countersignal

#64

Post by steveBK123 »

331c8c71 wrote: post #63
steveBK123 wrote: post #47

"An example from Ogilvy Vice Chairman Rory Sutherland: If you’re a top executive, turning up to work on a bicycle is a high-status activity because it was a choice and not a necessity. But if you work at Pizza Hut, turning up on a bike means you can’t afford a car." This tidbit reminds me of a similar anecdote (that my experience aligns with) re: the modern upper class that wearing a $2k Rolex or driving a $70k BMW i…

>$2k Rolex I thought the cheapest Rolex is substantially more expensive. Am I wrong?

Fair point. My numbers are probably off on everything now.

Before the 2020s era inflation you could definitely pick up a mens one used for $2k, like a Datejust model for example.

Likewise a $70k car is neither particularly rare or exotic now with how much the average car price has been pushed up by big trucks and EVs.

Re: Be wary of imitating high-status people who can afford to countersignal

#65

Post by NikolaNovak »

nibbleshifter wrote: post #59
B8MGHCBekDuRi wrote: post #35

Earlier quoted context omitted.

> Can you imagine if some newspaper interviewed a recent lottery winner [...] But to the ignorant, it all sounds very impressive the Gell-Mann Amnesia effect described by Crichton comes to mind here. It is quite potent when media talk about crypto and usually involves evident logical fallacies that are not dissimilar to Orwellian double-speak. Like the idea that cash is freedom so crypto supporters also support no ca…

> even though you can't buy crypto with cash and crypto cannot be converted directly to cash I have bought and sold crypto primarily using cash for the last ten years, what are you talking about. Yes, many people use an exchange. Many do not.

Physical cash? How?

Re: Be wary of imitating high-status people who can afford to countersignal

#66

Post by fabianhjr »

BuyMyBitcoins wrote: post #60
sbarre wrote: post #30

Earlier quoted context omitted.

Rich people never want to acknowledge their luck, because it doesn't fit the "self-made" narrative. edit: to please the pedants, I should have said "many rich people", as to not imply "all". My fault.

The nuanced take is that luck is something that can be “made” through putting oneself in situations conducive to getting lucky through exposure, networking, and repeated attempts / not giving up. You might be able to get successful people to admit that they were in the right place at the right time, but they’ll almost always qualify that with how much effort they put in to be in that situation.

> repeated attempts / not giving up

Being able to afford that wouldn't be lucky, it would imply some sort of per-existing wealth or at least a solid support network.

Re: Be wary of imitating high-status people who can afford to countersignal

#67

Post by steveBK123 »

etherael wrote: post #33
TrackerFF wrote: post #27

Maybe a bit OT: The other day I read an interview with a local guy in his 20s that struck gold with crypto, he'd invest something like $20k, and turned it into $40M. He basically went all in on one alt-coin before the marked exploded late last year, and the coin went up 2000x. When asked about it, he of course came up with a narrative that this wasn't just dumb luck. He had had worked hard for those $20k, and he had…

Granted that based on probability alone he just got lucky but from the details of the story it's not possible to be certain of that. If he can offer a narrative about why and how he knew such a move would have such a result and the narrative fits with reality, then how is he not correct? Yes you can get both lucky and tragically unlucky when it comes to investments, but that doesnt mean there's no such thing as a rat…

Yes, in any cohort of investors, by nature some random sample or going to outperform in any given year. In fact, statistically the concept of "hot hands" will rear its head because.. some subset of the outperformers will actually outperform over multiple years.

It may be skill, it may be luck, or it may be both.

But consider that this outperformance & hot-hand phenomenon can be replicated even in purely random games like coin flipping.

So sometimes taking the "winners" and trying to craft narratives of why they succeeded and what you should do to replicate them is a silly game.

Re: Be wary of imitating high-status people who can afford to countersignal

#68

Post by doubled112 »

steveBK123 wrote: post #64
331c8c71 wrote: post #63

Earlier quoted context omitted.

>$2k Rolex I thought the cheapest Rolex is substantially more expensive. Am I wrong?

Fair point. My numbers are probably off on everything now. Before the 2020s era inflation you could definitely pick up a mens one used for $2k, like a Datejust model for example. Likewise a $70k car is neither particularly rare or exotic now with how much the average car price has been pushed up by big trucks and EVs.

It's pretty easy to add a few options and pay $70K or more for a Ford F-150 these days. At least here in Canada.

People love their pickup trucks.

Re: Be wary of imitating high-status people who can afford to countersignal

#69

Post by wildrhythms »

627467 wrote: post #50
TrackerFF wrote: post #27

Maybe a bit OT: The other day I read an interview with a local guy in his 20s that struck gold with crypto, he'd invest something like $20k, and turned it into $40M. He basically went all in on one alt-coin before the marked exploded late last year, and the coin went up 2000x. When asked about it, he of course came up with a narrative that this wasn't just dumb luck. He had had worked hard for those $20k, and he had…

It takes a certain combination of work/knowledge/luck to profit from anything in life. Seems reductionist to equate buying low and selling at peak to buying a lottery ticket. But so it does to claim hard work has been the main reason why financial investors profit

>It takes a certain combination of work/knowledge/luck to profit from anything in life.

Plenty of people 'profiting' on the wealth of their parents, grandparents, etc. when they themselves have never worked a day in their life and don't have much knowledge of anything.

Inherited wealth is an obvious contradiction to the meritocracy that so many people believe we live within today.

Re: Be wary of imitating high-status people who can afford to countersignal

#70

Post by helen___keller »

steveBK123 wrote: post #47

"An example from Ogilvy Vice Chairman Rory Sutherland: If you’re a top executive, turning up to work on a bicycle is a high-status activity because it was a choice and not a necessity. But if you work at Pizza Hut, turning up on a bike means you can’t afford a car." This tidbit reminds me of a similar anecdote (that my experience aligns with) re: the modern upper class that wearing a $2k Rolex or driving a $70k BMW i…

> wearing a $2k Rolex or driving a $70k BMW is frowned upon. But instead they have eccentric "hobbies" requiring $10ks of of equipment, inclusive of "needing" $10k viking stove/range, and $10k subzero fridge/freezer in your kitchen because you are a "foodie" […]

Isn’t this conflating status signal with lifestyle?

The wealthy have always enjoyed expensive lifestyles and hobbies. In and of itself, expensive hobby equipment is not a status signal (it can be, of course, if you plaster it all over your personal social media)

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