How do you deal with uncertainty?
It would be nice to know everything.
Of course, if I did, I’d probably use it to my advantage. And then no one around me would be happy.
So it’s a good thing I don’t.
But, in lieu of knowing everything, I can leave enough room to be wrong and still not lose my house.
Maybe that’s something you can learn from.
So, how do you deal with uncertainty?
Gambler’s fantasy
In short: it’s taking several smaller bets. With a chance of outsized gain.
That doesn’t mean trying to clean up in Las Vegas. Though you’re welcome to try.
People say blackjack has the best odds. I think it’s roulette.
People don’t look at roulette because it’s easier to see 1 in 38.
Not great odds. But look at what’s on the side of the table.
Because that side of the table is 3 to 1 odds that the ball will land in roughly a third of the possible outcomes. (Or at least it was in Vegas sixteen years ago 😅) Put a chip on two of those and you have a greater than 60% chance to make a 50% profit.
That doesn’t seem so bad. And it may keep you at the table long enough to get a few free drinks.
But here’s the honest truth: when I ran a Monte Carlo simulation 100 times taking 100 bets each time, I lost an average of $80 on a $10 table.
Looks like you’re paying for those drinks after all.
Consolation prize
Sorry to break this to you, but the house likes to win so it can stay in business.
If roulette is inherently rigged, where does that leave you?
Don’t worry. Life offers a few things you can control.
Find a place where you know you can win
Even if it’s just making your boss happy enough for the privilege of coming back to work the next day. But if you know you can push that lever and something will come out of it, it’s more likely you can continue to do that over a longer period to sustain yourself.
Stack the deck with outsized outcomes
No, working a job won’t make you rich. But you can pay attention to what you’re doing to the point where you have full control over the outcome of your machine on your shift.
Once you have this mastery, learn to apply it to other areas of your life.
Engineers, for example, can make great stock traders because they already read and react to trendlines at work. Pay attention to what you’re good at and build on it.
Only risk what you are willing to lose
When you let that be 1-2% of your overall account, you get 100 chances before you go broke. That gives you plenty of opportunity for things to work in your favor.
Embrace the suck
Somethings you can’t mitigate away.
It could be a market collapse. It could be a customer who runs short on cash and can’t make a payment. It could be the spouse who’s finally leaving you for the affection you don’t reciprocate. They will come.
And you need to learn to live through them.
The only guarantee
You don’t have to know everything to overcome all uncertainty. Actually, you’ll drive yourself crazy trying.
But you can know enough to get yourself to the next day.
And tomorrow just might mean everything to you.
Affiliate corner
Here’s another tool I use to ride the waves of uncertainty. VectorVest has kept me on the right side of market trends for over 5 years, because not losing money on a downtrend is just as important as making more on the way up. Try it yourself to find the right stocks to buy at the right time.
Let’s say you make it to tomorrow. You could use some more of my experience. Subscribe today to have it delivered directly to your inbox:
Learn more on stacking the deck in your favor. Read these related stories before you go:
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