the other is the time horizon. this... is potentially infinite and most likely makes up the bulk of unreasonable valuations.
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this model can then lead to a new type of rebalancing philosophy. older philosophies include ideas like: 60/40 stocks bonds or 1:1:1:1 stocks:bonds:gold:cash or long volatility vs short volatility
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in this newer philosophy a portfolio is like a ship, sailing into the unknown. when the seas are rough, you rebalance into things that have value mostly in the present. when the seas are calm, you can let down the sails and increase speed.
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when seas are disastrous what you want are things that have a strong expected future. iphones may die but corn will be eaten. governments may fall but gold will always be shiny.
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this last technique is like abandoning ship for the lifeboats. the point isn't to grow but to survive, 0% at best. trying to grow in a disaster is like saying "if a nuclear war happens along with an alien invasion and a giant meteor, what stock do i buy to be rich?"
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just like managing ego, the key is simple but constant observation of how much of present perceived value is present vs expected future. and just like the rustling leaves announce the presence of wind, Contact With Reality is the only way to know this.
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a mark of maturity is an active sense of declining abilities and the specter of looming death/impotence. a limited future horizon prevents ridiculous valuations like "i just graduated college and learned some programming, i know how to fix the company and also the world."
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End of conversation
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