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Greed is certainly in play sometimes, but not all behaviors that subjectively fall under speculation for me have high risk-reward dynamics. For eg, playing wordle is a speculation type activity for me.
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Superstition, yes, but ironically Statistical irrationality — no. At least not for me. Weird outlier bets are not the same as irrational. Imo, betting on normalcy 100% of the time is the rally wildly irrational thing to do.
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“Wishful thinking” is easily conflated with “what if” thinking or “nothing to lose” asymmetric upside low-cost bets, but yeah there’s often an element of that present when speculation willfully blinds itself to downside risks. But is not unique to speculative behavior.
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Replying to @vgr
Wishful thinking
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Hmm. Yeah, I’d restate as uncritical self-certainty in their own ability to value things. I’d say the best speculators treat the nature of value as something *revealed* by the effects of speculative behavior.
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Replying to @vgr
indifference to underlying value creation?
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Question interests me because anti-speculation types acts like you’re supposed to feel guilty or ashamed and that’s so far off, I can’t even fake it to humor them. Im not that good an actor.
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And it’s not clear to me what it means to live non-speculatively? What do you do? Never entertain a what-if? Assume change is impossible? That values don’t evolve? That it’s possible to act without unintended consequences? That whole syndrome feels more like a vice to me 👀
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Yeah I don’t get this. a) Money for nothing is the best kind of money. b) Humans have always lived off money for nothing, be it burning dead ancestors as fuel, or even vegans eating hardworking plants that make their own honest glucose out of sunlight and inorganic chemicals. t.co/k8N9B5pgOu
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Funny how “normalcy washing” can disguise speculative aspects. I’m currently exploring buying a house and it seems like the most dangerously speculative thing I’ve ever considered doing. Betting on economic future of a *dingle* geography over 30 years 🤯
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Yet nobody calls that speculation even though it is anchored in a government-sanctioned local-supremacism fantasy that’s wilder than any other gamble I’ve ever entertained.
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A few versions of this “unfair externalized suffering” point in replies. I think it’s revealing. It’s a mental model that presumes not changing has no costs. Let’s unpack that a bit…
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Replying to @vgr
Don’t people who say that usually talk about a very narrow type of speculation where being right and profiting from it means a large groupe of people (presumably unfairly) suffering from it? Do people criticize the concept of speculating in general?
I think what’s going on here is a tension between two unilateral impulses — working to maintain a status quo or working to change it. Neither is a consensus or democratic behavior. Both operate through non-shared agency (to stop things or do things) as fait accompli behaviors.
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The individual valuation moves are just more visible in one case (“innovation”, “progress”, “excitement”) and invisible in the other (“normal”, “fair”, “overly”). But prima facie there is no reason to believe that either change or constancy is the safer path.
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Hypothesis: The most dangerously unhinged wishful speculation is the speculation that things might remain unchanged. Because society has all the assets of incumbency to bet on that speculation by default. Do nothing and trillions of dollars worth of bets ride another day.
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An meteor is headed directly for your city. Which is more “speculative” — believing it will magically miss and staying put, or evacuating? Many act-to-change decisions have this basic structure where the do-nothing move is the speculative one.
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I suspect the basic logical fallacy in treating speculation as a vice is conflating “acting differently” and “increased risk” or equivalently the conviction that continuing to behave as you’re used to is the lowest risk behavior. There’s other stuff going on, but this is central.
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