Cognitive arbitrage: the strongest in the investment market to fight big with small

Before talking about today's topic, let me share with you my views on market conditions:

The market has undergone a considerable correction in the past two days. Bitcoin and Ethereum have fallen by about 20% in one day. Judging by the heat before the market correction, the madness of the market is still controllable.This is just a bull market pullback and not the end of the bull market.

In the bull market cycle, such a callback is conducive to the healthy and sustainable development of the bull market, cooling down the market, and then proceeding to the next round of upside.

I also emphasize again what I have said before, in a bull market, we should expect such a callback, the more such callbacks, the healthier and longer the bull market will go.

So I think everyone should not be nervous, continue to pay attention to the market, and control their mentality.

In a bull market, we often do nothing. For example, right now, in such a market, I neither buy nor sell any tokens.

What did you do during that time? To learn, research and reflect.

I recently saw a point of view on "cognition", and I think it is necessary to share it with you.

why?

why?

Because the higher the risk, the more unknown factors it contains. From the public's point of view, as long as any one of the many unknown factors is triggered, the matter may not be successful, and all previous efforts will be wasted. Therefore, the public will consciously Avoid such things.

Therefore, there are very few people who engage in this kind of high risk, and the person who engages in it faces few "potential" competitors, and once he does this kind of thing, he almost becomes a monopoly in this field. can obtain amazing monopoly benefits.

The most typical case is entrepreneurship. Anyone who wants to start a business and wants to succeed needs to give everything of himself, including time, energy and even personal wealth; Is the vast majority, but only a very small number of successful people. And once successful, the fame and wealth that entrepreneurs get will be astonishing.

This principle seems to be common in all walks of life, but in my opinion, sometimes in the field of investment, this principle is not true, or even on the contrary, sometimes the risk of an investment product may not be positively related to the return, and it is entirely possible that an investment The risk of the product is low but the return is high.

why? Because there is another important factor that magnifies the judgment of ordinary people on the risk of this investment product:This factor is cognition.

When different people face the same investment product in the same market environment, their different cognitions will lead to their different judgments on the risk of this investment product.

Take a familiar example: Bitcoin.

Now its price has reached 50,000 US dollars. On the one hand, its price has become farther and farther away from the range that ordinary investors can bear; The threshold, and even the risk of card closures for deposits and withdrawals, is not as convenient as the stock market.

As the price of Bitcoin rises higher and higher in the future, I believe that these two obstacles will become higher and higher for ordinary investors. Because of this premonition, I repeatedly reminded everyone in last year's article:The window for ordinary people to invest in Bitcoin has become smaller and smaller, and Bitcoin's final door to the public is closing a little bit.

But the market went back to ten years ago, when its price was only tens of dollars or even lower, almost all investors who came into contact with Bitcoin could afford it, and investors could buy it on Taobao. The two obstacles just mentioned did not exist at all. At that time, the risk of investing in Bitcoin was almost zero, because as long as we took out a few meals to invest, even if we lost all of them, the loss would not affect us. life.

Then why were there not many people who came into contact with it and finally invested in it? Because of the huge cognitive barrier, most investors think this matter is "risky".

And the people who invested in it reaped amazing wealth in the future, so where did this wealth actually come from? Cognitive monetization or cognitive arbitrage from those who dare to eat crabs.

In a previous article I said,As long as friends who have followed us to invest in Bitcoin in the past two years, our cost is lower than most of the world's top investment institutions that only entered last year.Why are we stronger than them? Because our cognition allows us to take advantage of them.

In my opinion, this kind of cognitive arbitrage is a unique feature of the investment market. It can make us almost "a lot of money", and opportunities for this kind of cognitive arbitrage often appear.

So how can we seize this cognitive arbitrage opportunity? There is only one method: reading and thinking with a thirst for knowledge, an open mind, and all-encompassing.