Missed Opportunities And The Up-side/Down-side Balancing Act

You're listening to Business Lunch with Roland Fraser. This is your seat at the table. Welcome to Business Lunch with Roland Fraser. I'm the producer, Darren Clark. Now, Roland has absolutely been cranking with the Ethical Profits in Times of Crisis challenge and we've been able to share some of the short nuggets from that. But over the next couple of Mondays, I get to ask Roland a few questions that we thought we would be relevant and helpful to our listeners. So before we begin, make sure you hit the subscribe button on Apple Podcasts so you get the follow up snack size episodes. We really appreciate you tuning in. So let's begin. Okay. So Roland, the listeners on the show, they get to hear a lot about your successful strategies and occasionally your quote, failure stories. So for a moment, will you tell us how you bounce back or deal with it when things do go wrong or, or tank?

One of my favorite books, when I was interviewing Richard Branson, I like to get ready for these interviews. I look at what are their recommended books and all these things, and one of his turned out to be one of my favorite books. It's called Black Box Thinking and it's really an analysis. It starts with the analogy of the black box from recorder from airplanes that gets recovered and the failure rate in the airline industry because it's open sourced within the industry to learn from every mistake that's made from every plane crash and all the recordings from all the black boxes that has become one of the safest, lowest failure rate industries on the planet. And so that we should look and think about that and that failures are very educational opportunities.

Yeah, absolutely. Okay, so can you give us a mistake or missed opportunity that sticks out in your mind that you've learned from?

So to me, I was trying to think of like anyone in particular that I mean, I learned from all of them. So like, big missed opportunity. That's one of my favorites was this thing that I walked into. I was doing property development with a contractor and I went in his office and his office had like a couple of polls that were support poles. And around one of the polls there was a couple guys and they're like, yeah, we got this new invention, check it out. We're looking for somebody to invest with us. And I was like, okay, what is it? And he's like, well, we tied, I'm a surfer. So I tied the surf cord to this thing and I drilled a hole in a softball and put a horse bit between it and then tied the surf leash to that and put velcro on the end and if you wrap it around a pole, the surf stuff makes it unwind and you can hit it and you can just keep hitting it for practice. And I'm calling it the Hitaway. And I was like, that is awesome. I am never putting any money into that, for sure. And. And then he went on and sold millions and millions and tens of millions of dollars in it with trucks, leaving this thing every. It was really funny. One of the biggest dumb things that I passed on. But what it just told me is constantly every failure tells me, be more humble, think bigger. Look at all of the different options. You know, minimize downside risk. That's. That's something you get. The guy that wrote Antifragile does a great job of explaining that. You know, know, really for success, for wealth, for everything. It's about minimizing the downside risk so that you've got the stable thing. He calls it barbell thinking. And on the other side, the barbell. As long as the. The upside is giant and the downside is minimal, then why not, right? So right now, to use something that's. That's crazy that my. My son and I were just talking about is the price of GameStop stock, right? So if you go into GameStop stock and, you know, you hear at the beginning of that, that, you know, oh, this guy said it, and you know, he's. He's a good predictor of things. And you throw. You're like, you see this moving to throw a thousand bucks into it. If $1,000 can be lost with no loss to you or $100, why not? Because you're not gonna miss it. It just means you're not gonna do some other thing that doesn't matter to you anyway with that hundred dollars. And. And the upside is huge. Some. One of his buddies just made 70 grand off of something like a hundred bucks, right? So, you know, he's gonna pay off all his school loans and all this stuff. Well, that's cool. That makes sense because you're not gonna miss that a hundred grand. You're not gonna be significantly disadvantaged if it doesn't work out. And if it does work out, yeah, you had this. You got this huge potential win, but if instead you're doing what My dad did this. My dad bet the farm. He made his money by betting the farm, and he kept betting the farm until he lost it. Right? And that, like, the consequences of losing everything that he had built up was pretty significant. In the GameStop example, apparently there was a fund that had. That was doing. That had done investments called shorting, and they lost $13 billion right in this thing. So their loss was huge. Their upside was was big. But was it going to change their $13 billion lifestyle? Probably not, right? So how can you organize your knowledge bets, your relationship bets, your financial bets, your business bets around the things that you can afford to lose that have great, huge returns while maintaining on the other side, the stability of the things that are going to incrementally, linearly get you to where you know you want to get. That, to me, is the magic of the balancing act.

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