Thursday, May 15, 2008

Investment [Relationships]

It's been a good day. I actually got out running today. I kept it really short and really slow, but it felt good to be out there. It was a beautiful day for a run. Like always, I'd like to get out and run more. Now that the weather is really nice, maybe I'll actually make it happen. I'd really like that.

So, I've been meaning for a long time to toss out my theories on relationships. Maybe that's not even a fair thing to call what all this is. Essentially, it's an excuse for me to over-analyze. I love to analyze. Here's the real kicker here, though. I don't fully understand this. I've got a decent idea in my head, but I'm trying to learn. I understand that this model is not a perfect one. It's incredibly logical. When it comes to relationships, logic isn't always the greatest answer. I'm really hoping, though, that I can start using this model to start making decent decisions. I've had one plan for relationships for high school for the past 2.5 years, and it has worked well, I think. It has had its drawbacks, but it has also had its sweet sweet side effects. High school is nearly over, and I'm not exactly sure what my new plan is yet. I'm hoping to build a good model that will make sense, so that I can use that model to better determine what my actual plan will be. Sound ridiculous? Maybe it is, but hey, give me a break. I'm just sorta exploring. This might crash and burn. Here we go!

Me, Kyle, Levi, and James have formulated a way to compare the actions of different guys towards girls. We've come up with the idea of investments, that is, long term investments and short term investments. We see a guy running up to a girl and giving her a hug (a la P Burn) to be a short term investment. It carries fairly high risk, but it is almost immediately either rewarding or disappointing. Its long term effects are not incredibly extensive. We classify short term investments as bold actions by a guy to get a girl's attention for at least a brief amount of time. These are very active investments.

On the other hand are long term investments. Me, Kyle, and James all see ourselves as long term-investors. Long term investments are actions taken by guys that will not immediately result in any significant recognition from a girl, but will, over time, improve our standing with them. In the most extreme sense, long term investments can be passive things we do without even thinking about influencing girls. Me going to school and doing well is a very small kind of long term investment. It will, I hope, eventually improve my standing with most girls. There are more direct forms of long term investment. Helping a girl with something, homework, door holding, etc. etc. can be a long term investment, as long as the guy isn't obnoxious and "Look at me!" about it. The key to long term investments is that they don't seek immediate recognition or reward. They are intended to accumulate over time, increasing a guy's standing with a girl or girls until he is in a favorable position.

My old model consisted of these two kinds of investments. I'm beginning to think, though, that this investment idea is not simply a binary operation. It's not just short term and long term. Rather, there is an entire spectrum of investment options. It ranges from the incredibly short term to the exhaustingly long term. There's an investment choice for everyone within the spectrum. There are investments that harmoniously blend the ideas of short term and long term. Investments can get pretty complex.

I've also begun to think that almost every action a guy undertakes can be looked at as an investment, not just the actions that the guy thinks about or plans. He doesn't have to actively say, "I'm gonna impress this girl" in order for it to be an investment. Almost every interaction he has with girls can be looked at as an investment.

The currency we're shooting for here is not US Dollars. It is, instead, attention and respect from girls. It is our standing with them. How well they regard us, I suppose. How cool a girl thinks we are. It's the gut feeling they have about us before they put any thought behind it. That's what we're shooting for. For the purposes of the discussion, I'm going to refer to this as "reputation". It's sort of taking a nod from RPG's where you gain reputation with a faction, and they'll give you stuff. If we can have a really high level of reputation with a girl, we're in good shape.

Within the spectrum of investments, there are ups and downs. In the old binary system, short term meant you actually got to flirt with girls, and that you actually had a chance at some form of relationship. Long term meant security and decent regard from a lot of different girls.

Sometimes the market is good, and most investments you make will result in a net increase of reputation. Other times the market is bad, and you'll lose reputation. This is sometimes outside of guys control. Whether it's long term investing or short term investing, we will sometimes lose reputation due to factors outside of our control. That's the market for you.

I love personal finance, and this model does a pretty good job of blending the harsh but beautiful reality of the economy with the harsh but beautiful reality of this whole high school scene. It's possible to apply the idea of diversification here. In almost every single guide to investing for dummies, the experts will recommend diversifying one's portfolio in order to make a more secure gain. That means that instead of buying a ton of just one stock, they will buy smaller amounts of several stocks. The logic behind this is that the stock market, in general, trends upwards. It will generally go up. Individual stocks within the market are very volatile. They will go up and down like crazy. When taken as a whole, though, the market moves upwards, generally. By diversifying, one can capitalize on that general market trend without worrying about the fickle nature of individual stocks.

Diversifying is always encouraged for new investors, because it is more secure. Warren Buffett, one of the richest investors in the world, does not diversify. He encourages everybody else to diversify, however. His logic is that he's a professional, and has been doing this his whole life. He stands to make much more money from picking awesome single stocks and investing very heavily in them. He feels personally qualified to make those calls. He suggests, however, that most people are not qualified to make decisions like that, and should stick to safer things.

Moral of the story? Diversification is safer, and will yield slowly appreciating results. Picking one stock out is much riskier, but could potentially yield very profitable results. Chances are you'll never become as rich by diversifying as you would by picking one stock. The same idea can apply to relationships. By focusing your effort on one single girl, you open up the option of a relationship, and that could be pretty great. You also open up the chance of getting your butt kicked and being tossed out, broke.

There are a million other market analogies that could be made. I'll leave that for another day.

What is the status of my portfolio? Because after all, theorizing about all of this is one thing, but it's entirely worthless if I can't understand how it relates to me. Keeping in mind that the market is volatile and that I don't know what will happen in the future, I think I have at least a decent idea of where I'm at.

I make it a policy here to refrain from discussing personal relationship details. It's not that I'm a coward, I just don't think it's good form. I have a lot that I could say about my personal portfolio right now. I've been thinking about it a lot, trying to make sense of it. If I have a good idea of how my portfolio stands, I can have a better idea of what to do next to keep building wealth. I would love so much to go into detail. I don't have many qualms about discussing it in person, but I just don't think it's good form to do it here, online. So I'll refrain.

The basics, however, remain the same. I've been a long term investor. I've built some wealth, slowly. But even long term investors, at one point or another, have to decide to cash in their 401k for retirement. One cannot make long term investments forever, or they will die with a million investments and no solid or tangible capital. Long term investments can take a guy 90 percent of the way, but it takes a riskier investment to begin a relationship.

It's an idea I've been calling the vulnerability point. The vulnerability point is a point on the spectrum that's very close to center. It's a mix between long term and short term. It's where the investor has to say, "Yes, I am interested. I want to try this." It's more long term than short term guys are used to, because it implies some sort of commitment to the future. It's much much shorter term than I'm used to, because it requires effort, and it carries a (relatively) enormous amount of risk. It's the vulnerability point because up to this point, very short term and very long term guys aren't at all at risk. Very short term guys never play for keeps, and all the girls know that. They do what they do, and then life goes on. They don't stand to lose much. Long term guys never stand to lose much because they're so careful to never do anything that would make them risk losing anything. By approaching the vulnerability point and migrating towards the center of the investment spectrum, guys open themselves up to serious risk for what could be the first time.

I recognize that this point will have to come. I'm not sure when it will come, but at some point or another I will have to stop investing solely for the accumulation of reputation.

That's my market theory for relationships. It's imperfect, clearly, but I like the idea behind it. It's a decent model, and it's something that I can grasp and run theoretical situations with. It's great for questions, because instead of analyzing feelings, I can analyze absolute value. For example, which is a better choice, diversifying and earning a little reputation with a lot of stock, or going for the gold and trying to earn a lot with one stock? Which yields more absolute value? What does a two year hiatus do to that absolute value? What effect do others' actions have on the market? Is this a good time for a long term investment, or a short term investment?

I'm sure I'll come under a bit of fire for all this, you know, likening something this irrational to something as mundane as economics. I'm not saying that I evaluate girls logically by any means, but I think I'm saying that I want to make the best choices that I can, and that this is one way of me trying to figure out what's best for me and for everybody else. It's just a theory that I've had some fun thinking about this week. Take it for what it's worth. Me, I think it's nearly time for bed. I'll keep watching the market, though, waiting for my time to pounce. Ok, so not really, but I do love economics. And kangen water. And string cheese, that too.

Thanks for reading friends. I hope things are going well for you. Keep up the excellent work. Peace and love~

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