The Journey of Financial Enlightenment

Hello everyone! :wave:

As the lifeblood of everything Pynk, we owe you, our esteemed crowd, the keys to Financial Enlightenment. Like a nascent colony of ants, the Pynk Team has been working in the background to unearth exquisite investment ideas, newly emerging market trends as well as intriguing insights from amongst the brightest minds of our times. Today, we are happy to bring you Yoda, the Star Wars grandmaster of the Force, a pop-culture icon and symbol of strength and wisdom. Yoda is here, to give us a lesson or two on the path to financial enlightenment. With 900 years under his belt, he surely knows a thing or two about retirement planning, wealth management, and effective risk/reward strategies.

The Virtues of Financial Enlightenment

We believe there’s a striking similarity between Force Enlightenment - the peak level of Force Mastery amongst Jedis - and Financial Enlightenment, the pinnacle of effectively managing one’s financial resources. Hence, we present the virtues that each ‘Padawan’ ought to follow on their path towards Financial Enlightenment:

Patience, Education & Caution - Behind the enticing prospect of trading complex financial instruments and becoming an overnight millionaire, there is the dark side of the force shooting the Death Star at your finances. Countless retail investors have lost their hard-earned money as a result of rash financial decisions. Increasingly, retail investors are encouraged by pushy ads to personally manage their financial livelihoods. According to eToro, about 75% are losing money.

Patience and education are fundamental to building financial wealth. Given that the economy experiences cyclical periods of boom and bust, staying invested over the long-term in actively managed, fully diversified investment portfolios helps investors smooth out market gyrations, and make the most of their financial assets. Similar to the role of the Lightsaber for a Jedi, grasping important concepts such as the time value of money, the magic of compounding returns, and the threat of inflation are instrumental in your journey towards Financial Enlightenment.

A Deep Commitment to Long-term Investing & Ongoing Learning - Padawans spend countless hours refining their control of the Force while listening to Yoda’s words of wisdom. They start early and they do so consistently to become skilled masters of the Force. If you start investing early and stay invested, the ‘miracle of compounding’ will see your returns magnified many times over the years. Not only can your capital grow but part of the profit generated by successful companies is returned to you as dividends, boosting your returns. Padawans are tireless in seeking to understand and live by Yoda’s words of wisdom. A relentless pursuit of educating yourself in investing will pay handsome rewards.

Words to Invest By

  1. “You must unlearn what you have learned.”

The world surely looked different to Yoda being in his late 800s as opposed to when he was in his first 100 years of life. Hindsight would be ideal in life but anyway knowledge is power. Yoda must have surely re-invented himself and his approach numerous times as the world around him changed. If he had developed his expertise in Outer Rim* markets, he would surely have realised in good time that Sith Lords would be interested in the production of private clone armies to overthrow the Republic. With that kind of foresight, he could have either made a killing on Intergalactic Warfare stocks or could have saved the lives of Jedis and innocent people alike.

Technology around us evolves at breakneck speed. Bearing this in mind, developing an attachment to our old beliefs can put our ability to make sound financial decisions into question. This love of familiarity becomes more problematic as we get older. Essentially, learning to let go of old views and beliefs, to embrace change, and to be open to new ideas goes a long way to staying ahead of the game. After all, it’s important to realise that we don’t know what we don’t know. Therefore, striving towards further learning with fresh eyes and an open mind is key to succeeding in investing.

*Look at it as the Star Wars equivalent of emerging markets.

  1. “Size matters not. Look at me. Judge me by my size, do you? Hmm? Hmm. And well you should not. For my ally is the Force, and a powerful ally it is.”

A chap like Yoda probably started from the swamps, like the one he was exiled to on Dagobah, and climbed the ladder all the way up to the Jedi Council on Coruscant, the Galactic Capital of the Republic. This was all thanks to his unparalleled knowledge of the Force. Size didn’t matter to him so why should it matter to you however modest your means, when you have the keys at your fingertips to becoming financially enlightened? What do I mean by size? Nowadays, almost anyone can invest their own money, regardless of the size of their initial savings pot. Bearing in mind the Virtues of Financial Enlightenment, you can build your financial wealth by starting small and building your way up to the top. So don’t be put off because you don’t have a lot to invest today. With a commitment to developing your financial know-how, the sky’s the limit! By the way, the fact that you’re reading this post means you are already on your intergalactic way to the top!

  1. “Fear leads to anger; anger leads to hate; hate leads to suffering.”

If there’s one thing that the Jedi Council feels very strongly about, it’s the fear of loss developed through attachment. It’s no secret that trainee masters of the Force must not fall in love - that’s a sure one-way ticket to the dark side - (Spoiler Alert!) surely Anakin and Kylo Ren would have a few things to say about that.

The same goes for investing. A ‘master’ in the arts of Financial Enlightenment does not fall in love with their investment ideas, especially as euphoria in the markets can lead to crazy prices. Rather, these Masters focus on their higher powers of considerate, in-depth fundamental analysis. Fear of loss should creep in when you can recognise that prices are being fuelled by hype, rumour and ignorance - suffering and loss are the consequences that wisdom seeks to avoid. Remember, unlearn what you have learned. Developing attachment to investment ideas may blindside even the most skilled ‘masters’ of Financial Enlightenment. Always strive to look at things with fresh eyes and not too much emotion. The market is dynamic and circumstances change. Learning to see things as they are now can go a long way in enhancing your financial well being.

The Dark Side Looms in the Shadows

The dark side is quicker, easier, and more seductive. Skilled in the arts of dopamine-fuelled instant gratification, stock trading brokerage platforms are gamifying users into an unhealthy and ultimately costly addiction. Wisdom and know-how are falsely substituted by get-rich-quick approaches, blind ignorance and blue sky no risk promises. On the other hand, the Light Side of the Force seeks to promote learning while earning and enjoying, all in a safer environment. You will be compensated as you display your long-term and consistent commitment to your learning journey with financial enlightenment easily within your reach.


Disclaimer: This information does not constitute any form of advice or recommendation by Crowdsense Ltd. and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision.

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Man, that is craaazy!!!, but now that you mention it, it totally makes sense… People without any basic knowledge about finances now get the chance to put their money at risk in a way that was impossible just a few years ago.

And indeed it can be highly addictive, I’d put it right next to gambling addiction, the mechanism is very similar

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Spot on!
I believe that the trading platforms encourage users to make multiple transactions, as this is where their earnings lie. If 75% of users (retail investors) loose money, then who is picking up the winnings? I would guess professional investors.

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@Eva the big players shorting retail investors’ positions must be quite happy :joy: :rofl:

I didn’t mention this yesterday @RazvanPaun, but I appreciate the Star Wars analogies, I had a great time reading this :grin:

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@mosigman @Eva - 100%.

If you are getting bombarded by eToro ads on YouTube as I do, you’ll see that the tone they use is tailored to induce a sense of fear of missing out (FOMO). FOMO is described as a sense of urgency among new ‘investors’ that usually drive stock prices considerably higher. That’s when unsophisticated investors suffer a substantial loss, and professional investors usually pick up the pieces because they have a better understanding of the market (not perfect by any means). It has much to do with behaviour and biases, a subject I will touch upon in the near future in this section.

Another way they draw people into stock trading is by making it sound easy but, in reality, it’s very complex. Looking at investing from a game theory point of view (an area of economics that examines the behaviour of market participants), what is meant to be a ‘game’ of collaboration for the purpose of distributing capital to make humanity better off, becomes a zero-sum game in which if one side wins, the other must lose by default and vice versa.

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Hahaha, watched the whole saga recently so thought ‘why not capitalise on that, huh?’ to have and share a bit of fun. :joy:

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Not to rag on etoro too much, but one of the main problems with their system is that people see a trader has made 40% in the previous month and so everyone jumps on his profile and copies that trader. As we all know, by that point it’s too late. Quite often they all then lose money. It’s rare for people to make 40% month on month.

Totally agree with @RazvanPaun re FOMO and selling the ‘get rich quick’ dream to consumers.

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Thank you for this piece of writing Raz…maaaaaan…you really made my day.
I am reading this one in depth just today. Great source of inspiration it is…:joy::joy::joy::pray::rocket:

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This is wonderful, everything is explained great!!
Excellent work @RazvanPaun :ok_hand:t3:

Remember people, stay away from dark side, too much stress there and you can easily lose all your hard work from before. There is no quick and easy, time factor is essential in finance.

:pynk: Pynk side is fair, fun and you can always learn something new.

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@Al_Wallace - “Past performance is not representative of future results” should reign supreme, especially when it comes to following the portfolios of unsophisticated investors.

Pssst, sophisticated investors are considerably more reliable but not great… 88.97% of U.S. investment funds have under-performed their benchmark (e.g. S&P 500 Index, MSCI World Index, etc.) over a 15-year period (as of March 2019) - meaning that, whilst they may not be losing money, their performance is lower than targeted.

It’s one of those fallacies that absorb new users and, as eToro themselves mention on their website, leads to people ravaging their finances. This topic ties in well with human behaviour in an economic context. Knowing the fundamentals of biases/heuristics is compelling given that our minds are playing tricks on us, leading us to bad decisions.

For example, most people out there believe they are above-average decision-makers, which isn’t realistic. This leads to overconfidence, which is particularly well represented by the Dunning-Kruger Effect. The model shows that having just a bit of knowledge in a field can put anyone in serious trouble (the peak of Mt. Stupid) if asked to make decisions that involve that kind of knowledge - financial markets are the perfect examples. As someone accumulates more knowledge, they realise how much they don’t know (valley of despair). The more persistent ones out there, walk the slope of enlightenment to become knowledgeable and dependable decision-makers (culminating in a life-long journey across the plateau of sustainability).

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Wow love this Razvan. So interesting, thank you for sharing. I hope you write more on this vital topic for all Pynksters to be benefit from.

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@Tradelta @predictor - May the force be with you!
Striving for funkier, more creative and engaging ones every day. :joy:
We’re blessed to have @pb1 pushing the bar higher.
Stay tuned! :stars:

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Thank you for this @RazvanPaun! This just proves why we need Pynk…because no one is as smart as all of us!!! (Even if some think they are)

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I feel worryingly familiar with the peak of mount stupid :joy:

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That graph is soooo accurate haha

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@Al_Wallace - I recently started looking into mixology. After checking out a few cocktail recipes I thought about having a go at doing my own based on gut feeling - the combinations sounded brilliant in my mind, but my girlfriend vehemently disapproved. :sweat_smile: :man_facepalming:

Mt. Stupid is where I am at when it comes to mixology. :joy:

@predictor I loved it the moment I saw it!

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@KarenM - that’s what we’re striving for - one could define what we’re creating as a knowledge exchange market. The more participants there are, the more liquid the market becomes. In other words, the more people interact with the community, the prediction tool, FFM and forecast questions, the bigger the volume of insights from around the world. This has a direct impact on the quality and performance behind our decision-making.

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An additional opinion related to what we’ve been discussing recently guys :joy::

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