The Road Not Taken

Capital Thinking · Issue #1179 · View online

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.

-Robert Frost 1915

Never Look Down the Road Not Taken

by Nick Maggiulli | Of Dollars and Data:

I recently saw an interview of Magic Johnson where he talks about one of the most important financial choices of his career. After winning the NBA championship in 1980, Johnson was offered sponsorship deals from Converse, Adidas, and Nike. While Converse offered the most money, Phil Knight, the head of Nike, told Johnson that instead of cash, he could give him shares of Nike.

Johnson, not knowing much about stocks at the time, took the Converse deal. After all, money talks.

But, when Johnson ran the numbers years later, he realized that the Nike stock he turned down would be worth nearly $5 billion today, or 8x his current net worth:

Johnson’s story is familiar to anyone who’s ever sold a stock too soon or passed up an opportunity that went on to experience explosive growth.

I made this mistake many years ago when I only bought one Bitcoin at $8k (to later sell half of it at $52k). I “knew” I should’ve bought more, but I didn’t. You probably have a story of “the investment that got away” as well.

However, I’m here to tell you that this kind of thinking is a mirage. It’s pure fantasy. Because the way you think things would’ve turned out is not the way they actually would’ve turned out. How you imagine an experience is a theoretical exercise. It’s a mental simulation of your past. But, how you live through that experience in real-time tends to produce very different results.

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Never Look Down the Road Not Taken

On financial regrets and why life never turns out the way you think it should.

Of Dollars And DataNick Maggiulli

*Featured post photo by Adrien Tutin on Unsplash