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Old 09-26-2016, 06:27 AM
dreamxite dreamxite is offline
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Default BASE jumpers are dying and what can we learn from them?

I wrote a post recently on several lessons investors can learn from BASE jumpers. Due to length, I'll only post part of it here.

PDF version here: bit.ly/2djuXez
Web article here: bit.ly/2d1JxcT

National Geographic recently ran a story – Why Are So Many BASE Jumpers Dying?[/URL] looking at reasons behind the rise in BASE jumpers fatalities, which I believe can offer investors some important lessons about risk.

The risks that investors encounter is no less different from BASE jumpers. They come in all shapes and sizes, and almost always invisible. As we will see here, a majority of the risks are build up gradually behind the scene before investors actually hit the ‘Buy’ button.

One of the reasons more BASE jumpers are dying is due to proximity flying, i.e flying close to objects like rocks and forests, which offer a richer experience than flying off a plane.

“Flying a wingsuit out of a plane offers little perspective… If the dream was the true and raw perception of flight, then somehow wingsuits needed to be flown closer to objects…one in which the stakes are high, margins are thin, as the rewards are unforgettable and extremely addictive.”



Just as it can be hard for BASE jumpers to quantify how riskier it is to do a proximity flying compare to flying off a plane, investors are constantly pushing themselves into riskier investments that promise high return without knowing what they’re getting themselves into.

“…more people getting into it very quickly without a lot of experience. People are now getting into skydiving only as a way to reach their ultimate goal: wingsuit BASE. Now we have a population who barely knows how to fall or how to fly a canopy [parachute], but they are already skimming rocks in wingsuits.”



Every field has its fundamentals. In this case, it is physics, aerodynamics etc, whereas for investing, it is microeconomics, accounting, psychology etc. Investors tend to rush into the market before having a good handle on basic fundamentals. As the reasoning goes, why worry about fundamentals when you can ride the trend on a rising tide?
“…wingsuit BASE novices are shortcutting every step of the process, a process that might involve tens of thousands of dollars in airplane time, hundreds of jumps at each stage, and ultimately many years of consistent, full-time practice…There’s a lack of education, a lack of awareness of what they’re getting into, a lack of how real the consequences are…”

Risk pervades every stage of the investment process and decision that you choose to take, or not to. In this case, BASE jumpers are shortcutting the entire process instead of taking a methodical approach to practice the sport.

In PC games players have a life meter that indicates their health level. Pretend that as a risk meter, with 0% indicate zero risks and 100% as the maximum. Whenever someone executes a BASE jump or buy a share, the risk meter goes up, otherwise, it stays close to 0% since you won’t lose any money. That’s why during market uncertainty, investors would reduce their risk by selling all their positions and go 100% cash. That’s how things work right? Not really.

The risk meter actually represents the entire process, not only when you are in the market, but every factor that changes your behavior and options. Therefore, if you are shortcutting the process, the meter doesn’t reset itself back to 0% but stays at 20, 30 or 40%. When you’re back in the market, any market risk will add on to that 20-40% baseline. And the problem is all these risks are not obvious.
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  #2  
Old 10-12-2016, 11:37 PM
FrankS FrankS is offline
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Default Re: BASE jumpers are dying and what can we learn from them?

Interesting analogy! Thanks for sharing.
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Old 04-24-2019, 05:17 AM
Valz Miky Valz Miky is offline
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Default Re: BASE jumpers are dying and what can we learn from them?

We should be trying to do something worthy with our life and that’s doing something like Forex. It’s a lot more easier with quality broker like FreshForex, who are amazing by all means and have superb setting from small spreads to lightning fast execution of trades, rebates and much more.
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