Letter 11 - The Mental Game of NFTs

It is not enough to be good at chess, you must also play well

This Letter is going to be a bit different from my others. For starters, I wrote this a few days ago and the magics of the interwebs means that it got sent today while I am somewhere in the Cappadocia region of Turkey. I obviously couldn’t choose to write about anything current in the NFT space (wait let me guess - there were three 10k generative drops in the last 24 hours and two are struggling while 1 is killing it - how’d I do?). Anyway - back to the past. I am going to zoom out a bit and look at some bigger picture things. I’ll also try and keep it short and sweet unlike my usual missives.

Before getting into NFTs I was a professional poker player for roughly 15 years. It was basically all I knew. I went from high school -> university -> dropping out of university -> poker. I learned a lot of things during my unconventional career, and I think a lot of what I learned can be applied to the NFT space.

This incredible quote by Siegbert Tarrasch is some of my favourite series of words in the English language. It can be applied to virtually every area of life. Everyone knows that they should eat well and exercise. Knowledge isn’t usually the hard part. Execution is. In poker, the knowledge is a little harder to come by than “eat well and exercise”, but for most of my career the learning curve was never too crazy. Lots of people knew how to play hands properly, they knew what they needed to do to win. But in the moment for one of a hundred reasons, they would not play well. A slightly ‘worse’ player that plays well 90% of the time will always outperform a ‘better’ player that plays well 25% of the time. The NFT space is the same.

That being said, all of this is still so new that I think the knowledge is still hard to come by. There’s no amazing book on NFTs (yet…should I write a book? 🤔), and it is hard to find good information. 97% of people on twitter are just shilling their own bags or projects, and the ones who aren’t are still figuring this space out anyway. I don’t really think anyone can claim to be an “expert”. There hasn’t been enough time for experts to emerge. The OGs in this space have been here for years, but even they only have a few months experience in this new world of apes and cats and all the rest. At best one can claim to be slightly-less-ignorant-than-average.

With knowledge hard to come by it is all the more important to make the most of it. How? Well.. I don’t know :-) It depends (this is my favourite answer to any question, ever). Everyone’s situation is going to be different, and every situation is going to be different. You can never walk in the same river twice. But perhaps I can give a few general pieces of advice that have worked well for me, and hopefully some of what I say will be useful to some of you.

1. Focus on your decisions, and not your results. Put thought into every NFT purchase and sale. It can be as simple as “there are lots of people buying this right now, it’s going to sell out soon, and I think that I can make money flipping on secondary”, but there should be some thought beyond pure FOMO. If you think about your purchases before you make them, and have good reasons for making them, then the results are borderline irrelevant. You cannot control the market. Sometimes a piece of FUD comes out right as the project sells out that was out of your control and the secondary market tanks. Well that’s okay. You now have another opportunity to make a good decision. That decision might be to jump off the sinking ship asap, or it might be to try and buy more cheap NFTs as people are selling in fear while the product/project is still great. Every situation will be different, but the results will always be largely out of your control. Focus on what is in your control.
   

2. Sometimes the best decision is no decision. Buying and selling NFTs is thrilling. I love when I get an e-mail from OpenSea saying that n NFT has sold or that one of my bids has been accepted. I love hitting that ‘mint’ button on websites and I love seeing what I get. This is dangerous. It can even be addictive. Hell, it’s certainly addictive. I have no doubt that our brains are flooding with endorphins in this fast-paced micro-second-attention-span NFT world we live in. Sometimes, probably often, the best thing to do is nothing at all. This is hard because it is not fun. It takes willpower to sit back and watch as people mint out a project, especially if the secondary market is alight and things are trading at 3-5x almost immediately. But for every project that does that there are many that do not, and I think the ratio of new projects that continue to trade above mint price vs new projects that do not is only going to decrease as time goes on. Willpower is like a muscle though. It can be trained. Mine isn’t fantastic, but I believe it is getting better every time I decide not to mint. It gets easier and easier, and it feels better and better to cherry-pick the right projects for the right reasons.
   

3. Remember what really matters in life. This one is more for me than anyone else. Hint, it’s not NFTs, and it’s not money. This bubble we live in is insane. It doesn’t sleep, it doesn’t breathe, it doesn’t slow down. It is literally impossible to stay on top of everything. Trust me, I tried. These last couple of months I have spent close to 16hrs a day from the moment I open my eyes to the moment my head hits the pillow thinking and researching and tweeting and buying and selling and doing anything and everything NFTs. I still get asked about projects I have never even heard of about 10 times a day. It’s impossible to be on top of it all, so accept that you can’t be. Stop neglecting your loved ones, and stop neglecting your own health. When you’re 80 you’re not going to be thinking “I wish I bought one more NFT” (unless Fidenzas are worth $100m or something…🤔 no no, not even then). But I’ll bet you’ll wish you played more with your kids and pets, and made more memories with your partner. I bet you’ll wish you traveled more or stayed in better shape. I think we would all do well to remember this more often - or at least, I would.

I leave you with a quote from my favourite philosopher and inspiration for my screen name. Special shout out to my old poker mental game coach Jared Tendler whose books ‘The Mental Game of Poker’ and ‘The Mental Game of Poker 2’ helped me tremendously, and inspired this post.

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What’s on my radar?

Oh, I dunno. Probably something like this 🙂

We’re still early.

Disclaimer: The content covered in this newsletter is not to be considered as investment advice. I’m not a financial adviser. These are only my own opinions and ideas. You should always consult with a professional/licensed financial adviser before trading or investing in any cryptocurrency related product.