The 2 Problems With Arbitrage

I once tried to profit off arbitrage in the most literal way possible: I bought a cryptocurrency on one exchange, where it was newly listed, sent it to another, and sold it there for a profit. New coins permeated slowly across the ecosystem at the time, and, for a few hours, you sometimes had a chance to exploit varying prices in different marketplaces.

If I recall correctly, the trade worked for a portion of the coins I bought but not for all of them. By the time I managed to get all of the tokens out from the one exchange, the price had caught up everywhere else. No getting rich quick this time!

There are many other, more sophisticated ways to arbitrage, and I tried several of them over the years.

Some people fly to US, buy Pokémon cards for cheaper dollar prices, bring them to Europe, hope customs ignores them, and then sell them over here for a 30% profit.

Others propagate new technology by porting it from one geography to another while most of the target market is still unaware. In the early days of visual website builders, you could sell website creation as a service even if you didn’t know how to code. Eventually, those tools became cheap and widely available, so there was no need to hire someone anymore. You could now do it yourself in the same time or less.

In 2007, three German brothers founded Rocket Internet, a startup studio whose entire business model exists around copying successful startups from around the world, mostly the US, and establishing European equivalents.

The list goes on and on. There are always an infinite number of arbitrage opportunities at any given time because economies move at different speeds around the globe. Now, with AI, you could offer tons of services to unsuspecting, busy business owners. Create or translate content, build software, speed up processes—all using existing templates, hooked together and sped up thanks to the machines.

There are only two problems with arbitrage.

The first affects any creatively inclined person: It’s boring. You’ve found a loophole in the system. Yay! Now, you must hack at it with the same repetitive steps—over and over and over again. Perform A for B, get paid, find a new client, and repeat. And no matter how automated you make it, in the end, it’ll always be work. To find customers. To convince them. To deliver the service at scale without things breaking. But if you’re already working, why not create something new? Something you actually want to see in the world? That may or may not work, but that actually feels rewarding should it succeed.

The second problem is that arbitrage never lasts. Whatever gap you’ve identified is closing as soon as you’ve found it. After all, you’re never the only one with an idea. Arbitrage always comes with a ticking countdown. Some windows last longer than others. It could be years, months, or only a few weeks. But eventually, once markets have caught up with one another, you’ll have to move on to something else. And again, the same question presents itself: Why not spend that time working on one thing you actually care about? An idea you already know might take decades to come to fruition, but which could pay off not only to a much larger degree but also with more than dollars?

More often than not, arbitrage is the young man’s vain attempt at skipping the game. A cheap shot at early retirement which rarely works out. Some arbitrage businesses genuinely help their target markets, and they’re all part of the force which actually eliminates price differences in the end. But the number of proud arbitragers is tiny for a simple reason: You’re profiteering off everyone else’s lack of knowledge, and that’s not very inspiring.

Life’s too short for chasing arbitrage. Find a candle whose wax won’t run out, and protect its flame for as long as you can.

You Don’t Have To Contribute Immediately

“Leaving soon,” the label read on my Netflix screen. “Alright,” I thought. “It’s as good a time as any to finally watch The Truman Show.” I pressed play and received 103 minutes of world-class storytelling.

I knew the movie was about a man whose entire life turns out to be a TV show. I knew it carried big significance for Jim Carrey, who portrays the main character, Truman Burbank. In fact, I wrote about Jim’s struggle with—and great philosophical theories on—identity many years ago already. So I also knew that as soon as I watched The Truman Show, I’d probably want to write about that, too.

The movie did give me much to think about. I opened a new placeholder draft, and then…I let it sit. For a day. Another day. A week. And then one week more. The inputs were all circulating, but I couldn’t quite put my finger on what exactly I wanted to say. I didn’t want to merely rehash the whole “life is a Matrix to be broken out of” concept. Echo bubbles, social media, sure. Those comparisons have all been done before.

Some weeks went by, and I started wondering whether I’d actually have to say something about Truman at all. He would have fit in perfectly into those old pieces on identity! Maybe that train had long passed me by? But eventually, a seemingly unrelated idea popped into my head.

The spark came from an observation at work. That combined with some dreams I’d been having about talking to my high school teachers. And when I started writing about the intersection of those two, guess who popped into my head? Truman! Or, rather, his wife. “Meryl.” It was a small but pivotal scene in the movie. Definitely not the one I would have thought I’d be writing about. Alas, here it was. Related. Relevant. Ready for me to contribute.

The scene became the third example in a post about the roles we play in life despite not actually being actors. And, just like that, I had written about The Truman Show.

You don’t have to contribute immediately, you know? Even when you’re excited about what’s in front of you. Good ideas often stay good for many years. It’s okay to pull them back out much later and say, “Now is the time!” Because figuring out the what, and the how, and the why, those all, too, take time.

When your mind is made up, speak it. But don’t force out an opinion where none exists. Oh, and if you find you have nothing to say at all? That’s cool, too. Silence is its own kind of gift. Among other things, it creates the space to watch a great movie—and let the cycle of your contributions start anew.

Sometimes, the Obvious Answer Is Right

At the very last minute, German national football coach Julian Nagelsmann dropped a world cup bombshell: Manuel Neuer, the 40-year-old, retired goalkeeper of legend, would return to grace the team with his presence once more. Neuer had withdrawn from the national team two years prior but agreed to play.

The public didn’t think it was a great idea. “Neuer’s too old now.” “He was already retired. He’ll be out of the game.” “These kinds of comebacks never work.” Neuer still plays at Bayern Munich, but the voice of the people had a point.

In the end, Neuer couldn’t live up to his past performances. Germany didn’t win a single game without suffering a goal from the opponent and eventually lost to Paraguay—typically not the toughest team to beat—after a penalty shootout in the round of 32.

Manuel Neuer is one of the greatest goalkeepers of all time. He always will be. He won the most prestigious goalkeeper award five times and was crowned goalkeeper of the decade from 2010-2020. But now, Neuer’s time in the goal is coming to an end.

Germany already had a new goalkeeper. He’d been playing with the team in many matches. He was integrated, younger, and up to the task. Nagelsmann calling Neuer back—and him agreeing—looked like two men trying to hold on to a past that was no longer there. Perhaps that’s all it was—and the crowd remained right.

Often, the obvious answer lacks nuance. It’s easy to brush ideas off and miss everything that’s important. But every now and then, our gut hits the nail on the head. The question, then, is not why the obvious answer is obvious. It’s: Is it actually right? For if so, there’s nothing wrong with speaking it aloud—even if it means calling out the head coach.

Being Grateful for Your Own Creations

Whenever I manage to wake up at 5 AM, I find myself immensely grateful for those extra morning hours. There’s magic in being awake when no one else is. You feel as if you have all the time in the world and, in a sense, you do—for the world is still asleep, and you’re off to a head start. To me, no matter how I spend them, these hours are always filled with joy.

The thing is, I created them, didn’t I? It was my own doing to wake up at 5 AM and claim those hours. I made time—so why do I feel grateful, and to whom?

There’s a similar dynamic with my favorite articles I’ve written over the years. Many of them are old now, and yet, when I come across them again, I often notice a feeling of gratitude. “Thank god I was in the right space back then to write these as I did.” Because of course, only the me from that time could have written them. I could never write the exact same piece now.

Yet, once again, I wrote them. I showed up back then, and that’s why the writing still exists today. So what’s with the gratitude?

I don’t have children yet, but I can already see them as the ultimate example: Technically, we created them—but millions of parents feel immense gratitude for their children’s existence every day.

Of course, our feelings of gratefulness aren’t wrong. They’re exactly right. But, as a symptom, they reveal something about the underlying cause: Even for our own creations, we can’t take 100% of the credit. There are always other, invisible forces at play.

From waking up early to making art to raising kids—for even the tiniest success, everything must come together in perfect harmony. Billions of microscopic preconditions, all leading up to a single intersection in time. One moment to cement their result. Then, an eternity of said result existing or, at the very least, once having existed for however long.

Take pride in your creations. You did all the showing up it took to carve them into reality. But show thanks, too. When you feel an inexplicable wave of gratitude, don’t override it with entitlement. Nothing in this world happens entirely according to our own will. There’s always a little stardust involved, and that’s worth appreciating.

A Moment To Talk About It

Herbert’s parents once ate takeout for an anniversary dinner. The mindset stuck with him, and he struggles to spend money even when it’s an obvious life improvement or small investment to fix something necessary. “Maladaptive frugality,” he calls it.

Herbert shared the idea on his blog and posted it to Hacker News. There, it sparked a big discussion. Many people in the comments said most Americans struggle with spending too much, especially on credit, and could learn from Herbert’s attitude. Others confirmed they, too, have a hard time not defaulting to the cheapest option.

Reflecting on his piece striking a nerve, Herbert curated some of the comments. He closed with the following words: “I’m glad we all had a moment to talk about it.”

That’s what writers, creators, and connectors do, isn’t it? Making space for conversations to happen. Filling that space with a trust advance. And then hoping a gentle echo comes back. This blog is little else. It’s been going for some 1,500 days. That’s 1,500 chances to talk about something that might otherwise have stayed silent and hidden.

Here’s to many more such sparks—and to investing in ourselves whenever it makes sense.

Getting the Last 10%

My favorite Pokémon cards to collect are those belonging to so-called “subsets.” These are mini collections within, or sometimes across, the larger, official sets released by The Pokémon Company every two months or so.

Sometimes, these sets are deliberate, for example with a designated rarity. At other times, Pokémon just throws in a bunch of cards following the same theme. Many subsets include nine cards, which all neatly fit on one page in a binder. Others go up to 18, 30, or even 35 cards. But in all cases, they’re limited number of entries makes them more attainable—at least relative to collecting full master sets of the main expansions, which can easily run into the thousands of dollars, even for new releases.

The latest subset I’m collecting is one of several featuring “shining” Pokémon. These are rare, glowing, differently-colored versions of their respective Pokémon’s counterparts. The nine cards in this subset are from 2017. Some still cost less than 10 bucks in near-mint condition. Others have already run beyond 100 euros. They’re not quite considered vintage yet, but they soon will be.

Every time I go after a collection goal like this, I have to ask myself: What condition do I want to obtain these cards in? For bigger milestones, like my Umbreon master set, I immediately knew I would not be able to afford all cards in almost-new status. But whenever I can, I go for the most minty condition I can. Since these were only nine cards and most of them still affordable, I set my filters to near-mint and went off.

Often, the price jump hurts when you look at it. “Ack. An ‘excellent’ one would run me 150. Near-mint is 200.” It feels hard to justify. Visually, the quality jump between “excellent” and “near-mint” can be almost imperceptible, depending on the cards. Especially if all you’ll do is place them in a binder, like me.

But there is a catch: The more the price increases over time, the bigger the gap between squeaky clean and three small scratches becomes. What’s a 50-euro difference now might end up being a 200-euro gap in five years’ time. And that’s before grading the cards, which I don’t usually do—but retaining the option for the future also holds value.

For one of the cards, the near-mint version I ultimately chose was almost three times as expensive as the cheapest excellent option. But as soon as I held it in my hand, I knew: This was money well spent.

It’s hard to invest 30%, 50%, 100% more only to go from 90% to 100% on the quality scale. Not every scenario warrants it. But some do—and when you’re convinced you’ve found yourself in one of them, you should not hesitate to cough up the extra dollars, hours, or resources.

Excellence is sneaky: Getting the last 10% demands so much more than just those extra 10%. But that’s why we call it “excellence”—and why the first spot on the podium is valued much more highly than the second.

The Moment We Change Forever

We can rarely identify it as it happens. Usually, it takes hindsight to point and say: “That’s when it happened. After that, I was a different person.”

For 25 years of my life, Howard Shore’s iconic theme of the Shire in Lord of the Rings was just a song to me. A nice, familiar song, but nothing more. Then, the church organist played it when my little sister walked down the aisle to get married. Now, I can’t listen to it anymore without getting misty-eyed.

Songs played at big events seem to be a good example. I still remember the sun shining on my uncle’s grave as we buried him. “See You Again” from the Furious 7 soundtrack was echoing through the cold winter air.

At my great-grandmother’s funeral, I was 12. I pushed the button on the stereo in the chapel, and Andrea Bocelli’s “Time to Say Goodbye” came on. We all just listened to the song in silence.

There are other poignant memories, of course. Sitting in a car, handing over a letter to a girl I loved, and getting rejected. Taking a phone call in the library, which confirmed I was selected for an internship at BMW. Handing in my Master’s thesis.

Not all of these moments come with homework. Some do. But all of them are worth looking back on. “Oh. So that was when it happened. After that, I was a different person.” And if you want to change again from there, special moment or not, you can do so any time.

Don’t Swing Your Sword in the Dark

The main plot point of Devil May Cry, a hack-n-slash video game series revolving around demon hunter Dante, is revenge. The king of the underworld, Mundus, killed both of Dante’s parents, one to see through his plan of conquering the human realm, the other to enslave Dante’s brother Vergil as his ally.

That’s a lot of bad blood to start with, and it only gets worse from there. In the animated series, Dante is pretty blunt about his ambitions. Even the threat of yet another super-demon coming back to life and feeding on millions of humans to grow his power seems to be little more than a nuisance. “If Argosax comes back and kills Mundus, then I won’t get to do it myself,” Dante tells Lucan, a trusted mentor.

What Dante will realize only too late is that, indeed, he has more in life worth fighting for than revenge. There’s Mary, a former demon hunter turned romantic interest. There’s his buddy Enzo, who helps Dante find well-paying missions. And, of course, his brother, whom he immediately starts arguing with as soon as he meets him again after many years of lost contact.

“A man driven by vengeance swings his sword in the dark imagining all he hits is his desired enemy,” Lucan counsels Dante, “not seeing who it is he truly wounds.” In the end, all of Dante’s friends will pay some price or other for his obstinacy.

Sometimes, your purpose must carry you beyond relationships. But when relationships are your purpose, consider your next actions carefully.

It’s easy to get carried away for a prize ultimately not worth having. Before you start swinging your sword, make sure you turn on the light. Victory is rarely worth becoming someone you’ll dislike—even when it’s victory over the forces of hell itself.

Watching Clouds

When’s the last time you did that on purpose? For me, it was years—until yesterday.

I sat on my sunbed in the garden, working. It was mid-afternoon, and I got tired. I closed the laptop and laid down. I shut my eyes and listened to the environment. When I opened them, whoa!

There they were. Three large cloud constellations. Drifting. One was half-hidden behind the roof of my building. The other two, however, already provided room for interpretation.

One looked like a serpent dragon, coiled in a zigzag pattern, with one giant claw at its tail. Its jaws were wide open as it roared into the sky. I could almost hear the sound.

The other batch of cotton shaped into a pretty well-defined scorpion. Two huge claws coming full circle in front of its body. A short but sharp tail, ready to attack.

For a few minutes, the two beasts floated next to each other. How would their bout end? Before I could find out, they slowly dissolved, merging into new patterns. Just like that, the fantasy was gone.

When I sat up, I still felt tired. But I was also somewhat rejuvenated. A little daydreaming in nature can go a long way.

Cultivate your resting places, and visit them before you need them. Make time for watching clouds.

Let Your Feedback Ripen

After day one of our annual company get-together, I already had a lot of feedback. The food was not as nice as the year before. The sessions were more work-focused, which was good, but the event now lacked the human element altogether. There weren’t enough breaks to digest information, let alone meaningfully recover in some of the hotel’s amenities. On and on the list went in my head.

I wanted to take some notes on the morning of day two to make sure I can relay some of my thoughts to the organizers later, but then I stopped myself. For many of my points, it was too early to tell. What if the next two days’ dinner turned out amazing? That would surely balance out the bland noodles from before. What if we’d circle back to how we feel and cope during that day’s sessions? Perhaps there might be more breaks, too. Who knew? Not me at that stage.

So, instead of writing it all down, I allowed it all to sink into my subconscious. Have it simmer in the background, you know? If a piece of feedback was relevant, my opinion of it surely would only get stronger from here. And if it wasn’t, it was probably fine if I couldn’t remember it by the end of the week-long event.

It rarely hurts to note down your first impressions. But, sometimes, first impressions can carry us away. We double down on them and start to see only through a filter we’ve already chosen. So don’t get too attached to those notes. Be fascinated by how your opinion changes as time goes on. Then, make a clear cut, look back, and understand how you’ve arrived at the stance you ultimately ended up holding.

Good criticism is like an avocado: It needs to age just long enough for the taste to come out exactly right. Let your feedback ripen, and don’t worry too much about getting all your points across immediately.