Never put all your eggs in one basket. Play it safe. Don't bet everything on the success of just one venture. You're gonna get hurt if it fails. Diversify. Get into 1000s of different real estate properties, cryptos, stocks, rolexes, side hustles, waifus.
Common wisdom.
The worst defense is having a single point-of-failure.
Spread your wings.
Diversify.
Never put all your eggs in one basket.
Nassim Nicholas Taleb, a renowned author, statistician, and risk analyst, is known for his work in the field of finance and probability theory. He is the author of the book series "Incerto," which includes popular titles like "Fooled by Randomness," "The Black Swan," "Antifragile," and "Skin in the Game."
In the context of the saying "never put all your eggs in one basket," Taleb has expressed a similar sentiment in his works, particularly in the book "Antifragile." The idea behind this saying is to emphasize the importance of diversification and risk management in various aspects of life, especially in investments and decision-making.
Taleb's concept of "antifragility" goes beyond mere diversification. It is about creating systems, organizations, and portfolios that benefit from uncertainty, randomness, and disorder. An antifragile system doesn't just withstand shocks but gains strength and resilience from them. The core idea is to have a setup that gains from volatility rather than being harmed by it.
In the context of investments, Taleb advocates for a robust approach that involves spreading your investments across different assets and strategies. This way, if one investment performs poorly or experiences a significant downturn, the overall impact on your portfolio is mitigated. He advises against overly complex financial instruments and derivatives, as they can introduce hidden risks and dependencies that can lead to catastrophic consequences.
In summary, Taleb's perspective aligns with the wisdom of not putting all your eggs in one basket, but he takes it further by emphasizing the need for antifragility and robustness to navigate uncertainty and randomness effectively. By diversifying intelligently and embracing antifragility, one can be better prepared for the unpredictability of the world.
But what if you only have one egg left to play around with? What if who you want to be necessitates putting all your eggs in one basket? It's like getting married, or starting a passion biz. Put all your eggs in the egg basket then. Mentally, if not materially. And I emphasize egg basket, not just any basket. Our dear friend Mr Taleb wrote an entire book on this subject as well:-
In "Skin in the Game," Taleb emphasizes the importance of having personal exposure and risk in the decisions one makes. He argues that people should have a stake in the outcomes of their decisions, especially in matters that can have significant consequences. Having "skin in the game" means that individuals have something to lose if their decisions turn out to be detrimental or something to gain if their decisions succeed.
The concept of "skin in the game" aligns with the idea of going all-in or putting all your eggs in one basket to some extent. If you have a strong conviction about a particular course of action and truly believe in its potential, then committing a substantial portion of your resources or efforts to that one option might make sense. By doing so, you have a direct stake in the outcome, which can lead to more careful consideration and accountability.
However, it's important to note that Taleb's concept of "skin in the game" is not meant to encourage reckless or blind risk-taking. He advocates for decision-makers and leaders to have a personal downside if their actions lead to negative consequences for others. This aligns with his broader philosophy of embracing uncertainty and managing risks in a responsible and prudent manner.
In summary, while Taleb's "Skin in the Game" may appear to promote the idea of putting all your eggs in one basket, it should be understood in the context of personal responsibility, accountability, and being willing to bear the consequences of one's decisions. It's not about encouraging imprudent risk-taking, but rather, about aligning incentives and responsibilities to improve decision-making and outcomes.
This is why in the game of markets, it may be wise to look out for those who put all their eggs in the egg basket (by choice) that no one's talking about, if you wanna be a step or few ahead. Many will fail. Some will succeed. Many such examples IRL.
If the whole world operates 100% on "never put all your eggs in one basket" all the time, no one will ever dream of the egg basket. No one will try to build it. No one will take the risk of trying to make it work. The vast potential of the egg basket remains veiled forever.
Never put all your eggs in one basket.
Sometimes I wonder if this saying is just psyops planted by our reptilian overlords so that we may never discover true gold, or in this case, the egg basket.
The concerns which fail are those which have scattered their capital, which means that they have scattered their brains also. They have investments in this, or that, or the other, here, there and everywhere. “Don’t put all your eggs in one basket” is all wrong. I tell you “put all your eggs in one basket, and then watch that basket.” Look round you and take notice; men who do that do not often fail. It is easy to watch and carry the one basket. It is trying to carry too many baskets that breaks most eggs in this country. He who carries three baskets must put one on his head, which is apt to tumble and trip him up. One fault of the American business man is lack of concentration. (Andrew Carnegie, QuoteInvestigator).