Intro

Good Trades aren't just understood by the people of Wall Street. When's the last time you heard a fucking moron parrot "buy low, sell high!"? Probably somewhat recently. But the concept of the Good Trade is universal.

The entire capitalistic business enterprise is built on capturing excess value above the cost you paid to create the original value. Bankers do this by charging a fee to raise capital, generally. Restaurateurs do it by paying less for the food, rent, and staff than you do for the finished plate. Likewise, there are societal good trades as well. The key difference is that the rules are very different when trading good and services vs. trading relationship capital.

Let's explore some trades beyond the 101. I'll dedicate a post to each concept. Extra reading at the end in footnotes for those interested.

Good Trade #1 - The Distressed Asset

Let's say you own a piece of debt, meaning you gave another party money assuming you get that money back later plus a stream of cash (interest). Repayment becomes doubtful. You have 3 choices:

  • Hold on and hope to get paid
  • Sell out, locking in your loss
  • Double down on the position, buying more debt at lower prices^1

All 3 are viable or retarded strategies depending on the situation.

If you bought at the top, #1 might work out fine if you get repaid in the end.

\#2 is perfectly rational if you think prices will continue to fall or bankruptcy is inevitable - no more thinking about it, move on to the next and make the money back.

\#3 can be great if the market is wrong and you are right - pick up the same asset you liked at expensive prices on the cheap and up your overall returns.

All 3 can lose you money, #3 especially so, if you're wrong. Allocate risk accordingly and you are a Good Trader.

Let's say you rent a piece of pussy (never buy if it flies fucks or floats), meaning you gave another party your time and attention assuming you get that investment back later plus a stream of female prizes (sex and companionship). Repayment becomes doubtful. You have 3 choices:

  • Hold on and hope the stream of female prizes comes back
  • Sell out, locking in your loss
  • Double down on the position, investing more resources

Unlike finance, there are some clear winning strategies here.

\#1 is viable assuming you curtail YOUR investment in her. You also have a whole pile of tools in your chest (like Dread Game) to level-set the value between each other. Played correctly, you can re-acquire what you had "on the cheap" - don't go straight to #2.

\#2 is appropriate if you think her value to you will continue to fall either because (i) further investment will yield too little or (ii) irreparable damage is done (like bankruptcy, you just want to avoid going to court with this one...) Plus, all "costs" are sunk costs in relationships, meaning as of today, yesterday's chocolate is as valued by her as yesterday's blowjob to you.

\#3 is NEVER WORTH IT. Briffault's Law makes it very clear that a woman's promise to continue the deal based on future benefit becomes null and void once that benefit is rendered. If what you got yesterday for a good price is now at a bad price, your buying power has not decreased. The woman is trying to change the trade to get more without giving more. Sound like a Good Trade to you?

Conclusion

In economics there is the concept of diminishing marginal utility: The benefit derived from a product lessens with each successive unit consumed. IMO, this is a law of the universe. Consider an all-you-can-eat buffet. If you arrive hungry, the first plate from the buffet provides 100% utility in satisfying your hunger. By the time you’re eaten the second plate, you are no longer hungry. If you return to the buffet for a third plate, you will probably feel overstuffed after eating it. In terms of "utility" you are now in negative territory.

If we accept Briffault’s law at face value, women derive diminishing marginal utility from their relationships with men after acquiring the desired benefits. Core tenet of TRP right there. Fortunately, this utility exists in her head, and you have the ability to pull the strings in the perception department. It's true that women are perceptive, but their perception skills are sharp only in relation to you.

Most of her "desired benefits" kill the relationship you would want to have - this is where Briffault fell short and TRP picked up. Give her what she claims / Western society tells you she wants, and you're in negative utility territory. Use the techniques we teach here, and she'll always come back for another plate at the buffet with limited investment. That is a Good Trade.

It's up to you as the man to either renegotiate the terms of the deal or cancel it. Your ability to choose the correct of the 3 options above will determine whether or not you are a Good Trader of your resources. Good luck out there.

Footnotes

(1)

A key element of distressed debt trading is that yield is negatively correlated with price. This means that the higher the price, the less you get paid in principal and interest. This sounds strange at first, but let me math it out: if you buy $1000 of debt that yields 5% when it is issued, you are said to acquire it "at par" or 100 cents on the dollar. That purchase yields 5% per year, for life. However, debt prices become very volatile when repayment is in question. Let's say you got that same piece of debt at 80 cents on the dollar (this is called a "discount") and it matures in 2 years. Your new yield is:

$50(1 + r)^-1 + $50(2 + r)^-2 $1000(1 + r)^-2 = $800

Now, no one does this without a calculator because you need major skills to do iterative math mentally. Punchline is your new current yield is 6.25% and yield to maturity (or lifetime return) is 17.732%. This factors in both your heightened interest AND the $200 "principal" earned when the bond matures and you get paid $1000 for your $800. Here's a link if you want to geek out on bond math. That site also has a yield calculator.