Most of you have probably never heard of Kyle Bass.
He’s a Texan hedge fund manager, who made his fortune and fame by correctly predicting the 2008 Global Financial Crisis.
While the world economy and stock markets around the world crashed, Kyle Bass more than tripled his money.
He did this by betting on the decline in prices of assets that were supposedly backed by safe real estate mortgages (turns out they weren’t).
Quickly after, he emerged on the world scene as a famous ‘short seller’ – people who bet on asset prices falling, not increasing.
Since then, he’s publicly declared that the Chinese banking system will soon collapse, has made a huge bet against the Chinese yuan, and even interviewed a Chinese refugee billionaire in a secret private jet hangar in Texas to back up his claim.
He lives on a huge farm in Texas – and needless to say, he’s a bit of a badass.
Kyle Bass is smart and has a proven track record.
And professionally, he bets on things going wrong.
So it’s no surprise that he’s often quoted by people who think everything is wrong and that the world is falling apart – that the economy is going to tank tomorrow, that the world is all downhill from here, that life is getting worse, etc. – you get the picture.
But the interesting part about Kyle Bass that most people don’t know is that he’s actually very optimistic about the future.
Here’s what he said in an interview some time ago:
“You want to invest in human innovation. You should be optimistic about the millions of people around the world who are trying to improve the way we live, work and invest in places like Silicon Valley.
Yes, you can still take excitement in spotting things that are less in sync in the world… but spotting these anomalies should be just an arrow in your quiver, not your whole quiver.”
In other words, Kyle Bass, the poster child for betting on things going wrong, is an optimist.
His message is actually that you should primarily invest in things going right – and if you can afford it and know how to do it – then you can invest a bit in things going wrong.
But virtually all the people who quote Kyle Bass tend to leave that part out.
And there’s a reason for that. They seek confirmation bias – information that confirms what they already think about the world and shuts out everything else.
They use Kyle Bass – and others like him – as justification that everything is wrong. And so they leave aside his real optimism.
It’s something we all do. It’s why liberals read the New York Times and watch MSNBC, and why conservatives read the Wall Street Journal and watch Fox News.
But confirmation bias can be incredibly limiting if we choose to focus on the wrong things.
Look – I get it, there are a lot of challenges in the world that need to be addressed. Climate change and the rise of Artificial Intelligence – including robots taking human jobs – are just two examples.
But we also have incredible firepower to deal with these things.
Millennials are now the largest population group in the largest consumer market on the planet (the US) – and they demand sustainability, equality and a new, impact-driven way to do business.
We also have new tools to fight these problems, including exponential technology that will radically change not only entire industries but also the very fabric of our society.
And there is overwhelming scientific evidence that despite what the media tells you, life is getting substantially better for most people on the planet every decade – and will continue getting even better in the future.
For example, in the 20th century alone…
– free markets lifted over a billion people out of poverty
– infant mortality decreased by 90%
– maternal mortality decreased by over 99%
– and human lifespan more than doubled.
But if you had focused on the headlines of the day at any given time, you would never have been able to see the bigger picture – namely that the future is brighter than you think.
Of course, I’m not saying we won’t have bumps in the road on the way there, but it’s important to remember that the road is moving us forward.
Things will get better, and humanity will thrive.
Of course, you can choose to be an eternal pessimist – but you’ll likely spend a lot of time being depressed about the state of the world.
Or you can choose to be an optimist and observe how far we’ve come already – and how far we might go next.
Which one of those you choose has huge implications not only for your sanity – but also for your financial future.
On the one hand, you can reject change and turn it into a doomsday prediction, do everything you can to protect yourself and stay safe – and miss out on all the opportunities and gains.
And on the other hand, you can choose to embrace change, engage with the world and invest in the people who are transforming industries and making life better for everyone.
If you choose the former, you’ll probably own a bunch of gold, guns and canned foods for when riots break out.
But if you chose the latter, you’ll own productive businesses in high-growth industries that create breakthroughs and solve humanity’s biggest challenges.
These businesses are the vehicles that have consistently created wealth throughout modern history. And they will continue doing so in the future.
I’m sure you have no doubt which one I encourage you to choose.
Optimism From A Bad-Ass Billionaire
Most of you have probably never heard of Kyle Bass.