Level 6: The Entrepreneur
If there is a player of any level that has my utmost respect, it is the level 6 player, the entrepreneur. The reason is that this is the most dangerous level; the riskiest one. The odds of success here are so miniscule, that it can be pessimistically assumed that the average entrepreneur selected from any random sample ‘will’ fail. Similar to the level 3 player (the speculator), the players of this level wish to make it big; the only difference is that they strive for innovation whilst aiming to make it big. The level 6 player is compensated liberally for success, and erased brutally for failure. Anyone playing in this level is not guaranteed a good night’s sleep by default. These players, regardless of whether they are successes or failures, collectively push the global economy with their innovations, and risk-bearing approaches. They are the forefront of the army. Consequently, they are also the ones that suffer the most casualties, regardless of whether the war is won or lost. My respect for them comes also with good reason. Unlike the level 2 corporate nut-job, the typical entrepreneur has skin in the game (credit: Taleb); which means that he is likely to be directly penalised for his mistakes and directly rewarded for useful solutions to society (a fair deal), whereas the corporate nut-job takes all the glory of success exclusively for himself and parries all the misfortunes of failure onto his employer and his underlings (basically, everyone except himself).
Level 7: The Fox of Wall Street
This is ‘supposedly’ the top level in the game. In terms of risk, it ranks third (level 6, and level 1 take the first two spots respectively). Unlike the level 6 spear-head, the odds are (usually) heavily in favour of the average level 7 fox. The level 7 player has higher odds in his or her favour because of the massive cost of entry into this level, both in terms of capital, and in terms of the specialised knowledge in complex financial instruments. The two extremes are of course possible, where a fox overcomes lack of knowledge by buying it with his or her huge capital, or a fox overcomes his or her lack of capital with his or her ultra-specialised knowledge, and precise execution. The keyword that describes this level at best is ‘hedging’. Without going into technical details, the foxes configure their moves to gain from directional exposure (they could potentially gain from the market moving either way), unlike the level 5 ‘clever’ investor who is essentially long the market (wishes the market to rise unidirectionally, and not for it to go down), and doesn’t do anything actively to protect himself or benefit from a downward market move. The upside at this level is that this level single-handedly controls a big market-share of the entire game’s pot-money with arguably the least bang-for-the-buck of all levels in terms of useful solutions for society. The really clever foxes have a good chance of cutting a sizeable slice from the bigger chunk of the net market-share. The downsides are many, one of which is that one small calculation mistake made by a timid fox puts him or her right into level 3 (the speculator), causing a sharp change in fortunes, which means that the margin for error is (usually) very, very low. Ethically speaking, one could argue that all the directional plays taken by the foxes manipulate the average person’s livelihood (*ahem* Level 1 *ahem*). Apart from this, it is only fair to mention the wolves and hyenas that lurk in this very same level. These are dangerous creatures that take part in the gains, and parry the risk onto unsuspecting victims (sounds just like *ahem* level 2 *ahem*). Have you ever asked yourself how much percentage of your loss is being shared by your mutual fund’s diligent manager? Or how much your friendly broker stands to lose when you lose money on your leveraged CFD (Contract For Difference) trade? If you ever choose to ask such questions, the wolves and hyenas in sheep’s clothing magically reveal themselves to you.
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