Know How You'll Get Out Before You Get in

“Know how you’ll get out before you get in” seems so obvious.

In a business, where you’re theoretically there to turn a profit, why would you not think through a full cycle before you start in?

We all do this, for both good reasons and less than good ones.

Back in 2008ish I read Jack Schwager’s book Market Wizards for the first time.

I was only a few years into finance, pretty new on the public markets side, and more confused than anything else.

Enter Schwager’s book and his cast of character profiles.

With the world starting to go off a cliff, I started to realize there was a whole other form of entrepreneurialism at work.

Bruce Kovner coined this quote in the context of trading.

But, as a non-trader, I can’t help but want to apply it to the rest of life.

Any time you are expecting to measure the return on an experience, know your out.

Whether it’s a job, a scheme, or a project in your house -

If it’s a likely finite position you’ll be taking, think about the good and bad ways it can end, and pre-plan your exits.

The corollary is that any time you are expecting to play an infinite game, meaning the exchange is relational and not transactional in any way, abandon these calculations until they’re needed.

And they might be needed! Don’t get caught up in blind hope. But, in an infinite game, know you’re in.

Friendships, family, marriage, etc. deserve some honest respect for not requiring outs, but be realistic too. Boundaries, at a minimum, matter.

All great advice starts somewhere narrow.

Figuring out how (and why) it applies more broadly to life is one of life’s great joys.

In case you missed it, I had the great pleasure of interviewing the one and only Jack Schwager last week for Excess Returns. We talked about his journey in markets and writing, and the timeless wisdom from many of the brilliant minds he spent time with. I’m very proud of this one: