Did you know that Phil Galfond dropped a great newsletter yesterday? No? Unlucky, you can’t read it.
PG doesn’t send emails to his newsletter subscribers often, but when he does, they’re always worth your time. Yesterday’s drop, “Making the GTO Decision: What Your Ego is Charging You,” was no exception.
I’m sharing this in full knowledge that I’m not sure if there’s any way you can read it if you didn’t get it. As far as I can tell, the only way to read the text is to have subscribed and received it in your inbox. There’s no online edition. It’s not a Substack. The emails come from PhilGalfond.com, but the emails are not published in the articles section.
So consider the quote below a teaser to get subscribed (it’s on the homepage) so you don’t miss out on the next one. He doesn’t email often, and while he’s usually promoting his next class, it’s not spammy, and he always brings an interesting lesson to your inbox.
Also, it is not called PG Tips, which is a huge missed (though probably British-only) opportunity.
Bill bought Tesla stock many years ago.
He’s done well — congrats to Bill — but he’s also facing a challenge: when does he sell?
A few times a year, he thinks about selling. He knows the position is terrible bankroll management — he’s now way too concentrated. But selling and then having the price skyrocket… that would be painful.
If the price drops — sure, that sucks, but he doesn’t feel as bad. “I’m still ahead,” he tells himself.
The loss is easier to stomach because holding doesn’t feel like an action. And if it’s not an action, it can’t be a big mistake.
But holding is an action. Or at least, it’s a decision — a bet.
Every day Bill wakes up and doesn’t sell, he’s making a decision. He’s looking at the current price and choosing to have that much Tesla stock at that price. If he had $90,000 in cash and you asked Bill, “Would you buy $90,000 of Tesla stock right now?” he’d almost definitely say no. Too concentrated — way too risky.
And yet (ignoring tax implications, which isn’t the real reason people make this mistake), that’s exactly what he’s doing every single day.
Keeping feels different from buying. But it’s the same bet. It’s an emotional bias — a logical fallacy — that prevents people from seeing things clearly and making the best decision for themselves.
