The Diamond Hands Principle

I’ve followed Reddit investing drama and memes for a while now, and I think it’s time I articulate my understanding. This has the potential to change the course of the economy, and will continue to influence the rise and fall of stocks going forwards if more are adopting it. I will state the “not financial advice” legal disclaimer, but I’m not going to name you specific securities anyway. Let’s talk about what it means to have diamond hands.

Does Diamond beat Paper?

I’ve been through all kinds of investing educational materials, but every time it’s the same things. Set stop orders to lock in profits. Look for analysts you trust. Diversify using ETFs (stocks someone else picked). Invest on margin to get better returns. What if I think debt and loans are a bad idea? What if I think my money choices should be my conscious decision? What if I (someone paid to automate things) think we should be suspicious of automation as a substitute for moral action? What if I think the best choices in life are the ones that require personal sacrifice and only my own skin in the game?

The New Old-Fashioned Way

In the bedrock under the “diamond hands” meme are some pretty old views. What’s funny is the principles most “new” phenomena are based upon aren’t new ideas, they’re just the new way of expressing them. Value Investing is the idea that you should invest in what you deem is empirically worth investing in. In practice it’s the anti-establishment approach to the economy. Good value investors generally follow neither the conventional wisdom nor each other. In the words of early 2021 Redditors, they like the stock. They do their own “due diligence” (or DD) and report and debate each other’s findings. They are skeptical of analysts, who are other humans with their own biases.

Warren Buffet is the name everyone knows when it comes to value investing. But of course, the next thought people have is to grab everything he has said and try to emulate him. That’s the wrong approach. See, here’s the catch: when it comes to value investing – to do it properly philosophically, you can’t just rely on someone else. By the time you know what Buffet invested in you’ve missed the window. You need to think like he did 50 years ago. You have to do your own research, and put money on what you think merits it. You need to own the decision. It’s not a less risky gamble to expect other people to make money for you. It only eliminates effort on your part, oddly in an area of your life you value highly.

Paper Hands

When you trace economic decisions influencing markets, a large share of them are made on the basis of other people’s analysis. This extends to such a large degree that the market will go down merely because society thinks it will, and it will go up because society thinks it will go up. The opposite ordering should be true. People should be able to predict it well based on how companies are performing, not based on public perception of people who don’t even invest. Politicians and activists and other wealthy public figures appear to accrue wealth in conjunction with this influence. To the extent it’s true, it’s punishment of the masses for lack of faith in themselves and for giving their personal power away to people all-too-willing to take charge of it.

Similarly, the modern way of investing money on a day-trading or frequent basis is to sell stocks when they drop a certain percentage from all time highs, or to buy ones when they cross a certain percentage over certain lows. To sell going low, buy going high. It is not an insensible strategy to lock in profits and minimize loss. But it functions as if you are relying on letting the market to decide how you will buy and sell. You are being reactive on your investments, instead of proactive. I, along with some others, think there’s a better way.

The 💎👐 Principle

I equate the principle of diamond hands to what a well-versed religious person calls faith, what a philosopher may call integrity, or trust.

This is the Diamond Hands Principle:

If you like the stock, buy the stock. If the stock skyrockets, do not sell the stock. If the stock drops, do not sell the stock; consider buying more instead.

You have to decide why it is you want to make an investment. You have to decide if the future of a company is bright, if it is innovating, if it is making the right decisions internally. But if you decide it is undervalued and you like the stock, act like it. Have some faith and trust in yourself.

Is it risky or foolish? Those looking mainly to lock in profits the old ways will say yes. I’m not looking to lock in profits immediately. I like the stock. The things I invest in are things I think should succeed.

Buy low, sell high. Hold. HOLD. HODL. Maybe sell a little when it’s high to cut your losses. If you do this wisely, you can eventually remove the amount of money you have invested, and having broken even, hold a good amount with diamond hands until the end of time. But the general rule is to hold, and buy or sell only in rare circumstances. So much so that the typo “HODL” has become an in-joke; some go by the affectionate term “hodlers”.

How to Have Diamond Hands

You can’t simply adopt the principle out of mere wanting to. There’s a reason the Reddit and 4chan frequenters refer to themselves as autistic or as crazed animals. It’s about defying the odds. It’s about staring in the face of losing a lot of money and not blinking. It takes a large amount of courage and some would say a measure of stupidity.

I’ll always laugh at this tragedy from Isaac Newton’s finances. You should read The Intelligent Investor yourself. Buffet did. It’s ancient, you can find a PDF.

Back in the spring of 1720, Sir Isaac Newton owned shares in
the South Sea Company, the hottest stock in England. Sensing that
the market was getting out of hand, the great physicist muttered that he “could calculate the motions of the heavenly bodies, but not the madness of the people.” Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price—and lost £20,000 (or more than $3 million in today’s money). For the rest of his life, he forbade anyone to speak the words “South Sea” in his presence.

Jason Zweig, commentary on the introduction to Benjamin Graham’s The Intelligent Investor

If you want to have 💎👐 and not 🧻👐, it will help to decide what it is you are willing to lose. Don’t invest money that you can’t throw away. I also refuse to trade on margin, which essentially means using your investment as backing to take out a loan to invest more. I believe debt is an evil seldom necessary, and loans to increase gains seems like a deal with the devil for greed’s sake. Personally, I also agree with Elon Musk that shorting (the process of borrowing stock you hate to sell, to own a “negative” amount), should be illegal. It offers infinite risk for rewards.

Those who hold out on an investment seemingly beyond its prime are referred to as the “bag holders”, a term as old as Thomas Jefferson’s usage in 1793. You don’t want to be the person left with the dregs of your collective effort while others run off with the valuables. So what do you do when someone challenges or mocks you? Return to the principle itself. Do you like the stock? Revisit or do more analysis. Go take another look at a company’s big three documents: Income Statements, Balance Sheets, and Cash Flow. If you’re confident in your decision, stick to it. Time will tell. The only true bag holder is the person who sells at a loss. I’ve seen many who sold a stock that collapsed and then rose again, to become bag holders of a stock that was doing well, holding a bag of their own making, snatching defeat from the jaws of victory.

Don’t let other people tell you what you’ve seen and decided. Don’t let other people tell you what to buy or sell until you’ve gone and verified what they say yourself. Trust your own judgement work on improving your own judgement.

Concluding Personal Disclaimer

I recently turned more than a 1000% profit off of one investment in 3 months. That’s mainly what urged me to write this. I knew I would, few else who had the money did, and I couldn’t afford to put forward much at the time. Had I seized another earlier opportunity it would have been a 10,000% or even 100,000% profit. But hindsight is too late, so I look forward to the next good thing.

I am down a little from decline of one heavy speculative investment. The fact of the matter is, I don’t feel I’ve lost that one because I still think that investment is seriously undervalued. I’ve made substantial gains everywhere else so far, and the one “loss” I expect a massive return on soon. It’s not a loss until you sell. I’m willing to live and die by that sword.

My investments are new, and still modest in the 4 digits, but I’ve found they outperform the market whenever it turns down, and keep up when it does well. I am concerned about the value of the U.S. dollar like many other Americans, I suspect an economic downturn soon, and then possibly an upturn after that. Everything comes and goes, but one needn’t be blown about by the short term winds.

There’s nothing constant in life but change, and I plan to have diamond hands in the face of it.

Be Quiet.

Peace, be still. Listen. Hush. Shush. Breathe. Be quiet. There’s a lot of us online who spend way too much time speaking or spectating. Don’t be one of them all the time. You don’t have to reply to every post or even acknowledge every reply to you. Sometimes the hardest path and one less traveled is to not take the journey others do at all.

We live in a very noisy world – literally and figuratively. I spent the weekend at our state’s aquarium and it had awkward soundproofing triangles on the side because of the noisy roads nearby. (Easier to see in this ancient pic below)

SHELBY DOBSON / LOVELAND LIVING PLANET AQUARIUM

What kind of metaphorical soundproofing do you have in your life? We’re constantly barraged by advertisements online and streams of posts from our friends and peers, and news articles are always fighting to be as psychologically loud as possible. What do you think this is doing to us? We’re getting louder and louder. We’re becoming less able to hear good things that are quieter. Truth of the matter is, we’ve been in this deafening noise for so long that some of us seem to have forgotten what it’s like to step outside of it.

Step outside of it. Every day in this tough year I see another acquaintance snap and make a drastic negative life change because they can’t take it anymore. Divorce and breakups, quitting a career, torching a project, permanently cutting off friends, suicide. People “can’t take it anymore.” The only way you’re going to be able to survive and succeed in a perpetually negative noisy world is to manage to get outside it and know the opposite exists, and what it looks like. A lot of still-successful celebs and commentators I’ve noticed will do so once a year with some kind of “break”. Even they need to be quiet sometimes.

I want to examine just three simple things you can do to bring more peace and balance in your life if you’re roped into tumultuous news and entertainment. (I have more but let’s narrow it down to a few you’ll remember)

1. Take a Sabbath

The word comes from Shabbat, the Hebrew origin that dates at least back to Moses’ 10 Commandments. For practicing Jews that’s Saturday. For most Christians, it’s Sunday. But you don’t have to be religious. It’s a generic principle. You need to take time to mentally rest from the crap you have to put up with every other day of the week.

Decide what that would look like to you. Maybe your phone is always turned off all day on the first day of each month. Maybe you refuse to open certain social media apps on a certain day of the week. Whatever you do, you need to define it as a law that you live by, one nearly as big as “don’t kill people”. One public figure takes an entire month away from being online, with assistance from peers to find out what was missed. What matters is that you take a well-defined regular quiet break. Do what fits into your own work schedule.

2. Meditate

Do you know how hard it is to do nothing on purpose? For some of us, it’s boring. For others, it’s a nightmare that lets our inner demons have a voice. Many of us don’t want to be left alone with our thoughts. For those and many more, to go meditate on purpose about their life and problems is a terrifying idea that takes legitimate courage to face a little introspection.

Introspect. Take time to sit on the floor quietly with your eyes closed for 10 or 15 minutes. Set an alarm if you have to. You can hum or empty your mind and think of nothing and see what bubbles up. You could have paper and pencil ready. You could only focus on your breathing. You don’t even have to call it meditation if you think it’s silly. But we don’t get enough of it. You may even find time to meditate on the go, if you go running without music like I do. But if you don’t give yourself time to introspect, you forego one of the only ways to course-correct your life and improve where you’re headed. And maybe if you faced those demons they’d leave and take some anxiety and stress with them.

3. Write

This is one of the reasons I have this blog now, but I write elsewhere too. Writing has a deeply therapeutic effect on a cluttered soul. When you write down what’s on your mind, it suddenly doesn’t have to be on your mind anymore. You can clear and quiet your mind. I’ve encountered this numerous times, where I finally write down a list of things that have been secretly plaguing me and then suddenly I can think and breath again.

I can’t overstate the value of coping with stress, anxiety, and possibly depression by writing. Barf your mind onto a page. Make it a note document you can conceal from everyone. Spill it. Start a journal or diary. Let it all out and see how it affects you. You’ll feel better once you realize you can have a paper therapist. It might help you become aware of things you keep forgetting, and you’ll be able to look back a few weeks later and see what ended up mattering versus what didn’t age well.

Takeaway

It doesn’t matter how you go about it, but if you can’t give your subconscious some ways to participate in your life, you’ll go crazy. We’re seeing it happen to all kinds of people this year. If it means you have to start hiking into the mountains, do it. It’s one of the reasons people find various vacations alluring. You need one around once a week. There was a time in our culture where that’s what weekends were for, but we rush into them so hard or work on those days now and we’re less sane and less mentally healthy than ever. If you haven’t, start doing something for your present or future self. Turn down the signals. Find time to be quiet.

Thinking in 4D

I want to mention of one of my favorite mental exercises: thinking in higher dimensions. I find it’s useful to expand your ability to visualize difficult things. (I should do a list of brain workouts!) These nerd kings will take you on a journey, and I want to go over the 4D part. (You might watch it more than once when you have time, until you can grasp it!)

Try conceptualizing 4D objects. It’s not easy to handle higher dimensions, but I encourage you to try the fourth specifically. One of the common ways of describing the fourth dimension is to use time as another axis. This has the benefit of showing you an animation of something changing shape to describe all the 3D “slices”, showing you the whole thing. The problem is it introduces a bit of a crutch, in that it feels a lot more like regular 3D, hiding the nature of that extra dimension.

If you are going to imagine something changing shape over time, you need to also imagine that all of the vertices on the object are connected through time to each other. You have to imagine that a certain subset of the frames, even if just the first and last, are all connected by lines you can’t see. See the problem? That’s why it’s easier to imagine the fourth as something like scale instead, when introducing it. Just pretend you can go smaller forever like you can go bigger.

Here is what a 4D rotation looks like on its fourth axis. It’s fun.

A 4D cube, a tesseract, rotating on the fourth axis. Rotation on other axes look normal.

Make sure you remember that 4D objects are built out of 3D objects. You need to think of the tesseract as 6 squished cubes connecting the inner and outer cubes. Those 8 cubes are what a tesseract is made of. Don’t think about it as points and lines too much, or you’ll miss what you’re trying to visualize. Here’s a way to fold and unfold it that might help.

See all 8 cubes.

I really think that’s the one you ought to have down by now. Now go back and watch the first Avengers movie and you might look at the blue cube different. If you’re religious, you can go see Salvador Dalí’s Corpus Hypercubus.

Once you have that down, you can begin to think about the other five regular convex polytopes. You might know that the platonic solids mentioned in the video are the D&D dice (minus the d10 diamond). Well, you can think of these as the main six 4D dice.

What fun are 4D dice if you don’t roll them?

Nobody would expect you to grasp 120 squishy dodecahedrons. I still recommend trying to study the first four to expand your mind. The first three should be reasonably within reach. For fun, we’ll end with the 120-cell from the inside.

Faith of a Scientist

I guess I always believed in God. There were times when I questioned as any healthy teenager should. But God is there for me, I made sure. Part of me thinks more people would believe in God if more believers acted the part. I feel like nowadays people who profess or push belief are so hollow in acting it out, it’s no wonder that so many reject or criticize it. There’s so much evil in the world to make one doubt, if nobody has good answers or shows the pathway forward.

I want to talk about why good religion and science work together.
I might have a unique relationship with God, and religion as a whole. I’m a STEM guy through and through. I live and breathe the logical, the rational, the empirical. I’m sure atheistic peers might view such a claim with their usual cynical skepticism. I don’t blame them, though they do so erroneously. I’m in a profession where I have a degree with Science in the name twice. But I deviate from the typical religious person too even among my own, having no time for superstitious nonsense.

I don’t want to talk about me or religion here, I want to talk about why I think my foundation of faith may help anyone with life who tried it as a frame, but I need to contextualize it, so if you’re really turned off by organized religion, skip the next paragraph.

I will be deliberately evasive lest you think I’m here to preach, but suffice it to say I belong to a heavily maligned Christian sect. We profess to be the modern iteration of New Testament believers, authorized by God and those original apostles. Our beliefs predate the councils of Nicaea, when Nero was blaming fires on us in Rome. People… don’t like us for that claim. I’ve been accused by other professed Christians of being a devil worshipper. I’ve been accused of being in a sexual fertility cult, throwing virgins off of rooftops, and thinking god is an alien on another planet. Of course we get called a cult, then racist, sexist, and every other word. You only need know we’re different, and believe our doctrine is finite and coherent, and that’s where I’m pulling from.

Ok? Cool.
Faith is the first principle.
Faith is a principle of action and of power.

That’s my claim. If it’s true, you can’t fully unpack it since everything else springs from it, but I’ll give the necessary bits my best shot.

What’s cool is all the definitions of the word faith as it is colloquially used in the English language are correct enough and uncorrupted enough by time to be tremendously useful in a secular discussion of it. Having faith in yourself, having faith in others, acting in good faith (even legally!), and having faith in karma, the future, and so on are fundamentally useful and pragmatically fundamental.

Without falling into rabbit-holes of human consciousness and free will, let’s say we are beings or entities that take actions and our actions are driven by our motivations. Well then, biologically we divide the nervous system into two halves, the sympathetic and parasympathetic. The former handles “fight-or-flight”, we’ll call that fear, and the latter handles anti-fear, which ranges from faith to apathy to lusts. (catchphrase being “rest-and-digest” or “feed-and-breed”). Those two systems drive all of our motivations from the most primal bowel movement to the most high-level like “success”.

Faith is the key motivation. It’s the bottom motivation from a religious end, and it’s the peak motivation from the scientific end. It’s responsible for a lot of self-fulfilling prophecy, in that people who think they can accomplish things often overcome incredible odds to succeed. And those who doubt and fear, arguably the opposite of faith, tend to fail or quit. This is why some prosperity gospel con artists are successful – because believing in something or yourself does move you forward. It’s also why some of the most brilliant minds fail. Faith only works if it’s in something that is true, and half the time, half-truths might suffice. But perfect faith can move mountains and produce miraculous consequences, natural and explainable though they may be.

I’m a big fan of the Yin-Yang ideas of eastern philosophy. In order for us to be successful organisms we need to voluntarily rotate between the halves of the nervous system, or even just creative and rational halves of the brain, in a way that’s sustainable across time from days to generations. Too much of one or the other makes you ill and dysfunctional. In order for our parasympathetic systems to keep us happy, we have to know where the predators and dangers are from the sympathetic. In order for us to remain sane, we have to slow down the sympathetic and not let little things get us outraged and angry all the time.

Pragmatically, this means the more you face your fears and the more you get out of your comfort zone, the more you’ll move forward in life. You just need to have a little more faith in others and yourself. Otherwise, you end up in a downward spiral instead of an upward one, in which you become driven by your fears and lusts, instead of being master of them. It’s up to us to choose faith and live out our heroic journey through life slaying our dragons, even if they appear as homework or bills or job hunts. Otherwise we can become tragic failures, captive in a basement or cheap apartment with roommates we hate and seemingly endless debt. You voluntarily go out into the chaos and accomplish something to bring back home to the order, or you remain where you are until you involuntarily get sucked into backward circles of alternating stressful chaos and personal tyranny.

Science and religion are completely compatible in my view. I find that any conflict between them indicates a flaw in one’s understanding of the other. As long as you humbly bake in that you’ll never know everything in either case there’s no issue. They are two parts that make a whole together. David Hume’s “Is-Ought Problem” rubs on both. You can’t derive an “ought” from an “is”, and attempts to do so lead rapidly to eugenics and/or genocide in a Machiavellian fashion. And those who try to derive what “is” from what “ought” to be are the same fundamentalists who demanded the sun orbited the earth: they’ll remain in the dark ages, devoid of the “wizards” they burnt. You need a knowledge system that lets you establish what is true and how to find out more. And you need a belief system that tells you what you should be doing with the information the former produces. We seem to be losing both.

I believe the scientific method is a perfectly reasonable place to start for determining the existence of God. If you want an answer, learn how to pray about it. Don’t recite something, talk to God as if He exists and ask for a way to determine. If you’re dead serious and honest about it, you will eventually experience the evidence. I’ve had friends who had miracles happen when they took my counsel to pray in spite of disbelief. It’s non-transferable, un-recordable empiricism each person has to test themselves, but I assure you the same data others experience can and does come.

I also believe faith is valuable in accomplishing useful scientific endeavors. It takes a lot of courage and risk to pioneer science, be it intangible travel to distant places, or fighting the battles many do in seeking funding for research. Without a little self confidence from somebody science doesn’t get done. Somebody had to take risks to test people for COVID-19.

Takeaway

I believe in a God who listens and answers but plays by the rules. I don’t believe in a fast and loose interpretation of the word omnipotent, God employs no magic and can’t violate causality or do things that can’t be done. There’s always a natural explanation and most of His doing is letting nature take its course for our education and work out details afterward. He will open our eyes to possibilities and expand our free will if we have the faith to ask and let Him.

I believe in the Big Bang, evolution and natural selection, and in the scientific method as it is used appropriately. I believe in the power of people who act in faith to pioneer, discover, and sustain our world and explore our universe. I believe you can too, if you have more faith in yourself. I also believe it takes a massive amount of faith to try and raise the next generation of scientists and engineers. I’m doing my best to succeed.

I have faith.



In the Beginning

Every blog has a first post.
If you’re reading this, you’re likely interested where I got my start so let’s go there now. I’ll be sure to stay on topic and sort/tag my other writing so you can skip to the stuff you care about.

I was born in – ha just kidding, I got my start writing code in my early teen years circa 2004 from a book about game programming my mom got me from Barnes&Noble. It taught me how to program in a system called BlitzBasic, and I later moved to its 3D rendering counterpart, Blitz3D. I don’t have a lot to show for it now but I had a lot of fun with my brothers making little toys and screensavers and so forth. One of these projects was a Super Smash Flash clone – an old web 2D Super Smash Bros. I had basic AI, and we only ever had the fake blue Mario from Super Mario Sunshine, Baby Bowser, Fox McCloud, and Lucario. Given that at the time only Melee was out, adding Lucario back then was particularly prescient.

In those teen years, I self-taught guitar, Adobe Photoshop, Blender, and I dabbled in a tiny bit of HTML and JS. I took piano and karate lessons (man, I was clumsy before that). I was a kid who always got high grades but seemingly tried to be good at everything at once. There was a trumpet and a recorder in there, I wrote my own sheet music, a few other random hobbies. (I made an underlit desk for art, with drawers out of K’nex) I wrote Pong from scratch and an AI for it on a calculator in study hall out of boredom. They were crazy years. I had a rough time in middle school and was homeschooled halfway through 6th grade, skipped 7th grade, and returned to public school as a junior and graduated at 16 in ’07.

I was always a weird “gifted” kid to my parents. Some people might find my list of hobbies extensive for a few teen years. It was just life. They had me tested as a first grader and IQ was… irrelevant, ask me somewhere else. I was a seeming rational oddball toting a TI-84 yet nobody knew I slept on the floor with the curtains open during full moons.
I’m writing this on 9/11, and I was in a weekly gifted class when the second plane hit. The teacher told us what was going on while the rest of the school was kept quiet. We read Don’t Sweat the Small Stuff For Teens in what time I spent in that class and I still credit it with having changed my life for the better at a lot of points. I’d still recommend it no matter your age.

Original cover I had

So that’s me as a kid. I went to a church university, then paused it and spent 2 years as a full missionary across the country. I decided I would go into Computer Science when I essentially came back to (for lack of a better term) civilian life (it’s that regulated and different). I did and the rest is history. I skipped the first course, which was good because I already had a year of general courses that I enjoyed but went nowhere. Married my wife, got the degree, and now I know stuff about things.

And here comes this blog, following my learning new stuff about new things and maybe helping you along the way.

Of course that’s not the whole story. I firmly believed in doing educational hobbies to supplement my education so I can make long-winded posts about each section of my college years, but now you know the man behind the handle.

Takeaway

I was mostly only ever smart because people kept telling me I was and I felt pressured to be. When I didn’t, none of my gifts mattered. You can only do whatever you think you can. So forget being a world champ or famous and go draw or build something great.
Take it from me, the second smartest guy in the room, who made friends with most of the smartest ones.

If you take away anything from this failed-polymath’s first post, take this:
You can be good at anything you decide you want to be good at.
All you need is self-discipline to make time and to try and to discard the notion that any non-competitive goal is out of reach.