The Structural Similarities Between Bad Investments and Bad People

By VeilNode -

The Structural Similarities Between Bad Investments and Bad People


A Comparative Analysis Using TLT

This essay is not an attack on any specific individual.

Rather, it is a structural analysis. By examining a familiar financial instrument— the iShares 20+ Year Treasury Bond ETF (TLT)— we can better understand a recurring pattern that appears not only in portfolios, but also in human relationships.

1. Structural Similarities

1) Persistent Decline: Dead Money

TLT:
When interest rate conditions turn unfavorable, capital becomes trapped. Hope remains, but progress disappears.

In unhealthy relationships:
Over time, the cost increases, while the probability of recovery steadily declines.

In both cases, the issue is not short-term noise, but a structural problem.

2) The Illusion of “It Will Get Better Eventually”

TLT: “When rates come down, it will recover.”
People: “People can change.”

These beliefs are not strategies. They are holding positions backed by hope rather than evidence.

3) Risk Is Always Assigned to the Holder

The market remains indifferent.

Losses are borne exclusively by the one who refuses to exit.

In this structure, the last person to recognize the damage is always the one who stayed the longest.

2. Key Differences

1) Presence of an Underlying Asset

TLT:
It is backed by a clearly defined underlying asset: U.S. Treasuries.

Unhealthy relationships:
Narratives and emotions may be abundant, but accountability, reliability, and substance are often absent.

TLT may be low quality at times, but it is not unsecured.

2) Exit and Accounting

TLT:
Losses can be realized. Taxes can be managed. Re-entry is possible.

Unhealthy relationships:
Even after exiting, lost time, emotional depletion, and eroded trust remain off the balance sheet.

3) Maximum Drawdown

TLT: Approximately –20% to –30%.
Unhealthy relationships:

Decision-making capacity.
Self-respect.
Life direction.

Losses that cannot be quantified.

3. Investment Recommendation

TLT can damage a portfolio.

Unhealthy relationships can damage a person.

Therefore, the conclusion is straightforward:

  • TLT is a conditional holding.
  • Structurally destructive relationships should be delisted immediately.

Closing Thoughts

This is not an emotional outburst.

It is an illustration of a familiar investing mistake: holding a position without understanding its structure.

Markets issue warnings in numbers. Relationships often destroy value in silence.

One-Line Summary

Whether it is an asset or a person, long-term holding without structural understanding is almost always the most expensive decision.

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