The Adaptability Advantage

Happy Friday Bitcoiners,

Last week, I discovered my old Dark Charizard Pokémon card is worth $3,575. The one I gave away in 2010 for free.

Pokémon cards have returned 3,000% over the past decade alone. The S&P 500? 180%. That piece of cardboard I treated as just worthless fun has outperformed hedge funds, FAANG stocks, and almost every "sophisticated" investment strategy.

But here's what this taught me: we're living through a complete repricing of ‘value’, and if you can't adapt to this new framework, your portfolio will continue to drastically underperform.

This week we dive into 👇

• Why mental flexibility beats financial strength every time

• The great repricing of scarcity (and why "stupid" assets are spiking in value)

• A practical framework for spotting the next undervalued asset class

Let's jump in⚡

1) The Adaptability Imperative

Here's the brutal truth: strength without adaptability is just delayed failure.

The Nifty Fifty stocks of the 1970s were supposed to be "one decision" stocks you'd hold forever. IBM, Xerox, Kodak, Polaroid. These weren't speculative garbage - they were the bluest of blue chips. Kodak was worth $31 billion and controlled 90% of US film sales.

Today? Bankrupt, making generic drugs. Of the original Nifty Fifty, over 40% no longer exist or trade as penny stocks.

The difference between then and now? Today's winners adapt. Microsoft pivoted to cloud, but Kodak? They invented the digital camera in 1975 and buried it to protect film sales. That's what rigid thinking gets you - a Wikipedia page in the past tense.

This hits home because I watched my uncle face this exact choice. When I tried to orange-pill him in 2020, Bitcoin was around $10k. My uncle’s a smart guy, but he's also a boomer who thinks diversification means owning both Coca-Cola AND Pepsi.

I expected the usual dismissal: "bubble," "criminals," "fake money."

Instead, he said: "I don't understand this. Send me a book."

He read "The Bitcoin Standard" cover to cover, making notes like he was studying for the SAT. His best question: "So it's like gold, but you use computers to verify it's real and send it anywhere instantly?"

Bingo.

He bought at $10k. Today that position is up 600% while his bonds are down 30% after inflation. His golf buddies who mocked him for buying "fake internet money"? Still sitting on 60/40 portfolios, wondering why their retirement can't keep up with groceries.

The lesson? In a world changing exponentially, your ability to question assumptions isn't just valuable - it's survival. My uncle had 40 years of traditional investing to overcome. He adapted. Meanwhile, people half his age are still waiting for interest rates to "normalize."

Good luck with that. You'll be waiting until Bitcoin hits $1,000,000.

2) The Great Repricing of Scarcity

Pokemon cards: up 3,000% in the last 10 years. Logan Paul bought a rare "Pikachu” card for $5.275 million back in 2021. A Super Mario cartridge sold for $2 million in the same year.

The S&P 500? Up 180% this decade. Your advisor's "balanced portfolio"? Half that after fees. The financial media is baffled. "These assets don't produce cash flow!" they cry.

That's precisely the point.

When central banks printed $16 trillion in four years, that money had to go somewhere. And people don't just seek returns anymore - they seek stuff that can't be ‘printed’.

Companies can issue more shares. Governments can print more bonds. But Nintendo can't print more 1st edition Charizard cards. That supply is fixed forever. Sound familiar? It's essentially just the Bitcoin long term investment thesis with worse custody and higher storage costs 😂.

My Dark Charizard story isn't unique. At the time, giving it away felt fine - just clearing out junk. Every millennial has this story. The guy who sold 10,000 BTC for two pizzas in 2010. The cards mom threw out or donated to charity.

We treated scarce assets as worthless because we used the wrong mental model to assign value to them.

The repricing isn't over. It's accelerating.

Boomers cling to their "stores of value." Real estate? Being tokenized. Gold? Can't transport it, verify it, or divide it easily. Meanwhile, a generation that grew up digital puts wealth into digital scarcity. They understand: in a world of infinite monetary expansion, only things that can't be expanded have real value.

Pension funds debate going from a 60/40 to a 65/35 allocation. Meanwhile, some “degenerate” who DCA’d into Bitcoin the last three years outperformed Yale's endowment.

That's not speculation - that's adaptation to a new reality where scarcity itself is the asset class.

3) The Flexibility Framework

Here's how to spot the next Pokemon card before it's worth $3,575:

Look for assets that can't be printed. Not "won't be" - CAN'T be. Companies issue more shares. Governments print more bonds. But Nintendo can't retroactively make more 1st edition Charizards. Bitcoin can't exceed 21 million. This isn't about scarcity - it's about unchangeable scarcity.

But here's where Bitcoin separates from Pokemon cards: Bitcoin adapts while maintaining its scarcity:

• Mt Gox Hacked? Multiple Buyers surfaced to buy up the claims.

• China banned it (at least) seventeen times? Bitcoin became more distributed.

• Block size wars? Bitcoin adapted with SegWit.

• Today’s debate? Spam filters with Knots vs Core - I’m sure Bitcoin will do its thing and come out more antifragile.

Every attack made it stronger because it could evolve without compromising its core value proposition.

Your 60/40 portfolio can't do this. It's using allocation models from 1952. Before color TV. Before the internet. Before the Fed’s “money printer go brrr”. Traditional assets are frozen in time.

Bitcoin evolves in real-time while keeping its sacred properties intact: 21 million cap, decentralization, censorship resistance.

The lesson? Stay flexible about everything except your principles. Question every assumption except the fundamental ones. My uncle understood this - he challenged his beliefs about money but not about value.

Right now: debates about Knots vs Core, quantum resistance. Next year? Something we can't imagine. This is a feature, not a bug.

The crypto crowd doesn't get it either. They keep launching "better" Bitcoins. Faster! Cheaper! Smart contracts! Like trying to build a better cockroach. You don't need a better cockroach - you need something that survives nuclear winter.

As we covered in 'Understanding Your Circle of Competence', knowing what you don't know is power. But knowing when what you know is wrong? That's survival.

Key Takeaway

The world changed, but most investors play by rules from when a filing cabinet could crash the market.

Your homework: Pick one financial "truth" you've believed for five years. "Bonds are safe." "Real estate always goes up." "Bitcoin is too volatile."

Spend an hour researching why you're wrong. Read the opposite view. Look at data, not narrative. Then act - even if it's 1% of your portfolio.

My uncle did this with one decision - to read a book instead of dismissing what he didn't understand. That flexibility became his best financial decision ever.

Adaptability isn't about predicting the future. It's about admitting the present already changed while everyone else lives in the past.

Because in a world where Pokémon cards outperform the Fortune 500, the riskiest thing is refusing to adapt.

Stay adaptable,

@Publius256