Ep282: Julian Hosp – Learn to Win by Focusing on How Not to Lose

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Guest profile

Dr. Julian Hosp is the largest crypto influencer in the German-speaking world, with over 90,000 followers on YouTube. He has written many articles and spoken at many blockchain conferences.

He is a medical doctor and ex-professional athlete, and CEO co-founder of Cake, and chairman of DeFiChain Foundation.

His vision is to bring blockchain awareness and understanding to a billion more people by 2025.

You can find a large collection of his articles on his blog.

 

“It’s way easier to invest by trying not to be wrong, rather than by trying to be right.”

Julian Hosp

 

Worst investment ever

At 22, Julian was a successful professional athlete living his best life. He had about $100,000 in savings that was just sitting in the bank. Julian had no intention of investing the money as he knew nothing about investing.

Pressured into his first investment

Julian happened to go to Brazil for training, where he met a fellow Austrian named Ralph. Ralph was a super friendly dude, and Julian got along with him just fine.

Ralph told Julian about this fantastic investment opportunity that he wanted him to invest in. It was a new lot right at the beach that would get converted into actual construction land. He was looking for people to buy parcels of this land because he could split this up, and it would be easier to develop. Ralph made the investment look super exclusive and such a no brainer deal that was going to make Julian a millionaire.

Putting in his entire savings

Even though Julian had no clue about real estate investing, Ralph was compelling and made him feel like he had to move fast else he’d miss out on the deal of a lifetime. Julian decided to invest and handed Ralph $80,000.

Here come the crickets

Julian left Brazil a month later, and that was the last he heard of Ralph and his investment. After weeks of trying to reach Ralph endlessly without any success, it dawned on Julian that he had been duped into making his worst investment ever.

Lessons learned

Take your time to recover an investment loss

When you lose money, don’t try to get it back straight away. You might end up retaking the same stupid risks. Take some time to let the emotions cool down before you try something else.

Learn to win by knowing when to exit

If you want to learn to win in investing, you must know when to quit. Have an exit plan, and make sure you understand how it works. You need to have a plan for when things are not working out. This prevents emotions from getting in the way of deciding to exit an investment.

Don’t be pressured into investing

Whenever you feel pressured by someone to make an investment, step away immediately and take time to think about it on your own.

Become a strong diversifier

Focus on diversification because out of 10 to 15 investments, probably just a couple will fail, and the rest will cover the loss.

Andrew’s takeaways

Take your emotions out of investing

Losing is two and a half times more emotionally painful than the joy of winning. You must take emotion out of investing.

Build trust first

Build trust with the people you want to make a financial investment with before you seal the deal.

Actionable advice

Limit your access or the speed of access to making investment decisions. If possible, have strategies and tools in place that slow you down from buying and selling something to give you time to think about it.

No. 1 goal for the next 12 months

Julian just became a father and so his number one goal for the next 12 months is to spend more time with his son and provide him with a successful first year.

Parting words

 

“Try not to be wrong instead of trying to be right. It’s hard trying to be right all the time.”

Julian Hosp

 

Read full transcript

Andrew Stotz 00:04
Hello fellow risk takers and welcome to my worst investment ever stories of laws to keep you winning. In our community we know that's a winning investing you must take risk but to win big, you've got to reduce it. This episode is sponsored by a Stotz Academy which offers online courses that help investors, aspiring professionals, business leaders and even beginners to improve the finances of their lives and their businesses. Go to my worst investment ever.com right now to claim your discount on the course that excites you the most fellow risk takers, this is your worst podcast host Andrew Stotz and I'm here with featured guest, Dr. Julian hosp. Julian, are you ready to rock

00:48
her ready to roll?

Andrew Stotz 00:51
Let me introduce you to the audience. Dr. Julian hosp is the largest crypto influencer in the German speaking room with over 90,000 followers on YouTube. He's written many articles and spoken and many blockchain conferences. He's a medical doctor and ex professional athlete and CEO, co founder of cake and chairman of defy chain foundation. His vision is to bring blockchain awareness and understanding to a billion more people by 2025. I follow him on LinkedIn and also on Facebook and find many of the things that you share fascinating. And you can also find him on LinkedIn. But you can also go to his blog, Julian Haas comm slash blog and see some of the interesting articles that he's written there. So, Julian, take a minute and filling further tidbits about your life.

Julian Hosp 01:49
Sure, thanks, Andrew. I grew up in Innsbruck, a little town in Austria, Europe. That's where I grew up. I had a very average upbringing at the age of 15. I moved to the states to Nashville, Tennessee, was a very big mind shift, mind change and mind shift. I learned how to kite surf quite early in my life, became a professional kite surfer. I traveled the world I was in over 100 countries, I got paid to do to go to places where people went for the holidays, I studied medicine, became a medical doctor quit after a year, I was so frustrated, learned about blockchain in 2014, that it's now six years ago. And that's been the journey that I've been on ever since. And yeah, that's a bit of a shortcut of the last three years

Andrew Stotz 02:35
now. And it's quite a ride. I tell you, the whole blockchain crypto world is just so amazing. Well, now it's time to share your worst investment ever. And since no one ever goes into their worst investment thinking that will be tell us a bit about the circumstances leading up to it, then tell us your story.

Julian Hosp 02:54
So I was 22 years old 2008. I put yourself into my shoes. I was a professional athlete, I got to travel the world. All my expenses were paid. I was a not a teenager when I was 22. I mean, what else could you give a young guy and 22 other than money, traveling to all the beaches that there are beautiful women, a lot of parties, it was just a lot of craziness. You didn't have any sorrows. The only day you cared about what's today, tomorrow didn't matter yesterday, didn't matters. It was very simple. Um, and at 22, I had saved quite some money up for that age, I had around 80,000 euros or let's say 100,000 US dollars in the bank. I had all my expenses were covered. I was doing super fine. And up until that point. I never really made an investment. I for me all there was was my job was the competitions. Yeah, what's the price money? And well, I had $100,000 cash sitting in my bank account. And up until that point, I didn't even consider investing because I had no clue about it. So yeah, that's that's all there was. So that was the situation. I was. I was in Brazil, South America. And I was there almost every fall, because for training was just really fantastic for kite surfing. And I meet Yeah, this other Austrian, his name was Ralph. And he told me that, yeah, he would have this really fantastic investment opportunity, where there's this new lot right at the beach, that was going to get converted into actual construction land. At the moment. This is not made for construction, but now it would be allowed to be building on it. And he was looking for people to actually buy parcels of this land because then he could split this up and it would be easier to be developed. And he made it look super exclusive. Such a no brainer deal because he said yeah, I'm looking for someone like one of those partisans who Be 60,000 euros or like 80,000 US dollars, and a super exclusive deal these things are gonna sell like sliced bread. And yeah, I got to move fast. If I don't move fast, it's gonna be done and I'm not gonna have access to that. And I had obviously no clue about real estate, I had even less clue about real estate in Brazil. I had no idea about any loss there. I had no idea about property prices, I had no idea how land in Brazil was going to get changed from just being, I don't know, nature land to construction land. So of course, I had to buy that deal. He makes so much sense. Yeah, it was my very first investment. I gave him the 60,000 euros, 80,000 US dollars. And he promised me the world. He told me I was going to become a millionaire with that. I 100% believe them. And I left Brazil about a month later and never heard from him ever since. I yell at them. 60,000 euros maybe doesn't sound much to some. But when I was 22, that was, yeah, pretty much everything that I had it. It was everything that had saved up everything and ended for me, I saw myself already having a million dollars at that point, because that's how what that was all the promises that he made. And for me this was actually and for me, the really hard part was that I saw myself as a real failure at that point. And I still remember I flew to Bonaire right afterwards a beautiful island in the Caribbean. And I was kite surfing there. And I really saw myself as such a failure I was. And that's actually the only time in my life that was really considering maybe I'm not worth living anymore. Because I was I felt really at the low end, I didn't even want to share this with anyone because I was so embarrassed. I was disappointed in myself. And yeah, it was really, really, really rough for me. Um, yeah, just considering what had happened and how I got cheated. And yeah, and obviously I blamed everyone, other than myself.

Andrew Stotz 07:18
Mm hmm. It's, uh, you know, I appreciate the fact that you share some of these feelings, because it's sometimes on the show, people just tell the story, and they don't, you know, explain their emotions. But you know, losing really sucks. And sometimes losing kills, where people have jumped off buildings or done other things when they've lost, because they just feel they lost confidence they lost. You know, they feel like they've let their family down or whatever. I'm curious. When was the moment when you realize this is lost?

Julian Hosp 08:01
I mean, I don't know. It took a really, really long time. I just didn't want to accept it. I know, it probably took, yeah, two weeks after I was gone, that I was still I was still believing. Or maybe he doesn't have access to the internet. Oh, it's South America. They're gonna have he was such a nice guy. You know, he was so he was so welcoming. And he told me that, you know, he might be traveling and there might be some problems? I don't know, it was. I know, at some point, I can't I couldn't give you an exact date or exact timeline.

Andrew Stotz 08:40
So how would you summarize the lessons that you learned from this?

08:45
Well, and maybe do the follow up

Julian Hosp 08:48
story to that, and maybe then go into the lesson. Hmm. Obviously, when you lose money, the first thing you try to do is you try to get it back. And I had lost pretty much all of my money in a very short timeframe. So my goal was to get all this money back in the same amount of timeframe. Now, obviously, if you go from let's say, $100,000 to $20,000. Go back from $20,000 $200,000 you need to make 400% Plus, and so the only way to do this was with high risk option trading and I had no clue about option trading. But I went on the internet and I was like how to make a lot of money in really short time. And so they got told me about option trading. And so to make a long story short, one stupid decision led to an even stupider decision where I threw bad money after well, bad money already, but it's really more bad money behind it. Actually, in this case, it was good money, but it turned into really bad money. And what ended up was that after scrubbing Bonaire, I had actually lost everything because I took so high risk and I was just so stupid, that that really, really down spiraled. And to me, that was That was one of the biggest lesson as one of the first lessons is, when you lose money. Don't try to get it back straight away or don't try to get the money back, did you lose the same way you lost it, don't try to take the same stupid risks again. And to me that was such a big eye opener at that point. Because I really had believed that, hey, I can get it back. I can get rich quick. I got rich quick.

10:35
Ah,

Julian Hosp 10:37
yeah, second lesson. It's, and that took me quite some time to learn. But it's way easier to go for beta to go for diversification of assets, versus going for alpha meaning to outperform one specific asset class. And the easy way to say this is it's way easier to invest by trying not to be wrong, rather than by trying to be right. Trying to be right is so difficult. There's very few people in this world who can be right consistently, the majority of investors, including myself, should actually try not to be wrong on an investment. And rather try to hedge your downside, just what you said in the intro, I really love that. And yeah, and try to hedge downside don't lose money. And I think that was my second humungous lesson, and I've ever, in anything that I do today. I literally live that. And I think that's really important. And the last one, I think many people talk about that. But it is, you really should understand your exit, you need to understand how does this work? And how can you get back out? How does the investment kind of work? I should have realized very early that my exit out of this is going to be impossible, because I rely on this person that I didn't have a contract with that I didn't know I didn't understand the local laws, the regulations. And yeah, looking it from the outside, it's such a no brainer. But obviously when you're in it, greed comes in emotions come in, you see yourself as a millionaire. And that just destroys everything.

Andrew Stotz 12:09
Well, let me summarize what I took away from this. I mean, the first thing I really you know, appreciate how much you've shared about this, because I know it can help people. And that's what this show is all about. You know, this show is about being honest and sincere about the mistakes that we made and helping other people. And I think you've provided us with some great lessons in the first one, this one about, you know, don't lose money or protect your downside is it the second one is about the emotion that you talked about, in trying to be careful of investing, when you've just lost. And there's a great book called your money in your brain. And it's a book by Jason swag. And I just found it a fascinating book, that basically looking at functional MRI studies. And all that they were able to say that basically, as I would explain is, investing is a contact sport, it is a physical activity. It has physical implications. If you see a stock price going up three times in a row, and you're owning that it causes a firing of the dopamine in the same location is if you were on cocaine. And we've learned now, you know, through lots of, you know, academic work, but just reality, we know that also losing is two to two and a half times more emotionally painful than the joy of winning. So there's so much emotion involved, and it just gets really dangerous. And so I think that that's one of my lessons is the idea of how do you take emotion out of it? Or how do you sit on the sidelines? I think in your case, what really kind of mattered probably was just getting on the sidelines and letting the emotions cooled down. And the second thing is that I didn't

Julian Hosp 13:53
have money to invest anymore so that the deal was done at that point. Yeah.

Andrew Stotz 13:56
And you were really on the sidelines. Yep. All right, I'm out. And the other thing is that I, one of the courses that I have taught for years, and the book I wrote was how to start building your wealth, investing in the stock market. And it's really the slow way of building your wealth over time. And I had a, you know, I get older people that come to that course. And they basically say, you know, this is awesome. I wish I had known it when I was 20. But Andrew now can you tell me how to make money fast? Because I'm 50 something, and I'm gonna retire when I'm 60. And I haven't saved any money. Can I say, you know, I, the only way that I know to make money fast, is if you start a business and it's very successful, but it's not going to be in the stock market. It's not going to be to option trading and learning it and then applying it's not going to be to forex trading. In fact, these could be ways to lose money fast. That doesn't mean that some people don't win in those but we also know that probabilities are at play in that case. And the last thing I would just highlight is it After Now, having 500 written stories submitted to me and gone through now, almost 300 stories in the podcast, I identified six common mistakes. And yours was Mistake number four, and it's called misplaced trust. And it's surprising how easily we give away our money to people that we really don't know. And somehow they mess with our mind. And they push all the buttons that for those people that are either ripping us off, or, you know, just persuading us to do something, it's probably not that good. They must sometimes think God, that was easy. You know, if it's the right person done it done in the right way, we are so gullible. So I think that this highlights to all of us that we want to make sure that we build trust with the people that we're gonna do a financial investment with. And I think that's my other main learning anything you'd add to that?

Julian Hosp 16:01
Um, I mean, maybe like a couple of things for me today, right? Today, for example, whenever I get pressured by someone to do an investment, I immediately step away. First one, as soon as I feel that my investment depends on one person that tries to convince me to invest, I step away, it doesn't mean that I don't invest in people I invest. When I invest in stocks, for example, I really, for me, it's very important that I invest in people that I feel obviously can drive the company and can make it successful. But at no point, would I feel comfortable if that person would start chasing me to actually invest because I would feel really, really weird. And maybe it is a bad decision not to invest. But that has been a really good recipe for me today in the investment side. And I guess the other thing is, I really I have become a strong diversifier. I know that Buffett, for example, says, Don't diversify, invest in a few baskets, baskets, protect those baskets. I yeah, for me, this doesn't work, I don't see myself understanding the investments well enough that I could see myself outperforming other people. For me, what has been super successful, has been truly diversifying, knowing that out of 1015, very diversified investments, probably a couple will just fail. But the others will completely cover that. And that has been over the past, since then, basically, over the past 10 years has been extremely successful and extremely profitable for me.

Andrew Stotz 17:32
Yeah, I think that's a great point. And I'm just I'm imagining a red flag. And what you talked about when someone's pressuring you, it's important for the listeners out there to know the red flags, someone's pressuring you, someone's pushing you, someone's pursuing you to make an investment, that should raise a red flag doesn't mean that that person is going to rip you off. It doesn't mean that the invest no good, but it means you better stop and investigate. So Wow. All right. So based upon what you learn from this story, and what you continue to learn, what action would you recommend our listeners take to avoid suffering the same fate? I'm picturing you first time in the encounter with this guy? You know, that's part of what I'm picturing. But of course, you may be thinking about the Forex or the, the option trading, tell us what advice you would give.

Julian Hosp 18:21
Um, so the way I then recovered was, first of all, because I was good at making money, and that didn't change, I was still making good money. But what for the very first time actually informed myself about real estate, and real estate didn't really make me a millionaire. But it gave me the right mindset to do so. And what it did was, it showed me the advantage of a rather illiquid investment, because of the emotions, it's not that easy to get into any property that you're buying. And it's not that easy to get out. So many times you sit there and you see something on the internet where like, I need to buy this apartment. It's not like going on your brokerage account. And then you buy an apple stock with a click of a button. But there are actually days takes days, maybe weeks, maybe months. And by that your emotions have settled the same thing on the exit. So I learned this and this helped me so much real estate and it taught me Actually, the real estate is not that good of investment stocks, for example, are most of the time actually outperforming real estate promise just that you that your emotions are in there, you buy the stocks, when they are high, you sell them when they're low, because of your emotions. And on real estate, you don't have this. So my action, that's what I really pass on is I know many times people teach you that you should be like that you should use all the online accounts and you should do everything yourself. And I actually believe this, but the biggest success for me has been limiting my access or the speed of access to a lot of the investment decisions on purpose. today. I have strategies and tools in place that slow me down in buying something and selling something Simply so that I have to, on the one hand convinced myself again, maybe convinced someone that I need to talk to you and say, Hey, can you please do this for me? Or that may be there's just two days in between that slow me down and heart, I cannot remember where I missed out on an amazing investment opportunity because of two days. If it's those two days, it wasn't the right investment opportunity for me anyways, it would have been a gamble. And so looking back over the last 10 years, that's the single most important action that has has led today to my investment success.

Andrew Stotz 20:30
I love that, you know, just the concept of slowing down. So for the audience, the key thing here is when you feel that pressure, slow down, and take it slow, you don't have to rush in anything. All right. Last question. What's your number one goal for the next 12 months?

Julian Hosp 20:49
It's not a financial goal. I just became a father. So yeah, it's a very personal goal. Yeah, just providing my son, a successful first year. spend a lot of time with him. See him grow up. It's to me that's now way more important than anything else, right now. So yeah, in a year's time, if I had, if I got to spend almost every day with him and a couple of hours every day, I would have I would consider my year success.

Andrew Stotz 21:19
Yes, I can see your happiness on your face. So that's fantastic. And congratulations, listeners. There you have it another story of laws to keep you winning. Remember to go to my worst investment ever.com to claim your discount on the course that most excites you. Now, as we conclude, Julian, I want to thank you again for coming on the show. And on behalf of a stocks Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Julian Hosp 21:57
Try not to be wrong. Instead of trying to be right. It's really hard trying to be right all the time. Beautiful.

Andrew Stotz 22:05
That's a wrap on another great story to help us create, grow and most importantly protect our wealth fellow risk takers. This is your worst podcast host Andrew Stotz saying. I'll see you on the upside.

 

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About the author, Andrew

Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company that provides institutional and high net worth investors with ready-to-invest stock portfolios that aim to beat the benchmark through superior stock selection.

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