Surviving Hell

Sometimes the important thing is simply to survive. This seems so obvious, but it is not and it is one of the keys that explains why many investors remain in a privileged position with respect to the market over the years.

Circumstances make the person, also the investor.

Some time ago when I launched a technology consulting firm with my partner Marc Vila, we decided to call it Milgrams, in honor of Stanley Milgrams, the famous Harvard psychologist who conducted experiments at the limit of ethics and who was key to answering questions such as: how is it possible that an advanced and mature society like Germany in the 1930s allowed the rise of Nazism and its atrocities?

Milgrams has taught us a lot, his studies shed light on the limits of human behavior, the mechanisms that explain obedience and is key to the daily development of our work at Subutai, which consists mainly in understanding the psychology of the masses that operate the crypto market.

We would need quite more than an article to explain in detail all the lessons learned with him, but I want to stay with one that can be useful in this market hell we live in.

His most famous experiment was the one he developed in the basements of Yale where he tricked volunteers into believing that they were participating in an experiment on forced learning in which they had to press a button every time another volunteer (who did not really exist, it was fake) failed a response that resulted in an electric shock. The experiment actually consisted of seeing to what extent they continued to subject other people to electric shocks by the mere fact of having a person in a white coat next to them repeating “the experiment must continue”. The experiment was about obedience.

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He made a bet in the department with his colleagues to see what percentage of subjects they thought would get to press the last pin, the 450-volt pin, a shock that could be lethal. His colleagues ranged from 3 to 10%. The results of their first experiments came to 65%. Sixty-five percent of the subjects went so far as to press the last pin only because a doctor in a white coat told them to do so. When asked, all of them blamed the other volunteers “for having failed to respond”. The same two reasons used by the Nazis tried at Nuremberg: he was only following orders, pure obedience, and the victims (Jews, gypsies, homosexuals, defeatists, …) must have done something to deserve their fate.

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Milgrams conducted several subsequent experiments with some variations, he reached a level of obedience of about 90%

It is worth remembering that we are a human mass, that we move in mass, that we are much more obedient than we imagine. If you wonder how it is possible that we have fallen so low after having reached so high, remember, we move like a beehive, like a small army of ants, that was once good is now bad. What was once the fire of a lively flame is now only a smoke. 

When I studied all his experiments, I entered a kind of existential crisis, a social depression. I lost faith in the group, in humanity, recognizing myself as part of this obedient human mass without criteria. 

Until one day I came across a letter from one of the subjects with whom Milgrams had experimented, it was during the Vietnam War:

I was a participant in 1964, and although I believed I was hurting another person, I didn’t know at all why I was doing it. Few people realize when they are acting in accordance with their own beliefs and when they are subject to authority. Allowing myself to feel with the understanding that I was subject to the demands of authority to do something very wrong would have scared me out of myself. I am fully prepared to go to jail if I am not granted the conscientious objector claim. In fact, it is the only route I could take to be consistent with what I believe. My only hope is that the jurors will act equally in accordance with their conscience.

In other words, the subject was so traumatized by his participation in the experiment that he realized he had to ask himself and question his obedience to the point of being willing to go to jail for being a conscientious objector against a war he considered unjust as the Vietnam War was. How could he go and kill other human beings out of obedience? Knowledge sets him free. 

I regained faith in humanity when I realized that in each and every version of his Milgram’s experiments he never made it past 90%, that is, he always found 10% who had the courage and bravery to question obedience. To say no. To not submit. To not tighten the pin. To object. Not to accept between option A or B, but to look for C, D, or whatever. And curiously, I began to review those people I most admired and respected, and I seemed to see a pattern. They were the type of people who have the character and the criteria, the knowledge and the daring, not to obey. 

Sometimes being that 10% can be very hard. Imagine what it must have been like to be against Nazism in Germany. There were many Germans who stood up to Nazism, and some paid for it with their lives. I imagine they must have felt very lonely, surrounded by a huge effervescent mass of people, I guess most of them just tried to survive, waiting for all that to happen. Those are the ones I’m interested in.

If you’ve made it this far, I’m sorry but your conscience has already awakened. Like the conscientious objector, who refused to participate in the war. And now you must ask yourself as an investor what you want to do. Should you obey what the media tells you? The white coats or the ties? The professors and technologists? Crypto is dead? Should you sell all your assets and buy gold? Keep it under the mattress? Or do you believe that crypto is here to stay? That it is a technological revolution that should replace the dollar standard and overcome the old defects of an inflationary economy?

Last week social sentiment for Bitcoin has reached very high levels of Panic. Reaching 70% of panic during the monday fall. The 7-D pie closes with 56% of Panic.

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If you are a crypto investor, and you are suffering the market, remember that sometimes all you need to do is to survive hell.

Yours in crypto