This post will cover the surprising investing wisdom from the Netflix series Ragnarok. But first, our disclosure:
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A Series Finale, Thor, And Investing Wisdom
Ragnarok is a Norwegian Netflix series about a teenager named Magne who discovers he is the reincarnation of Thor in modern times. The series follows Magne as he learns to use his new powers as Thor to battle his enemies, the Giants. In Norse mythology, Ragnarok is a significant event that includes the final battle between the gods and the giants.
You might wonder what a Netflix series about Thor and investing have in common. Surprisingly, the answer is a lot. You might also wonder who watches a show based on Norse mythology and thinks about investing. The answer is me.
Before you run off and watch the show out of curiosity, know it is nothing like the Marvel movies. The show is slow-moving with far less action. Sure, it has some provocative scenes, like when a Giant strips naked to hunt a deer, but overall, I give Ragnarok 3 out of 5 stars.
Okay, now let’s get back to why I am writing this post. It’s about the investing wisdom we can learn from Ragnarok. So, let’s get to it and see how Netflix’s Ragnarok can be a lesson in investing. Rest assured, I will avoid major spoilers if you want to watch the series.
Investing Wisdom #1: Listen To Your Gut
The third and final season of Ragnarok went downhill from the start. I get that the temperamental Thor in Norse mythology is nothing like the charismatic Thor of the Marvel universe, but did they have to make him so obnoxious? It was so unwatchable it took me four tries to get through the first episode of season 3.
Magne threatens the Giants in every other scene by sticking his hammer in their faces. It was so obnoxious that by the end of the episode, I was rooting for the Giants to kick Magne’s butt. This marked a departure from the first two seasons, and my gut told me it would not get better, highlighting the first investing lesson we can learn from Ragnarok.
Listening to your gut when investing, as I did with the third season of Ragnarok, is a powerful tool. It’s not about always being right but using your gut reaction, whether positive or negative, as an opportunity to reflect on the action you are about to take.
Ask yourself why your gut tells you something is a good or bad investment. Does it sound too good to be true? Are you being drawn in by the promises of quick riches?
List the pros and cons of the investment you are considering. Do they align with what your instincts are telling you? If not, why?
If someone is advising you on an investment, why do you trust them? Is it because of their smile? Are they your friend or some “finfluencer” you follow on YouTube? What makes them qualified to give advice? What’s their motivation?
The key takeaway is to use your gut reaction as a jumping-off point to ask questions rather than using it to make a rash decision.
Investing Wisdom #2: Do The Research
After watching a few lackluster episodes of season 3, I decided to pause Ragnarok. I had to figure out what was happening with the show and whether it closely tracked Norse mythology. I wanted to determine if it was worth continuing. So, I went to the internet to learn more about Thor.
Just as I took the time to learn about Norse mythology, it’s crucial to pause and conduct thorough research before investing. Research is not just a step. It’s a journey that equips you with the knowledge and understanding needed to make informed investment decisions.
Research allows you to make an educated decision but doesn’t guarantee the decision will pan out. No matter how extensive your research is, there is always a possibility of losing money when investing.
Instead, research helps you evaluate whether the potential reward of an investment justifies the risk. It helps determine how much money you can risk for a potential return. A recent example is my decision to invest in a Bitcoin ETF.
Research and a Bitcoin ETF
After a disastrous Coinbase investment, I was on the fence about investing in crypto, but the new Bitcoin ETFs piqued my interest. Rather than rushing in without a plan, I researched as much as possible on crypto ETFs.
I’ve read articles on cryptocurrencies and their ETFs to understand how they work. I learned about nodes, stablecoins, altcoins, and everything in between. I also looked into expert recommendations on the ideal amount of cryptocurrency to include in a portfolio.
After months of thorough research, weighing the risks and rewards, I allocated a small portion of my portfolio to a Bitcoin ETF. But the research doesn’t stop after you invest.
I continue to read books on cryptocurrencies to broaden my knowledge of the subject. I also listen to crypto podcasts, like The Pomp Podcast, to stay current on the cryptocurrency industry’s latest developments.
Investing Wisdom #3: We Hate To Lose More Than We Like To Win
After the disappointing first episode of the third season of Ragnarok, I didn’t know what to do. I had already invested so much time and emotion into the show. Giving up was not an option.
Instead, I continued watching, refusing to accept loss. This emotional reaction is known as “loss aversion.”
Loss Aversion
Loss aversion is an investing concept that explains why people feel the pain of a loss twice as much as the joy from an equivalent gain. In other words, winning feels good, but losing feels much worse. A $1,000 loss feels a lot worse than the joy of a $1,000 gain.
Loss aversion is a psychological trap that can lead to poor investment decisions. Being aware of it is the first step to avoiding it and making sound investment choices.
Loss aversion is why Patriots fans are still bitter about the two Super Bowl losses to the New York Giants, even after winning six championships. It is also why individuals hold onto a losing investment for too long. They are unwilling to accept the loss.
I know all too well what it is like to fall into the loss aversion trap when investing. You can say I am the poster child for loss aversion.
One of the first stocks I bought was Alcoa. It was right after the Great Recession, and Alcoa was trading at all-time lows. I was convinced I would make money, but that did not happen. Instead, the stock kept going down.
I couldn’t accept the loss, so I kept telling myself I would sell Alcoa as soon as it returned to the price I bought it. It took almost ten years for the stock to reach that price point again, and I held onto it the entire time.
This experience taught me the hard way the importance of doing thorough research before investing and the dangers of falling into the loss-aversion trap.
Investing Wisdom #4: Sometimes You Have To Walk Away
With so many shows available, deciding which one to watch is more challenging than ever. Once we choose a show and invest time in it, we can become emotionally attached, making it difficult to give up even on the worst of shows. The same is true when it comes to investing.
We can become emotionally attached once we decide to invest in an asset. The fear of losing sets in, making it even more difficult to walk away.
The stock you bought becomes more than a piece of paper. It becomes like your first love. You hope the spark can be rekindled no matter how bad the relationship gets.
After watching the third episode of the final season of Ragnarok, I was faced with a dilemma: Should I continue watching or move on to another show?
It can be difficult for a buy-and-hold long-term investor like me to walk away from a stock or a TV show. Short-term market fluctuations are a normal part of investing, and every TV show has bad episodes or seasons. The challenge is knowing when to quit, if ever.
While deciding what to do with Ragnarok, memories of my lost decade of investing in Alcoa came flooding back.
Investing in Alcoa taught me two valuable lessons. The first is that investing in individual stocks is risky, and the second is that sometimes you must let go. So, after two and a half seasons, I stopped watching Ragnarok and walked away.
Was it the correct decision? I don’t know, but I can always go back and finish the series, just like I can always buy back into a stock I sold.
Investing Wisdom #5: More Isn’t Always Better
How do streaming services and investment brokerage companies advertise their value proposition? They emphasize quantity over quality, focusing on the thousands of choices they offer to lure in new customers.
More shows are available to watch than ever, with Netflix alone offering thousands of shows. New streaming services are constantly coming online, leading to many more options beyond Netflix, such as Hulu, Disney+, Amazon Prime Video, and Apple TV.
Separating the good from the bad can be challenging with so many viewing options. Finding a worthwhile show to watch can seem impossible, with most shows not being with your time. The same can be said for investing. There are more investing options than ever, and new ones are constantly being created.
There are tens of thousands of publicly traded companies and a growing number of mutual funds and ETFs worldwide. New crowd-funding investments are emerging every time you turn around. There are thousands of cryptocurrencies available, and new ones are being created in the blink of an eye.
The bottom line is that people want more value for their money and often think more is better. While this mindset might work when shopping at Costco, it doesn’t necessarily apply to streaming or investing.
Having access to too many options can lead to people wasting their time and money on low-quality shows or investments that offer little value.
More is not always better.
Investing Wisdom #6: Don’t Get Too Cute
In season three, Ragnarok veered off course because the writers got too cute and overcomplicated the show. This happens all the time with TV shows and when investing.
It’s easy to make investing more complicated than it needs to be. I’ve tried many strategies, but few have given me good results. I have invested in individual stocks, IPOs, sector funds, and individual bonds. I’ve chased higher yields with mortgage REITs and the Dogs of the Dow.
In the end, very few of these strategies, if any, consistently outperform the market. For every one of my wins, such as Nvidia, there are many more losers, like Alcoa, AT&T, Walgreens, Verizon, Annaly Capital, and the list goes on and on.
I still invest in individual stocks and try different investing strategies, but my failures taught me not to rely on them for my future needs. Instead, I have learned to build my investments on a solid foundation of low-cost, broad market-based index funds. From there, I can take smaller, more calculated risks with my money without jeopardizing my financial future.
When I chose to invest in a Bitcoin ETF, I didn’t sell off my S&P 500 index fund or take up a large position. Instead, I kept some cash on the sidelines and only invested a small amount in the Bitcoin ETF. In other words, unlike the writers of Ragnarok, who went all in on a risky storyline for the final season, I did not go all in on a risky investment.
Remember, the dustbin of history is filled with TV shows that became too clever and ended in failure. Try not to let your investment strategy become part of that heap.
Investing Wisdom #7: No One Can Predict The Future
If I had known how season three of Ragnarok would turn out, I might never have started watching the show. If I had known how my investment in Alcoa would end up, I can guarantee I would never have invested in it. The problem is that I cannot predict the future, and no one can.
Don’t be fooled by all the “experts” telling you how the stock market or a particular stock will perform. None of these experts can predict the future. While they may occasionally be correct, it’s important to remember that even a broken clock is right twice a day. More often than not, their predictions are wrong and often downright comical.
Funniest Predictions
In 2008, Jim Cramer told his audience that Bear Stearns was okay, saying it would be silly to move money out of it. Two days later, the bank became insolvent and was eventually sold to JP Morgan Chase.
In 1998, Nobel-prize-winning economist Paul Krugman predicted that by 2005, the internet’s economic impact would be no greater than that of the fax machine. Instead, it revolutionized our lives while creating entirely new industries and jobs.
Steve Ballmer, the former CEO of Microsoft, laughed away the iPhone. He famously stated, “There’s no chance that the iPhone is going to get any significant market share. No chance.” How’s that Windows phone going for you, Steve?
Harvard MBA alum and bestselling financial author Harry Dent makes a living off being wrong. In 1999, he wrote “The Roaring 2000s,” but instead of roaring, it became known as the lost decade, bookend by the dot-com bubble and the Great Recession. However, that did not stop Harry Dent from making more hilarious predictions.
In 2009, following the bottoming out of the markets after the Great Recession, Harry Dent published “The Great Depression Ahead.” However, rather than experiencing a Great Depression, we entered the longest bull market in history.
I could go on and on, but you get the picture. No one can predict the future, not even Nobel-prize-winning economists, CEOs, Harvard MBAs, or ex-hedge fund managers.
Thor and Your Money: Putting It All Together
Who would have thought a show about a modern teenage Thor could offer such insightful investing wisdom? While it may seem unusual to draw parallels between a Netflix series like Ragnarok and investing, there are valuable lessons to be learned.
Listening to your instincts, conducting research, and understanding your emotions are as vital to investing as Thor’s hammer is to battling the giants. Being skeptical of “expert” predictions acts as your shield.
So, whether facing off against mythological beasts or market volatility, the investing wisdom we covered in this post remains as timeless as the legend of Thor himself.
