Participation Awards are Valuable
But not in Sports
So I’m in the locker room, and this older guy (older than me) is talking about how he liked playing ball again
“Let’s face it, I like to win.”
“It’s better than participation awards,” I chime in
“Without a winner, where’s the motivation, right?”
But as Murphy’s Law would have it, my daughter won a participation prize at school just for showing up.
And while I’m in the back of the crowd, I’m thinking maybe participation awards are valuable
Woody Allen once quipped
“90% of success in show business is showing up.”
And the same thing in business and investing. Especially, the long form of it.
Forget alpha.
Forget edge.
Forget the genius macro call you’re waiting to make.
The uncomfortable truth is that the market doesn’t reward brilliance but participation. Everyone else is just fighting over the crumbs that participation leaves behind.
The logic is almost embarrassingly simple. Markets are, at their core, a price-discovery machine powered by human engagement. More buyers, more sellers, more believers, so, ergo, prices find a higher equilibrium over time.
Pull the participants out and you don’t get a sideways market. You get a collapsing one. The denominator shrinks. The whole machine loses legitimacy.
This is the original sin of every bear thesis: it underestimates the gravitational pull of mass participation. You can be right about every macro variable and still lose because you bet against the crowd showing up. They almost always show up.
And when they do, they bring capital, conviction, and compounding.
But participation isn’t permanent. It’s trust-dependent. Misconduct corrodes it. Opacity corrodes it. Every Ponzi unwinding, every insider dealing, every regulatory overreach that makes civilians feel like the game is rigged
ergo, bleeds participants.
Some never come back. The retail investor who exits in disgust takes their capital, their word-of-mouth, and their next generation with them. The institutional allocator who loses faith reallocates to real assets and stays there. Participation is the water; misconduct is the slow leak in the tank.
The DJIA from 1932 forward isn’t a story of better earnings models. It’s a story of more Americans deciding that owning equity was a rational act. Mutual funds mainstreamed participation. The 401(k) institutionalized it. The smartphone brokerage democratized it further. Every structural innovation that lowered the friction of participation added a permanent increment to prices.
Conversely, every crisis
1929, 2000, 2008, 2020
was preceded by misconduct that eventually drove participants out, and every sustained recovery was a story of them coming back.
The conclusion writes itself: the only guaranteed prize in investing is awarded to those who stayed in the game.
The participation award isn’t consolation. It’s the whole competition.
So here is how YOU can participate.
With the help of Claude.ai, I created a 5 - 10 minute routine to observe the popularity of investing daily.
As I narrate currencies, and ideas, we must never lose focus on the ‘rithmetic of the market.
In war, and peace.
Don’t worry if you don’t even know where to start, I’ll try to help narrate this daily for subscribers.
Like what you see? Contribute to my fine wine collection (so far 4 bottles).
Have a most positive day,
Eric