What are examples of activities/bets with asymmetric upside?

This might be simplistic, but the concept of "asymmetric upside" might be captured in any situation where "the worst thing can happen is that the person says no."

This includes: applying to competitive positions when you don't seem completely qualified, cold calls in sales (sales seems to be heavily based on asymmetric upside, where sales people call many different people until they get a few Yes-s), and asking people to hang out just to make friends.

More related to money, I've thought that cheap (and often free) educational material to have a large potential upside. Good books are often time well-spent, as long as there is enough time spent applying the concepts too. A cheap online course on video editing (I think about $10 USD at the time) has also come in handy many times.

> Investing in call options on AMD in 2014 or Tesla in 2019 also had huge asymmetric upside. It was clear that these stocks had massive risks, but while the upside wa potentially s huge, the downside was capped at -100%.

This is a terrible example. No one knew that the stocks would skyrocket. So at the time it was asymmetric on the downside because the cost of options were ridiculously expensive.

The lottery.

Honestly it bugs me a bit that I don't know the right way to model it - because so often people will slate it for having a terrible expected return (E[X]), but.. some very high percentage of us here could play every single week without noticing it (negligible downside), and yet winning however slim the chance would be somewhat life changing - even if it wouldn't make you quit work it'd be a nice windfall.

I suppose you can just view it as a microcap, very high risk investment.

I don't play, fwiw. I do have Premium Bonds, a lotteryish government scheme in the UK where you keep the invested amount and it can't go down (other than in real terms) but has a shot at winning various amounts each month up to the maximum of £1M. That's a lot easier to justify to myself, but I do wonder if it's a bit too easy to dogmatically hate on the lottery.

"For example, usually asking someone out on a date has huge asymmetric upside. You might hit it off and end up being in a happy relationship. If not, you'd just be a little embarrassed and maybe awkward with the person afterward."

Or it goes so "well" that you get married and they take half your stuff in a divorce.

Asymmetric upside is only really useful if the EV is positive.

Bets "on the inside" in roulette have asymmetric upside, they pay out 35:1.

The problem is that the chance of winning is 37:1 on an American wheel.

This means that the EV is negative: do it enough times and you will lose money.

You should constrain your search to positive EV gambles.

Buying a house in the United States. For as little as 5% down, and low-single-digit-fixed rates over a 30-year term, you can purchase an asset worth hundreds of thousands of dollars and you get to keep all the upside if its value goes up (which is historically quite likely, especially since housing policy in the U.S. deliberately keeps supply low). It's insane leverage, an excellent inflation hedge, and you get to deduct the interest payments from your taxes, to boot. Oh, and when you do sell, a bunch of that upside (up to $500k) is tax-exempt if it's your primary residence.

- sleep early, wake early, nap at noon. You're still sleeping the same amount of hours but somehow, are more productive and feel better. When I keep to a 10 pm, 5 am routine, I'm in tip top shape mentally.

- 1 hour early morning walk. Just magic.

- cook and make your own food. Cheaper, healthier, and therapeutic to boot. Also a venue to making new friends, as food brings people together.

- a non-activity: get rid of the permanently attached smart device. Bet here is hours spent on a device are far less productive/helpful than equivalent without one.

Develop a technology that helps people convey complex ideas using narrative trails and other techniques on top of massive local storage, as portrayed by V Bush in "As We May Think" in 1945. It still hasn't been done yet, despite the problem of efficiently conveying complex information as being one of the most important challenges facing mankind (more than 75 years ago!)

If you can help people convey complex ideas, with all the context and nuance, you've created a new level of expressivity and productivity that could help us all in ways we can't even currently imagine.

Here's my favorite example -- in the form of a story.

A bunch of friends visits a young guy who recently moved to Las Vegas. "Here's how we get twenty bucks in Las Vegas," he boasts to his friends, putting $20 on the roulette wheel for black. When it comes up red, he puts down a $40 bet, bragging that "I'll keep increasing the size of my bet until I make back my money -- plus another $20!"

One time he'd had to double his bet four times in a row, but he's convinced that his system works, and does it every time company comes to visit.

Do you see where this is going? One day he hits a horrible streak. Five times in a row he's lost the bet. (So, $20, $40, $80, $160, $320.) Now he's got to bet another $640 -- and hope that he wins. (It's getting awkward, with all his friends watching him lose, feeling bad for him...) At some point his wallet is out of cash, and he's slinking back to the in-casino ATM machine. (And the bank balance isn't infinite either...)

Conclusion? This particular strategy has an asymmetric downside. More often than not, you'll walk away with $20. But the casino knows that sooner or later you'll have that one very bad day where they'll get it all back.

Legal insider trading. Prominent example are US Congressmen.

Personally investing into specific technologies (e.g. NVIDIA) and then passing legislation to promote those technologies benefits everyone, although asymmetrically.

Starting a side hustle business? For "$10k" work of effort it could lead to many times that in revenue in the future.

Just expanding on the call options, one can even take a neutral hedge position by buying PUTs and CALLs at the same strike price. So, in essence you are betting that the price won't stay at the same level and would either rise or fall. Your net option premium is higher (approx. 2x of just buying a CALL opt or PUT opt only) but your long-term risk is much lesser (considering a sequence of bets) as scrips tend to be on an uptrend or downtrend in a given window and much less frequently get stuck in a range bound behavior.

Moreover when the assymetric event occurs (i.e., a meteoric rise or an abysymal crash), the loss is limited to the premium paid whereas the upside is huge.

Combine that with the Kelly Criterion (discussed widely here: https://hn.algolia.com/?q=Kelly+Criterion) you have a strategy.

Asking for a raise or a promotion. The squeaky wheel gets the grease.

There may be toxic environments where there is a large downside - losing your job - but I hope that is not the case for most who are reading this comment.

capture a regulator and have them put your competitors out of business

bribe politicians to use your countries armed forces in your companies interests

get the government to cover any downsides of your product

be the child of a politician and offer consulting services

found a central bank

there are lots more

> Investing in call options on AMD in 2014 or Tesla in 2019 also had huge asymmetric upside. It was clear that these stocks had massive risks, but while the upside was potentially huge, the downside was capped at -100%.

This is unactionable advice. Call options on any stock are capped at -100%. It's choosing which ones are worth that risk that is the hard part.

Good insurance. Paying a fair amount of money to hedge against rare but potentially ruinous events - like your house burning down - is obviously a good strategy. The trick with insurance is finding the sweet spot between paying too much for cover you don't need or too little and being exposed to gaps in your cover. Lately I've been increasing all my excess values to bring down premiums, because I can afford to pay a high excess and it's unlikely I'll need to.

Learning programming.

Options in general have asymmetry built in; that's the point of using them for risk-management. The idea is that the buyer pays a flat amount for the privilege of limiting the downside risk, and the seller is expected to know what they're doing and rake in that flat fee in exchange for being able to handle the rare-but-severe unlimited downside.

Networking, you never know who you might meet and how useful they might be in the future. PG said in an YC talk "put yourself in the position to get lucky". Networking is one of those ways.

College education is/was one. Hard to tell these days with the high debt that comes with it for many but it can mean a complete change of lifestyle for the individual and his/her family.

I like to think it still is.

Investing in Bitcoin in 2011 after learning about it on Hacker News.

I wish there was a financial instrumented which is regulated and allows to bet on a stock decreasing while the potential loss is limited.

Binary options providers are often scams.

Moving. All the famous actors moved to New York or LA at some point. Elon Musk moved out of South Africa, Silicon Valley, etc.

Buy crypto while I'm awake, sell about ten minutes before I wake up.

Health, education.

Asymmetric downside - sharing ideas that you could potentially personally benefit from just because somebody gave you some inspirational hippie BS wisdom like “we’re all working for the progression of humanity”. Wake the f up, welcome to capitalism, the snakes just took you for all the creative brain power you had.

Running a casino