Investing at the speed of light
Okay, so we all know about Einstein’s theory of relativity, right? One of the results of relativity is that time slows down as speed approaches the speed of light. But how can we use this to improve our returns when investing?
I’ve been thinking about this for a while, and I think I have it figured out, but it is a bit complicated.
Buying a bond is the same as receiving a series of inflows; the price is based on the present value of those inflows. If time slowed down, those inflows would be further in the future, and thus worth less. So a bond will decrease in value as you approach the speed of light. Obviously buying a bond is not the right plan then.
But what about shorting a bond? Yeah, that could work! Find someone who is about to travel at something approaching the speed of light. Ask him what bonds he owns. Short those bonds. Then, when he is on his journey and his bonds are worth less, buy them from him to cover your short.
I will leave the method of communicating with him while he is traveling at the speed of light up to you to figure out.
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