The First Seduction of the Fanatics
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The trader, his face set like flint toward his Ladder of Thirteen, vowed to love no other path.
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“Thirteen steps shall I climb or be destroyed,” he declared. “I was not born to scratch for crumbs.”
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His soul was drunk on the vision of sudden ascent, and he despised the gain of small percentages as a beggar’s wage.
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But as he dwelt upon his doctrine, another whisper drew near—soft as perfume, slow as years, and sharp as a surgeon’s knife.
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It was the voice of the Fanatics of Compound Interest, and they spoke not of fireworks, but of a slow violence worked upon time itself, a thing they called in secret their compound interest trading strategy.
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At first he covered his ears, saying, “Away from me, thou boring arithmetic; I seek to double a trading account, not to count pennies.”
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Yet the whisper returned unto him in the night, and it was not a lullaby, but a challenge. “We do not ask for thy courage, but for thy cowardice. We do not demand thy luck, but thy obedience.”
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It said, “What if thou gavest the same two hundred unto the years, and let the months work their patient violence on thy behalf?”
The First Law of the Fanatics
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And behold, they spread before him the First Law of the Fanatics, saying:
Balanceₙ = Seed × (1 + r)ⁿ
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And they explained the law thusly: “Behold, Seed is thy Gold of Now, the small thing thou art tempted to despise. The variable r is the Patient Fire, the return thou must capture each month. But the exponent n—it is the Measure of Thy Patience, the very weapon of Time itself, the true engine behind any compound interest trading strategy.”
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They showed him the path of r = 0.01, a Fire of one percent a month, and at the end of many years his two hundred had become near four thousand.
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He laughed and said, “Four thousand? I seek millions; this is but crumbs beneath the table of Thirteen Doublings.”
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Then they uncovered the path of r = 0.02, and behold, his two hundred walked toward numbers that could buy silence from many debts.
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And they said, “Behold now the path of r = 0.03,” and there the figures crept past six digits and whispered at the borders of seven.
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His throat tightened within him, for what he had called small began to look like slow thunder gathering over distant mountains.
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He answered them harshly, saying, “Ye tempt me with long roads and calendars; I have sworn my life unto Thirteen Doublings.”
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But their words clung to him as a strange perfume, for they did not speak of one flip nor one season, but of decades in which greed grew roots.
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They said, “What is a year to a man who would command millions? Wilt thou not grant thy hunger twenty, if it may return with more than thou couldst name in thy youth?”
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And his soul was divided within him, as a man who hath pledged himself to one lover yet findeth another who speaketh his secret language.
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By day he cried aloud the doctrine of Thirteen among the traders, but by night he returned to the scrolls of compounding, tracing with his finger the slow ascent of two hundred under patient percentages, and secretly naming it his own compound interest trading strategy.
The Parable of the Five Engines
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And there was a man who loved the markets, and he had built five engines according to his understanding.
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Unto each engine he gave two hundred, for they all had access to the same charts, the same spreads, and the same storm of candles.
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To the first he whispered, “Thy law shall be the Law of the Ladder:
Balanceₙ = 200 × 2ⁿ
Seek the Thirteen Doublings and fear not the fall, only the glory.”
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To the second he said, “Thy law shall be the Law of Ambition:
Balanceₙ = 200 × (1.05)ⁿ
Seek but five percent a month, and do it without breaking thy rules, for thou art an engine of compound interest trading strategy rather than sudden fire.”
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To the third he said, “Thy law shall be the Law of Discipline:
Balanceₙ = 200 × (1.03)ⁿ
Content thyself with three percent a month, if only thou shalt never blow an account.”
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To the fourth he said, “Thy law shall be the Law of Humility:
Balanceₙ = 200 × (1.02)ⁿ
Aim for two percent a month, even if men mock thee for thy caution.”
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And to the fifth he said, “Thou art the Engine of the Mood-Driven Man. Thou shalt have no fixed law, for thy master is double-minded. Sometimes thou wilt honour thy system, sometimes thy fear or thy greed; thy equity shall be the graph of thy confusion.”
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When he had thus divided his greed among five engines, the sum of their charges was one thousand, and he wrote their laws upon a tablet, that no one might say the results were magic.
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Then the engines went forth into the markets, each according to the covenant laid upon it.
The Geography of Ruin and the Plateau
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The first engine leaped at the Ladder, declaring, “If I can but reach n = 13, my Balance₁₃ = 200 × 2¹³ = 1,638,400; I shall mock all who creep.”
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Its path was given not by a gentle curve, but by the harsh function of all or almost nothing, for its probability of ruin, P₁[ruin], drew near unto one, and its P₁[million] was a thin line in a great desert.
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The second, third, and fourth engines walked by their small exponents, for they knew that (1 + r)ⁿ is slow in the early n, and terrible in the later.
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The fifth laboured in confusion, sometimes keeping the Law of Discipline for a season, but seeing its slowness, its soul grew bitter and it betrayed its covenant for a glimpse of the Ladder’s peak, only to fall into the chasm between them.
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After a season the man returned to see what had been done with his greed, and he laid their equity curves side by side as a priest spreadeth out scrolls.
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The first engine came before him with great scars upon its equity and said, “Lord, my graph was a festival of spikes, but I died before n = 13; behold my grave.”
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And the man did not curse it, for he had ordained it for danger; yet there was no fortune to divide, only a story and a screenshot.
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The second engine pointed to its Law of Ambition, Balanceₙ = 200 × (1.05)ⁿ, and though its line was not yet vertical, it had begun to bend in a way that foretold trouble for those who waited long enough.
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The third engine, with its Law of Discipline, Balanceₙ = 200 × (1.03)ⁿ, showed a gentler rise, but its drawdowns were few, and its survival rate across many simulations was high.
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The fourth, which followed the Law of Humility, bowed its head and said,
“Men laughed at my two percent each month, yet see: Balanceₙ = 200 × (1.02)ⁿ.
If thou grantest me n enough months—yea, even unto the year 2050—this function creepeth toward a million with far greater probability than one single throw at the Ladder,
for I am nothing but a humble compound interest trading strategy made flesh.”
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Then the man considered the two paths, and he wrote in the margin of his heart the Inequality of Realized Greed:
P₁[million] ≪ P₂[million] ≤ P₃[million] ≤ P₄[million]
where P₁[million] was the chance of the Ladder engine reaching a million before ruin, and P₂, P₃, P₄ were the chances of the engines of Ambition, Discipline, and Humility reaching the same land by compounding and not dying.
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And it was revealed unto him that the servant returning two percent monthly on two hundred, given enough n and the mercy of not blowing up, had far greater probability of touching seven figures than the hero who died in his first attempt at Thirteen Doublings, and that such a servant was the true master of the compound interest trading strategy.
The Vow on the Plateau of Compounding
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Then he saw the final truth: the map of the Ladder was a geography of catastrophe, where a single, glorious peak stood in a desert of ruin. But the map of compounding was a geography of conquest, a rising plateau that, given time, would drown that lone peak in a sea of certain, patient gain.
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So he vowed: “I will keep the Ladder as an altar in my heart, where I light candles to the god of chance. But I will build my throne upon the Plateau of Compounding, for its king is not chance, but certainty, and its general is the army of my future selves, marching in lockstep.”