Sunk Cost & Stop Loss

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|                    SUNK COST & STOP LOSS                   |
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|                                                           |
|   500K didn't buy love, just "accept losing the bet"      |
|   You might not be a simp, but you might be a Fat Cat     |
|                                                           |
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Sunk Cost - Behavioral Economics Foundation of Ponzi

In economic terms, sunk cost refers to past payments that cannot be recovered. It’s irrelevant to future decisions.

Human Nature’s First Reaction

“I’ll tell everyone - what I’ve lost, I will definitely get back”

The result is usually sinking deeper. Same with relationships, playing schemes, and running schemes.

Three-Ponzi Theory Perspective

Dividend scheme essence:
├── Increase user sunk cost
└── Increase their dreams of APY

Like Fat Cat:
├── Goddess crooks her finger a little
├── He's already planned what to name the children
└── Giving 20 more bucks ≠ Getting one step closer to goddess

Understanding this "pseudo-positive feedback" is crucial

Headwinds - Should You Let Go?

Whether a direction or project can make money has nothing to do with your investment.

Role	Determining Factors
Retail	”Momentum” and “House”
House	”Momentum” and “Luck”

Investment Big Enough to Move Yourself

Maybe you started as a rational person
        ↓
When investment is big enough to move yourself
        ↓
You might confuse cause and effect
        ↓
Believing your investment determines the thing must work

Common Cases:

Linea/ZKS/FT repeatedly PUA, still so many followers
Inscriptions are dead, still asking if Rats, Atomical can list on Binance

Same for Running Schemes

Community leader operation subsidies paid
Operations center opened
Phuket conference hosted
Almost $2M spent
        ↓
But daily orders still only ~$5,000
Decreasing every day
        ↓
Can this project still take off?

The scary thing isn’t failing to take off and not making money. The scary thing is knowing it won’t work but dragging on, draining your resources

Knowing when to stop is essential for scheme operators

How to Know When to Stop?

Plan in Advance

Before launching, need clear stop-loss planning:

Dimension	Content
Financial investment	Maximum acceptable investment going to zero
Non-financial resources	Platform institution insurance, stability costs, post-event settlement costs
Time opportunity cost	Especially launching in bull market, how much time waste is acceptable

These three points convert to a total amount and a total duration = Your stop-loss point

Three Scenarios

1. Exceeding Expectations

Early profits far exceed costs
        ↓
Harvest before marginal returns diminish

2. Struggling

Early profits barely cover costs
Follow-up profits trending down
Counting payout ratio, approaching cost
        ↓
If trend can't be reversed, close quickly
(Even hard rug if necessary)
        ↓
Ensure those who must break even are paid back, you don't lose
Still have some money to handle community issues
Exit gracefully

3. Crash

Early profits can't cover costs
Follow-up profits decreasing over time
        ↓
Close quickly
        ↓
Don't use unused resources
Those already used that must break even - pay from your pocket
Stop loss, pack up, exit quickly

Schemes Can Be Learned, But More About Wisdom and Heart Training

Three-Ponzi Theory is just methodology for launching schemes, only tells you the framework, what’s clearly wrong to avoid.

True Secrets Cannot Be Taught

Ability	Meaning	Source
Reading momentum	Judging current narrative trends, market comparative advantages	Wisdom (mysterious)
Self-discipline	Recognizing sunk cost essence, willpower to overcome “unwillingness”	Trained
Essence	Escaping herd mentality and moral frameworks, finding first principles, cutting noise	Self-cultivation

The scheme path will be hijacked by political correctness and moral obligations. Without the ability to recognize and hold the essence, you will be drowned by noise

Core Formulas

Sunk Cost Trap:
├── More investment → Harder to let go
├── Moving yourself → Confusing cause and effect
└── Knowing it won't work but dragging → Draining resources

Stop-Loss Calculation:
├── Acceptable financial investment going to zero
├── + Non-financial resource value
├── + Time opportunity cost
└── = Total amount + Total duration

Three Scenarios:
├── Exceeding expectations → Harvest before diminishing returns
├── Struggling → Close quickly if trend can't reverse
└── Crash → Stop loss, pack up, exit

Ultimate Direction:
└── Industrialized schemes = Formula-based solution minimizing opportunity cost through minimizing errors

No eternal winners in scheme circles, the scheme path is walking on thin ice

Harvesting hundreds of millions for mansions and models is low probability. Real scheme operators spend most time on the trial-and-error path