You need to be bigger

Jeff Bezos is quoted here as saying: “Percentage margins are not one of the things we are seeking to optimize. It’s the absolute dollar free cash flow per share that you want to maximize, and if you can do that by lowering margins, we would do that. So if you could take the free cash flow, that’s something that investors can spend. Investors can’t spend percentage margins.”
This quote summarizes the whole post that I want to write. You can make 600x returns on an investment, you can outperform at work, in the football field, in the gym, etc. but it doesn’t matter much if the base is small. I have made investments that have given me insane returns during the 2020–2021 bull market, but that doesn’t really matter in the long run. My investments were small and even after 1000% return they still don’t matter much. I didn’t feel anything. If you made your $100 into a $1000, good for you, but it is still $1000 and won’t matter much in the long run. Same goes for knowledge and progress at work or in other places. You need to keep building a broader base and it becomes harder and harder to earn exponential returns from that wide base. But as Jeff Bezos as said above, absolute numbers matter. Amazon TTM margins are 5.52%, something that would look bad in a valuation class. But we all know it is an excellent company and can do anything it wants. A 10% return on $1 million is more impressive than a 1000% return on $100. A powerlifter beating his PR at an IPF meet by 5 kg is way more impressive than me beating my PR by 15 kgs in my basement gym. I can only bench 70+ kg. They can bench 150+ kg or more. Absolute numbers matter more. You can be great at something, but if it can’t be scaled to huge levels, it is impressive but not that great. Size matters.
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