> For the complete documentation index, see [llms.txt](https://cafebedouin.gitbook.io/potm/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cafebedouin.gitbook.io/potm/section-2-the-cost-and-architecture-of-formation/2-the-mullahs-fixed-cup/interlude-optionality-and-alpha.md).

# Interlude: Optionality & Alpha

> “When you hold an option and the world moves with you, you enjoy the benefits; when the world moves against you, you are shielded from the bad outcome since you are not obligated to do anything. Optionality is the state of enjoying possibilities without being on the hook to do anything…
>
> …In contrast, the closing of doors and possibilities signals the loss of optionality. This language doesn’t only apply to career planning: Don’t be surprised to hear someone in finance talk about marriage as the death of optionality.
>
> This emphasis on creating optionality can backfire in surprising ways. Instead of enabling young people to take on risks and make choices, acquiring options becomes habitual. You can never create enough option value—and the longer you spend acquiring options, the harder it is to stop…
>
> …The shortest distance between two points is reliably a straight line. If your dreams are apparent to you, pursue them. Creating optionality and buying lottery tickets are not way stations on the road to pursuing your dreamy outcomes. They are dangerous diversions that will change you.
>
> By emphasizing optionality, these students ignore the most important life lesson from finance: the pursuit of alpha. Alpha is the macho finance shorthand for an exemplary life. It is the excess return earned beyond the return required given risks assumed.
>
> *-Mihir A. Desai, “*[*The Trouble with Optionality*](https://www.thecrimson.com/article/2017/5/25/desai-commencement-ed/)*.” The Harvard Crimson. May 25, 2017*