The Great Wisdom In Opportunity Cost

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Feb 13, 2026

There are two ideas that we believe sit at the foundation of building wealth.

They are not very new ideas. Institutions and generationally wealthy families have used them to make investment decisions for as long as markets have existed. But they are rarely taught, and they are almost never part of the conversation that reaches everyday investors.

Those two ideas are opportunity cost and the time value of money.

This letter is about what they mean and what they look like in practice.

What Opportunity Cost Actually Means

Opportunity cost is not about what you lost. It is about what you will never gain because of a decision that is made. It is the future value that was forfeited, whether or not it was realized at the time.

Here is an example.

In November of 2021, an investor buys 1,000 shares of Nvidia at $33 per share. Total investment: $33,000. Thirteen months later, in December 2022, the semiconductor market is getting hammered. Nvidia has been beaten down. The investor, watching their position bleed, sells all 1,000 shares at $14 per share. They walk away with $14,000. On paper, they have taken a $19,000 loss.

That is the number they see. That is the number that feels real.

Now here is the rest of the story. 

Today, Nvidia trades at roughly $190 per share on a split-adjusted basis. Those same 1,000 shares would be worth $190,000. The distance between what the investor took home and what the position became is $176,000 in value that will never be theirs.

That is opportunity cost. The future that was forfeited.

The Time Value of Money Makes It Worse

The time value of money is a straightforward idea: a dollar today is worth more than a dollar in the future, because today's dollar can be invested and compounded over time. Every year it stays invested, it grows. Every year it is missing, that growth never happens.

When you apply this to the Nvidia example, the $176,000 in forfeited value is not a fixed number. It is seed capital that will never get the chance to compound. At a reasonable long-term equity return of 8 to 10 percent annually, that $176,000 grows to somewhere between $380,000 and $450,000 over the following decade.

So the investor who believed they were "cutting their losses" at $19,000 may have actually walked away from nearly half a million dollars in future wealth. And the statement never showed them that number, because opportunity cost and time value of money do not appear on brokerage statements. They only become visible in hindsight.

This is one of the reasons we believe that understanding what you own, and deeply understanding why you own it, is just as important as the decision to buy in the first place. When you know the value of what you hold and where that value may be headed, you are better equipped to evaluate whether a drop in price is a signal to act on or simply noise to sit through.

The Story Behind the Numbers: Nvidia's Narrative Bridge

The math is important. But what makes this example powerful is not just the numbers. It is the story of how Nvidia went from being one thing to being something entirely different, and how most people missed the shift while it was happening.

In 2021, Nvidia was widely understood as a cyclical semiconductor company. It made GPUs for gaming. Wall Street modeled it that way. Analysts cautioned against treating it as anything more than a cyclical chip stock. When the semiconductor cycle turned down, selling felt logical. The narrative said: this is a chip company in a downturn. The price action confirmed it.

But underneath the surface, something was shifting. Nvidia's GPUs turned out to be the essential hardware for training large language models and powering the emerging AI infrastructure buildout. The company was evolving from a maker of gaming graphics cards into something much larger: a foundational piece of a multi-trillion dollar technology transformation.

Over the course of 2023 and into 2024, the market began to recognize this. Nvidia was no longer being valued as a cyclical chip stock. It was being valued as infrastructure. A toll road for the AI economy. The stock moved from $14 to $190.

We think of this as a narrative bridge. An asset starts in one category. The world begins to change around it. For a period of time, the price does not reflect the new reality because the broader market has not caught up to the shift. Eventually the narrative flips, and the asset gets repriced to reflect what it has actually become. In other words, a once-in-a-generation shift in how an entire asset class is valued. In Nvidia's case, that repricing was roughly 13x.

The investors who understood the shift and held through the noise were on the other side of that bridge. The investors who sold during the drawdown, acting on the old narrative, stepped off before the crossing was complete. And the cost of stepping off was not the $19,000 on their statement. It was the $176,000 in forfeited value, compounding to potentially to $450,000 over the following decade.

No one had a crystal ball. But the ones who understood the value of what they owned, and the structural shift that was underway, were better equipped to hold through the turbulence.

Why These Ideas Hit Differently Right Now

The principles that have created wealth across previous generations are still important. Diversification, discipline, saving, and patience built real financial security for millions of people, and they continue to matter.

But the environment in which those principles are being applied has shifted, and that shift changes the math in ways worth understanding.

Since 1970, home prices in the United States have increased roughly 1,608%, while general inflation has increased about 644%. When the average baby boomer entered their 30s in the mid-1980s, the home-price-to-income ratio sat around 2.6 to 3.5. For the average millennial entering their 30s around 2019, that ratio had climbed to 4.6. The cost of public college tuition has risen approximately 177% in real, inflation-adjusted terms since the 1970s. Medical care costs have consistently outpaced growth in the broader economy. A dollar in 1980 has the purchasing power of roughly $3.93 today.

The three biggest expenses tied to building a stable financial life have all outrun wage growth by wide margins. This does not invalidate what worked before. It means the same level of effort produces different results in a different cost environment.

And there is another factor that is changing the equation. AI is compressing the speed at which value accrues to early positioning. This is not about some vague sense that "everything is moving faster”, which it is… It’s something more specific than that. When structural shifts happen faster, the window to recognize and act on them narrows. And when that window narrows, the cost of missing it compounds more quickly. A repricing that used to unfold over a decade or more can now unfold in a fraction of that time.

What this means in practical terms is that the margin for error around opportunity cost and time value of money has gotten thinner. Not because of any generational failing, but because the rate at which a missed opportunity compounds against you has accelerated. The landscape shifted. These two ideas are how you can navigate it.

A Pattern We Are Watching in Real Time

We want to be transparent about something we are observing. Not as a guarantee or a prediction, but as a pattern that looks familiar to us.

Ethereum today is still widely priced as a speculative crypto asset. For much of the market, it sits in the category of high-beta tokens that trade on sentiment and momentum. That is the current narrative.

But underneath that surface, the structural picture has been shifting. Stablecoins, which function as digital dollars moving on blockchain rails, are already settling at a scale of $150 to $180 billion on Ethereum's network. The federal government, through proposed legislation like the Clarity Act and the Genius Act, is building the regulatory framework to bring institutional finance onto blockchain infrastructure. The Treasury Secretary has publicly stated that stablecoin legislation needs to pass. The architecture being designed to address the national debt relies in part on creating demand for Treasury bills through stablecoins.

If this sounds familiar, it should. An asset being priced in one category while a structural shift builds underneath. A gap between the current narrative and an emerging reality. A bridge that has not yet been fully crossed.

We are not saying the outcome is certain. Nobody has a crystal ball, and the regulatory pieces are still being assembled. The bridge is not built yet. But we have seen this pattern before. Nvidia was priced as a gaming chip company while it was quietly becoming the backbone of AI infrastructure. The narrative had not caught up to the structural reality, and the people who recognized the shift early were positioned on the right side of a massive repricing.

We believe something similar may be unfolding with Ethereum and with companies that are positioned around the Ethereum ecosystem. We are watching it closely, and we believe understanding opportunity cost and time value of money is the lens that makes this kind of pattern visible before it becomes obvious to everyone.

Two Ideas. A Lifetime of Context.

Opportunity cost asks: what am I actually giving up? Time value of money asks: what will that decision cost me over the next decade, and the decade after that?

These are the questions that institutions and generationally wealthy families have used to make decisions for as long as markets have existed. They are not complicated. But they are rarely taught, and they are almost never part of the conversation that reaches everyday investors.

These two ideas sit underneath everything we do. They are the lens through which we evaluate what is in front of us, and they are what we come back to when the noise gets loud.

We wrote this letter because we believe these ideas belong in more hands. And because we believe this is the kind of conversation that matters across generations, whether you are someone with decades of experience in the markets or someone just beginning to ask the right questions.

Disclaimer: This document represents the views and analysis of Patriot Advisory Group and Quantum. It is provided for informational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any security or asset. Cryptocurrency and digital asset investments carry significant risks, including the potential for complete loss of principal. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult with qualified financial, legal, and tax advisors before making any investment decisions.