1/ Some thoughts on portfolio construction (each section expanded below):
> think in probabilities
> think in risk units
> don't forget about duration
> don't fall in love with positions
> have entry/exit strategy
> don't try to be a hero
> think in probabilities
> think in risk units
> don't forget about duration
> don't fall in love with positions
> have entry/exit strategy
> don't try to be a hero
2/ Think in probabilities:
Position sizing should be based on probability relative to another asset/theme.
Example: What is the probability Solana surpases Ethereum? Likely not zero or 100%. If probability is x%, then size SOL relative to ETH according to x
Position sizing should be based on probability relative to another asset/theme.
Example: What is the probability Solana surpases Ethereum? Likely not zero or 100%. If probability is x%, then size SOL relative to ETH according to x
3/ Think in risk units:
How many incremental risk units are you taking by investing in x vs. y, where y is inherently lower risk or beta.
Example: investing at the dApp layer is a levered bet on a base protocol. Factor in illiquidity, execution and technical/dependency risk
How many incremental risk units are you taking by investing in x vs. y, where y is inherently lower risk or beta.
Example: investing at the dApp layer is a levered bet on a base protocol. Factor in illiquidity, execution and technical/dependency risk
4/ Don't forget about duration:
Consider mix of public/liquid vs. private/illiquid. The last thing you want is to have to force sell long-term positions because you need cash. Balance your portfolio with cash-generating assets to cover your overhead. Will give you mental clarity
Consider mix of public/liquid vs. private/illiquid. The last thing you want is to have to force sell long-term positions because you need cash. Balance your portfolio with cash-generating assets to cover your overhead. Will give you mental clarity
5/ Don't fall in love with positions:
Early-stage investing in categories like crypto requires patience & conviction. But that doesn't mean you should become a maximalist. Be prepared to adapt, update your thesis & not be afraid to chop positions if things are not working out
Early-stage investing in categories like crypto requires patience & conviction. But that doesn't mean you should become a maximalist. Be prepared to adapt, update your thesis & not be afraid to chop positions if things are not working out
6/ Have entry/exit strategy:
Common in crypto for narratives to get ahead of fundamentals. Valuation is key to the opportunity/thesis.
A low-quality asset can be attractive at a certain price. A high-quality assets can be a terrible investment at certain price
Common in crypto for narratives to get ahead of fundamentals. Valuation is key to the opportunity/thesis.
A low-quality asset can be attractive at a certain price. A high-quality assets can be a terrible investment at certain price
7/ Don't try to be a hero:
Be patient & stick to what you know. You're not supposed to play every hand in poker - same is true in investing. Your strategy is unique based on your collective experience, financial position, & stage in life. Know your edge and develop that.
GLHF
Be patient & stick to what you know. You're not supposed to play every hand in poker - same is true in investing. Your strategy is unique based on your collective experience, financial position, & stage in life. Know your edge and develop that.
GLHF
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