Thread by @DegenSpartan

been struggling lately with position sizing

- sizing from a risk mgmt perspective

- sizing such that the expected return is worth the effort

no solutions, just sharing thonks

some people have mathematical formulas that tell them what % of their portfolio to bet, some has other methods

but usually the problem is that the optimal size projected is much larger than the current liquidity of the project

so do you skip it? go for it? size down?

if you skip it, it has to be an operational reason, since if ops capacity was available, you would take the trade, even if you needed to size down cos of liq

but most of us are retail and time and energy are our limiting factors, making it physically impossible to increase load

if you go for it despite liquidity concerns, you're elevating the risk because the play morphs to "do or die" as you lose the ability to gracefully exit without nuking it

many VCs accept this strategy and they simply have to hope / help liq grows enough by the time lockup ends

its no surprise that usually the largest winners are from this category

but plenty of -99% losers too. dont need to look back too far, theres plenty of "do or die" investments from the ICO era that are now "dead"

depending on your assessment, the r/r could be good or shit

if you size down, you probably are in the most flexible position, but now you're taking on additional load and the $ earned per time expended is suboptimal because of the smaller size

if the size is too small, its probably not worth it given the cost in mental physical fatigue

one thing i find that helps me a lot is not evaluating positions in a vacuum, but holistically along with the rest of my exisiting positions

particularly if theres an overlap in any thesis or segment, which helps me refine what is the LT war strategy vs the ST battle strategy

as i type this out, i wonder to myself if my positioning is correct

which stables have blackswan risks? do i have too much of those? are the stable farms ive allocated to safe from hacks or bugs? or solvency issues?

being 100% stables is tough honest work

as long as you arent facing the issue of optimal size > liquidity, you're in the sweet spot where you will enjoy economics of scale without capacity (capital, not operational) being another dimension that you need to worry about

just keep hustling, cos its worth it in this zone