Learning from my mistakes.
Here are some of the most embarrassing mistakes I made in my investing career.
Hopefully some can be cautionary tales.
Here are some of the most embarrassing mistakes I made in my investing career.
Hopefully some can be cautionary tales.
1/ Confidence
Early in my career I placed much more emphasis on other people's views than my own analysis.
While triangulating views is useful, this leads to bad process and you end up being someone's exit liquidity, or missing fund-returning investments ( $FTT ).
Early in my career I placed much more emphasis on other people's views than my own analysis.
While triangulating views is useful, this leads to bad process and you end up being someone's exit liquidity, or missing fund-returning investments ( $FTT ).
2/ Hip firing
In 2020 I got carried away by the sheer euphoria of DeFi. I couldn't believe my thesis was finally playing out after a year.
I mistook beta for genius and started losing discipline. When things started unwinding I got hit bad.
In 2020 I got carried away by the sheer euphoria of DeFi. I couldn't believe my thesis was finally playing out after a year.
I mistook beta for genius and started losing discipline. When things started unwinding I got hit bad.
3/ I spent weeks studying every decision I made there and imposed processes that made sure emotion played no role in how i invest.
This is how I handled the DeFi summer crash vs. how I handled this most recent downturn in my personal portfolio.
This is how I handled the DeFi summer crash vs. how I handled this most recent downturn in my personal portfolio.
4/ Table selection
Good day traders are rarely great investors, and vice versa - don't try to do everything.
It took me 6 months and a big loss to realize I don't have the temperament for low time frame day trading, and while the game is interesting, I only have so much time.
Good day traders are rarely great investors, and vice versa - don't try to do everything.
It took me 6 months and a big loss to realize I don't have the temperament for low time frame day trading, and while the game is interesting, I only have so much time.
5/ Being a donkey
In a bull market it's tempting to want to milk the market and do everything. Every trading shop has a ventures arm, and some VCs have a trading arm now.
In retrospect, the EV maximizing thing is to do one thing very well.
sive.rs/donkey
In a bull market it's tempting to want to milk the market and do everything. Every trading shop has a ventures arm, and some VCs have a trading arm now.
In retrospect, the EV maximizing thing is to do one thing very well.
sive.rs/donkey
6/ Think in %
For a while, the size of my bets did not scale with the size of my portfolio. I'd cringe at bets that seem too large, and equate dollar amount to real terms, which paralyzed me with fear.
Needed to dissociate investment capital from "net worth" and think in %.
For a while, the size of my bets did not scale with the size of my portfolio. I'd cringe at bets that seem too large, and equate dollar amount to real terms, which paralyzed me with fear.
Needed to dissociate investment capital from "net worth" and think in %.
7/ Sizing with conviction
Early on, I had no process around bet sizing.
A year of watching others make disproportionally more from my calls than myself made me realize I needed some consistency around sizing according to my conviction.
Recommended:
neckar.substack.com/p/layers-of-co…
Early on, I had no process around bet sizing.
A year of watching others make disproportionally more from my calls than myself made me realize I needed some consistency around sizing according to my conviction.
Recommended:
neckar.substack.com/p/layers-of-co…
8/ Burnout
This is by FAR the most important.
For a while I was constantly tuned in to the market.
Whatever relaxation I had were slivers stolen from a constant state of hyper-awareness, which took a toll on my health and decision making skills.
This is by FAR the most important.
For a while I was constantly tuned in to the market.
Whatever relaxation I had were slivers stolen from a constant state of hyper-awareness, which took a toll on my health and decision making skills.
9/ Burnout (cont'd)
Scaling ( brought on board 4 people for our analyst team) aided with this, but the wider point is to make peace with the fact that you cannot predict and control everything,
If your system needs you to babysit the portfolio 24/7 it needs to change.
Scaling ( brought on board 4 people for our analyst team) aided with this, but the wider point is to make peace with the fact that you cannot predict and control everything,
If your system needs you to babysit the portfolio 24/7 it needs to change.
10/ Related reads on this
Mastering the Market Cycle - Howard Marks
Fooled by Randomness - Nassim Taleb
Psychology of Money - Morgan Housel
Mastering the Market Cycle - Howard Marks
Fooled by Randomness - Nassim Taleb
Psychology of Money - Morgan Housel
fin/ That's all for now - I'm sure I'll fuck up more in the future in new and unexpected ways. My current goal is to make sure the above do not happen again.
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