biggest transfers of value in markets happen from impatient to patient capital
how to position yourself to be patient?
- avoid leverage
- position sizing
a) if you're not willing to make a position >1%, then you don't have enough conviction. do more work
b) correlation and concentration risk is a concept that is widely talked about but deeply personal. are you prepared to ride the volatility or the risk of holding a position that is >20-50% of your portfolio?
- insulate your lifestyle. alternative and passive cash flow streams give you peace of mind. make that source of income at least equal to your overhead (ideally some multiple of that)
conviction doesn't mean yoloing and trying to do 100x. it means putting yourself in a position to play the game you love for as long as possible and compound capital. i'm not trying to time markets perfectly, i'm trying to proserve capital and compound because there will be multiple cycles and I believe this asset class is young and poised for growth
almost every time i've felt some degree of fomo to chase the market thinking i won't get the opportunity to invest at a price i like, i end up timing it poorly. i remind myself to always preserve some cash to bid when the market sentiment goes to extreme bearishness. let the market come to you
investing is a very psychological sport so naturally there will always be moments of extreme sentiment - euphoria to fear. either do nothing or act with conviction during these moments
and, above all, the worst mistakes i've seen investors do is when they can't stand other people making more money than them. that's when they loosen their discipline and standards. focus on your process, not on others. even more, it's ok to celebrate the success of others. not everything is zero sum
how to position yourself to be patient?
- avoid leverage
- position sizing
a) if you're not willing to make a position >1%, then you don't have enough conviction. do more work
b) correlation and concentration risk is a concept that is widely talked about but deeply personal. are you prepared to ride the volatility or the risk of holding a position that is >20-50% of your portfolio?
- insulate your lifestyle. alternative and passive cash flow streams give you peace of mind. make that source of income at least equal to your overhead (ideally some multiple of that)
conviction doesn't mean yoloing and trying to do 100x. it means putting yourself in a position to play the game you love for as long as possible and compound capital. i'm not trying to time markets perfectly, i'm trying to proserve capital and compound because there will be multiple cycles and I believe this asset class is young and poised for growth
almost every time i've felt some degree of fomo to chase the market thinking i won't get the opportunity to invest at a price i like, i end up timing it poorly. i remind myself to always preserve some cash to bid when the market sentiment goes to extreme bearishness. let the market come to you
investing is a very psychological sport so naturally there will always be moments of extreme sentiment - euphoria to fear. either do nothing or act with conviction during these moments
and, above all, the worst mistakes i've seen investors do is when they can't stand other people making more money than them. that's when they loosen their discipline and standards. focus on your process, not on others. even more, it's ok to celebrate the success of others. not everything is zero sum
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