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[tae kim @firstadopter]

GOOD: Morgan Stanley's sales desk called me a supply chain smartie in an email to their hedge fund and mutual fund clients.

BAD: My name is misspelled on second mention. :/

GREAT: Stock market is much smarter now versus DeepSeek last year because good smart takes FROM SUBSTACKS are sent around to everyone

[Chris Lakin @chrislakin]

what your risk-aversion costs you

[degentrading @degentradingLSD]

Understanding your own behaviour in a drawdown is one of the most important things you can do - because just like death and taxes- drawdowns are guaranteed as well

[Citrini @citrini]

Since CPI is either going to be a clearing event or a thanos snap event, I figured it might be a decent time to be helpful.

If you’re relatively new to investing, then you’re bound to learn about what happens when your portfolio goes down.

Now, this is coming from someone who’s portfolio is up a paltry 20% YTD and hasn’t been gunning it on risk recently. Although also someone who’s been trading and investing their own money for the better part of a decade and has managed to not go bust (except for one, very painful time early on).

If you’re constructing a portfolio it’s important to realize it is its own position rather than a collection of positions. A stock is not just a company but the sum of its valuation, shareholder base, its sensitivity to liquidity, crowding, financing/rates and its catalyst calendar. High beta stocks are often five different trades in one ticker.

You should always have a working idea of your “tilts”. Does your portfolio go up/down more if tech rallies, if certain countries outperform, if a specific thematic is validated etc etc.

In general, you should not have a portfolio of 20 different stocks that all act the same. You might think you won’t, but getting the value of your book cut in half will make you do stupid things. (As an aside, this is also why even though buying the dip is generally a good strategy, progressively buying the dip early into a drawdown can make you mess up at the exact lows.)

High beta stocks come in all shapes and colors but in general they are selling the distant future. In good markets, the time out to that future is cheap. In bad markets, you start paying rent. That rent tends to appear as a lower multiple even while estimates stay the same.

A lot of times people will tell you the only thing that matters in a drawdown is “is the thesis intact?”. That’s one aspect, the other two are “how have expectations changed?” and “did you size like an idiot?”.

Don’t average down just to improve your cost basis, the market doesn’t care about your cost basis. Only add if you can truly underwrite the expected return improving, and that means taking a view that goes beyond a default return to multiples that may be unsustainable.

Price can become a fundamental and technical sell offs can manufacture fundamental problems - reflexivity cuts both ways.

The best question you can ask yourself in a drawdown is “from here, what is the range of outcomes and what’s the best use of the next dollar?”. If early in a drawdown you note that every time one sector goes up your portfolio goes down, it could be a decent idea to add exposure to that sector.

The ultimate goal is not to avoid every drawdown but to make sure no single drawdown takes away your ability to act on real opportunities when they arise.

No amount of truisms will help make anyone a better investor, but there is something you can do right now. If this is one of your first few drawdowns, you can observe how you react. Take notes on it. Find out what mistakes you make and then optimize your portfolio, sizing, strategy etc to compensate for those shortcomings. It’s a lot easier to do that than try to fight your own psychology - and anyone who pretends there’s a one size fits all answer to that is lying.

[Gavin Baker @GavinSBaker]

Conviction is when you are frustrated that a stock is not down more.

[Chat @MonsieurBluee]

@Mononofu is to DeepMind what @gdb is to OpenAI.

[Chat @MonsieurBluee]

@shguke I feel seen.

[Chat @MonsieurBluee]

@btwn_dimensions

[Chat @MonsieurBluee]

@WiringTheBrain Same for neuroscientists trying to figure out 'functions' of neurotransmitters.

[Chat @MonsieurBluee]

@vientsek @andy_l_jones

[Chat @MonsieurBluee]

@fr0zenEntr0pie I'm still pissed off that Isayama had Mikasa and Jean married, and that was 3 years ago 😑

[Chat @MonsieurBluee]

@kucchi09 The Better Angels of Our Nature: A History Of Violence and Humanity by Steven Pinker

[Chat @MonsieurBluee]

@ethiopiancheri real

[Chat @MonsieurBluee]

@shauseth thanks for confirming my shitposting talent

[Chat @MonsieurBluee]

@steeltroops_ai still waiting for the right teacher to come...

[Chat @MonsieurBluee]

@DanielW_Kiwi haz skill

[Chat @MonsieurBluee]

@xrist0bg @cto_junior based claude

[Chat @MonsieurBluee]

@PicturesFoIder @IterIntellectus bro you got featured lol