Tag Archives: #LongTermFool

Optimizing

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Action.

Too much action?

Recede.

Too little action?

Still ok.

No action at all.

Sometimes fine.

No action ever, very longish?

What, are we blocking pores now? Not allowing an organism to breathe? Cleanse?

How much to engage with one’s folio?

Burning question.

Correct answer?

It’s different for everyone.

How to find out? What works for you?

By doing.

By trying this.

And that.

By trying it all.

By seeing what gives max comfort level.

Space.

To do everything on one’s agenda, and to still do full justice to one’s stock foray.

How I do it?

Well, it’s been all about self-discovery for me.

I love auto-pilot.

On sweet-spot.

Till sweet-spot, engagement. Perhaps daily.

Once sweet-spot, almost no engagement.

Tools?

Delete the apps.

No quote windows.

No reminders, alerts, or the like.

Burning itch?

Trade.

Another market arena.

I trade options.

Buy side.

Full on technology assisted.

AI.

API.

Algorithmic monitoring.

Almost fully on auto from start to finish.

Positional.

Detached.

I primarily trade for distraction.

Profit is an added bonus.

Loss happens. Is normal.

I trade small.

Then, full curriculum other than markets.

Daily plate is packed with all kinds of engagement.

Enough to forget that the stock market exists. For meaningful phases.

Upside?

Letting the folio be on sweet-spot for as long as possible.

How to know that intervention’s required?

It’s nothing market-related, for me.

On purpose.

A biggish expenditure comes along.

I need to sell one of my worst losers to meet the expense.

Systems on.

Expunge.

Systems off.

Income in?

Systems on.

Adding to one of the top winners.

Systems off.

Top winners keep rotating, since their buying anyway lessens on top-ups.

Fat-head portfolio. A spin on fat-tail winner accumulation.

Happy when systems are off. Life’s got many facets to fathom and enjoy.

Happy when they are on, since I love the engagement angle.

Optimizing to the nth.

🙂

Why few win big

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What?!

bl-5.

Some kind of code word?

No. More like a nightmare recap.

Say it again.

b for bravo. l for Lima. minus. 5.

What is it then?

A horror list.

One’s worst performers.

Why have it?

You pull out this list upon expenditure that crops up. Any kind of expenditure.

And then?

See if anything high-conviction shows up in bl-5.

Yes?

Disregard for now.

Look for anything low-conviction. Discard to the tune of expenditure.

Don’t you use income against expenditure?

That’s the whole thing. Income needs to go into something currently high-conviction.

Fresh purchase?

Yeah.

Why?

Good money needs to chase good things.

Worst performer money with an issue needs to take care of outgoings. This way the folio cleans up. Gets weeded. On auto.

Well, let me tell you, no one is going to do it like that. So inconvenient. Like using a leg to scratch a head.

True.

Winners do things differently.

A few people win in the market.

Very, very few win big.

To win big, almost everything we do needs to be…?

Done differently.

Correct.

Like bl-5 implementation.

Bitter pill, but if you say so.

I insist.

At least tell me what bl stands for.

Well, one’s portfolio – listed – in ascending order of performance. Cut off list after the 5 worst performers. Pinpointed info. Nothing more pulled if not required. bl is just a command I use on AI to initiate the pull. You can name the list whatever you want.

Can you finally please tell me what the bl stands for, for you?

Sure. Invert the list. bl5 command prints the five best performers. That’s my ‘buying(b) list(l) 5(best performers, no minus here)’.

My spare funds go into these.

Into the same ones again and again?

No. As you keep buying something, its buying average lowers. Let’s say, upon adequate lowering, it goes into 6th position. Now it’s not ‘outputted’ in bl5. It doesn’t get funds. What it does get is time to perform once again, on repeat, like it’s been doing, but this time on a bigger buying base. Would then mean more burgeoning for the folio.

You’re not even looking at valuations, just pumping in the funds into bl5ers?

They have the maximum runway, don’t they?

Runway?

Slots between them and bl-5. Maximum. Meaning maximum time to keep performing like they have been doing. Resulting in more and more burgeoning off a bigger and bigger base…

What if something misses?

Let it.

Might erode 50%.

Let it.

Expunge?

Only if it’s reached bl-5 and conviction’s flipped to low, and the other candidates in bl-5 are high-conviction.

So, it gets time to get its groove back and prove itself again before being bought more.

Exactly.

What if a bl5er keeps downgrading, reaches bl-5, and your bl-5 is full of high-conviction stocks?

Like the core IT world just now?

Yeah.

Well, the least-conviction one needs to be discarded then, to the tune of the expenditure.

Would it pain you?

Yes.

Why do it then?

Confronting the pain for a more lucrative tomorrow is a winning mental condition.

We can always buy the laggard back later.

When it starts performing, you mean?

Yes.

What a loss for you then.

No. Wrong thinking. Loser thinking. Imagine IT starts churning out mega results. One enters. Core IT lands in bl5. One loads up. 2 to 5 baggers in a year or two? How do the mathematics look now.

So that’s how a winner would think?

Try it out.

The most difficult thing to put into practice.

Precisely why so few win big.

Where’s this heading?

In 25 years, you’re sitting on many multibaggers with very large buying bases.

Fading Institutions

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Edge.

Institutions have an.

Retailers have another.

Both edges don’t have much in common.

What’s our edge as retailers?

No one knows what we’re doing.

When we’re doing.

How we’re doing.

Where we’re doing.

Playground?

Everything.

And when we decide to act very, very independently, …

…not dancing to any institutional calendar, …

… that’s when our edge deepens.

Comfort level.

Feeling good about life.

Not a slave to anyone’s tune. Meeting one’s own timelines, expenses, requirements, goals.

Fade 1.

Then, we take time out of the equation.

Institutions don’t. They can’t. We can. So we do. Fade 2.

With time out of the equation, we allow big trees to grow.

Institutions live from quarter to quarter. We live from family milestone to family milestone.

No tension. Free. Unencumbered. No pressure. No rut. No over-complication. No showmanship. Pure action. Fade 3.

We exercise independent thought. Doesn’t need to look good on paper. Doesn’t need to be passed by a boss who reports to shareholders. Original, new thinking. Breaking new paths. Unprecedented wins can follow. No herd mentality. Guess who has it? We don’t. Fade 4.

We’re not glued to our screens. We’re alive. We live. Life. To the fullest. With enjoyment.

Fully faded.

Another Angle to Noise

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Sounds simple, right?

The sheer numbers ( , baby) strategy outlined in the last post?

Well, hmmmm.

What’s simple to someone need not be so to another.

In fact, no one’s going to do it this way, perhaps, almost.

Why so?

For starters, it is the toughest thing in the world to let go of a loser.

Takes years, maybe decades, to become comfortable doing so.

For something like this to actualize, one needs to rewire completely.

Without many hits and knocks on the head, rewiring is not possible.

No one rewires just like that. Only after full tuition fees. Losses. Beatings. Lessons.

Learnt.

And then, on top, we’re being told to add the proceeds to our highest winner.

All lessons in valuation are screaming. Our normal wiring is screaming. Our fingers refuse to punch in the orders. Until we understand the logic.

Something growing rapidly proves so by being your best performer.

No one knows how much growth is left to happen.

All one has is a conjecture, an estimate, a prognosis.

At best.

Nothing more.

You do know one thing though.

This champion grower is allowed max runway in your folio, because it needs to traverse the most distance to becoming the worst performer, who is the kick-out candidate.

So your champion is given the most time to show more spurts of growth. Since you don’t know when these come, owing to the non-linear nature of high growth, you are allowed the privilege to being there the longest in your champion, in an effort to harness multiple spurts. The chances of the champ being kicked out are the lowest at this time.

Then you load up. Buying average goes down. Top guy is now number 2 or 3. No more loading next proceeds into. New number 1 gets new proceeds. Fund accumulators rotate thus. These are good enough candidates too, hovering around the top of your folio. Funds flow into strength. Thus.

After some years, certain holdings continue to perform, and reach multibagger status. You’re represented maximally as per your capacity — the strategy has seen to it. Others got some loads and started to lag. Well above exit level though. Then they catch a spurt and start topping again.

A few head below.

Some even manage an exit.

It’s ok.

You lose 60-70% on the losers exited initially. Over the years, the exit baseline moves up and up. After some years, exits are winning, not losing, since the worst performer in the folio is itself a thin winner. Trajectory is ok.

What are you winning in your top 10 after 10 years?

Are all of your top 10 multibaggers? Likely.

What’s the upside?

In a growth market?

A potentially future high-growth market?

Who claims to know?

Exactly.

Upside…

…can be anything.

Think of a number. A reasonable one seeing the nature of the market.

What’s the 60-70% lost in some holdings?

Noise, right?

Numbers, Baby

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We spoke about our shift in thinking, …

… remember?

Magic Bull has decoupled…

…in its approach.

The WWS exit pathway.

Worst weed standing.

Remember that name.

And out it goes.

Upon opportunity.

Upon expenses.

Now here’s another one.

BPS.

Best performing scrip.

Add to.

Get its buying average down, on purpose.

It’s got maximum runway, to WWS.

That’s why, add to it from proceeds, from fresh income.

Don’t look at any other metric.

Just the fact that it’s the BPS.

And add.

It’s performing.

You’re betting on continued performance.

A few quarters might dip.

Unless it demotes to WWS, it won’t be expunged.

Then 8 quarters in a row – extraordinary growth.

Remember that high growth is a non-linear entity.

To catch it, and harness it optimally, we must be…

there.

In the most manageable, highest magnitude way.

As you keep adding to your BPS, it eventually gets demoted to number two, or three, or something.

Because, buying average dips.

That’s great.

Now we have a new best performing scrip to be added to.

Sideway injections. Bombastic results from a held scrip above buying average? Add to, one lot.

New members. Bombastic YoY results and a little QoQ improvement too? Add to, one lot.

That’s the entire system.

Funds move towards strength.

No affiliations.

No married to.

You control by attenuating the speed and the magnitude of WWS exits.

All held above 25%?

Stop the expunging.

Trade something else on another platform, other underlyings or scrips, for distraction.

Or…

…go on a holiday.

Advice?

Advisor?

No room.

Also, where is the need?

Everything is right here.

Programme your AI to serve results on a platter, screened, each morning, to feed the system with sideway injections and / or potential new candidates.

All we need now…

…is guts, to follow through.

Rest is all numbers…

…baby.

Sweet Spot? Seal it.

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Magic question.

You’ve definitely been asked before.

Many times.

How many stocks are ideal? In a folio.

What’s the answer? The correct one.

I have a different question.

My question is – is this really the correct question?

I have another question.

Why are we even trying to ask this question?

One more.

What allowed us to define…

…the flow…

…of a macro entity called the market…

…as it relates to micro individuals like us?

Right.

Let’s try this other approach.

Which one?

The one where we don’t define.

Where we let the market’s flow and our experience of it decide…

…how many stocks?

How does this play out then, for us, in practical terms?

Entry. Entries. As per criteria.

Wherever criteria are met – entries, thus.

Exit as per WWS (worst weed standing) ideology, please see the last piece written.

Thus exit trapdoor portal is narrow.

Top-up parameters. Define.

So you’ve got entries happening, top-ups too, and a narrow exit path through the WWS route.

That’s all the defining that’s required.

Number of stocks comes into automatic generation mode.

Breaking it down.

Entry criteria hits for 20 stocks over the next 12 months. So, 20 entries.

All available funds in.

WWS engine switched on.

New entry candidate.

Worst weed out.

New candidate in.

New funds come in.

Top-ups.

New entries.

Number of stocks grows to 40.

Funds run out.

WWS engine switched on.

New candidate.

Worst weed out. New candidate in.

No new funds over the next five years.

5 new candidates. 30 top-ups owing to top-up criteria hits. Personal expenses. All funded by worst weed exits.

Number of stocks after these 5 years reads 25.

And so on and so forth.

Where are you? Nowhere in the picture.

It’s the math taking the decisions. The defined system. Rule-based. Exactitude. On auto. No emotion. No you. Except to press the buttons.

Sweet spot.

Seal it.

Winning the Hand with 2/7

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For the first time in life…

…being fully invested…

…seems a better idea.

Dangerous?

Sure.

Can halve in no time.

That’s something we carry with ourselves into the markets.

If we are afraid of something halving, we should look at other pastures.

Why aren’t we afraid of our investments halving fast?

Ever heard of upside?

Well, what is it?

The upside. How much?

Any limits?

In a growth market?

Potential future high-growth market?

Can’t give a number. Except that, over the long term, upside is perhaps nx, with n being a big number.

That’s enough reason to be fully invested.

Full benefit of upticks.

Big uptick days, perhaps 80% of them, are closely embedded with big downtick days.

Reason to stay invested all the time.

Expenses?

Sell the worst weed standing. Spend the proceeds on expenses. The biggest loser finances expenses.

Income?

Top up the winners.

Why?

Why not the losers?

This is a shift in Magic Bull thinking.

Winners have the longest runway before potentially becoming the worst weed standing.

In that long runway, they can double, treble, n-ble. Runway then becomes ultralong.

That’s why add to the winners.

Worst weed standing pivot philosophy allows winners much time to become even bigger winners, adding to the positive loop.

What about the negative loop?

Winner stops performing.

Down.

Down.

Down.

5 notches away from being the worst weed standing.

4 notches.

3.

Starts performing.

Up.

Up.

Up.

Above buying average.

Adding to.

2 bagger.

4 bagger.

Huge runway again.

10 bagger.

Adding to, runway is phenomenal.

100 bagger.

Kachinnnnng.

Some other winner stops winning.

Below buying average.

Down.

Down.

Down.

3 notches to worst weed standing (WWS).

2.

1.

WWS status.

Expense comes up.

Out.

That’s the exit route.

One route to expunge.

The entire philosophy pivots on WWS exit status – on the small trapdoor portal provided for cleaning up the portfolio.

Emotion?

No emotion.

With regard to exit, market dictates what to do.

We just elevated the status of the biggest loser to house-cleaner-in-chief.

That’s turning our biggest loser into a winning strategy pivot.

That’s like winning the hand in Texas Hold’em with a 2/7.

NoiseLess

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That’s…

…where one wants to be.

Really tough though.

Something or the other keeps the connection on.

One gravitates towards noise.

It’s like a short circuit.

That something, …

…consisting of harmful information…

…finds a way…

…to make one plunge into it.

Switch off, one hears?

Right. Fair words. That’s when the devils start to rise.

One has just switched off, and the next person one meets blurts out the information which one least needs. By default.

Did you see? The benchmark was down 2%. Or. Oh what a crash today. And. How much is your folio exposed to XYZ?

Ideally – market action, and then other stuff. If not other stuff, then other uncorrelated market action. Then other stuff. Not market info all the time – one doesn’t want that at all. Everyone hovering around sees to it though.

Solution?

Mindset.

Belief in system.

Confidence.

A decoupled system.

Not doing it like institutions do.

Working as per its own rules.

Rules made by – self.

No one else knows these rules. They don’t apply to anyone, except to – self.

Since one’s system’s got its own set of rules, guess what doesn’t apply to it?

Right. Noise.

And because one knows it, guess what got that much stronger?

The ability to deflect the culprit.

Noise – thrown at – self – self – deflects – deftly.

Without the poison, …

…the rest, …

…they say,

…will be History.

MindSet Win.Win

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Pressure from walls.

Constant.

Resistance.

More pressure.

More resistance.

Throwing in crucial time.

Crack.

Change trickles in.

Very small alterations.

Biggish.

Big.

Full.

Mindset is now ready to take on the new.

The ability to let go of a low-conviction holding takes a long time to learn.

Especially when it’s bleeding. Perhaps badly.

Keyword is low conviction here.

Something turned.

One is looking at the scrip differently.

High’s become low.

Out mode.

Looking for something where conviction’s become high.

Let the funds remain in the market, unless they are needed for something more imp.

Why?

Let’s be there.

Where?

There.

In full.

When growth haphazardly and non-linearly makes itself felt.

So, outgoing replaced with incoming.

Portfolio’s health just took a leap.

Congratulations on mindset win.win.

Upside?

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Hey.

I’m all in.

Into India.

Growth.

Emotion.

C-word. Rhymes with interruption.

Extremes.

Consumption.

Hunger for outreach.

Cut to high growth.

This being a non-linear entity.

Comes a phase where we might quadruple in six months.

That time is not now, I got that.

Time now is to get in.

When all bleeds.

That’s what I’ve done.

Downside?

Sure.

Can be down by 50%.

60%.

Would take some black swans though.

Won’t be the only one. All will go down in such conditions.

Sleep?

Well.

How can I take the strain?

Have 23 years of practice. Blood and biochem can take it and then some. I have that confidence in myself.

Any more downside?

Mood.

Emotional checks.

Good behaviour at all times, coming naturally.

No worries because markets fall.

Selling a weed upon fund requirement state of mind.

Don’t need more.

Upside?

Unlimited.

Paying the Price

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Hey.

In the markets…

…our convictions fight against each other.

Cut to the ongoing core IT vs AI standoff.

With mega spends on standoff propaganda alone, currently, the AI lobby is winning.

Not…

…comprehensively.

I fight from the core IT lobby side, which, btw, is evolving, obviously not fast enough in the eyes of almost all, and the image badgering continues.

One admits to being wrong for a while.

Admission means action.

Low-conviction SaaS names bow out. Losses taken. From what remains, stronger names bought, in innovative arenas. Ballast. Bought. Clean balance sheets. Vision. Bought.

Coming to the high-conviction names, they will remain.

However, taking on the humiliation of admitting, accepting and dealing with low-conviction losers is something I am deliberately doing.

I’d much rather discuss my losers with you.

It doesn’t mean I’m not holding winners.

It’s just that I’m choosing to discuss my losers with you.

On purpose.

A little bit of humiliation everyday, admitted, acted upon, and gotten rid of, goes a very long way. One wakes up to holding multibaggers, one fine day, sooner than later, in this manner.

And on that day, some of my high-conviction IT names, if still around in portfolio when they beat the propaganda machines of the AI brigade by posting unexpectedly great results, will then also count amongst the multibaggers held.

On the other hand, if this doesn’t happen for a longish enough time, high convictions will turn lower, ultimately underceding a minimal threshold. Since I finance my expenses by selling losers, and put my income into fresh potential winners, underceders will eventually exit. That’s the price one pays for pursuing multibagger accumulation.

Point is, ultimately, losers find the exit door. Before they become losers, they get ample leeway, measured both in time, and in notional losses, since conviction is, for that long time period, high enough to not identify them as weeds. However, once mentality flips, the weed is born in the mind. Once the mind makes up its mind that something is a weed…

…that something needs to be weeded out, …

…only to be replaced with potential flowers, …

…again, and again and again.

An Anatomy of Loss Aversion

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Just ask…

…a doctor…

…about the toughest course at medical school.

He or she will probably say…

…anatomy.

Well, cut to the stickiest field in market play.

You got it.

Loss aversion.

Is a thing, and is…

…not a thing.

Depending on the on-off switch.

Switch is off, and you don’t need to bother about how much your stock is down.

There is something in the story telling you that the broad market is wrong.

Gross discounting and mispricing.

So gross that you’ll buy more?

Maybe.

So gross that it scares you into capitulation?

Because you’ve lost faith?

Your story not sticking?

Welcome to a world where this particular switch has, for you, just turned…

…on.

And in this world, the Sun doesn’t shine so bright.

Your food doesn’t taste so good.

Your mood is below par at best.

Your ego just took a huge hit.

You were wrong.

Now you are either facing up to it, or…

…averting the gaze of your loss.

This is a common storyline. Happens all the time. To all of us. Please…

…don’t beat yourself up about it.

1). Since belief is gone, so must the stock … go.

2). From the remnants, buy into something where the story is rock solid, and where perhaps some margin of safety exists too. Basically buy where your maximum tick-marks hit.

3). Move on. There’s so much to do in life.

Once a switch goes on, please…

…keep the torture phase down to…

…zero.

By following steps 1). 2). and 3).

Till the time that a switch goes from off to on, till that time comes, please…

…enjoy your life in your world where the switch is off.

Please…

…don’t sacrifice off-time by behaving like it’s on-time.

Off-time means time and space to make some great calls elsewhere, those that come in handy, especially when a switch turns from off to on.

You know the next step.

Risk vs Reward

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Hey.

I am not ashamed…

…of being fully invested…

…in equity.

Yeah. That’s the status.

Invested. Fully. In equity.

Dangerous?

Sure.

So is driving.

Flying.

Cycling.

Living.

It’s about first digesting the dangers mentally, and then acting.

So, what are the dangers?

Loss.

Hmmm. Notional loss at best. So’s that of one’s house, when its value goes down in price.

Notional.

Since requirement is a very small fraction of corpus, it can be pulled from corpus, when it surfaces.

What will be pulled?

Chunk or the whole of a loser.

Loser’s liquidation will fund expenses.

Any accrued income will go into creating future winners.

Good money chases good outcomes.

Bad money finances expenses.

Nothing stays loose in the bank.

Fixed deposits are passé composé. Baby.

A). Our currency depreciates by the day, geo-politically.

B). Inflation eats into FDs daily, as sure as a shot.

C). Why be subject to this double whammy?

Is being down 50%, or 70%, or 90% in stocks — even the overhang of such a possibility — a better outcome, you ask.

Well, it can happen, I’ll give you that.

In fact, every stock quoted will be down 50%+ once every 5-7 years, on average.

With such scenario, how can I sleep at night, you ask.

It’s ok. I sleep well.

You see, I’ve not pickled the funds away blindly.

Quality companies with shareholder-friendly managements. Impeccable balance-sheets. Minimal debt. Value. Growth at reasonable price. Higher growth at representable price. Some punts, yes, with very high growth at unreasonable price, but that’s what one pays for very high growth. This will yield results. Over time. That’s why I sleep…

…well.

What’s the max I can lose?

100%.

Correct. For max loss to happen, planet needs to be going down. In that scenario, stocks won’t be our worry.

Reasonable number?

A 50-75% max notional loss is always on the cards, temporarily, with the world on tenterhooks all the time.

Temporarily is the key word.

Growth markets swallow hiccups–fast. And, I’m invested 100% in a growth market. With hiccups. (Where are there no hiccups?) Soon to be a high-growth market. Watch.

What’s the max profit I can make, let’s try and answer that.

Do we even have a number here?

I don’t.

Minimal Leeway

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Beats.

Bass.

Rhythm.

Swing.

Dancing.

Got my own groove going.

Background becomes…

…noise.

This…

…is the state of mind…

…mandatorily required…

…before entering an arena…

…called markets…

…in my opinion.

Now the noise can come.

It gets filtered through layers, and layers.

Most of it gets weeded before reaching.

That bit which makes it through, comes as whetted info that is required for action.

And action it is.

Need for action?

Switch on.

Action.

Done?

Switch off.

That’s it.

That’s markets where one wants them.

Any more leeway, and they have you.

Which version do you want?

Graduating

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Hey.

It’s taken me the longest time to graduate…

…in the markets.

What, you expect me to show you a…

…college degree…

…for the…

…MARKETS?!

Graduation here is nothing like that.

It’s more a state of mind.

A mind that knows…

…how to get rid of a …

…loser.

And not feel broken up about it.

No emotional aftermath.

No overhang. Period.

Buy a winner with the money that remains. Spend it towards expenses.

Use it to fulfill a desire.

Move on.

On repeat.

That’s market graduation.

It’s also the difference between winning and losing.

Very few people win here.

Why?

Nobody wants to admit they are wrong.

Nobody wants to take the immediate hit.

Almost…

…nobody.

The 10-12% who do…

…win.

And they deserve it.

It’s a very expensive lesson.

Money-wise. Time-wise.

Many go broke and aren’t able to learn it.

Others run out of time. Still not graduates.

A lot like one of the deepest lessons of life.

The one that has a…

…‘sorry’ in it.

Admitting that one’s wrong. Taking corrective action. Doubling down with positive action. Moving on to fight many more battles, thoroughly enriched.

Welcome to the Graduation++.

I completed my post-grad before I did my grad, here, in the stock markets.

Was always good with numbers, so the post-grad lesson came earlier.

How to take a losing system, and make it a winning system, just on the basis of number-correlations…

…but more of that another day.

🙂

Gracefully retiring CostFreeNess for Oneself

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Hey.

Comes a time, when a concept has done its duties towards one.

One’s own philosophy has undergone many x.y upgrades, on the back of the wealth being created by a concept, …

… … one like … …

…CostFreeNess.

Why would someone then retire such a concept?

Perhaps requirements from the field of action have changed.

Yes.

That’s the one.

Let’s divide the timeline of action into before and after.

Before today, the day of retirement [of CostFreeNess, for me], I was getting established.

The extra boost supplied by CostFreeNess was…

…required.

It gave a feeling of doing something right.

I don’t need that validation anymore.

Walking towards different heights, climbing new peaks, setting forth in motion new paths, pioneering a new trajectory – casting off the transient and revealing the true – to quote a central axiom of Nichiren Buddhism – all this – requires walking free from older concepts that were once pivotal for one.

Were.

What’s coming is not where these are pivotal anymore.

Hence the retirement, for myself.

With lots of thankfulness and gratitude.

CostFreeNess is long not done for others, in different phases of their market trajectory.

CostFreeNess is a king-maker.

I remember describing it as the closest thing to a holy grail in the markets, starting the sentence with, if I remember correctly, that ‘although no holy grail in the markets exists, …’

In this space, you’ll find many, many pieces, during which this concept was developed and during which it saw itself through, to its logical conclusion.

Of course many others would have discovered this pivot for themselves; CostFreeNess is a universal phenomenon, albeit abstract; it exists like the wind or the rain, or like sunlight and the mountains.

No one here is claiming that they are the founders of anything.

If at all, I have repeatedly remarked, that …

… we stand on the shoulders of giants.

And, to make it a better world, we pay our debts forward.

At times, something we work on …

… becomes a giant …

… like CostFreeNess.

Please feel free to stand on the shoulders of a giant called CostFreeNess, and progress on the back of its propulsion.

🙂

Gamble Ramble

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In sixteen hundred something, …

…most of mankind believed swans…

…to be white.

People would use the metaphor ‘black swan’, to insinuate things or events that were considered to be …

…‘impossible’.

Cut to now.

Black swans exist.

In reality.

The bird, in Australia.

The disastrous event genre, amongst elsewhere, also in markets.

Events earlier considered ‘impossible’, now happening…

…regularly.

Big moves.

An index going circuit. Multiple times — has happened.

Stock doing 20% up or down is no great shakes.

10%+ moves are like bread and butter these days.

News gets factored in within minutes to an hour.

Which brings us to the elephant in the room.

Can one leave the trading screen?

If one has chosen to trade, that is.

Hmmm.

Screen all the time is something I don’t want at all.

Is it possible — to leave it, and go about care-freely with other work?

Leave to whom? Or, to what?

AI, for example?

Hmmmm.

Not too sure.

When moves are big, stop-losses get jumped. Happens all the time. Remember CHFUSD? Considered unbelievable at the time? Oil. Gold. Silver. Jane Street. Brexit. CoViD. List goes on.

What about overnight?

Overnight positions are most highly exposed to black-swan openings, period. That’s the risk overnight carries.

Then, why trade?

Exactly. If too much screen-time is a thing, forget intraday. If you want a sound sleep, forget overnight.

What do you do then?

I invest for the long-term. That’s my main. Distraction side-hustle is the trading window. Play-amounts. Long. Paper trading as of now till system becomes profitable. As of now, it’s not.

Not what?

Not profitable.

Worrying?

No.

Why?

Trading system is a distractor for me. It’s not about money. I want my attention to be away from mains.

Why?

Fear of doing too much there. Fiddling around one time too many.

What about trading systems that go short?

The idea of developing one is attractive.

So, then?

However, exposure to unlimited loss, full exposure to a black swan event should it happen, is a big discourager and demotivator.

Understood. Still, it’s the short systems that make money.

Correct. At the cost of max screen-time, tense nights, cortisol-laden days, and the whole negative spiral.

Point. So what does one do?

Have developed a ‘junior’.

What’s a ‘junior’?

A junior investment system, that lets candidates graduate to the senior system.

Oh, interesting. Selection. Survival of the fittest. Clever.

Thanks. Junior keeps me busy and distracted. Senior relaxes and doesn’t get rearranged unnecessarily. Decent balance. Linkage as in promotion ladder. Natural selection, as in that which doesn’t get promoted till a longish time-stop, is expunged.

Elegant. Slick. Wonderful. Why do you then need a trading system at all? Let it die out. No full-on screen-time. Relaxed nights.

Exactly. However, am still trying to find the right fit for the gambling instinct.

That which every human has? And needs to channel appropriately, lest it balloon?

Ya.

MarketAble

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What makes us…

…marketAble?

What’s it boiling down to?

The essence…

…or, if we will, the sediment…

…is…

…what…

…exactly?

It all starts off with savings.

Save, save, save.

Now, there’s a moat.

Let’s call it emergency fund, first.

Moat grows.

Comes a time, where we say… … enough.

That’s enough moat.

From that point onwards, we are able…

…to enter the market without the tensions of not having something to fall back on.

Within this time-frame of putting together an emergency fund and making it grow beyond critical mass, we haven’t been sitting idle.

Busy, baby.

Putting together a…

…system.

Rough stage.

Deployment stage, perhaps on paper.

Moat gone beyond expectations?

Right, system needs to be ready by now, to be deployed, live.

System goes live.

Refine.

Fine-tune.

Adjust.

Fiddle.

Attenuate.

Nail.

Will take some years.

In those years, we play it small.

Right.

Comes the sweet-spot.

You feel it.

System feels just…

…perfect…

…to us.

That’s the moment.

Now we can scale up.

We are continuing to, though, as per market situations — refine, fine-tune, adjust and attenuate.

Idea is to maintain the sweet-spot.

Goes away?

Bring it back.

Keep bringing it back.

Once we’ve learnt to keep bringing the sweet-spot back…

…we are then, from that point onwards…

…marketAble.