Drawdown - intellectualfinance.com

Sortino Surgery: 3 Moves to Cut Your Downside Without Touching Your Upside

Most investors treat risk like a single number. One score. One verdict. Portfolio goes up seven percent, down seven percent, and the math says both moves were equally “risky.” This is the logic of standard deviation, and it is, to put it politely, incomplete. The Sortino ratio exists because someone finally asked an obvious question: […]

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The 100% Problem: Why Math Is Cruel to Losers

Drawdown, Financial Markets, Investing

There is a brutal little fact hiding inside basic arithmetic that most investors never think about until it is too late. It goes like this: if you lose 50% of your money, you need to gain 100% just to get back to where you started. Read that again. Losing half requires doubling. Not gaining half.

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Is This the Most Dangerous Formula in Finance? (Kelly Criterion)

Asset Allocation, Drawdown, Investment Strategies, Trading

In 1956, a physicist at Bell Labs named John Larry Kelly Jr. published a paper that had nothing to do with Wall Street. He was thinking about noise on telephone lines. About how much information you could squeeze through a signal before static ate it alive. The paper was dense, technical, and aimed squarely at

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Why “Diamond Hands” Is a Dangerous Myth in a 60% Drawdown

Drawdown, Financial Subcultures, Investing, Investment Strategies, Risk & Return

There is a phrase that has become something like a rallying cry in modern investing culture. Diamond hands. The idea is simple and seductive: hold your position no matter what. Do not sell. Do not flinch. The market will reward your courage eventually, and those who panicked will wish they had your nerve. It sounds

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