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 […]
Why “Diamond Hands” Is a Dangerous Myth in a 60% Drawdown Read More »
Most people who learn about beta in a finance class walk away with a clean, satisfying equation in their heads. High beta equals high risk. Low beta equals safety. It fits on a flashcard. It feels true. And like most things that fit on a flashcard, it misses almost everything that matters. Beta is one
High Beta vs. High Risk: Why They Aren’t the Same Thing Read More »
There is a particular cruelty in how markets destroy wealth. Not because the destruction itself is unusual. Things lose value all the time. The cruelty is in the packaging. Some losses arrive like a meteor. Others arrive like rust. And the human mind, for all its pattern recognition, is almost comically bad at treating both
Death by a Thousand Basis Points vs. The Big Crunch Read More »
We think in straight lines. Our minds prefer symmetry. If something falls by half, we assume it needs to rise by half to return to where it started. This intuition, so natural and automatic, is completely wrong. And this wrongness costs people fortunes. The arithmetic is simple enough. If you have $100 and lose 50%,
The Math of Recovery: Why a 50% Loss Needs a 100% Gain Read More »