Concentration compounds
Concentration compounds. Concentration on borrowed money gets liquidated at the bottom of the exact drawdown it was supposed to sit through.
Holding a 30-50% decline is a structural property before it's a character trait. No margin, no promises that can be called, cash that isn't spoken for. Only then does conviction get to behave like conviction.
And the honest test for "understand the business well enough": can you write down today what would make you wrong? If the exit condition exists before the loss, you're concentrated. If it doesn't, you're attached. The market prices those two identically on the way up and very differently on the way down.
Size the conviction. Structure the survival. Time does the rest. ⚡
Thank you for the tag @dannycheng2022. Agree with every line. An excellent follow!
