Boiling Down to Unity

What is unity?

Oneness.

The thing everything has boiled down to.

That, which emerges after all the dust of everything has settled.

Yes, that.

Not the one as in being united, not that unity.

The one-resultant-vector unity.

The equation-being-solved-unanimously unity.

The one big solution for everything that’s bothering you – that unity.

Why are we talking about unity?

Because it is the answer.

What is the question?

Or, what are the questions?

“It’s the question that drives you, doesn’t it, Neo?”

There are many questions.

Each has different questions.

Each strives for a unique unity.

Each must find his or her unique point of peace.

Till then, mind will be restless, something will always be missing, and peace will be elusive.

Are we even talking about money?

You bet.

We strive in a million ways to garner money and make it grow.

We try different methods. Lots of strategies. People. Planning.

What is it boiling down to?

Have we recognised it?

In what form do we wish to see our money ultimately?

Do we have that kind of vision?

Are we standing on the mountain with that bird-eye view?

If yes, our strategies start culminating towards the final goal.

Why?

Because we know where we are going.

How did we know where we were going?

We asked the question.

Then we followed our mind. It led us to the answer.

Took some time, didn’t it?

At least we got there.

That’s huge.

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Holding the Line

Your systems are in place.

They’re implemented. 

Basics are going. Life basics. Family basics.

Then you’ve got your income basics. They’re safe. They generate income. This income goes towards comfortable upkeep of your family. Some of it is saved. 

Your investment portfolios are firing. Savings have built these up. You don’t touch these, but keep adding to them upon opportunity. 

You’ve just finished implementing all your trading systems. 

Some of these are on auto-pilot. 

The other ones demand a little of your time each day. 

They keep you sharp and all there. 

Nothing much. 

Just fifteen to twenty minutes each. 

Skin off your teeth. 

You tackle them with your bed-tea. 

In other words, you are set as far as being income plus plus plus. 

Good. 

Now what?

Now you need to hold the line. 

What does that mean?

It means everything. 

It means no blow-ups…

…no crazy decisions that impact folios and family…

…basically nothing insane coming from you that will threaten your hard-earned situation or worse. 

Holding the line means making sure basics stay intact…

…folios keep growing…

…and new systems keep developing that add to these. 

It’s really that simple. 

When you hold the line, your next step either maintains status quo or adds to you. Preferably, it adds to you.

However, the simpler something is, the more difficult it is to follow. 

What are the demons that can slay you?

Over-confidence.

Over-ambition.

Hubris.

Greed.

Showmanship. 

Debt.

One-up-on-the-Joneses-ideology. 

This stuff looks pretty harmless at first, but is enough to give rise to cracks. 

Cracks grow… 

…till you’ve either come back to your senses and filled and sealed them…

…or till they’ve destroyed you right down to beyond your basics. 

Yeah, a full blow-up is never really far away, once cracks start to appear. 

Therefore…

…while holding the line…

… you keep reminding yourself about what you’re doing…

…why you’re doing it…

…and that you’re never going to blow up, come what may…

…and that you’re going to keep holding the line, come what may…

…and that your next step is always going to add to you.

Happy Holding!

🙂

Control

Longevity.

We look for it in the markets too. 

It’s natural.

Our first instinct is to survive. 

Our second instinct is to survive well. 

In the markets, both these instincts are addressed by our definition and understanding of control. 

Are we control-freaks? 

There’s no harm in admitting it, it’ll save us from losses. 

Well, if we are, we’re better off seeking another career where control-freaking is an asset.

In the markets, it’s not.

Yeah, surprise surprise, Mrs. Market is gonna keep hitting our stops again and again and again, till we get tired of second-guessing her and just sheer quit.

Or, if we’re adamant too, she’ll just drive us bankrupt. 

Are we giving her complete leeway?

Well, then she’ll drive us bankrupt anyways, with no stops in place.

Mrs. Market works against us when we exhibit extreme behaviour wrt control.

Let’s fine-tune control.

We’ll find the median for stop-size.

Something that’s workable.

We then move with her.

If she moves in our direction of the trade, we keep raising our stop with her, from a distance, quietly.

Control, mild, unadvertised.

She’ll stop us out eventually, perhaps after some profit.

Good. 

As in, workable. 

When she goes berserk in our direction of the trade, we’ll ignore her and just let her do her thing.

Minimum control.

No definition of targets.

Stop is far away. It’s deep in profits, and being raised quietly. She’ll need to stop us out with a big swing against us. Yeah, deep in profit, we’ve kept a large leeway between stop and CMP.

We’re not micromanaging her.

Motive?

We wish to allow her to go even more berserk in our direction of the trade.

We’re daring her too, as in “come and get our stop, if you have the guts to fall this far”.

Control.

Very subtle.

We’re controlling our environment, while simultaneously ignoring her.

Very workable. 

We’ll live long in the markets. 

Scaling Up

When you find a system… 

… that works… 

… what’s the next step? 

Plunge? 

Wait. 

Look left and right. 

Meaning? 

Look at your basics. 

Are they in place? 

Meaning? 

No worries about food on the table? 

No worries about kids’ education funds?

Basic family luxuries in place? 

No? 

Get these together and going. 

Yes. 

Ok. 

Go for it. 

Scale up. 

Your decision to scale up should at no time endanger your basics. 

You’re scaling up from  your extras.

You’re scaling up with stops in place. 

If your stops are hit, you’ll change your system till it works again. 

You will not borrow from your basics. 

You will wait for your extras to accumulate, and divert these into scaling up. 

Having gotten all that out of the way, let’s cast a glance at the concrete process. 

1x is working, or so you say. 

In fact, you’re sure 1x is working. 

Ok. 

Now do 2x.

Working? 

5x.

Can you take it? 

Do you sleep well at night? 

Fine. 

10x.

Working? 

Family life intact? 

Basics intact?

Fine. You take it from here. 

Where do you plateau? 

Right before a level where something might get disturbed. 

It’s really that simple. 

Happy scaling up! 

🙂 

Monotony

Plan in motion? 

Let it play. 

Sure, monotonous. 

Monotony bores you, right? 

Boring monotony yielding acceptable results is a good outcome. Don’t spoil its party. 

Divert your attention. 

Try a stunt. 

Risk a little. 

Maybe one out of your ten stunts works out. 

Develop this one further. 

Still working. 

Scale it up slowly. 

Working. 

Auto-pilot. 

Monotony. 

Results still good. 

Stop looking. 

Let it play. 

Look elsewhere. 

Do something new with yourself. 

Soon, it’ll be time to go. 

Meanwhile, build a legacy to leave behind, in your memory, one that benefits many. 

What is an Antifragile approach to Equity?

Taleb’s term “antifragile” is here to stay.

If my understanding is correct, an asset class that shows more upside than downside upon the onset of shock in this age of shocks – is termed as antifragile.

So what’s going to happen to us Equity people?

Is Equity a fragile asset class?

Let’s turn above question upon its head.

What about our approach?

Yes, our approach can make Equity antifragile for us.

We don’t need to pack our bags and switch to another asset class.

We just approach Equity in an antifragile fashion. Period.

Well, aren’t we already? Margin of safety and all that.

Sure. We’ll just refine what we’ve already got, add a bit of stuff, and come out with the antifragile strategy.

So, quality.

Management.

Applicability to the times.

Scalability.

Value.

Fundamentals.

Blah blah blah.

You’ve done all your research.

You’ve found a plum stock.

You’re getting margin of safety.

Lovely.

What’s missing?

Entry.

Right.

You don’t enter with a bang.

You enter at various times, again and again, in small quanta.

What are these times?

You enter in the aftermath of shocks.

There will be many shocks.

This is the age of shocks.

You enter when the stock is at its antifragile-most. For that time period. It is showing maximal upside. Minimal downside. Fundamentals are plum. Shock’s beaten it down. You enter, slightly. Put yourself in a position to enter many, many times, over many years, upon shock after shock. This automatically means that entry quantum is small. This also means you’re doing an SIP where the S stands for your own system (with the I being for investment and the P for plan).

Now let’s fine-fine-tune.

Don’t put more than 0.5% of your networth into any one stock, ever. Adjust this figure for yourself. Then adjust entry quantum for yourself.

Don’t enter into more than 20-30 stocks. Again, adjust to comfort level.

Remain doable.

If you’re full up, and something comes along which you need to enter at all costs, discard a stock you’re liking the least.

Have your focus-diversified portfolio (FDP) going on the side, apart from Equity.

Congratulations, you just made Equity antifragile for yourself.

🙂