You Can Never Win, You Can Never Be Right

Submitted by QTR's Fringe Finance

For a long time, I confused being right with making money. I thought the two were naturally connected. If your analysis was sound, if your thesis was correct, if you saw something before everyone else did, then eventually the market would reward you for it. Sometimes that happened for me. Many times it didn’t.

Over the years, I have been wrong innumerable times. But I’ve also been right about a lot of stocks, macro trends, bubbles, narratives, and distortions in the market. I have identified companies that were wildly over- and under-valued. I have spotted trends early. I have watched ideas play out almost exactly as I expected them to and have watched others defy all sense of what I perceive to be reality.

And yet despite everything I’ve gotten right over the years, looking back I see that active trading did more damage to my portfolio (and mental health) than almost anything else I have done in investing. That is not an easy thing to admit after years of writing about markets, but it is the truth. I’ve made peace with the fact that I have far more value as a commentator than I do as a trader.

One of the hardest lessons markets have taught me is that objective truth and market outcomes are two completely different things. You can be fundamentally correct and still lose money. You can have the right thesis and the wrong timing. You can understand valuation perfectly and still get steamrolled by liquidity, momentum, central bank intervention, sentiment, or some exogenous event nobody could have predicted. The market does not give a f*ck about your idea of fairness, justice, facts or timing. It does not care about logic. And it certainly does not care about your ego.

So many times I have had the right idea and the wrong execution. At some point that simply becomes exhausting. All I can do now is try and offer up ideas to people who are hopefully better at executing them than I am.

I love the old investing saying, “be right and sit tight.”

When I look back honestly at the periods where I performed the best, they were usually where I did the least. I bought quality assets (or shorted dogshit where cost to borrow was low), stayed patient, ignored noise, and let time do the heavy lifting. The periods where I performed the worst were usually the periods where I tried to outsmart everything around me. The more I traded, the worse I did. Not because I suddenly became less informed or less intelligent, but because constant action creates constant opportunities to make mistakes.

Active trading — like live betting a baseball game on DraftKings — gives you the illusion of control. It tricks you into believing every moment requires a decision and every move deserves a reaction. Most of the time it does not. Most of the time the smartest thing you can do is nothing at all. For me, that rule applies all of the time.

As I look at society, the part that scares me nowadays is how normalized gambling and speculation have become in everyday life. It is no longer just Wall Street or casinos. Prediction markets, sports betting, options trading, crypto leverage, gambling apps — life has been turned into a tradable hamster-wheel-like dopamine loop. And you can...(READ THIS FULL COLUMN 100% FREE HERE).