Curiosity - The Weekly Dose of Wisdom
Weekly dose of learning
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1.
Drawdowns Are the Price of Admission, Not a Market Malfunction
An 85% drop in value isn’t unusual—it’s normal. Even the best investors face huge declines (like 76%). This means big losses aren’t mistakes—they’re just part of investing in stocks. How you handle these drops matters more than picking the right stocks.
The real question is: Is this a temporary dip or a permanent decline? Temporary slumps (like oversupply in chips) often bounce back strong. Permanent declines (like outdated retail stores) usually don’t. This difference is more important than financial numbers or valuations.
Most struggling stocks stay weak—only a few become huge winners (10x+ returns). Since you can’t predict which ones will recover, it’s better to spread your bets than focus on a few turnaround hopes.
2.
Insider trading amidst policy flip-flops
If Trump were a poker player, he’d swagger to the table talking shit, go all in, then fold before his opponents respond. It’s easy to dismiss this behavior as crazy or incompetent. But it raises a troubling question: Is this a deliberate effort — straight out of an autocrat’s playbook — to create volatility that the autocrat and his acolytes can exploit? What if this isn’t incompetence, but a strategy?
Financial Times columnist Robert Armstrong coined the perfect term: the TACO trade — Trump Always Chickens Out. Trump and his team have such contempt for the system, they don’t see any downside risk in burning the village to save it.
These policy gyrations have created an association of “toxic uncertainty” with brand USA. Announcing more than 50 new or revised tariff policies in a matter of months makes no sense, until it does. Trump’s market manipulation operates like a carnival game — it’s rigged.
Trump’s ability to trigger wild swings in stock prices has created an environment ripe for insider trading, undermining trust in U.S. markets and eroding a pillar of American prosperity — the rule of fair play. When Trump shocks the market and then retreats, it gives his inner circle, both in Washington and on Wall Street, an opportunity to place trades with asymmetric upside. They have information the other players (whether they’re buying or selling) don’t possess.
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Thought of the Week
“In the end, these things matter most: How well did you love? How fully did you live? How deeply did you let go?” - Gautam Buddha
"I have noticed that doing the sensible thing is only a good idea when the decision is quite small. For the life-changing things, you must risk it." - Jeanette Winterson
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