#146 – Optionality & Roger Federer

Good morning everyone,

Hope you’re having a great week!

Here are 5 things I found interesting over the past few days.

Let’s jump in.

read online on my website

read time 3 minutes

#146 – The Rundown:

• Quote: Prioritise. Prioritise. Prioritise.

• Podcast: Portfolio construction essentials.

• Article: Optionality by Kopernik.

• Video: Roger Federer’s Dartmouth Commencement Address.

• Tweet: Calm determination.

Quote:

Podcast:

Portfolio Construction Essentials

A really good pod driving home some key concepts around personal portfolio construction, particularly in relation to equities investments.

Reinforcing the importance of diversification, the power of a core/satellite portfolio, and the investment case for ETFs.

Listen on Spotify, Apple Podcasts, or YouTube.

[Duration: 22 minutes]

(P.S. I made a Spotify playlist with every podcast I’ve ever recommended. Hope they bring you as much value as they’ve brought me.)

Article:

Optionality by Kopernik

Going back-to-back this week with another article/white paper courtesy of Kopernik Global Investors, this time on the topic of optionality.

Specifically, mitigating portfolio risk in potentially volatile times via positive asymmetry.

Corporate speak which essentially boils down to the importance of having an investment strategy that is flexible enough to deal with a range of uncertain future outcomes.

These were my key takeaways:

1) Volatility creates opportunity.

2) The investment strategy that outperforms in the long run is one that is hurt minimally when things do not go as expected and benefits greatly when things work out in our favour.

3) When one has options, one can limit the downside if things in life don’t go as planned, with the potential for great upside if they swing in one’s favour. It is interesting that investors don’t demand the same of their portfolios.

4) Once the crowd does not see the need to hedge their optimism, patient, humble, and disciplined investors are able to buy optionality for a very cheap price; in some cases, for free.

5) Trouble lies ahead when the crowd piles into one story.

6) It is easier to determine fragility than it is to forecast the future.

7) Investors suffer from a failure of the imagination that the future could look different from the past.

8) Black swan events are by nature unpredictable, and we are unable to calculate the probability that they will happen, so many investors ignore their potential occurrence.

9) The most successful traders speak in probabilities of one thing over another. Not one dares to pound the table and state something with absolute certainty.

Check out the full article here.

Video:

2024 Commencement Address by Roger Federer at Dartmouth

Tennis legend Roger Federer delivered an excellent Commencement address at Dartmouth College in New Hampshire on June 9, 2024.

A really great listen.

These were the lessons that I’m reflecting on:

1) ‘Effortless’ takes a lot of effort.

2) Top-ranked tennis players win barely more than half of the points they play. Don’t dwell on every shot.

3) Your opponents have self doubt, too.

Check out the video here.

Tweet:

Calm Determination

Thanks for reading! Grateful for your support.

Stay hungry, stay humble, stay curious. ⚡

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See you in the next one,

Dimi

(P.S. the best ways to get in touch with me are via email or LinkedIn).