Mike Shell · Founder & Chief Investment OfficerASYMMETRY® Observations
Mike Shell on markets, risk and asymmetric risk/reward, written as he sees it, while it matters.
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Owning 500 Stocks Doesn’t Make You Diversified.
An investor can own 500 stocks and still have too much riding on one part of the market. At Wednesday’s close most stocks were trending up, most technology…
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Everyone Sees AI. The Edge Is Who Gets Paid.
Everyone recognizes AI. The edge has moved to who captures the incremental cash flows as it scales, and the semiconductor cohort just changed state while the platforms that…
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A Better Rally May Need a Worse Market First
A week ago, sentiment wasn’t set up for a year-end advance. Now prices are falling and fear is rising together. Fear improves the payoff, but what the market…
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GLP-1 Has Entered Its Second Act
Everyone recognizes GLP-1. The edge now is identifying where the next dollar of economic value it creates will accrue before consensus fully prices it.
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Convexity Isn’t Asymmetry
A 10-to-1 payoff can still lose money. Convexity is a shape; asymmetry is the relationship between probability, payoff, cost and portfolio consequence.
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Eight Sectors Rose. The VIX Rose Anyway.
The S&P 500 lost 0.5% on Monday while eight of its eleven sectors rose, and the VIX closed above 20 for the first time since July because the…
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Positive Expected Value Isn’t Enough
A bet with +10% expected value can still destroy capital. Volatility drag, the Kelly criterion, and why position size decides whether an edge ever compounds.
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An Edge Doesn’t Size Itself
A strategy with positive mathematical expectation can still destroy the investor using it. The edge never changes; position size decides whether the portfolio survives the sequence long enough…
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The Shape of the Payoff Matters More Than the Forecast
Forecasts describe what we expect. Payoff structures determine what happens when reality is different.
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You Can Lose 90% of the Time and Still Win
A 90% win rate can lose money. A 10% win rate can compound. The difference is payoff, and surviving the sequence.
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Survival Is a Return Driver
Returns compound on the capital that remains. Every dollar that survives stays available for the next opportunity.
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Decide the Risk First. Then Take the Full Position.
We don’t size by conviction. We define the risk, define the exit, and let those decisions determine the position size. Position size is the output.