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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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.
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Short-Term Breadth Broke. The Trend Didn’t.
The S&P 500 is one number doing the work of five hundred stocks. It can hide whether participation is broad, narrow, improving, or failing.
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What Success Starts to Excuse
“Success breeds complacency. Complacency breeds hubris. Hubris breeds arrogance.” Harry Da Souza delivers the line in MobLand as a warning to gangsters. It could’ve been written for portfolio…
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We Rotate—Not Allocate
Allocation fixes the exposure and hopes the environment cooperates. Rotation fixes the process and lets the exposure answer to evidence.
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The Index Gained 15%. Look What It Had to Risk to Get It.
The S&P 500 gained 15.20% in the second quarter. Best quarter since 2020. Easy money? Not exactly. The final number looked calm. The path to it didn’t. June…
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The Market’s Leverage Trap: When Borrowed Confidence Becomes Forced Selling
Margin debt is easy to misuse. A record high doesn’t mean the market has to decline. Markets grow. Account values grow. A larger equity market can support more…
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The Market Isn’t Just Expensive. It’s Dependent.
Valuation alone is the wrong frame. Not because it doesn’t matter. Because it doesn’t tell you what the market is depending on. Right now, the market is depending…
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Spot-Up, Vol-Up: When the Market Starts Paying for Upside
When stocks rise and volatility rises with them, most investors instinctively assume something defensive is happening. Sometimes that’s true. If the S&P 500 index is rising, VIX is…
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The Asymmetric Risk Hidden Inside a Calm Market
A quiet index doesn’t always mean a quiet market. Sometimes it means the violence underneath is cancelling itself out.