What We Believe Markets reward discipline, not hope.
ASYMMETRY® is the discipline Shell Capital Management uses to manage money and make financial decisions: limit what a decision can cost, leave open what it can earn, and size it so that being wrong is tolerable.
Nine beliefs.What each one means for your money.
Nine beliefs, and what each one means for your money.
- 01
Losses hurt more than gains help.
A 50% loss needs a 100% gain to get back. Avoiding the deep loss is the central job.
- 02
The exit matters more than the entry.
Every position has its exit decided before we buy.
- 03
Risk is what you can lose, not how much prices move.
We count the dollars open to loss across the whole portfolio.
- 04
Evidence, not forecasts.
How much is invested follows what markets are doing, and the portfolio changes when the evidence does.
- 05
Rotate, not allocate.
Exposure moves with trends instead of sitting in a fixed mix.
- 06
Hundreds of holdings can be one bet.
We diversify the reasons a portfolio makes money, not the count of positions.
- 07
Every wealth decision is a bet.
Each has a cost you can define and an outcome you can’t. Size the cost.
- 08
Systematic doesn’t mean automatic.
Rules run the process. A person is accountable for it.
- 09
You should know who manages your money and how they’re paid.
Two principals, your account in your name, and how we’re paid, stated plainly.
Beliefs are only useful if they change decisions.
We believe investment risk should be chosen on purpose, evidence beats conviction alone, and a portfolio’s result depends on how its exposures behave together. We also believe financial decisions should reflect the family that owns the capital. Each belief changes what we do, and each one can fail.
| Belief | What we do because of it | Where it can fail |
|---|---|---|
| An edge has to survive testing. | Test outside the years an idea was built on, after costs, in rising, falling and disorderly markets. | A persuasive history can still fail in the future. Testing lowers that risk; it doesn’t remove it. |
| Risk is a dollar consequence. | Set exits and sizes so the predefined risk is tolerable, and look at what happens when prices gap. | Prices can gap past an exit, and several positions can fall at once. |
| Different drivers beat different labels. | Measure what each position depends on, and reject what only adds more of the same. | Relationships between markets change under stress, often when it matters most. |
| Capital and family decisions belong together. | Let tax, estate, liquidity and market risk set one mandate. | A plan is only as good as what it knows, so it’s reviewed as the family changes. |
Losses hurt more than gains help.
It’s arithmetic, not opinion. The deeper the loss, the bigger the gain it takes just to get back to where you started.
The bigger the loss, the bigger the gain it takes.
| Loss | Gain to get back | |
|---|---|---|
| 10% | 11% | |
| 20% | 25% | |
| 30% | 43% | |
| 50% | 100% | |
| 75% | 300% | |
| Yours30% | 43% | |
On $10 million, a 30% decline is a $3 million loss, leaving $7 million. Getting back to $10 million takes a 43% gain.
So the central job is avoiding the deep loss, not predicting the next gain.
What the beliefs commit us to.
Risk is managed before the loss.
Deep losses can take years to recover from, and for families near or in retirement, a loss can be permanent in practice. Our job is to manage risk ahead of time, not explain it afterward.
Asymmetric returns are worth pursuing.
More upside than downside doesn’t show up in every position or every year. We pursue it through position sizing, exits set in advance and acting on what markets are doing.
Keeping capital matters as much as growing it.
A portfolio that avoids the deep loss doesn’t need a heroic gain to recover.
Every portfolio is managed individually.
Each family has its own portfolio, in its own name at Goldman Sachs Custody Solutions.
Attention is the edge.
Decisions are made by the two principals responsible for the outcome, not handed down through layers of staff.
Advice that serves the client first.
We’re paid advisory fees, not commissions, and we explain what we recommend in plain words.
Questions about what we believe.
What is ASYMMETRY®?
ASYMMETRY® is the discipline Shell Capital Management uses to manage money and make financial decisions: limit what a decision can cost, leave open what it can earn, and size it so that being wrong is tolerable. The firm has used the mark in investment management since 2005.
Why does avoiding large losses matter so much?
Because getting back takes more than the loss. A 20% decline needs a 25% gain to recover, a 50% decline needs 100%, and a 75% decline needs 300%. The deeper the loss, the longer the climb.
Do you predict where markets are going?
No. We respond to what markets are doing. The portfolio changes when price trends and the evidence change, not on a forecast.
What does “rotate, not allocate” mean?
Instead of holding a fixed mix, ASYMMETRY® Managed Portfolios move exposure toward markets that are rising and away from those that are falling. We call it Global Tactical Rotation®.
Does every position make money?
No. Many positions exit at their predefined risk. The discipline is designed to keep those losses small and give the gains room to run.
Read how we think.
The same beliefs run through everything we write.
If you write, I’ll read it myself.
Mike Shell, Founder & Chief Investment Officer