They All Won't Be Home Runs!
Why it's impractical to expect a 100% success rate.
Just Winners? That’s Not How This Works.
We all want to invest in winners every single time. Who doesn’t like watching their portfolio turn into a green sea of gains? But as much as the internet might lead you to believe otherwise, that’s not how investing works in the real world.
Scroll through your X feed and you’ll see no shortage of traders bragging about their “banger” plays, triple digit options trades, perfectly timed entries, overnight gains. It’s easy to feel like you’re missing out or doing something wrong when your own portfolio doesn’t look quite as glamorous.
But here’s the truth: people love talking about their winners, and they go radio silent on their losers. That one biotech stock they hyped that’s now down 65%? Vanished from their feed. The options play that got wiped out in a single day? Never happened, apparently. This selective storytelling creates a distorted view of reality and it’s nothing more than noise. You’re better off muting it.
Don’t Fall for the Snake Oil
Another common trap: the mysterious “trading system” being sold for $99. Sounds tempting, right? “Buy my signals, join my Discord, follow my alerts!” But let’s use some common sense here.
If someone actually had a strategy that produced market-beating returns with minimal risk, would they really be selling it to thousands of strangers online? Probably not. They’d be quietly compounding their own wealth and sipping cocktails somewhere warm not hustling you for a subscription fee.
There’s a reason Warren Buffett isn’t active on social media trying to sell a course. Real wealth is built through discipline, patience, and clarity not hype, hope, and hot tips.
Winners Don't Need to Be Undefeated
It’s important to remember that you don’t need to win on every stock to do well over time. Not even close. A handful of solid winners anchored by good businesses, bought at reasonable prices, and held for long enough can more than offset your mistakes.
In fact, every seasoned investor has their own graveyard of losers, stocks they bought too early, held too long, or misjudged entirely. What sets successful investors apart isn’t that they avoid losses altogether, it’s that they limit the damage and let their winners run.
The Power of Staying in Your Lane
This brings us to a concept that doesn’t get enough credit: your comfort zone. Buffett is famous for sticking to his, and he’s done just fine.
When you invest in companies you understand, businesses with predictable cash flows, clear strategies, and durable competitive advantages, you’re much more likely to stay the course during rough patches. You’ll know why you bought the stock, and more importantly, you’ll know why you’re still holding it.
On the other hand, investing based on someone else’s conviction, especially in companies you barely understand, is a recipe for sleepless nights and poor decision making. You’ll feel the urge to react to every price swing, every negative headline, every “guru” tweet. And more often than not, those reactions will be driven by fear, not logic.
Keep It Boring, Keep It Working
In a world where attention is currency and everyone’s chasing the next big thing, the best investing strategy might feel… boring. But boring works.
Buy high quality businesses. Hold them for the long haul. Don’t overreact. Ignore the noise.
That’s not flashy. It won’t go viral. But it’s a formula that builds real wealth, slowly, steadily, and sustainably.
High Quality Portfolio Update
Last week, I shared a high-level overview of the initial screening process behind building the investable universe for this newsletter’s High Quality Portfolio. If you missed that post, you can find it here. It laid the groundwork by showing how a simple, disciplined filter could narrow the market from thousands of stocks down to 171 strong candidates.
Since then, I’ve taken a few more steps forward. I’ve been tightening the funnel further, experimenting with the screener and stress testing the valuation model that will guide final investment decisions. The goal here is not just to identify high quality businesses, but to determine which of those businesses I can value with enough precision and confidence to invest in.
As part of this refinement, 35 of the original 171 stocks have been removed from consideration, not because they were poor companies, but simply because I couldn’t confidently value them. That’s a hard but necessary line to draw. If I can’t build a reasonable valuation model around a stock, I have no business putting capital at risk. It’s not about whether the stock is “good” or whether it will perform well in the future, it’s about whether it fits within my comfort zone, where I can invest with clarity and conviction.
Saying “No” is Part of the Process
It’s worth emphasizing: I fully expect that some of the stocks I pass on may go on to be big winners. And I’m okay with that. This portfolio isn’t about capturing every opportunity, it’s about building a strategy I can execute consistently, over time. That means making peace with the fact that some excellent stocks will simply fall outside the boundaries of my process. That doesn’t make them bad investments. It just means they’re not my investments.
I’m focused on carving out a corner of the market where I believe there’s a high concentration of quality, companies with durable moats, sound balance sheets, strong cash flows, and management teams that know how to allocate capital. Within that universe, my valuation model will act as the final filter, providing a marginal but meaningful edge in identifying the best opportunities.
Looking Ahead: Launch Timeline
We’re now halfway through June, and the framework for the investable universe is starting to take shape. I’m close to completing the core structure, and the vision for the High Quality Portfolio is coming into focus. The initial goal was to launch the portfolio on July 1st, and that still might happen but I’m also weighing the wisdom of that timeline.
The truth is, I don’t want to rush this. The foundation of this project is the process itself, getting the screen, the valuation model, and the portfolio construction rules dialed in. I’d rather delay the launch by a few weeks than compromise the integrity of what I’m building. This is a long term effort, and it deserves a thoughtful start.
Stay tuned, more updates will follow soon as we inch closer to launch. I appreciate your patience and support as this idea turns into a real portfolio with real capital behind it.