This month was a good one. My best year-to-date, actually.

I don’t show my returns anymore, at least not month to month. I don’t think it’s relevant to anybody.

I liked this tweet from Daniel Vassallo:

I don’t want to get attached to any of my investment ideas, the way I was with Nuran Wireless.

Other than greed, which is the most dangerous sin as far as I’m concerned, there are 3 biases that I think have hurt my returns in the past:




Awareness of these biases makes me hesitant to go into the details of my portfolio holdings and how they performed. They are like cattle to me. I can kill (sell) any one of them tomorrow and eat the proceeds.

The Ultimate Game

I now view investing as the ultimate mental game. I’ve played all sorts of games in my life: board games, video games, chess, card games, poker, you name it. I don’t think there’s a single game out there that is as pure and complete as investing.

Here are just a few skills that this game requires, in my opinion:

  • analytical skills and cold rationality
  • emotional intelligence
  • psychological acuity
  • mental agility
  • high confidence
  • low ego
  • stamina

Beyond the fact that it gives me a shot at acquiring my freedom, I am in love with this game. Because in a way, it saved me.

The Loser Mindset

I feel like a loser. I’ve always felt this way, at least since puberty. I think the reason is that I feel like I’ve disappointed my father. In fact, I come from a lineage of first-born sons who disappointed their fathers, and fathers who disappointed their first-born sons.

As a young father, my paternal grandfather was a successful merchant, himself the first child of a divorced and remarried successful merchant. Competition arised between the two of them. The son was beginning to challenge the dominance of his father (my great grandfather), who was a man of influence. So one day, this man of influence, who by then had started a new family, decided to teach a lesson to his ambitious son: he contacted all his suppliers and asked them not to do business with him anymore.

My grandfather was unable to get any supplies from the market. No more products to sell. Debts to pay. Overnight, he was bankrupt.

All of this happened in Morocco decades ago, a place and time where a father’s authority was unquestionable and his blessing of the utmost importance. Not only was my grandfather barred from making business, he also had to beg his father to forgive him. More than that, he demanded to get pardoned for his mad ambition in written form, in the presence of an imam (mulsim priest).

In the process, my grandfather lost all credibility in the market. No one wanted to do business with a man who could be disowned by his own father, no matter what the reasons were. He was ruined. He had to move his family of five from a house, into a small apartment with two rooms.

My own father witnessed all of this. He was the right-hand little man of my grandfather and used to tag along and help his father when visiting suppliers. He saw his father get destroyed.

I love my father. He was an amazing dad, especially when I was a little boy. Things deteriorated a bit when I grew older, as it seems I could nothing that would please him. I was good at school, very good even, but I didn’t feel that he loved me. I knew that he loved me, but I couldn’t feel it. We were unable to connect on any meaningful level.

Professionally and business-wise, my father was doing very well early on. But then he started stringing several business failures in a row. He was either too impatient, too much outside his circle of competence, or both. I think these failures weighed heavily on him and made it harder for him to be emotionally connected.

I started adult life as an excellent student who went to university in France and Canada…only to accumulate failures. I dropped out of three undergraduate programs before going on a tangent to make a living as a depressed online poker player. Finally, I got bored with poker and decided to go back to school to study actuarial science. This time I knew it was my last shot (I was 30 at the time), and I finished successfully.

All that to say, I think that the loser’s mindset is tattooed on the inside of my soul.

What is the loser’s mindset? It’s feeling that you’re not meant to win - especially not win big.

I’m a huge fan of Metallica (James Hetfield in particular), and if you ask me what my three favorite songs are, I’ll pick Unforgiven, No Leaf Clover, and Low Man’s Lyrics.

Unforgiven talks about a bitter old man who’s about to die but never had the chance to live as his true self.

“What I’ve felt
What I’ve known
Never shined through in what I’ve shown”

In No Leaf Clover, the hero thinks he’s about to finally get lucky and break free, but it was nothing but an illusion.

“Then it comes to be that the soothing light at the end of your tunnel
Was just a freight train coming your way”

Low Man’s Lyrics is about a miserable tired man who’s writing a suicide note.

“And I can’t bear to see
What I’ve let me be
So wicked and worn”

Is it a coincidence that these are my favorite songs in the entire Metallica discography?

I feel comfortable in this negative, hopeless frame of mind. It’s what I’m used to. It’s what makes sense to me.

I feel that I’m not meant to win big because I don’t deserve it. It’s not who I am, is what I tell myself.

As a consequence, not only do I think and dream small, but when I do make big bets, they tend to be rotten ones that could go wrong. It’s because the loser’s mindset accepts the possibility of never winning, never getting free.

The winner’s mindset, on the other hand, expects to win! Winners see winning as a matter of when not if. That’s why winners keep winning. All they have to do is keep going, avoid obstacles along the way, and they’ll get there. Why not? They truly feel that they are born to win, and this bias helps them select winning bets and bet big when they find them.

Writing all of this helps me flush it out of my system. At least that’s the hope.

I want to be, feel, and act as a winner too. Not just LIKE a winner, but as a winner.

I used to dream of having one million dollars. Then I imagined, if only I could make it to two million, that would give me a shot at freedom. Meanwhile, winners who have identified the same bets as me but swung much harder at them are already out of the prison and enjoying life in a sunny place.

The exact amount isn’t important. What I want is freedom, and by that I mean being free to do whatever I want with my time. What’s important is to spend quality time with my children. I am a father now and expecting a 3rd child, and I want to break to losing streak. I want my children to be born and grow up in a winning environment.

To my dad: I love you. You were the best dad anyone could have ever hoped for, and for that, I am proud of you. Thank you for everything.

Neither Smarter Nor Dumber

A few weeks ago, I tried to understand and write about my investing approach. It was a frustrating exercise as I remember it, probably because I’m still early in the process of building my style. So I ended up trying too hard to come up with something to say.

In particular, I laid the idea that “On every trade I make, the person on the other side of it is smarter than me”, and I wasn’t really happy with that one. It felt too extreme. But I think I now have an improved version, inspired by Artem Fokin (see my post about a podcast featuring him here).

Artem is a bright investor and manager of the Caro-Kann fund. He published several investment theses and won the SumZero Top Stock of the Year award three years in a row (2017, 2018, and 2019).

As an example, he published a thesis on Trip Advisor in 2017. This thesis is 89 pages long! And it was wrong. Below is the 5-year performance chart for the stock:


Why was it wrong? I believe the answer can be summarized in one sentence: no switching costs. It costs nothing for end-users to switch from Trip Advisor to another platform (such as Google), which means all those sexy network effects can easily leak to another network. For example, I rely much more on Google Maps reviews and ratings nowadays than Trip Advisor, which wasn’t the case just two years ago.

Here’s a slide from his video presentation of this thesis (highlight is mine).


He assumes that his opponents (the other market participants) are myopically focused on the wrong thing. In other words, he’s saying they’re dumb. Which is the opposite of the idea I mentioned earlier (that everyone else out there is smarter than me).

And today, I think that both approaches are suboptimal.

I used to wonder why every thesis I read had this section called “Why the opportunity exists?”. I couldn’t understand what was the point of trying to reverse engineer why the market is wrong about something.

I changed my mind. There are weak and strong reasons as to why the market could be wrong. Myopia is a weak reason because it is safe to assume that the market is generally correct, especially when there is a large number of participants.

So here’s my improved idea: For the market to be wrong about something, and unless there are only a handful of participants looking at the idea, there needs to be a strong reason.

$BABA would be a good example, where I’m not saying that the market is wrong or that this stock is a good investment, but the recent regulatory crackdown on top of Jack Ma’s antics on top of a virus coming from China are, together, strong enough of a reason why the market could be wrong. Lollapalooza situations are generally a good hunting ground.

The market is neither smarter nor dumber than us. Rather, the idea is to look for situations where the market has a very strong reason to go wrong and take the opposite side of that trade.

Quantum Opportunities

We all learned a bit of classical physics at school. The laws of motion and energy, Newtonian physics, and so on. But the quantum world is another beast altogether.

For example, have you ever heard of quantum foam?

quantum-foam source: Fermilab

Isn’t it crazy? Particles popping in and out of existence for a split second, completely randomly? Funny enough, the expression “quantum foam” comes from the similarity to how bubbles in foam form and then pop.

Well, I think a similar phenomenon can take place in the stock market, especially in the micro and nano cap space (anything below $300M market cap), but not exclusively. Opportunities will pop into existence for a day, sometimes two, and then disappear. See my post on $DWAC for an example.

And while I respect and admire my value investor friends, they don’t really care about this phenomenon. They are more into classical physics than quantum weirdness. I’m not. I’ve seen enough of these random but extreme events to know that they can offer tremendous upside if one is agile enough to take advantage of them. Of course, if you need weeks of due diligence before deciding to move on a target, these situations are of no interest to you; even more so if you are managing other people’s money, and are accountable to them for your decisions.

As for me, I think in bets, and I try to look for bets that have an expected value distribution that is skewed on the positive side. I rarely wait to have all or even 80% of the information to make a move. I mostly act on instinct, and while the lack of process has hurt me in the past, it has been a net positive so far.

So I’d rather supplement my instinct with discipline and emotional awareness than let all of these opportunities pass me by.

To be clear, this is the style that seems to appeal to me, but I do not by any means claim that this is the best one. I don’t even claim that it makes sense (if you’re into math and logic, whether or not a style works might be an unprovable statement, which would make investing an incomplete system).

Here are some examples of very different styles that seem to work for other people:

Note: in the case of $DDOG, not cheap means 65x sales


To each his own.

P.S. One last thing.
While Fintwit keeps recycling the same tickers over and over again, this guy is going his own way and forging his own path, creating 60x returns for himself in less than 2 years (and helping many others along the way).


Until next time, stay cool & stay invested!