That’s what makes a market [Members]

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• 

  Mogul

  1 Daz May 25, 2026, 9:48 pm

  This active investing thing is hard, even for the omnipotent:

  https://alphaarchitect.com/wp-content/uploads/2021/08/Even_God_Would_Get_Fired_as_an_Active_Investor.pdf
• 

  Maven

  2 The Investor May 25, 2026, 9:55 pm

  @Daz — Yes, one of the all-time greats that.

  @all — Sorry for the delay with this one. I got floored with some medical-related stuff on Friday that basically lost me 36 hours, and it knocked everything out of sync. (Okay now!)
• 

  Mogul

  3 Delta Hedge May 25, 2026, 11:14 pm

  Hope you’re feeling better @TI. Nothing comes before health. Least of all money! 😉

  Concur with @Daz. There’s a similar one to AlphaArchitect out there on the Web for the scenario of ‘if you had access to the next day’s headline’ (but not the next day’s stock prices), i.e. you’d still lose money because, even if you knew what happens next, you just can’t know how Mr Market reacts to it.

  It’s the Keynesian Beauty Competition (I think it was JMK who noted the phenomenon), where you don’t actually judge the most attractive contestant (i.e. the actual best business here), but try instead to guess how the other judges will themselves guess how their co judges will vote (or some third, fourth or fifth order derivations of this).

  I just think it’s way too complicated (stock picking as a way of life) and unrepeatable from first principles. 55,000 listed companies globally is 220,000 quarterly reports annually. And what combination of which to hold in what amounts? We’re into factorials now (multi thousand digit sized combinational landscapes). When do you decide the thesis is validated or falsified? Why those criteria and not others? The questions never end. Firm answers are elusive. I just never could build the conviction even if I could stomach the drawdowns (which I think I perhaps could but only *if* I had enough conviction) and the complexity (life’s too short, sadly – if I lived 10,000 years and had no full time job then, maybe, I might feel differently, but I’ve got most likely only 1,500 to 2,000 weeks left, and, unfortunately, I am for now still very much encumbered by employment).

  I do dabble in individual names but in it’s totality it sub-sub 5% territory overall which means I don’t lose sleep or even miss a heartbeat if any one pick goes south. It’s a bizarre mix. Overall doing Ok with PLTR leading the multi bangers. Then again, there’s plenty of losers. KR1 down over 80% on purchase price (urgh), and it was massively off its ATH when I dabbled in it (but only to tune of hundreds of pounds in a seven figure overall portfolio now). Jet2 crucified off of the Iran war kerosene squeeze. Some sh** involving US rare earth companies earlier this year which I wish now I’d never touched, and somehow managed to buy just as the began to collapse after going parabolic before I clicked on ‘buy’ (couple of grand incinerated on those 🙁 ).

  I’ve seen MELI come up a lot in the growth stock / Southern Cone quality value community (confluence?) on investing Substack. I’ve signed up to north of 1,000 free Substacks now (95% investment and macroecon), so you get to see every name tipped sooner or later (I’ve switched the email notifications off for my own sanity).

  Don’t hold any MELI though. Probably won’t be doing so in the future, notwithstanding the truly superb article above (for which thank you). But I am overweight both the wider South America market, and specifically Brazil; via trackers, a specialist Investment Trust and with PBR (I also hold Columbia’s EcoPetrol. Whatever else, it’s hard to argue that LatAm is not cheap and Brazil especially both relatively and absolutely cheap. That doesn’t mean they’ll be good returns of course. Just I feel more comfortable buying Brazil on around 10x to 11x Forward and Trailing PEs than the US large caps on low 20x to 29x. Each to their own.

  Incidentally, Rebound Capital (on Substack) have a whole system for buying what they’d call quality growth on 50% to 75% drawdowns from ATHs. META in 2022. AMZN in 2002. That sort of thing.