Portfolio Management: Trust The Process, Ignore The Headlines
Market panic is constant, but disciplined, repeatable strategies like my Inflection strategy outperform by ignoring headlines and staying patient.
Executive Summary
There's always a reason to panic in the market. Always something to be worried about. So, what should I do now?
I give some practical advice of how my Inflection strategy allows subscribers to outperform. By sticking with the strategy, despite the headlines.
The Value of Experience
I recently read Bull by Maggie Mahar. It’s a fantastic book that explores how investor memory tends to fade after about 14–17 years.
After that, a new generation of investors often enters the market—one that hasn’t lived through the last big crash and struggles to find its footing. Written in 2004, the book obviously didn’t predict the 2008 financial crisis or the 2022 tech meltdown—but in many ways, it did. It’s not a book about predictions, but it’s a reminder that experience in the markets is often more valuable than being able to read a financial statement.
You might be thinking, “But I can just use ChatGPT to analyze a company!” Sure, there are plenty of tools out there. But what matters most is having a repeatable strategy—especially one that works not just in good times, but also during panic and uncertainty.
A Reason to Panic
Inflation, Iran conflict, debt ceiling, interest rates, tech bubble, election uncertainty…
There’s always a reason to panic and stop investing. But the real returns go to those who stay calm, stay focused, and remain disciplined when fear is loudest. The trick, more often than not, is to be patient—and ignore the headlines.
A Simple Strategy That Works
My investment strategy is easy to follow:
You buy when I recommend.
Then, you sit on your hands.
That’s it.
If you’re itching to trade, do it with your other stocks. But with the ones you buy because of me, give my process time. It won’t always work—but it’s designed to be repeatable and profitable.
I focus on businesses that are on the cusp of surprising the market by growing free cash flow faster than expected. When that happens, assuming investors expectations are not too extended, this often leads to big gains.
Honest Expectations
Without vision, you drift. Without direction, you quit. That’s why you need conviction in the Inflection Investing strategy.
Inflection investing works. But you have to believe it works—or you won’t stick with it through the bumps. It’s about backing companies that will see their free cash flow surge in the next year. If the valuation is fair, it tends to work. If the valuation is cheap, it often works even better.
Of course, no strategy is perfect. But if you understand this one, you can trust it. And if you trust it, you can stick with it—long enough to beat the Nasdaq.
What Makes This Strategy Work
The market follows free cash flow expectations. If you get those right—starting from modest assumptions—you can earn excellent returns. But the path won’t be smooth. That’s why stop losses don’t work well in small-cap investing. You’ll get shaken out too early.
Just look at PLTR.
Anyone using a 10–20% stop loss would’ve been kicked out multiple times over the past few months. I didn’t sell. I held through the volatility and walked away with a 30% gain in just 3 months. Then I exited.
Was it luck? Sure—there’s always some luck. But luck only matters if you have a plan in place before you invest.
The Bottom Line
There will always be noise. Always a headline telling you to sell. Always a reason to doubt your decisions.
But that’s exactly why you need a strategy you trust—one that cuts through the chaos and gives you a repeatable edge.
Inflection investing isn’t about reacting to the news. It’s about getting ahead of it. It’s about identifying businesses poised to surprise the market with stronger free cash flow, buying them when expectations are low, and having the patience to let the story play out.
You don’t need to trade every day. You don’t need to outsmart everyone. You just need to follow the process—and sit tight when the panic sets in.
This is the strategy I follow. It’s worked for me. And if you give it time, it can work for you too.