Portfolio Strategy: What Separates The Best Investors From The Rest? DISCIPLINE

Trusting the process and holding through volatility, especially when others are selling, is key to achieving superior investment returns.

Executive Summary

During earnings season, emotions run high. It always feels like you have to do something. Chase the latest quant or AI stock. Sell your so-called “dead money” stock.

Many investors believe that profits come from constant buying, selling, flipping, and chasing. But often, just days later, they end up panicking and selling into a drop.

That’s why I try to bring some sanity. Practical advice. The truth is, outperformance doesn’t come from being the smartest person in the room. It comes from being disciplined with the Inflection strategy. It’s a simple strategy to follow and implement—yet it works.

It delivers outperformance. The only catch is that you need to understand the process and give it a little time. Not an infinite amount of time, but at least 6 months to start seeing the first rewards.

A Reason to Panic

There’s always something to panic about in the market. Maybe short-sellers are making loud, fear-mongering comments. Maybe the macro environment suddenly looks weaker. Maybe headlines scream about the debt ceiling or the Fed not cutting interest rates as expected.

There’s always something to scare you, to shake your conviction. And when the noise gets loud enough, even the strongest hands start to doubt. That’s when investors get shaken out of good holdings—not because the business has changed, but because the endless negativity feels like disaster is imminent. The market is designed to test your patience and belief—usually right before a stock rebounds.

Sometimes watching your holding drop 25% or 50% in a matter of weeks is overwhelming. This will happen often. It feels suffocating and unmotivating to keep going with the strategy.

But here’s the best advice: if you’re in pain, others are too—and they’re already selling.

Discipline is the Key

If you can stay calm longer than the average investor, chances are most sellers will have already exited. When the rebound comes, the stock can rise fast.

The key with my investing style is simplicity—so you always know exactly what you’re doing. Discipline means having the conviction to hold through volatility and the patience to let a well-thought-out strategy, like the Inflection approach, play out.

Discipline stops you from being shaken out at the worst moment and keeps you from chasing trends that fade. Outperformance doesn’t come from perfectly timing the market—it comes from closely following the Inflection strategy when everyone else loses focus.

Practical Aspects

I believe the adjusted PEG ratio eliminates a lot of problems. Yes, sometimes I’ve deviated from it and still had success—like our exits from Palantir and Rubrik, which were initially thought of as highly overvalued, but in hindsight turned out to be very profitable investments in a short period of time.

But the adjusted PEG ratio cuts out the noise. It’s the cornerstone of my Inflection strategy.

So, what is the adjusted PEG ratio?

It’s a variation that uses free cash flow instead of earnings. It suggests that paying 3x or less on this adjusted PEG ratio often leads to favorable outcomes.

Here’s the formula: P/FCF divided by next twelve months’ growth rate.
If this calculation comes out under 3x, there’s usually a good reward-to-risk setup for the stock.

The Bottom Line

Discipline is the dividing line between average investors and those who achieve real outperformance. The Inflection strategy isn’t about guessing, chasing trends, or being the loudest voice in the room—it’s about following a proven process with unwavering conviction.

Markets are built to shake you, to tempt you into selling just before the rebound or buying just as the excitement peaks. But the disciplined investor doesn’t flinch.

Here, I’m asking you for patience—not endless patience, but enough to let the process work. If you feel the pain of holding, know that most others are already selling—and that’s precisely when the biggest gains are often just around the corner. Trust the strategy.

Outperformance doesn’t come from luck—it comes from sticking to the strategy when everyone else loses focus.