Systematization Of The Fundamental

THIS IS NOT INVESTMENT ADVICE

This was originally meant to be a piece about personal finance. But after going over it before publishing, I realized that proper conclusions need a bit more than just scattered thoughts, a broader framework.

Some of the ideas here might sound familiar. But in practice, the way I approach markets is pretty far from what you’d call the mainstream financial or political consensus. So it’s worth laying it out clearly - if only to make better sense of what’s actually going on.

What’s on the agenda

Why I think only a small number of securities are actually worth considering for conservative investing - and whether that list can realistically be expanded
How to approach gold properly (or: "Gold investing for dummies")
Why invest in foreign markets at all - especially when someone like Anthony Deden (Chairman of the Executive Committee at Edelweiss Holdings Ltd., well known in financial circles for his long-term approach to investing) prefers to stay within markets he fully understands
Why speculation starts to make sense when things tighten up
How to allocate personal capital across asset classes: stocks, bonds, metals, real estate, and alternatives

This isn’t about answering questions. It’s about showing the process so things actually make sense.

This project is basically a live stream of how I work. And I’m not changing anything for it. I use the same standards here as I do with my own money when I deal with the market - any market.

So let’s start with one key difference between how I see financial markets (and I’m not the only one) and what most people think is "normal" - the version pushed by influencers and the media:

Thanks to the efforts of banks, brokers, the media, and VIP Discord channels, people outside the financial world have developed a frankly idiotic idea of what proper market activity looks like.

The idea goes something like this: "John is a brilliant forecaster". Or: John has insider insights because he’s a hereditary Freemason - or maybe even a reptilian. Or John has some kind of super-algorithm that predicts Elliott waves and Kondratiev cycles for the next five minutes and the next one hundred years.

Accordingly, John bought Bitcoin at $1, sold it at $20,000, shorted it at $125,000, and bought it back at $60,000. He also put all his money into the Airbnb IPO at $150 and exited at $200. And a week before the next global financial crisis - complete with civil unrest and a collapse of the banking system - John escapes by private helicopter with a few models to his private villa somewhere in Thailand.

Sometimes, instead of a specific John, this role is played by a collective Goldman Sachs in the public imagination.

The real world doesn’t work like that. At all.

In reality, the people who survive and succeed over the long term are not those with perfectly accurate forecasts (those don’t exist, for purely mathematical reasons), and certainly not those who spend their lives trying to improve forecast accuracy. It’s those who are roughly right about the things that matter - and properly protected against black swans and other force majeure events.

This way of looking at the world is so far removed from social norms (and like it or not, we are social animals - stepping outside those norms causes anything from discomfort to something very close to physical pain) that it needs to be stated clearly from time to time.

And since this view clashes sharply with conventional thinking - or, more accurately, with widely accepted myths - author occasionally will give examples of how real professionals in the financial world actually operate:

The funny thing is that people who genuinely make a living from speculative trading - and do so professionally, either for themselves or for a very small and selective group of investors (there’s a reason their funds are usually closed to new capital) - never operate like that [like the mythical John above].

I could use myself as an example, but that wouldn’t be entirely fair, so let’s take Nassim Taleb - a professional options trader who made millions at BNP Paribas, UBS, Credit Suisse First Boston, and Bankers Trust long before he became an author (late 80s to early 90s).

In fact, it was those earnings that gave him the freedom to write books that weren’t narrowly technical or industry-bound. I was genuinely surprised when I first read Fooled by Randomness - it never occurred to me that the author of really great book on dynamic options hedging (Dynamic Hedging: Managing Vanilla and Exotic Options, 1997) could also be such a strong writer and philosopher.

Both Taleb himself and the traders he describes tend to operate in a much more conservative way: profits from speculation are regularly taken off the table and moved into something stable, profitable, and reliable.

When Fooled by Randomness was written, the Fed’s interest rate was around 6% - something that now seems almost unreal - which made plain bonds a natural choice for preserving capital (think of Taleb’s "barbell strategy"). Speculative trades and high-risk positions were kept to a clearly defined share of total assets - and nothing more.

In today’s era of monetary distortion, Taleb, myself, and many other professionals are forced to replace bonds with something less conservative, but still reasonably safe and inflation-resistant: for example, dividend-paying companies with real pricing power - the ability to raise prices without losing their position. And, of course, gold.

As Taleb once put it on Twitter (and in a Bloomberg interview), when asked about gold in his portfolio: "I am a reluctant long holder".

What can you do? In times like these, preserving capital becomes the priority.

A couple of notes on this approach:

The era of monetary madness isn’t over - it’s still ongoing. Earlier, at the beginning of this period, bonds offered low yields, and the money invested in them - or earned from them - bought fewer and fewer shares, meaning smaller and smaller stakes in real businesses. And ownership in real businesses is the only true long-term social mobility that actually exists. The same applied to real estate: fewer and fewer square meters of anything, almost anywhere in the world.

Now bonds - whether American, Europian, or anything else - may appear to offer higher yields, but inflation is high enough that those returns buy less: fewer shares, fewer real estate, and less of everything else too, down to everyday things like a decent cup of coffee. With that in mind, the stocks I look for in a conservative portfolio are essentially substitutes for "ultra-reliable financial instruments" in an era like this. I’m not looking for "buy low, sell high" situations - at least not in a conservative portfolio. I’m looking for companies you can hold for a very long time, ideally indefinitely. Those are rare. They always have been. And finding them at a reasonable price is extremely difficult.

To make it concrete, here are my criteria for a good stock:

a timeless business model. Startups, high-tech, IT, airlines - anything built around something humanity didn’t need 500 years ago - no.
a brutally clear business model, as simple as possible. Ideally, something like a mine or Coca-Cola production. The core idea must hold up in a crisis. The more boring the business, the better.
strong political protection. This is a major competitive advantage - the ability to survive crises, management failures, even extreme scenarios. And no, state ownership by itself doesn’t tell you much. You have to look deeper.
competent management. People who can actually run the business efficiently, without burying it under bad decisions or bureaucracy. Think of WeWork or Boeing - and then imagine the opposite.
a real controlling shareholder. Not a nominal one. The majority owner should be rational, disciplined, politically protected, and not sloppy.
a clear willingness and the actual ability - to pay solid dividends. That means manageable debt, stable income, and a payout ratio that makes sense. If there are no dividends, forget it. If there’s no profit, forget it. Growth is nice. Optional, but nice.
if we’re talking about a consumer-facing business rather than a commoditized one, then pricing power matters - the ability to raise prices without serious consequences. Tobacco companies are a classic example. Direct dependence on regulation or tariff-setting is a different story, which is why utilities are often not what I’m looking for.

The goal is simple: to build a portfolio of stocks that consistently pay dividends - ideally growing ones - that can hold up through inflation, crises, and currency devaluation, and that are run by competent management and controlled by rational majority owners with strong political backing. That’s what a conservative portfolio looks like.

Positions are sold only if something happens that breaks one or more of the criteria above. Ideally, the holding period is straightforward: you keep it long enough for your grandchildren to deal with it.

While we’re at it, a few words on geographic diversification.

Anthony Deden has said (quoting from memory) that he avoids investing in emerging, non-Western markets because in places like Europe, Canada, or the U.S., he understands the culture and the underlying mindset, whereas in other regions, he doesn’t.

To rephrase that in my own terms: if, due to your background and professional experience, you have some understanding of the politics, economics, and broader context of your own region, then geographic and currency diversification should be a core part of your strategy as a rational investor.

Not "all in on black", but proper diversification - across countries and currencies - as a way to distribute risk and create additional opportunities.

Personally, for the sake of that diversification, I’m willing to accept infrastructure risk - the kind that comes with accessing different markets across jurisdictions. It goes up - like right now - it goes down, but it’s always there.

All of the above leads to one defining feature of the kind of assets I select for conservative investing - and the way I build positions in them.

For more than 10 years now, like many practitioners before me (see the Taleb example above - and, more broadly, this is how financially disciplined people have operated for centuries, from London and Amsterdam to Singapore and Hong Kong), I’ve followed a simple rule. Every month, 30% of my post-tax income is allocated to investments in dividend-paying stocks and/or income-generating real estate (via REITs), with a small portion - no more than 10% of total financial assets - set aside for higher-risk positions or speculative trades.

So if there’s an attractive conservative stock, and it’s trading at a good price - and I’ve already bought it - then a further drop next month isn’t a reason to panic. It’s a reason to prioritize adding more to the position, assuming it still meets the criteria outlined above.

In fact, I’m perfectly fine with the scenario where "it never goes up again". That’s because I focus on dividend-paying companies with stable business models built around things that don’t really change - businesses that can usually pass on (almost) any inflation to the end consumer and, over time, translate that into higher dividends.

I treat the holdings in my conservative portfolio as ownership stakes in real businesses - the same way Warren Buffett does - and I consider that the only sensible way to look at it. I’m not particularly concerned with what those stakes are worth on paper (except in terms of whether I can buy more at a better price). What I do care about is the income they generate.

Over the long run, this approach is highly disciplining. It keeps you from doing stupid things (it helps to keep a simple log - why you bought a position, and why you sold it) and forces you to act based on clear criteria, not emotions, and to stay cold and deliberate in your decisions.

It also naturally leads, if you zoom out - to gradually building larger positions in undervalued dividend stocks. They only become "overvalued" when the dividend yield, relative to the current price, is consistently too low.

This is the only way to become what people like to call "old money".

A brief note.

An American financial analyst, Sean Williams, once calculated that the Coca-Cola shares in Warren Buffett’s portfolio were acquired at an average price of around $3.25 per share. If I remember correctly, Buffett finished building that position in 1994, having started back in the late 1980s.

Now, here’s the important part. You could calculate the return on that investment based on the current share price - roughly $52 - and it would look impressive. But it would also be misleading.

Because to actually realize that return in cash, you’d have to sell the shares. Until that happens, that return doesn’t really exist. It’s just a number on paper, and it can shrink at any moment as the market moves.

If you want an example of how quickly "paper returns" can disappear, just look at Wirecard AG - once a DAX-listed fintech company with strong ratings and a bright future.

Now consider a different kind of return: how much income Buffett generates annually on the dollars he originally invested in Coca-Cola. That number is roughly 52% per year in dollar terms - about $1.68 annually per share on his original cost. And he receives that income every quarter, without selling anything, without doing anything at all.

Future dividends are never guaranteed. But the risk of "missing the exit" and losing most of your gains because you didn’t sell in time is dramatically lower.

It’s worth pointing out that bonds (of any kind), most so-called growth stocks, and even index funds (with rare and imperfect exceptions) simply don’t offer a path to building what people call "old money" - the kind that earns like this.

And more importantly, what really prevents people from becoming "old money" is something much simpler:

the unwillingness to take responsibility for their own financial decisions - instead of outsourcing it to banks, advisors, or funds

the unwillingness to wait and the constant envy of quick-money stories

the unwillingness to invest in boring businesses

That’s why "old money" has always been rare. Everywhere.

Maybe that’s not such a bad thing.

Accordingly, situations like 2008, the spring of 2020, what happened in the Chinese (Hong Kong) market in 2021, or what’s happening in Dubai right now - I see all of that as something very positive. These are windows of opportunity (briefly open, in reality) to build positions in good assets at low, and sometimes even distressed, prices.

A few more words on asset allocation (I’m not suggesting anyone copy this - I’m simply explaining what works for me, and not just for me; there are many variations of this approach, the core idea is similar, the differences are in details and percentages), because it matters for how you structure savings, risk, and investments overall.

Earlier I mentioned the 30% allocated to financial instruments. After all essential expenses are covered the broader framework looks like this (and it’s worth noting that people who follow this approach tend to be fairly restrained in their consumption):

10% - allocated to some form of charity
30% - reinvested into your own business (yourself)* (we’ll get to what that means)
30% - held as a reserve, i.e. allocated to gold** (we’ll get to that as well)
30% - invested in financial instruments (typically in a way that roughly follows Nassim Taleb’s "barbell" approach: 90% in conservative investments, and 10% in high-risk positions with significant upside - and an equally significant chance of going to zero)

*On investing in your own business (yourself), there are usually two types of misunderstanding - one coming from business owners (mostly small business) and traders, and the other from salaried employees.

Let’s start with the typical problem among business owners (and some traders, professional poker players, bettors, crypto guys, and so on) - in general, people who never had their own Taleb, a distant relative from an old European merchant family, or a proper life mentor (not just a teacher of the Torah) in an Amsterdam or New York yeshiva.

The problem usually looks mathematically sound. A small business owner might have a business generating 30% annual returns on capital (or a trader with a system making 40% a year). And then they look at the idea of allocating a large portion of their profits into something like a dividend stock yielding ~6%, or even putting part of their capital into gold (which generates no income at all), and they think it’s absurd.

From their point of view, it’s simple: 30% is greater than 6%. They can do the math. So all - or nearly all - of their money (and very often borrowed money on top of that) goes into expanding the business or increasing the trading account.

In other words, the problem is that 30% is "not enough" for them. They want 100%. Ideally 200%, with leverage, as fast as possible.

And quite often, it works. The business grows, scales, expands, and everything looks great - right up until the moment when something inevitably goes wrong.

It can be a change in tax policy (new taxes, removal of tax benefits, stricter enforcement, formalization of a sector), or a broader economic shock affecting a country or an industry - COVID, 2008, 1998, take your pick.

And then that’s it. Bankruptcy - or, at best, a painful reset, sometimes all the way back to something like driving for Uber… or being the "Walmart millionaire".

(just in case - I’ve seen dozens of "brilliant" traders, if not more. The market wipes them out even more often, and in a less obvious way: a simple shift in market that destroys their edge - and they don’t even realize it. And in their case, the ending is usually harsher than for business owners, ranging anywhere from falling to the very bottom to… physically unpleasant conversations with unofficial creditors).

Over long time horizons (we’re talking decades), some kind of "unexpected" event is guaranteed to happen - which, in itself, makes it entirely predictable.

Those who trade away their margin of safety for faster growth today tend not to end well. And even if a particular "fan of obvious math" somehow avoids disaster through sheer luck during their active years, it almost inevitably catches up with their heirs.

Either the next generation burns through the wealth, or they lose the business themselves at the first predictably unpredictable crisis - having never learned risk management in the first place, because the person they inherited it from never had those skills either.

As a side note, having diversification and reserves is exactly what allows you (over the long run, and provided you select stocks based on business quality rather than the hope of selling to the next fool) to achieve returns comparable to small, high-risk businesses, but without the same personal risk or time commitment. To see this, you can look at Buffett’s returns on the dollars he originally invested in Coca-Cola, or the income those investments generate relative to the initial capital, not the current price.

The second type of misunderstanding comes not from business owners or traders (and others who have access to higher returns, albeit with higher risks), but from salaried employees. For them, allocating 30% to "investing in yourself" or "your own business" often doesn’t make much sense.

First, it’s worth pointing out that a salaried employee is, in fact, a business owner as well - just in a very specific form: a one-person business selling labor hours to a legal entity.

In modern culture, "spare" money is typically spent either on status-driven leisure (travel, experiences) or on equally status-driven consumption - what’s often called keeping up with the Joneses - again with the same experiences and Instagram attached.

And there’s no need to judge anyone for that (better to make money on social phenomena like this).

But if you look at it from the perspective that "every person is a business", then there are alternative ways to allocate both money and time:

All the possible (and impossible) courses, certifications, credentials, degrees - and everything else that HR departments love and value (even when it’s completely useless in real life).
(especially for developers and other IT specialists) deliberately harsh sales training - the kind you’d associate with Kirby-style demos or even a classic timeshare pitch. Not because you’re planning to sell vacuum cleaners or supplements, but to develop at least a baseline level of psychological pressure - and, more importantly, the ability to apply it. That alone can make you far more comfortable navigating corporate politics, and, where possible, help you tilt rewards, perks, promotions, and bonuses in your favor.

In a corporate environment, this is often a very high-return investment of your time and effort. "Vacuum-style selling" isn’t ideal, but you get the point. More broadly, it’s worth deliberately building what you might call your "corporate animal" skill set - whether with a good psychologist, on your own, or by working through the right material (ideally all of the above).

Because if "a person = a business", then your ability to extract maximum value within your personal corporate structure is effectively your sales and marketing department. And that department needs to be well fed, properly trained, and held to a high standard. By the way, this category also includes thoughtful gifts or gestures for people who make decisions in your organization. More often than not, even fairly expensive investments of this kind pay for themselves many times over.
Networking (forgive the term - I know everyone’s sick of it) - expanding your circle within your professional environment. Travel (yes, sometimes even at your own expense, if your “marketing department” couldn’t get your employer to cover it), and creating the right impression on potential future colleagues, employers, or HR - all of this takes both time and money (and time, as always, is money).

This kind of networking allows you to move up the career ladder more effectively, often bypassing internal corporate constraints - moving forward and upward regardless of whether your current manager values you or not, and regardless of how well your resume passes HR filters elsewhere.

(by the way, corporations like to say they don’t value "job hoppers" - that was already the case in the past - but then as now, in 99% of cases, that’s bullshit: corporations and state institutions don’t really value anyone. What they call "loyalty" is often treated as a form of weakness - something to lean on, exploit, and extract from. It’s not so different from having a mortgage: from their perspective, it’s leverage. A reason to apply pressure, squeeze more out of you, and at the same time remind you how lucky you are to have your "company family" and its "unique career opportunities").

and finally: those same 30% "invested in yourself" can, quite literally, be used to build up the capital needed to cover part - or all, depending on the type of business - of the costs of launching your own venture. That venture can very well grow out of some kind of pet project, which, by the way, also requires both time and money upfront (and time, as always, is money).

**Now, on to "gold for dummies".

In this framework, gold serves two functions - and those functions determine how it’s acquired and stored.

The first function is as a reserve of liquidity in scenarios where "everything is going really bad" - meaning the economy of a particular country is in ruins, the financial system barely works (or doesn’t work at all), the local currency is essentially worthless, and you still need to live, pay, and deal with problems.

At this point, many first-generation savers ask a reasonable question: why not just hold cash dollars (or euros)? It’s simpler, more familiar, more liquid - you can even put it in a bank deposit.

There are two reasons:

any fiat currency - including the dollar - has an issuing country behind it. And that issuing country is not immune to situations where its authorities decide to effectively default on holders of that currency (or at least on foreign holders), whether in digital or physical form, and/or to a relatively rapid inflationary crisis with similar consequences. If someone believes "that could never happen", I’m not going to argue — everyone is responsible for their own risk management.
gold has something else (this may sound surprising): a long-established, offline, international "parallel economy" that operates through its own channels and by its own rules. Under normal conditions, this system is mostly invisible to the average person (which is exactly how it’s supposed to be). But in critical situations, that existing - often informal - infrastructure can become extremely useful.

It follows that for this purpose, both bars and coins make sense - ideally in forms that are most liquid in the country where they’re stored.

That means, for example, official U.S. bullion coins like the American Gold Eagle, or widely recognized European coins such as the Austrian Philharmonic. Both are among the most liquid retail gold formats globally: easy to recognize, easy to verify, and easy to sell almost anywhere.

In addition, there are internationally accepted standards such as LBMA Good Delivery bars or DMCC Good Delivery bars - relevant if you’re holding assets in places like Dubai, or using it as an additional storage jurisdiction.

The second function of gold is liquidity for moments when "there’s blood in the streets" - to borrow the well-known Rothschild saying. Not a full collapse scenario where you’re digging up physical reserves from the first category, but a severe enough downturn where quality assets can be bought at half price.

The idea of "buy when there’s blood in the streets - even if it’s your own" is easy to quote and very hard to execute in practice. It only works if (a) you have something to invest, and (b) that “something” has not lost too much value - or hasn’t lost value at all during the crisis.

In this context, not only physical gold (coins and bars) can play a role, but also forms of “paper gold” - for example, shares in funds that hold physical bullion in specific bars, stored in specific vaults. That said, this requires careful judgment: you’re trading some degree of issuer risk (these things do fail from time to time) for greater liquidity.

How to allocate between these different forms of reserves is ultimately a matter of personal preference - both psychological and infrastructural.

It’s easy to see that having this kind of reserve turns an investor from a victim of crises into a beneficiary of them. These are the investors who calmly step in - and negotiate - for deeply discounted assets during periods of economic stress, pandemics, financial crises, or even war.

When an investor has capital (in many cases, gold), while everyone else is dealing with problems and debt, every crisis becomes an opportunity to move up - materially and socially.

It allows you to acquire, almost overnight, assets that under normal circumstances would require either years of extreme saving, or more likely - years of paying truly painful interest to banks.

Now, a few words on what, in my view, belongs in those 30% allocated to "financial instruments", beyond solid dividend-paying stocks - namely, real estate, "venture investments", and options.

Let’s start with real estate, in brief.

I draw a strict distinction between real estate as an investment and real estate for personal use. I won’t go into my views on mortgages or owner-occupied housing here - there’s little point, given how far they tend to diverge from conventional thinking.

As for investment real estate: all else equal, it has several significant advantages over bonds (despite the fact that many mainstream "experts" like to compare the two, since both are often treated as "fixed-income" or bond-like instruments):

Rental income (owning property without a solid rental yield is idiotic) can grow over time, keeping up with - or even outpacing inflation.
When a bond matures, the investor gets back money that has often lost a significant portion of its purchasing power (regardless of the currency). That’s a very different outcome compared to owning real assets - actual, physical space that may well have appreciated due to inflation and/or structural factors.
Even if rental income is fixed under a long-term lease, once that lease expires there is usually a chance for catch-up growth. Bond alternatives like floaters or inflation-linked instruments tend to be less reliable in this regard, since money-market rates can be artificially suppressed (see Turkey or Argentina), and official inflation figures in most countries are, more often than not, a polite fiction.

Because of all this, investment real estate can have a place in moderation - within a conservative portfolio.

As Warren Buffett once pointed out, real estate tends, sooner or later, to converge toward its "replacement value". And currency - fiat money - as many have observed, tends, sooner or later, to converge toward its true value: zero.

Criteria for good (i.e. discounted) investment real estate - mostly via REITs or similar structures in places like Hong Kong or Singapore, because when it comes to direct property ownership - as opposed to REITs or similar structures - deeply discounted opportunities are much rarer for most investors.

The "Barry Sternlicht criterion" - at least a 10% discount to book (or appraised) value of the underlying assets. The larger the discount, the better. If the discount is significant, the rental yield has to be very strong.
The rental yield should be at least comparable to - and preferably higher than - (a) the average yield of typical dividend-paying stocks in that market, and (b) the yield on AA-rated (or equivalent) bonds in the local currency.
The rental income stream should be as reliable as possible and/or have a substantial margin of safety. Typical examples include essential retail, luxury retail, fast food, port terminals, or toll roads connecting major metropolitan areas.
The management of the real estate fund should be of high quality (with quality defined along the same lines as for equities).

It’s easy to see why almost any real estate agent would hate these criteria - opportunities like this don’t come up very often. But it’s just as easy to see why: agents need to make sales consistently, month after month, and they tend to earn the most during bubble periods.

These criteria not only effectively exclude an investor from participating in bubbles (and in speculative trades around them), but also provide a substantial margin of safety - both in terms of the asset’s price and its income.

It might seem like situations like this only happen once in a century - but it isn’t. Even in a developed market like the U.S., we’ve seen this multiple times in recent years. It’s happening right now in China and parts of Europe, it’s also happening right now in and Dubai.

Now, briefly on venture investments, pre-IPO deals, and all that:

I genuinely don’t see the point of playing a guessing game about which startup will "take off" and dominate a market, a country, or the world over the next 10–20 years — especially since those are the kind of time horizons usually required to justify the valuations at which these assets are sold to investors.

When, with far greater probability, I can assume that over the same 10–20 years there will be a crisis somewhere that creates an opportunity to buy into businesses that are already proven - real, high-quality, cash-generating companies (or real estate) - at a 30–50% discount.

For a venture investment to work out, you either need to “find a greater fool” to sell to, or for the company to perform exceptionally well and more or less according to plan.

It’s generally safer to assume that things won’t go according to plan - that shit happens. And not just occasionally - it happens with predictable regularity.

Personally, I have no interest in digging through that particular dumpster of startups - especially when compared to what makes up the bulk of that 10% of my financial portfolio.

In a portfolio like this (very much in line with Taleb’s approach), the 10% high-risk component is primarily made up of derivatives - specifically, options.

A small allocation (and it doesn’t need to be large) can be used for hedging. In certain scenarios - especially during crises - those positions can generate significant, sometimes very large payouts, creating opportunities to buy high-quality assets at low prices and in meaningful size.

This is difficult to explain in abstract terms, but I’ll try to cover in one of the next articles.

Most option positions expire worthless - that’s normal, it’s how the strategy is designed (Taleb explains the same idea in his barbell approach). But the positions that do pay off generate highly asymmetric returns.

For that reason, it makes sense - in my view - to operate not just in your domestic market, but across multiple jurisdictions, wherever you can access liquid options markets.

In practice, I only take direct speculative positions in equities when there are no liquid options available on them. Even then, it can often make sense to structure the position in a way that resembles a simple capital-protected note - something I’ll also cover in one of the next articles.

Overall, when it comes to asset allocation and portfolio management, the overarching objective is to ensure that:

the portfolio is protected as much as possible from catastrophic capital losses

there is a steady - ideally growing - stream of income generated by financial assets (both conservative and speculative)

each crisis (treated as inevitable) and each obvious macro theme (COVID, oil shortages, monetary distortion, etc.) can be used as an opportunity to make step changes in personal and family wealth - ideally not just incremental gains, but order-of-magnitude increases

This is the framework within which my own process operates — the process you’re effectively watching unfold in real time through this project.

Now for the most interesting part - why dogs?

Let me explain, dear colleagues. In that little AI-generated image, there’s actually a deeper, somewhat humorous meaning.

The human brain - yours, mine, anyone’s - is not particularly good at distinguishing between image and reality, between a symbol and the thing itself, between play and actual life. That’s why we’re still drawn to movies, video games, rituals, mass events, sports - and, for the same reason, most advertising on the planet is fundamentally irrational. It doesn’t rely on logic, but instead operates through images and associations - bluntly, directly, and very effectively imprinting them into people’s minds and value systems.

Every person, regardless of intelligence or how rational they believe themselves to be, gradually accumulates a large number of imposed "shoulds" - ideas about how they’re supposed to think, feel, and act. These are shaped by the information environment, by interactions with others, and by constant direct and indirect influence from institutions, corporations, media, and various social systems.

Over time, these expectations become internalized. They start shaping emotional states, behavior, even long-term plans - often without the person fully realizing it.

You’ve probably seen it yourself: people who, over the past years, have spiraled into anxiety, burnout, or outright breakdown - not because of direct reality, but because of the constant pressure of information, expectations, and emotional contagion in their environment.

And here’s the point.

When your brain - even half-jokingly - imagines itself as a dog, something changes. A dog doesn’t overthink. It doesn’t scroll, compare, or spiral. It’s present. It reacts to what’s real, not to an endless stream of secondhand noise.

A dog is happy to see familiar faces. A dog enjoys simple things - food, movement, warmth, attention. A dog doesn’t carry the weight of abstract expectations about how life "should" look.

For a moment, that shift pulls you out of the pressure loop. The noise fades. The constant stream of other people's expectations and narratives loosens its grip.

And in that moment, something more fundamental comes back into focus: connection. Presence. A basic sense of being alive without constantly evaluating it.

In a strange way, this kind of mental "roleplay" acts as a reset - a small, quiet return to something more human. And maybe that’s the point: not to disconnect from the world entirely, but to step back from the noise and remember that beneath all the systems, signals, and pressures, we’re still just people - and that caring for ourselves and for each other matters more than any of it.

Take care of yourself. And take care of the people around you.

And yes - from time to time, it might be worth formally and unapologetically appointing yourself as a dog, and allowing yourself simple, grounded pleasures (again, food works surprisingly well).

You can even appoint someone you care about - someone who might need it - as a dog for a while.

Be a little more present. A little less reactive. It’ll be okay.