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Sup folks, hope all's well and ya had a superb 2025! The new year is in, here we go:
In 2025, I closed the year at an approximately +24% RCE (Realized Capital Efficiency) that spanned through dozens of trades that were under strict, self-imposed constraints:
* No shorting
* No options
* No leverage
* No derivates
* No intraday trading
* No signal services
* No community consensus
Purely equities, ETFs, time and accountability. This matters because most performance you see online is achieved by removing certain constraints, not by operating within them.
**My Equations**
I follow equations, mathematical models, probabilities and the like, that were created from scratch since 2022 and enhanced, evolved, molded over time in order to improve their efficacy. Markets don't just fail gradually, they fail discretely. Your equations are bound to fail at some point; your thesis, framework and the mesh of variables within them simply stop working. Not that they're wrong, not that its invalid, yet it becomes "detached".
Logic will fail, ones conviction becomes noise and time dilates, it stretches; whether you agree to it or not, and the question is, what then? One could force realignment, yet that is a mistake and the correct response in such conditions is time expansion.
One stops solving here, and instead, adopts the hat of "observation"; you must wait for the market to reactivate causality, for the various variables to come back online sorta-speak and for the price to respond accordingly. Only then does one know if the equation is still alive and has a "pulse", only then can alignment be reassessed.
I've been in these conditions many times across hundreds of trades, and almost every single time, if one ignores it, it has proven to be ones kryptonite.
**So then, what am I actually looking for?**
I'm not hunting immediate realignment, of course, that would be most ideal, however that is not required. What really matters is "reactivation"; one questions, are the variables responding again? Is causality returning and in what manner? Is price, once again, explainable? And many more questions inbetween...
Only after such reactivation does one evaluate alignment; and such alignment is with the stock itself, not the other way around; as if alignment does not return, or is extended in duration, the damage is surely compounded the longer one insists on having it "their way". That hat, is not a hat worth adopting, detrimental it can be.
**Ones "Eureka" moments**
Since 2022, from my initial "Eureka" moment to where they've developed to where they are today, such moments over time have become increasingly rare, not by accident, yet by design. As each equations baseline improves, it creates an ever-so-more-aligned equation; fewer unknowns remain, ones insights becomes incremental rather than explosive (even though they still occur, albeit at a decreased-rate-per-year); most variables are accounted for, and this is one of choice.
The objective here is not just to discover for the sake of discovery, yet to constantly calibrate each and every equation in order to maintain a continuously tuned framework; in such conditions opportunities are acted upon only when alignment reaches its highest-probability state, less excitement yet significantly more precision.
**Activity vs Precision**
Dozens of trades does not mean constant action, most of 2025 was not spent trading, on the contrary, this year had lots of waiting and observation, an approach I adopted more over the years and one that has proven to be far more valuable as time progresses. I allowed equations to resolve, or fail, allowing their variables to go dormant without forcing a specific interpretation.
Such restraint is not inactivity, on the contrary, it is capital preservation at the process level; a critical and important understanding to ones overall perspective. And had I adopted it even more, I'd have performed even better; more lessons to be learned, more experiences to be dissected, studied and understood.
Since I do not use leverage, options or shorting, my results are generated in the open, where mistakes compound just as cleanly as wins; theres no convexity to hide behind, no lottery moment, no asymmetric bailout. Every single decision must survive time. This alone makes the equation(s) fundamentally different.
**The Unmentionable Cost**
This approach is not comfortable, it requires sitting in ambiguity longer than most can tolerate, being early and looking wrong, being right and doing nothing, letting opportunities pass without chasing, destroying ones own thesis repeatedly time and time again.
There's no dopamine loops here, no rapid feedback; only post-fact truths. And the "edge" is not prediction, rather, its equation integrity; knowing when the framework is within bounds of activation, knowing when it has detached, knowing when to act and more importantly, knowing when not to act.
I'd argue most fail not because they're wrong, yet because they refuse to admit the equation has gone quiet, if an equation was present from the get-go.
**2025 and its Alignment**
Having a +24% RCE for 2025 is without doubt a personal record, and one I never expected to get to, I've exceeded all my expectations without doubt, and this was done not with the mindset of trying to obtain upside capture, rather, it was done by striving to not break alignment.
I'm quite defensive by default, and will maintain such a mindset until causality has returned. It could be weeks, months, maybe even years; too early to know, yet time will tell. I'm willing to sit on cash, bonds, or low-volatility positions without apology, and that discipline has produced the +24%, not aggression.
**2026 and Looking Ahead**
I predict 2026 to be an extremely difficult year, for many many reasons; volatility will disguise risk, noise will masquerade as opportunity and speed will be mistaken for skill; my long-term objective remains unchanged:
* Minimum +15% RCE per year through 2030
* Compounding toward an eventual portfolio doubling by 2030
* Defensive posture as the default state unless otherwise indicated, even then, caution advised
* Aggression only when justified by the entire structure
If the S&P ends any year in the negative, my absolute minimum expectation shifts to capital preservation of +1%; anything less than this then I have failed, anything more is pure execution.
**How does this work?**
My thesis/hypothesis is never static; its constantly evolving, organic and designed to be broken, repeatedly. I dont marry my thesis, I always dissect them time and time again. I destroy them through elimination, because thats how blind spots surface, thats how question I dont yet know how to ask become visible. Theres so much I have yet to learn, and room must be allocated, variables must be installed with such focus.
What emerges from all this is not a single defined answer, rather a mesh, a web; one that guides decisions better than any conviction ever could; and such theses are built, stress-tested in live conditions, dismantled and rebuilt in public, errors are logged and digested, wins are contextualized and nothing is ever hidden. Durability is absolutely critical.
**Survival**
Markets only reward those who survive long enough to compound. 2025 was a year of compression, restraint and integrity, 2026 will be about survival. Thats the equation and the chase is not novel, rather must be refining signal fidelity time and time again.
The objective is not dramatic epiphanies, but constant optimization of equation(s) that generate opportunities when they are most advantageous; crystallizing clarity while working to eliminate guesswork. Such an evolution is a fundamental principle of how I operate; controlled risk, verified outcomes and no emotionally-driven decisions.
The difference isn't semantics, its survivorship logic embedded in every single decision; controlled risk is not the headline, its a rule that protects capital and enables every single +1% of my RCE.
2026 is going to be a test of alignment, aligning equations with dynamic market cycles, execution with risk thresholds, and outcomes with principles; this is how ones baseline evolves and how winning over time works.
Wishing you all a successful 2026 ahead; all the best and party forth, peace out!