Managing expected returns is really difficult. Chatting with friends, expressing the desire to make money, planning the future with my girlfriend—both affect expected returns. As a conservative investor: one, I have a heavy position; two, there’s profit but I don’t close the position.
Expectations for a better life affect position sizing.
Changes in expected returns affect my actions.
On the very first day that expectations changed, I noticed the problem—good news.
Baby, you’re right; let’s earn it back!