Nvidia’s drama over the past couple of days has been more riveting than earnings season. Rumors about whether one person would stay or leave sent the stock gapping in after-hours trading. That shows a big part of how the market values this company has nothing to do with computing power or orders—it’s about “this person still being here.”
Here’s one of the most expensive lessons in risk pricing: when an asset’s moat is reduced to one person, its valuation comes with a gap you can’t hedge away.
My own approach is pretty simple: for any investment that “wouldn’t work without a particular person,” I automatically cut the maximum position size by 30%. I don’t leave that 30% to faith—I leave it for the unexpected. The real question is: how much of your current portfolio is actually a bet on one person’s judgment?
Here’s one of the most expensive lessons in risk pricing: when an asset’s moat is reduced to one person, its valuation comes with a gap you can’t hedge away.
My own approach is pretty simple: for any investment that “wouldn’t work without a particular person,” I automatically cut the maximum position size by 30%. I don’t leave that 30% to faith—I leave it for the unexpected. The real question is: how much of your current portfolio is actually a bet on one person’s judgment?
