The Psychology of Position Sizing
About this episode
The episode discusses managing emotional extremes in investing and provides a framework for effective position sizing.
Every investor lives with two competing internal voices: the hyper-optimist who wants to go all-in on an exciting growth story, and the hyper-skeptic who gets paralyzed by uncertainty or cut positions at the first sign of discomfort. Managing these emotional extremes isn't just about discipline—it requires a practical, repeatable framework to audit your portfolio without letting fear or greed make the call. In this episode, Stephen and Andrew break down how to take your emotional temperature, navigate the trap of portfolio indifference, and build systematic guardrails before market volatility makes the decision for you. What You Will Learn The "24-Hour Rule" for new ideas: Why forcing a mandatory cooling-off period stops shiny object syndrome from ruining your capital allocation. Fantasizing vs. Real-World Probability: How to spot the exact moment you start reverse-engineering excuses to sell proven winners for an unproven stock. The Danger of Portfolio Indifference: Why being completely emotionless can blind you to compounding multi-bagger potential (and make you cut winners too early). The "Coffee Can Portfolio" Paradox: How doing absolutely nothing frequently outperforms…
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