Private Trader - The Equation, The Mistake, The Cycle Shift

Educational only. This Market Log entry reflects the personal market views and interpretations of a private trader investing only their own capital. It is impersonal, does not consider your objectives, financial situation, or needs, and does not constitute financial advice, financial planning, portfolio management, or a recommendation or solicitation to buy or sell any security. All content is for educational and informational purposes only.

Date published: 2025-12-04

Alrighty, let’s dive right in.

The Defense

My entire portfolio right now is built around one core principle: defensive strength that doesn’t wobble under pressure. I’m holding roughly 15 stocks, all of which generate some form of dividend, and over the past weeks and months they’ve been doing exactly what they’re designed to do.

Minimal volatility, consistent income, and resilience through whatever noise the market decides to unleash.

But even the strongest defensive architecture has vulnerabilities; every build, no matter how disciplined, carries its weak points. The real danger isn’t the weakness itself, it’s making the wrong move at the wrong time, potentially jeopardizing the entire structure.

A recent example? The one I openly called out in my previous post: incorrect market timing on multiple ETFs I entered. I’m talking about a position dropping 10–15% within days or weeks. That’s not “volatility”; that’s simply wrong timing, plain and simple.

Wrong Timing – Now what?

The first question I ask myself is brutally simple: did I follow my equation/framework? Yes or no. In this particular ETF case? It’s a no.

The thesis wasn’t wrong, the research wasn’t wrong, and the equation wasn’t wrong (at least not yet).

However, my execution was wrong. ’Nuff said.

Owning this is non-negotiable. If I avoid it, I only shorten my lifespan in this entire game. The focal point isn’t destroying one’s psyche; it’s about giving myself tools to sharpen the next move. Accountability is the blueprint here.

From there, the question set becomes extremely clean and binary:

• Buy?
• Sell?
• Hold the line?

To Buy or Not to Buy

If I choose to buy (DCA), then I need clarity from two places: the equation, and the thesis.

One’s thesis can be flexible; one’s equation cannot (at least for most of the variables within it).

My original design was to allocate no more than 5% of my entire portfolio into these ETFs. I could push this to 6, 7, or even 8%, but only if it aligns with my mathematical framework. And if I do increase the weight, then I need clarity on when that increase happens.

An equation is built from variables, variables have weights, and weights shift over time; hence going back to my “equation validity”.

So when I’m wrong on timing, even if the thesis remains intact, the equation branches into new sub-equations: entry timing, thesis elasticity, conviction weighting, risk brackets — all of that must be processed before I touch anything.

I’ve proven to myself many times that following my equations provides me with the highest-probability path, but I still have leaks, cracks, and moments where I veer out of alignment. The goal is to make each of these deviations smaller over time.

To Sell or Not to Sell

If I choose to sell, I need just as much clarity: why am I selling? What broke? The entire equation or specific variables? Can there be realignment? Is the thesis still intact?

Only after I walk through these processes do I reach the stage where selling becomes an actual option — a final option. And the moment I do sell, I immediately switch to a different equation: one that focuses on recapturing lost ground with the highest-confidence move in the shortest realistic time frame. There’s no emotional shift here; it’s purely procedure.

In the case of these negatively skewed gold ETFs, yes, my timing was wrong. Yes, the position is down about 15%. But the thesis hasn’t changed. The equation hasn’t broken.

For now, these positions stay.

Upcoming Moves

In the next 1–3 weeks, I’m preparing to rotate out of several defensive positions and move roughly 20% of my entire portfolio into a pure cash state. I’ve shortlisted a set of equities I’m watching closely; once their triggers hit, I’ll rotate into them for the next cycle. It’s all about positioning.

Does the S&P still have more juice in the tank? We’re about to find out.

Every move in this game is a balance between discipline, timing, and the willingness to confront your own mistakes without ego. My defensive stance remains unchanged.

Prepare your defense and sharpen your focus; may you win every battle ahead. Till the next one, peace out.