Investment Thesis

The portfolio page shows the what: the current split, the policy summary. This document is the why: the full written thesis behind every weight, tilt, and prohibition, so future-me can't quietly rewrite history.

Part I. Flight plan

What this capital is for, what it holds, and the rules that govern every decision below.

1. Mandate: one approach, every phase

Capital income above personal expenditure, held with margin, and the same portfolio before and after the threshold.

Escape velocity is the whole mandate: the threshold where capital income exceeds personal expenditure and the household's freedom stops depending on anyone's payroll. That is the measurement. Not an index, not a peer, not a story for dinner. This document governs every phase: accumulating, crossing, living off it. The approach barely changes, because the arithmetic does not: a portfolio must outrun inflation for thirty or forty years whether you are contributing to it or drawing from it. One thing changes once you draw: an early crash hurts more than a late one, which is what sections 14 and 15 are for. There is no glide path here, no retirement-day switch into safety. Two success conditions, equally weighted: over the decades, capital appreciates despite withdrawals, and I sleep soundly through turbulence. A portfolio that wins on paper and costs me my nights has failed the mandate.

2. Principles

Survive first, take beta where pricing is efficient, automate everything, never be a forced seller.

Survive first, compound second: ruin is the only unrecoverable loss, volatility merely the toll charged for equity returns. Take beta where pricing is efficient. In crowded public markets I am the dumb money, so I buy the whole market at minimum cost, and take bets only where pricing is not. Costs compound exactly like returns, only against me; every basis point of fee, spread and churn is a permanent leak in the hull. Automate every decision that can be automated: the fewer choices I make, the fewer I can get wrong. Never be a forced seller. And keep it simple: anything I cannot explain to my household in five minutes does not enter the portfolio.

3. Stay fully invested. Stocks by preference, bonds by choice.

Equities and bitcoin carry the plan; gold is optional. No bonds beyond a two-year buffer. A fifth is the hard ceiling for anyone who wants calmer payouts.

Fully invested, always, in retirement too. My own preference is all equity, with bitcoin beside it. Over a multi-decade horizon the classic 70/30 leaves a great deal of performance on the road to buy a smoother line on a chart; it fights the match with one arm tied behind its back. Bonds earn a place for one reason only: they are a low-correlation asset, and they soften the cuts when a crash forces spending down. I hold the buffer of section 14 and nothing beyond it: two years of spending in cash and short bonds. A household that wants calmer payouts can go to a fifth of the portfolio in bonds, and pays for it in lifetime income and a smaller estate. A fifth, never more: past that, too much return stays on the table. And nothing else: no private equity, no illiquid alternatives, no infrastructure, no REITs, no commodity baskets. Equity index funds, bitcoin and, by choice, gold and bonds. I do not believe a household needs anything else, and every additional product buys complexity, fees and a story rather than return.

4. What I refuse to do

No timing the engine, no leverage, no consumer debt, no borrowed conviction, no products I cannot explain.

No timing of the core. Valuation is not a trading signal here: CAPE, yield curves and strategists' targets speak to probable long-run returns, never to next year, and time and again the cost of sitting out has exceeded the cost of sitting through. Contributions and withdrawals stay mechanical. One carve-out, stated plainly: in the bet sleeve, the chart may pick the day of a sale already decided. It never decides whether to hold. Beyond that: no leverage but a mortgage on the home (if you must, a third on top at most, fixed and uncallable; I don't), no consumer debt, no products whose fees or mechanics I cannot explain in five minutes, and no borrowed conviction: a tip is someone else's incentive wearing a friendly face.

Part II. Propulsion

Where the capital actually sits, and why.

5. Sleeve I. Global equities: the engine

Own humanity's means of production: broad, all-world, market-cap weighted, low cost, forever.

Broadly diversified, all regions, all capitalisations, market-cap weighted, low-cost accumulating index funds. This is ownership of humanity's means of production, the innovative ingenuity of our species, purchasable for a handful of basis points a year. Market-cap weighting is self-cleansing: winners grow their share, losers shrink out of it, no forecast required. Mostly all world: no sector bets, no home bias, no stock picking. A few tilts backed by research sit on top: smaller companies, value, and less of the US than the index now holds, because the US has grown so large and so expensive. The engine is boring by design, and boredom is what compounding feels like from the inside. This sleeve carries the plan: delete every other page and it still works, only slower.

6. Sleeve II. Asymmetric bets: the option

Buy adoption risk, not invention risk: new categories repricing the world, entered small.

Every few years a genuine breakthrough arrives and the world reprices around it. Four gates, all mandatory: adoption risk rather than invention risk: the technology already works, the open question is uptake; category redefinition rather than improvement; pricing not yet efficient; bounded downside against unbounded upside. The venture stage offers the wildest asymmetry and the worst odds: most ventures fail, a handful pay for all the rest, and the best entries are closed to retail anyway. After listing the asymmetry shrinks, yet outperformance is still on the table, because diffusion takes years. Amazon sold books for a decade before the world understood it. Apple was ancient when the iPhone landed. Nvidia made graphics cards until AI repriced the entire company. For every Amazon there was a Pets.com, and many more nobody remembers: I name the winners because they survived, which is exactly why every bet enters small. I bought bitcoin in 2016, seven years after release, and the upside was still enormous. Ideally you hold several such bets. They are hard to find and harder to recognise early. The hunting grounds now: space, biomedicine, health science, AI.

7. How a bet is ridden

Enter small, scale in as the thesis proves out, never trim a winner for rising, always trim one for growing too big.

The position sizing is a sequence, not a number. Start small, small enough that a zero changes my mood and nothing else. Then scale in as evidence accumulates that the thesis is correct, not as the price rises: new adopters, real revenue, the category forming. Wrong thesis, no more money. Right thesis, keep feeding it. And then the hard part: do not trim for gain. Bitcoin entered my portfolio as a small position and grew into a large share of total wealth. That is the mechanism working. Selling a winner to restore a neat pie chart is diversification misunderstood. But a winner can grow too big to survive its own crash, and there the rule turns: never trim a winner for being up; trim it for being too big. So set a cap on how much of your wealth any one bet may become, and write it down before the bull market, because in the bull market you will not choose one. The number is yours: your age, your income, your nerves, how soon you draw. I will not give you mine, and nobody should hand you theirs. Take some profits only after a genuine multi-bagger, ten times or more, and even then only some. Do not step off the rocket while it is still ascending. Get off when it stops being a rocket, which is a judgement about the thesis, not about the price.

8. Bitcoin in practice: ten years, no timing

Held through every crash without selling; the cycle tells me when to act, never whether to.

Bitcoin has been the expression of the screen: money the state cannot conjure, adopted node by node. Bought in 2016 and held ever since, through eighty percent drawdowns, through every obituary, through a decade of being the wrong-way driver. Not one attempt to trade it. That is the entire reason it worked. Two patterns have held through every cycle I have watched: the four-year rhythm and the 200-day moving average. Nothing else I tried helped. They time the execution of a decision, never the decision itself. Accumulate around fifty percent below the high; act into strength, not into panic. No guarantees attach to any of it. It has simply worked until now.

9. When a bet matures: the deliberate reduction

Sell when the thesis is spent, not when the price is high: asymmetry gone, concentration too large, threshold to fund.

Every asymmetric bet either fails or graduates. Graduation is the harder case, because nothing tells you to act. My rule: reduce when the case for holding has changed, and for three reasons only. First, the asymmetry is gone: bitcoin is mainstream-ish now, and I expect returns in line with technology equities rather than the unreal upside that justified the risk. A bet that has become a normal asset should be held in normal size. Second, concentration: it exceeds half my wealth in a bear market and could reach two-thirds in a bull. That is directional risk of a magnitude no thesis justifies, however sound. Third, purpose: funding early retirement, diversifying into the engine, buying the home. Never "it went up a lot." That is not a reason; that is a feeling. So it comes down, but not yet. The portfolio is still in its growth phase and the bet on new technology still has room to run. The trim comes at the next cycle top, in tranches, each sale planned around capital gains tax and where I am resident at the time, and the proceeds go to the engine.

10. Custody

Self-custody is the gold standard; regulated custodians are the honest alternative for those who want no keys.

Self-custody is the gold standard: sovereignty, portability across borders, privacy, no custodian between you and the coin, at the price of keys, backups, and inheritance planning nobody else will do for you. Since institutionalisation the menu has widened: in well-regulated markets, spot ETFs and large custodians are a legitimate route, held like any other security, though what you own is a claim on the fund, not the coin itself. For many people the honest trade is worth taking, because a custodied position you actually hold beats a self-custodied one you were too intimidated to start. Neither choice is free; each swaps one risk for another. Choose deliberately, then write down which risk you accepted, so that the next crisis finds a decision on the page rather than a panic in the moment.

11. Sleeve III. Gold: the optional ballast

The oldest money the state cannot print. Bitcoin fills this role for me; the metal is for those who want the proven version.

Gold earns nothing, produces nothing and compounds not at all, which is precisely the point. It is not there to grow; it is there because it has settled debts for five thousand years across every regime that ever believed its paper was eternal. Bitcoin is the asymmetric expression of the same idea, gold the proven one, and in my portfolio bitcoin carries the whole role: holding both would be doubling up on the same bet. Some prefer the metal, and that is a fair choice. Held physically, it has no counterparty and no chief executive, only a storage bill. Held small and left entirely alone: no trading, no cycle rules, no clever overlay. Either way, this is the answer to the scenario the equity engine cannot cover: not a bear market, but a monetary regime losing its credibility.

12. Property: deliberately not a sleeve

A home to live in, not a vehicle to compound in, unless you are genuinely creating value.

Property is not in this portfolio and that is a considered position. The market is crowded, governments tax it at every turn, and maintenance is chronically underestimated by the people quoting yields. The returns most landlords advertise are labour and leverage wearing the costume of passive income. One honest exception: creating value rather than renting it: building in emerging areas, renovating to a materially higher level, flipping a genuine dislocation. That is a business, with a business's hours, not a sleeve. So: primary residence only, bought to live in and enjoy. The mortgage follows the Manifesto: fixed rate, affordable in a bad year. Enjoyment is the return. Nothing more is asked of it.

13. Sleeve zero: health and time

The body and the hours are the first capital; no allocation applies, the budget is daily.

Named here for completeness and governed in the Manifesto: health and time are the first capital, the precondition for every sleeve above. Sleep, food, training, run on the same automatisms as saving. No percentage applies and no rebalancing helps. This sleeve is funded daily, in hours, and it is the only one where a missed contribution can never be made up. It also pays the best terms in the book: bounded downside, unreal upside, and the compounding shows in the mirror long before it shows in the accounts.

Part III. Flight rules

How the thing is flown day to day, in calm and in storm.

14. The buffer and the drawdown protocol

Two years of spending in money markets and short bonds, and no more: a trade between sitting out a bear market and leaving upside on the table.

The buffer holds two years of expenditure in money market funds and short-dated government bonds, and no more. It is built in the run-up to the threshold; while wages pay the bills, the engine takes everything. A bigger buffer softens a long bear market and costs upside in every other year; two years is where I strike that trade. Its job is not return, and some years it will lag inflation. Its job is to keep the engine unsold at the bottom: the bear market is paid from cash while the equities recover. In normal times the buffer stays full and the payout comes from the engine. Drawdown protocol, written in calm water: when the market is in a real bear, a fall of a fifth or more from its high, the payout switches to the buffer and the engine is left alone. The buffer drains while the bear is waited out, and it is refilled from the engine at the annual review once the pot is back inside the band of section 15 or above it. Should the buffer run dry while the pot is still below the band, the floor is paid by selling the engine. That takes years of bad markets in a row, and it is written here so it surprises no one. Selling equities in a fall requires a written case, a week of delay and a second reading of this document. The middle of a crash is no place to discover your risk tolerance.

15. Withdrawals: flexible, with guard rails

Three percent as the anchor, a band from two and a half to four, and a floor at ninety percent of the usual payout. One check a year against the real value of the pot, and the floor is never breached.

The withdrawal rate moves inside a band. The anchor is three percent of capital, the usual payout. The band runs from two and a half to four percent of the portfolio. Once a year, at the annual review, this year's spending is set against the current real value of the pot, and one of three things happens. Inside the band, nothing: spending rises with inflation and that is all. If the pot has grown so far that spending has fallen below two and a half percent of it, spending is raised to two and a half percent. If the pot has fallen so far that spending is above four percent of it, spending is cut to four percent, but never below the floor: ninety percent of the usual payout, the minimum the household can live on. When the rules pull against each other, they rank in this order: the floor is paid first; in a bear market the payout comes from the buffer, not the engine; only when the buffer is empty is the engine sold to pay the floor. Rigid withdrawals sell the most shares at the worst prices; naive flexibility slashes your standard of living the moment markets sneeze. The band avoids both. Nobody knows what next year brings. What the portfolio holds is humanity's habit of prospering, developing and pushing on: long term up, short and medium term a rocky road. The rails protect the principal on the rough stretches and let spending rise when the cushion is bigger. The success test: capital still appreciates despite the withdrawals, and a bad quarter never once dictates how we live.

16. Currency, jurisdiction and structure

Compound in strong currencies, spend in weak ones, and pay real professionals to arrange the wrapper.

Earn and compound where currencies are strong, taxation is efficient and productivity is high. Live and spend where costs are low. That gap is no investment return, yet it stretches the money further than most returns ever will. It needs no forecast, only the willingness to move and an eye on the exchange rate: each unit buys far more than it would at home, and even personal services become affordable where labour is cheaper. Base currency follows tax residency and actual spending, never sentiment. I measure net worth in several currencies at once, because a single-currency figure flatters or frightens depending on the reference point alone. Hedging deserves genuine consideration; alignment with where the bills land is the test. Use tax wrappers wherever they exist. Consider trusts and corporate vehicles for holding and passing on wealth. And pay properly for legal counsel, tax advice and accounting. It is among the highest-return money this plan spends.

17. The threshold and the annual review

Once a year, one measurement, capital income against expenditure; between reviews, tripwires only.

Once a year, one measurement: capital income against personal expenditure, in the currency I actually spend. Capital income here means what the portfolio can pay out under the rails of section 15, three percent of its real value, not the dividends it happens to distribute: accumulating funds distribute nothing, and the payout comes from selling. Escape velocity is declared only when capital income exceeds expenditure with a margin wide enough to absorb a bad decade. Rebalancing happens at the same sitting, at the band edges only, and never for its own sake. Cutting the winners early to buy more of the laggards is a poor trade: momentum is one of the best documented effects in markets, and what has run well tends to keep running for a while. So the portfolio may stay skewed while part of it outperforms; the cap on any single bet is what keeps a skew from becoming a single point of failure. Between reviews there is one check, at most every six months, and only for tripwires: a bet grown past its cap, a custody failure, a move of country, a change in what the household needs. Look more often and the noise starts making the decisions. Everything else is left alone for another year. If a genuine wipeout comes (the kind that takes the system with it) no allocation would have saved the portfolio; what survives is skills, health, automatisms and household. Rebuild from there. It was built from there the first time.

Open numbers, deliberately private: exact target weights behind the rounded split on the portfolio page, the gold and bitcoin targets, the cap on any single bet, buffer months at the margin, and the multiple required to declare escape. Personal calibration, not principle. They belong in the annual review, not on the internet.