The Position Sizing Miniclass

Most investors size positions to maximise the upside on the calls they're most excited about — the bigger the conviction, the bigger the bet. In May 2022, LUNA fell 99.99% in days. Some portfolios were wiped out; others took a bruise. Same coin, same thesis, same week — the difference wasn't the coin, it was the sizing. This miniclass takes the opposite approach.

Instead of asking how much you can make, it asks whether a position can ruin you. It starts with the Kelly Criterion — the formula that tells you how much to bet given an edge — and why nobody serious bets full Kelly. Then it builds four safeguards on top of it: conviction (ranking your theses by quality, not treating every bet as equal), volatility (sizing by risk contribution, not dollars), liquidity (a position isn't a position if you can't exit), and a hard cap (the ceiling no single failure can breach).

It closes with a full worked example — taking a position from a $37,500 starting size down to $15,000 through the four filters — and the difference between arithmetic and geometric returns that explains why one oversized mistake can erase years of right decisions. Position sizing is not about maximising the calls you get right. It's about surviving the ones you get wrong.