Author: Agarwood Capital

AgarWood Capital is a firm built on fundamental research that invests in value-growth equity securities. Our focus is research-driven with practical insights influenced by psychology, marketing, and technology disruption.

Lessons from Legendary Investors Amid Market Uncertainty

We stand at a unique economic juncture. For years, conflicting signals often muddied the waters, creating a confusing landscape: strong employment masked weak demand, loose credit existed despite slowing growth, and dovish policy battled rising inflation. These contradictions weren’t just noise; they acted as buffers, often delaying inevitable corrections.

Today, that buffer seems gone. The major risk indicators I track encompass a wide range. They include leading indicators like yield curve inversions and manufacturing PMIs. They also cover credit market stress. Even lagging indicators like employment are now showing cracks. All these indicators are finally pointing in the same direction. This synchronized alignment is what truly concerns me, and it prompts questions I often hear: “Are you ever optimistic? Has it just been doom and gloom for 15 years? Do you even invest, and have you beaten the S&P?”

These are fair questions, especially given my recent cautious tone. My current stance isn’t about predicting doomsday; it’s about recognizing a rare confluence of macroeconomic risks demanding a different approach. And no, I haven’t always been bearish.

(Note: A detailed breakdown of those specific economic signals is in my related Thread post — this blog focuses on the ‘why’ behind my perspective.)

My Investment Pivot: From 2009 Bull to 2021 Pause
For the vast majority of my investment journey, particularly from the market ashes of 2009 through late 2021, I was aggressively bullish. I actively rode one of the most powerful bull markets in modern history. I rotated through sectors and captured significant gains in growth stocks. Yes, I cumulatively beat the S&P 500 benchmark over that extended period. While not every single year was an outperformer, the long-term strategy delivered.

My decision to significantly reduce exposure in December 2021 was driven by two factors. The first was the practical need for liquidity as I was starting a new business venture. The second was a growing unease with stretched market valuations. While timing often involves luck, this move significantly shielded me from the worst of the 2022 drawdown.

The pandemic era became a turning point in my analysis. It prompted a deeper dive into macroeconomics – exploring the mechanics of debt cycles, the true power (and limitations) of monetary policy, and the complex dynamics of inflation. Watching the unprecedented global response, the massive fiscal injections, and the subsequent inflationary pressures made theoretical concepts starkly real.

I began to appreciate the inherent fragility within the economic system when pushed to extremes. Figures like Ray Dalio, whose warnings about debt spirals once seemed abstract, suddenly felt prescient. It also highlighted how quickly conventional wisdom can be overturned. I saw Michael Burry struggle with his 2023 short attempt, then pivot to undervalued Chinese equities like $BABA (which I also briefly traded in the $80s). This reinforced a key lesson: valuation isn’t everything. Overlooked geopolitical and policy risks can dominate fundamentals. This evolving global picture ultimately led me to exit even long-term holdings I previously favored.

• Mid 2022 Onward: Tactical Precision Over Board Optimism: Re-entering the market mid-2022 wasn’t a return to broad bullishness. It was about targeted, tactical trades where risk/reward seemed skewed in my favor. This involved:

• Selective Shorts: Targeting names showing technical breakdowns and appearing fundamentally overextended, like $TSLA, $BYND, and $SFIX.

• Contrarian Longs: Building a significant position in $META. Despite the negative sentiment, its core business strength compared to its valuation seemed deeply misunderstood. I held through the painful drawdown into late 2022/early 2023, even adding significantly to my position. I began scaling out of $META as it recovered strongly through Dec 2024. I eventually exited most of the position around the $600 level in late 2024 or early 2025. The highly speculative assets surge again despite clear signals the Fed wasn’t easing, suggesting market froth was outweighing fundamentals.

• Conviction Play: My focus shifted to $CELH, a company I’d followed since 2018 (initially alongside $REED). I saw $CELH as having tremendous potential over the next 5-10 years. I built a position through 2023 and exited entirely after a significant run-up concluded around February 2025. That marked the end of my last major long equity position.

Macro Warnings and the Challenge of Timing from Others
Many smart investors like Druckenmiller, Burry, and Dalio started sounding alarms years ago. They identified significant structural risks that were, and still are, valid concerns. However, their experiences highlight the brutal challenge of timing the market, even when your thesis is fundamentally sound.

Let’s look at their calls:

Stanley Druckenmiller’s Warnings:
In 2022, Druckenmiller warned of a potential “lost decade” for equities, predicting that U.S. stocks could deliver flat or minimal returns over the next 10 years. He attributed this outlook to several macroeconomic shifts, including:

• Persistent inflation
• Rising interest rates
• Deglobalization
• The end of easy monetary policy

“We’ve had a tsunami of money since 2009. All of that is going away.”
— Druckenmiller, Delivering Alpha 2022

Druckenmiller argued the bull run was built on unsustainable tailwinds — and those are now reversing. He emphasized that the favorable conditions supporting the previous bull market were reversing. These conditions, such as low interest rates and globalization, led to a more challenging investment environment. By 2023, his concern deepened. Speaking at the Sohn Conference, he called U.S. fiscal policy a “horror movie” and warned:

“If current trends continue, we could see a fiscal crisis by 2030.”

• Debt interest could soon exceed defense spending
• No political will to address structural deficits
• Rising risk of a bond market event

Additionally, he cautioned that the Federal Reserve might have declared victory over inflation prematurely. He was concerned that cutting interest rates during a strong economy could cause inflation to resurge. This situation draws parallels to the economic patterns of the 1970s.

Michael Burry $1.6 Billion Short Attempt:

Michael Burry—the legendary investor behind “The Big Short” made headlines again in 2023. But this time, it wasn’t for calling a housing crash. It was for betting big against the broader U.S. stock market. In mid-2023, Burry’s hedge fund, Scion Asset Management, disclosed large short positions. These were through put options on two major index ETFs:

• SPDR S&P 500 ETF (SPY)
• Invesco QQQ Trust (QQQ)

The combined notional value of these positions totaled $1.6 billion. While headlines focused on the size, it’s important to clarify: that figure represents the exposure. It is not the actual capital at risk. The premiums paid on options are much lower. Still, it was a bold and aggressive stance.

Why Burry Went Bearish:
Burry laid out his macro concerns clearly across interviews and social media:

Inflation would return: In early 2023, he wrote, “Inflation peaked. But it is not the last peak of this cycle… and the US in recession by any definition.”

• Recession Risk: He believed the U.S. economy was entering a slowdown masked by lagging data.

• Overstretched Valuations: Burry saw the tech rally—particularly in the Nasdaq-100 as reminiscent of previous market bubbles.

• Passive Investing Bubble: He’s been warning since 2019 that passive index flows distort market signals and create dangerous concentration in large-cap names.

To Burry, all of this added up to one conclusion: stocks were headed for a fall.

What Happened Next:
Unfortunately for Burry, markets had other plans. By the third quarter of 2023, both the S&P 500 and Nasdaq-100 had rallied sharply. The AI boom and renewed bullish sentiment powered tech stocks, undermining Burry’s thesis—at least in the short term. According to reports, Scion closed the short positions, and some analysts estimate the fund took a loss of around 40% on the trade.

The Semiconductor Shift:
After closing his broader market shorts, Burry didn’t sit still. He turned his bearish sights on another sector: semiconductors. Through new put options on the iShares Semiconductor ETF ($SOXX), Burry bet against a sector riding high on AI optimism. Yet again, the timing was rough—Nvidia and other chipmakers continued to surge, fueled by strong demand and investor enthusiasm.

Ray Dalio’s Structural Warnings:

Ray Dalio offers a similar lesson in macro-based caution. He’s been sounding alarms about market fragility for years, pointing to prolonged ultra-low interest rates and historical levels of quantitative easing. Like Burry and Druckenmiller, Dalio saw the structural risks inherent in the system. But unlike Burry, he didn’t place massive short bets trying to time a collapse. Still, his belief in powerful macro headwinds was strong. This conviction influenced Bridgewater’s positioning and led to underperformance at a time when markets were fueled more by liquidity and policy than traditional logic.

The Takeaway: Timing vs. Thesis
In theory, these elite macro investors were fundamentally right about many of the underlying risks: valuations were stretched, debt levels were unsustainable, productivity was slowing.

But timing matters immensely.

The primary reason their “doomsday” scenarios were early was due to unprecedented policy responses. In 2018, the Fed tried to hike and normalize policy, but the market panicked, and Powell backed off in 2019. Then COVID hit, and the U.S. injected $5 trillion in stimulus, rates were cut to zero, and the Fed ran historic QE. It wasn’t just stimulus; it was a liquidity shockwave. Every asset surged: crypto, meme stocks, tech, housing. Years of growth were pulled forward. The crash wasn’t canceled; it was delayed, kicked down the road by artificial means.

This is why Burry’s concerns in 2023, while valid, weren’t what the market was pricing in. Markets don’t move on fundamentals alone. They move on liquidity, positioning, and narrative momentum. In 2023, those forces drowned out macro caution, and Burry’s thesis got buried in the noise. His short became a textbook example of one of investing’s most brutal lessons: being early can still mean being wrong, even if you’re fundamentally right. Consider Warren Buffett in 1999, who warned about dot-coms being untethered from reality, yet the Nasdaq rallied another 80% before crashing. Buffett sat in cash; Burry tried to time the top.

Ironically, I think Burry is making another major misstep now by going long on China in this environment. He seems to believe China will be insulated from global risk, but I see it differently: U.S. market risk is global risk, and no major economy is truly shielded from it.

Why It’s Different Now — And Much Closer

Today, we’re out of tools.

• The Fed can’t cut aggressively without reaccelerating inflation.
• It can’t hike without triggering a credit event.
• It’s boxed in.

The biggest underpriced risk is Debt servicing.

• Interest on U.S. debt is expected to exceed $1.7T/year soon — more than Medicare or defense.
• By 2026, it will eat up ~15% of the federal budget.

Congress has no easy fix:
• Default? Global depression.
• Raise taxes? Kills demand.
• Print? Destroys the currency.
• Yield curve suppression? That’s hoping for a soft landing in a storm.

This isn’t politics — it’s pure math. And it’s catching up fast.

Another overlooked warning sign is the banking sector

You’ll hear, “Banks are cheap—strong earnings, high liquidity, solid metrics.” And sure, on paper, that’s all true. But cheap valuations don’t happen by accident. They’re a signal.

Banks are being discounted for a reason:
• Hidden credit risk in commercial and consumer debt
• Unrealized losses from long-duration assets still on the books
• Off-balance-sheet derivative exposure
• Liquidity risks if higher-for-longer rates start to break something

Banks may look stable. However, they sit at the center of a fragile financial system. This system is more exposed than most people realize. If anything cracks, banks are the first domino and usually the last to fully recover.

The market isn’t ignoring banks. It’s avoiding them.

Investors prefer to chase the MAG7 and growth stories. They don’t do this because they’re cheap. They are the only things still producing returns in a distorted, risk-heavy environment.

Where I’m Positioned Now

I’m cautious and I hold:

• Cash (providing optionality)
• Gold (traditional hedge)
• Engaging in selective short term equity trades (income)

I’m not chasing AI or crypto. I am taking profits and understanding it’s important to underperform during this market. I hedge when appropriate. I’m not permanently out, I’m waiting for better odds.

Final Thoughts: Long-Term Bull, Short-Term Realist

I’ve been long the U.S. market far longer than I’ve been cautious. I still believe in American innovation, but belief doesn’t override math. Today’s market is pushing up against macro limits: rising debt costs, policy exhaustion, and cyclical pressures. Ignoring these signals isn’t optimism—it’s willful blindness to what’s coming.

Will this market grind higher? Absolutely. Liquidity and narrative can defy logic for extended periods. My experience navigating the COVID crash taught me that timing involves both analysis and luck. During the crash, I stayed invested anticipating government backstops. I pivoted bearish in late 2021. I also tactically traded the subsequent swings, including the AI wave via $PLTR, which I exited near the end of Feb 2025. It also taught me the importance of knowing when not to press your bets.

Timing isn’t always skill. Sometimes, it’s knowing when to stop pressing.

Final Thoughts: The Patience Afforded by a Profitable Cycle

Am I early in my caution? Maybe. But my perspective is shaped by how the last few years unfolded. Exiting near the 2021 peak locked in substantial gains from a historic bull run. I re-entered near the lows of 2022 and early 2023. This allowed me to capitalize on the unexpected strength of the AI-driven rally. That “double dip”, catching gains on both ends of the cycle—gives me a different vantage point. It also reinforces the one habit most investors never master: patience.

This isn’t new territory for me. After stepping out in late 2021, I waited six months before re-entering. I dollar-cost averaged on the way down, then got lucky when AI momentum kicked in earlier than expected. But that rally taught me something else, don’t overstay when risk and reward disconnect. I’m willing to step back again, for another year, and let the market recalibrate.

Once you’ve harvested meaningful profits, the need to squeeze every last point of upside fades. The priority shifts to protecting capital—especially when macro risks are no longer scattered but aligned. This isn’t about predicting a crash tomorrow. It’s about understanding the current risk/reward setup. It simply doesn’t warrant full exposure. This is particularly true for someone who’s already been through the full cycle.

That said, I’m not permanently sidelined. If job losses pile up, and the Fed faces political pressure to cut, the equation changes. This holds true even with inflation still elevated. I’d redeploy capital as real yields compress and policy shifts again. But any rally sparked by emergency cuts wouldn’t erase the deeper structural problems, it would just delay them.

That’s why I’m looking at long-dated puts. Not as a gamble, but as a defined-risk hedge in a market that refuses to price in fiscal reality.

I know a lot of retail investors are still recovering from the FOMO-driven missteps of 2021. Many bought into hype and DCA’d into broken narratives. Now that they’re finally back to breakeven or modest gains—they’re impatient, even defensive. Some get personal when I challenge the market’s sustainability.

Ironically, I was the one warning about the bubble in 2021. And now? We’re right back to those extremes. So no—I’m not re-entering at these levels. I’ll wait until we get closer to 4,000 on the S&P. I will also wait until government policy creates a new asymmetric setup. I can then lean into this setup. Successful investing isn’t about staying aggressive at all times. It’s about knowing when prudence trumps action.

I’ve done this before—exiting high, re-entering low, and walking away again when risks overwhelmed rewards. That discipline paid off. And once you’ve seen the power of patience, you’re never in a rush again.

Maximizing Your Investment Returns: How to Avoid Hidden Costs and Boost Your Portfolio’s Performance

The stock market has been sluggish in recent weeks: the indexes are close to the lows of 2017 and 2018. The frightening news cycle and frenzied financial professionals believe that the stock market may fall even lower. Recent data and business closures demonstrate that a greater recession is possible. I believe that this recession, or the fear of such a recession, is positive for the U.S. economy. Let us not forget that we have already seen signs of life, in every economic recovery, to be greatly disappointed. No matter where the short-term equity market goes, the long-term strategy will always be effective. Two years from now, the stock market may still decline by 30%, but 20 years from now, the market will historically yield at least 10%.

As you probably know, research shows that professional investors have difficulty outperforming the market with stock selection. But as with any statistical data, be cautious about academic topics that have selected bias. Most of these data refer to professional investors as any person who can open a fund. Many well-connected or trust fund babies like Chelsea Clinton’s husband (Marc Mezvinsky) always underperform the market. Pension and endowment funds received 80 cents for every $1 invested by Marc Mezvinsky. Most of these professionals are rich enough to use their capital or well enough connected to collect money from close networks. These affluent and connected professional groups rarely perform the required investment due diligence. Buffet famously said, “Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”

Related image
Losing out on other opportunities

In this regard, there are many hidden costs to stock-picking. For example, in 2017 more retail investors bought REIT stocks because it was an outperforming the index average. The Real Estate Investment Trusts (REITs) were the best performing industry from 2010 to 2017,the entire industry quickly turned into one of the worst investment opportunities during and after the crash. Malls were a major industry to buy between the 1970s and late 1990s; most developers focus their efforts to build out malls that are quickly becoming empty shells and debt load. If you didn’t know much of this real estate information before reading this post, then you are one of these stock pickers that are at risk of losing money.

Nevertheless, too many people consider themselves a stock-picking genius. The majority of people will be smart enough to invest, but being smart does not offset a higher return. Being a business-orientated or entrepreneurial individual doesn’t make you more qualified as an investor either. Being an investor is a profession, such as being a firefighter. If your house is on fire, the least qualified person to save your house from fire – it’s you.
Anyone can learn about fire safety, but that doesn’t mean they have the knowledge to use that information to save themselves from a fire.

Many people are unwilling to apply due diligence to investments. Anybody can outperform for a few years in a bullish time. The common characteristics of retail stock pickers are individuals who lack financial skills, often have short-term benefits in their portfolio, and lack of long-term stocks.

The Hidden Costs of Trading – FIX Flyer
The Investment Hidden Fees

What are the other hidden fees of stock picking? I called it the T&T problems Time & Taxes

  1. The first cost is Time. If you have little knowledge and try to spend time learning, then you are racing against the clock against someone that is simply more knowledgeable and prepared. Novice investors spend time choosing stocks and never learn more about their investment through due diligence. Studying makes you informative, but it’s a long process before you get really knowledgeable to execute an investment. Knowledge originates primarily from information and experience.
    Everyone on the internet is informed about politics, but not everyone is knowledgeable. If TV ran the news on Biology and Chemistry 24/7, like political news, we would all feel like we can discuss science topics like we are all Ph.D. Scientists. I have another blog which is going to talk about the difference of being informed and knowledgeable. If you continue to choose stocks without being fully informed, you will underperform the market by 5% or more per year (50% in potential missed earnings over 10 years)
  2. The second cost is Tax, if you’re trading in a taxable account. The gap between short- and long-term capital gains is significant. When trading shares, it may be tempting to exit positions, particularly well after just a few months. Trading often leads to greater tax costs and I avoid it. Capital tax gain taxes are 0 to 20% vs income taxes that can be about 25% to 40%. Consider the amount of money you will leave on the table if you pay income tax on your investment performance. My investment strategy is to target long term positions over short term capital gains. Most people are thrilled to receive short-term profit (but they don’t realize that they pay income taxes on it).
Image result for hidden fees investment
Time & Taxes

Taxes and time can seriously erode performance, particularly for high-frequency stock traders in higher tax brackets. Most economic research studies show these and other mistakes made by the ordinary investor can reduce returns by 4% or more a year relative to a stock index (which hasn’t included the short-term tax fees).

A Difficult Decision: 5 Scenarios Where Your Career May Need to Come First

As an ambitious professional, you may feel pressure to choose between your career and your relationship. You may be asked to give up your career, change locations, or postpone your career goals in order to be in a relationship. But is it possible to have both a fulfilling career and a healthy relationship?

Making this decision can be difficult, but it is important to remember that you are in control of your own life and your own choices. It may be helpful to take some time to reflect on your values and priorities. What is most important to you in the long term? What do you want your life to look like in 5, 10, or 20 years?

Consider seeking out guidance from a trusted friend, mentor, or life coach. They can help you clarify your thoughts and provide support as you navigate this decision. It may also be helpful to set boundaries with your partner and communicate openly about your goals and needs.

Ultimately, the decision of whether to prioritize your career or your relationship is a personal one. It is important to trust yourself and make a choice that aligns with your values and long-term goals. Remember that it is possible to have both a fulfilling career and a healthy relationship, but it may require compromise and effort to make it work.

Image result for relationship or career

Scenario 1 – Career goals that don’t make it easy to stay together

If one person has sacrificed their career for the relationship and the other has a greater opportunity for career growth, it’s important for the latter to pursue their ambitions and for the former to support them.

However, if the career opportunities are in conflicting locations, one partner may have to sacrifice their time to make the relationship work. It’s already challenging to balance a demanding career with a meaningful relationship, so it’s important to ensure that there is still time and effort invested in the relationship. If there is not, the relationship may not survive in the long term.

Scenario 2 – Career opportunities are placed in different regions.

If both partners have equally promising career opportunities, one may need to make the sacrifice to support the other’s career. If one has a better probability of success, the other should offer support.

Scenario 3 – You have a great career to pursue, but your partner doesn’t enjoy a long-distance relationship

If you have a strong career goal but your partner is not willing to maintain a long-distance relationship, you may have to choose between your career and your relationship. You can try to persuade your partner to support your ambitions, but often times their feelings on the matter are already set. If you try to change their mind, it can be ineffective and may only serve to damage the relationship in the long term.

Scenario 4 – Conflicting living preference

One of the first things to consider is the overall well-being and happiness of the relationship. It’s essential to evaluate how living in a particular location will impact the dynamic of the relationship and whether it will be beneficial or detrimental in the long run.

It’s also essential to consider career opportunities and personal goals. If one partner has a strong career opportunity in a specific location, it may be necessary to consider a relocation. It’s important to have open and honest discussions about these opportunities and how they will impact both partners’ careers and personal goals.

Affordability and practicality should also be taken into consideration. It’s essential to ensure that the chosen location is financially feasible and practical for both partners.

Finally, it’s important to consider the role of family and friends in the decision-making process. It’s essential to have open discussions about the importance of proximity to loved ones and find a balance that works for both partners.

Ultimately, the key to making a successful decision about where to live is open communication, mutual understanding, and a willingness to compromise. By considering all of these factors and working together, couples can make a decision that benefits both their relationship and their individual goals and aspirations.

Scenario 5 – You have dreams and goals while the other is content and prevents you from achieving your dreams

If you’re in a relationship with someone who is content and holding you back from achieving your dreams, it may be time to reevaluate the relationship. It’s important to remember that relationships should be inspiring and uplifting, not hindering your growth and success.

If you love someone and are considering giving up your career to be with them, ask yourself if it’s truly worth it. Is it possible to have both a fulfilling career and a supportive relationship? While sacrifice is a natural part of any relationship, it’s not healthy to give up your dreams for someone who isn’t willing to support your ambitions.

In the end, happiness is subjective and it’s important to make a decision that aligns with your values and goals. If you’re with the right partner, a relationship can be a powerful force in your life. However, don’t sacrifice your career for someone who isn’t willing to support your growth and success.

Kobe’s Legacy Lives On: The Investing Lessons I Learned from the Black Mamba

On January 26, 2019, I had lunch with a prospective client on a Sunday afternoon. During the meeting, my phone vibrated repeatedly in my jacket, prompting me to wonder what the urgency was behind the messages. Later, when I checked my messages, I learned that they related to the death of Kobe Bryant.

One of my friends had sent me a late-breaking piece, and initially, I thought it couldn’t be true. I believed that social media was jumping to conclusions. However, upon visiting various social media sites and popular news media, I encountered the same, inevitable truth. In an attempt to hold onto the hope that Kobe was still alive, I watched replays of his games repeatedly.

The news left me in disbelief for the entire day, and I yearned for more news that would report that it was just a minor accident. It was emotionally difficult to hear that his daughter had died in the same helicopter accident. I couldn’t fathom the devastation that Kobe’s family must have felt after experiencing such a catastrophic helicopter crash. Kobe has always been an inspiration to me, and his loss is deeply felt. Anyone can relate to Kobe because he was genuine. His passion was undeniable, and the way he lived his life was truly inspirational.

Who Was Kobe Bryant?

Kobe Bryant was just 17 years old when he entered professional basketball in the NBA straight out of high school. At the beginning of his career, Bryant didn’t have many opportunities to play, despite having more potential than many of his teammates. When he was given the chance to play regularly, NBA fans saw glimpses of his unique style and skill. As his career progressed, it was clear that he was destined for greatness.

In 2002, I was fortunate enough to see Kobe Bryant and Michael Jordan play in the NBA for the first time. The home game took place in Washington, D.C., with the Wizards, led by Michael Jordan, facing off against the Lakers, led by Kobe Bryant.

The game was intense and close, but the Wizards ultimately beat the Lakers in the final seconds. During the game, Jordan told Bryant that he could “wear those shoes, but never fulfill them.” This critique annoyed Bryant so much that he stopped communicating with his team for two weeks. In the next game against the Wizards, the Lakers won, with Bryant scoring a retaliatory 55 points.

Michael Jordan VS Kobe Bryant – 2002.11.08

There were numerous similar stories about Kobe’s desire for revenge on the court, as he always found ways to improve and get ahead. His work ethic and pursuit of wisdom and knowledge led to five NBA championships and a lengthy list of legendary achievements.

Kobe Bryant’s work ethic was legendary. The best moments of his career were not captured on ESPN; rather, they occurred during the early mornings and late nights when he practiced more than anyone else. Bryant was always the first and last person to arrive at and leave the gym. He followed a strict workout regimen and even found ways to practice while injured, such as focusing on his weaknesses or using his uninjured hand. There was no off-season for Bryant; his summer training sessions were traditionally just as intense as the regular season. Hard work, both on and off the court, was a consistent effort for him. Kobe Bryant exemplified the meaning of perseverance and hard work through his actions.

Talent can only take someone so far in their profession. For example, most starting players in the NBA have the potential to score 20 points per game and some have scored a 20-point game, but most players cannot consistently perform at that high of a level every night. Similarly, most investors will have some years of outperforming the market, but most investors cannot consistently outperform the market average over a lifetime. Those few who can consistently perform at a high level share one trait: hard work.

Bryant believed that he should work hard as if he never had any talent. When asked why he was such a hard worker, he said, “To think of me as a person that’s overachieved would mean a lot to me. That means I put a lot of work in and squeezed every ounce of juice out of this orange that I could.”

Hard work is about commitment and there are no substitutes for it.

Lesson about short cuts: Blackberry (BB) had the potential to compete with Apple (AAPL) but has been unable to do so due to a lack of innovation. As a result, it is no longer a significant player in the smartphone industry. In an attempt to regain market share, Blackberry released a rushed and unfinished smartphone. However, the company did not invest enough in research and development or give its engineering team sufficient time to deliver the promised features. As a result, Apple has already won the market and Blackberry was unable to match its commitment.

Actively Seeking Wisdom and Knowledge

Kobe was skilled at using every tool at his disposal to become a better basketball player. He watched soccer and noticed that soccer players had a unique freedom of movement. He observed that they used more ankle torque than basketball players, but did not experience a higher incidence of ankle injuries. Kobe began researching ways to improve his signature shoe. He asked Nike to remove a few millimeters from the sole to provide better traction and incorporate the benefits of soccer shoes. The result was a low-top shoe that offered structural ankle support, improved traction, and faster response time.

Kobe Bryant was known for cold calling basketball players and business leaders to learn about their successes. He studied the movements of animal predators in order to incorporate them into his jump shots and psychology to gain an advantage over his opponents. Kobe also analyzed the weaknesses of other players and the foul calls made by referees. Some might view Kobe’s behavior as erratic, but those in similar positions of success often see this level of obsession as normal and even beneficial.

Many successful people have an obsession with their work. It is a common trait found in leaders, business professionals, and investors. For example, Sam Walton immersed himself in the wisdom of all he could learn from competitors to junior associates at Walmart. He took advantage of every opportunity to enhance the business. The Walmart business model is built on low prices and efficiency. Another example is Elon Musk, who was months away from bankruptcy and slept in the Tesla factory for months in order to turn the company around. Warren Buffett searched through 10,000 pages of Moody’s manual to become familiar with every public company. Once he found a few suitable investments, he studied everything he could about those companies and invested accordingly.

Champions are constantly seeking to improve and develop their skills. In the world of sports, championships are often determined by small margins such as a fraction of a second, one snap, or one turnover.

In the world of investing, small differences can lead to millions in earnings or bankruptcy.

Kobe Bryant’s dedication to basketball is inspiring. He has influenced many people and shared his wisdom. His “Mamba mentality” is about working hard and living up to one’s potential.

Kobe believed that he should always work hard as if he had no talent.