How I Invest: The Approach and What I Watch
From the archive. Kept up as a record, no longer updated.
How I Invest
Objective: Beat the S&P 500 with a concentrated set of high-conviction positions.
This page is the approach: the rules I invest by and the metrics I watch. I don’t publish individual trades here. This is not investment advice.
Metrics I’m keeping a close eye on
These are the gauges that set my posture.
| Metric | What it tells me | What I’m watching for |
|---|---|---|
| ISM Manufacturing PMI | Leads payrolls and earnings | Whether it holds above 50 (expansion) or rolls over |
| ISM New Orders | Telegraphs growth 3 to 6 months out | Any break below 50, which would be my first warning |
| ISM Prices Paid | My currency-debasement signal | Readings above 60, which tend to push capital toward dollar hedges like gold and silver |
| Fed funds rate | The price of money for everything else | The direction of the next move, not the level |
| CPI | Whether inflation is easing or re-accelerating | A turn in direction, since it drives the Fed |
| Nonfarm payrolls | Whether the job market is cooling | Weakness that persists, not one soft month |
| Corrugated box prices (PPI) | My physical-demand check: goods ship in boxes | Rising prices as confirmation that real product is moving |
If these turn, my posture changes first and the positions follow.
How I decide
- Concentrated, not scattered. A small number of positions I understand well enough to explain in a sentence.
- Quality incumbents on pullbacks. Businesses with real moats and recurring revenue, added when the price is cheap relative to the assets, not when the story is exciting.
- A small speculative sleeve. Speculative positions are sized so a total loss is survivable. That is the asymmetric bet, and it stays small.
- Income against what I own. Selling long-dated calls on positions I hold collects premium while I stay long, and it lowers my cost basis.
- Idle cash should work, but never force a buy. Cash sits in a money-market fund until there is a setup with a real margin of safety.
- Let the macro set the posture. When the watchlist says expansion, I stay deployed. If it turns, the posture changes first and the positions follow.
The idea underneath all of it: start from how often things usually work, size for being wrong, and write the reasoning down before the result.
This is my own thinking about my own money, published for education. It isn’t investment, tax, or legal advice, and I’m not a registered investment adviser.