Even a month before the collapse, we had no idea: The financial crisis through the eyes of a Wall Street veteran of 18 years | Dan Ha
An independent exercise, not a statement by the video creator or verification of every claim in the video.
Change position sizes while keeping the hit rate fixed
Start with 100 in assets and put 50 into each of two positions. If one rises 40% and the other falls 20%, assets end at 110. Give the winner a 25% weight and the loser a 75% weight, and the same outcomes leave assets at 95.
Check for yourself
- How does the portfolio return change when the same calls are right but position sizes differ?
- What additional loss scenario would you consider if both positions fell in the same economic shock?
Limits of application
This is a hypothetical one-period calculation. Returns and weights are fixed and trading costs are omitted. Actual losses and the extent to which holdings move together may differ.
- What to look for
- See how Dan Ha uses lessons from the financial crisis to assess a stock’s potential gains alongside the portfolio’s possible losses.
- Why it matters
- Write down the expectations embedded in the current price, then identify what would invalidate the thesis and calculate how much the portfolio could lose.
Timeline
9 segmentsHe assumes half his calls could be wrong and illustrates payoff asymmetry with a hypothetical stock that gains 40% in a favorable outcome and loses 20% in an adverse one. These are assumptions, and realized portfolio outcomes depend on weights, estimation errors and how much the holdings fall together.