This is a Guest Post by AK of Fallible
AK has been an analyst at long/short equity investment firms, global macro funds, and corporate economics departments. He co-founded Macro Ops and is the host of Fallible.
Increase your investment returns by red teaming your trade and investment theses!
Red Teaming is when you get an outside party to poke holes in your idea.
The goal is to expose your idea’s weaknesses so that you can strengthen it and make it more robust.
This process of Red Teaming is used extensively in the military.
The plans for an operation are set, and then team leaders that aren’t involved are brought in to think of “what ifs” to try and disrupt the plan.
So how does this work in investing?
Well the first thing you gotta do is change your mental approach.
NEVER FALL IN LOVE WITH YOUR IDEAS.
As humans we have a big tendency to do that and then completely miss our ideas’ shortcomings.
Instead you need to Red Team the hell out of your not only trade ideas, but your portfolio construction and investment strategy too.
You need to game different scenarios and remember that anything could happen.
Red teaming works best if you can actually have an outside party to critique your ideas.
And that’s the type of community we’re trying to build with Fallible.
Macro Red Team article-> Here.
And don’t forget to subscribe to the Fallible YouTube channel.