Rule du Jour: Rule #76 - Systematize to Neutralize (Patreon)

I've spent my entire life studying the greats. It all began when I was a kid, flipping through Leonardo da Vinci’s sketchbooks. Inspired, I started drawing helicopters—and by the age of six, I was building them out of rusty Meccano parts that i found on the street.

When I started investing now 35 years ago... I knew to be the best I had to learn from the best. But I was dumb and arrogant when I was young and at the age of 21 I got my ass handed to me. Anyhow, back to the rule.

Of my top legends Ray is #1. He taught me so much... but mainly Emotions, Blind Spots and Backtests.... [no coincidence I am obsessed with backtests in all our models and drove our Dev team nuts to build them].

So this rule is dedicated to Ray, who has helped make me who I am!

Dalio-Inspired Rule: Systematize to Neutralize

"The biggest threat to good decision making is harmful emotions." — Ray Dalio

This is why I am as cold as a fish when it comes to investing. The only thing that rattled me over the last 5 years was SOL falling to $8 and I decided to double down. Rattled but not dissuaded. So here are the 3 parts:

1. Emotion is the Enemy — Build a System/Process to Replace It

Emotions—fear, greed, ego—are natural but dangerous when making financial decisions.

• Codify your investing process into rules you can follow, models you use, processes you need eg look at me with buy levels, 5-year plans, ratios, allocations etc...... I am obsessed and nothing will push the train off the track unless the thesis changes eg, getting to 50% TSLA by year end.

• Have a plan, stick to it! Hence my Wholecoiner Obsession, 300 Tesla Shares, Retire on... etc... I plan, you should too

2. Backtest Before You Believe

Don’t trust a strategy until it’s been battle-tested in history. Dalio’s team tests every principle using decades of market data.

• Rigorously backtest your trades and theories over multiple cycles—booms, busts, and black swans. Most of my models include backtests... for this EXACT REASON!

• If your strategy only works in bull markets, it’s not a strategy—it’s a fantasy.

• Backtests also ensure much higher win ratios which is the killer edge. Thanks, Ray

3. Your Blind Spots Will Betray You — Find Them

We have spent years and nearly $1M to build out the Investor Profiler https://www.investor-profiler.investanswers.io/, a FREE QUIZ to help you know who you are, your strengths, but more importantly, your weaknesses. Blind spots are the killers of performance.

TLDR

“Systematize your investing to neutralize your emotions, validate with backtesting, and stay humble by exposing your blind spots.” IA 2025