📖David Swensen
Wait for the Right Opportunity
Wait for exceptional risk-reward opportunities.
The stock market is a no-called-strike game. You don't have to swing at every pitch. Wait for the fat pitch — the opportunity that offers exceptional risk-reward.
🏠 Everyday Analogy
📖 Core Interpretation
David Swensen treats survival as the first objective. Limiting permanent capital loss, controlling leverage, and avoiding single-point failure are prerequisites for long-term compounding.
💎 Key Insight：Selectivity dramatically improves investment outcomes.
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❓ Why It Matters
A single large drawdown can erase years of progress. Risk control is not timidity; it is the operating system that keeps compounding alive.
🎯 How to Practice
Define downside scenarios before entry, cap position size, avoid fragile leverage, and maintain liquidity so mistakes remain survivable.
⚠️ Common Pitfalls
Equating volatility with all forms of risk
Oversized positions without an exit plan
Using leverage to compensate for uncertainty
📚 Case Studies
1
Dot‑Com Bust and Diversified Equity Exposure (2000)
Tech and growth stocks collapsed after the late‑1990s bubble, while broad value, international, and small‑cap exposures fared better.
✨ Outcome：Avoided concentrated tech bets, kept diversified long‑term allocations, and benefited as non‑bubble equities and later markets recovered.
2
Dot-Com Bubble Peak (2000)
Swensen’s Yale endowment policy rebalanced away from soaring U.S. growth stocks into underweighted bonds, real assets, and diversifiers as tech valuations became extreme.
✨ Outcome：Reduced drawdowns in 2000–2002 bear market and preserved capital to buy equities at cheaper prices.
📌 Save this principle as your rule
One click to drop it into your personal rule library — every future trade will be scored against it.
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