Winner-Take-Most Markets: Bet Against Losers, Not Heroes

The longer I spend in markets, the more I realise that in practice, there are no neat narratives and easy answers.

Every cycle teaches the same lesson in a different way. What looks obvious in hindsight feels messy and uncomfortable in real time.

Lately, I’ve been revisiting everything one by one —commodities, stocks, crypto, macro trades, even the role of politics — and asking a simple question: Where do I actually have an edge, and where am I just guessing along with everyone else?

That question has evolved how I look at silver, equities, interest rates, crypto, and even AI. And the conclusion I have is that markets reward skillful positioning, not conviction based on hype or ideology.

Let me walk through Commodities first, and then we’ll move to traditional markets.

Silver is one of those assets people love to frame as perpetually undervalued.

The argument usually goes something like this: fiat money is being debased, silver is real money, therefore silver must explode eventually.

I wanted to test that more rigorously. So instead of looking at silver in nominal dollars, I plotted silver against the U.S. monetary base. This strips out a lot of the noise and forces the question: Is silver actually outperforming monetary expansion, or just keeping up?

Historically, the answer is underwhelming.

Over long periods, silver has roughly matched dollar debasement, averaging around a mid-single-digit annual return once you adjust for money supply growth. That’s not nothing, but it’s not some asymmetric, screaming bargain either.

The big silver moments — 1980 and 2011 — stand out precisely because they were exceptions, driven by squeezes, leverage, and speculative excess. They were momentum events, not structural repricings.

There’s another layer people forget.

Silver supply grows too.

Roughly 1–2% per year through mining and recycling. That alone means the “fair value” implied by monetary base comparisons is probably overstated.

As a momentum trade, silver can absolutely work. As a long-term store of value, I think the risk-reward is far less compelling than the narrative suggests.

This one took me years to accept.

Most stocks underperform. Not a small majority. A massive one.

Roughly 75% of stocks and 95% of crypto fail to beat their benchmark over time. Markets are winner-take-most systems where a tiny fraction of names generate the bulk of returns.

That means randomly picking a stock/coin gives you terrible odds.

Johnson & Johnson is a great example. It’s stable, boring, and widely respected. And yet over nearly two decades, it underperformed the S&P 500 by more than 50%.

You didn’t need to be wrong about the company. You just needed to be wrong about opportunity cost.

This is why I increasingly prefer betting against structurally weak assets rather than trying to find the next superstar.

Neglected stocks.
Unloved altcoins.
Projects with constant sell pressure and no catalyst.

Shorting losers isn’t glamorous, but statistically, it’s fighting gravity instead of momentum.

And for most people, simply owning the index beats the stress of trying to outsmart it.

One of the most common mistakes I see is people trading tertiary effects.

They think rates will fall. So they buy tech stocks. Or crypto. Or some thematic basket three steps removed from the actual variable.

That’s playing telephone.

If rates fall, bonds win. Directly. Mechanically.

Bond prices rise when yields fall because future cash flows are discounted at lower rates. That’s not a narrative. That’s math.

If I want exposure to falling rates, I want the cleanest instrument possible: long-duration government bonds.

Pure plays matter because they reduce error. Leveraged bond ETFs exist precisely for this reason: they give you amplified exposure to the variable you’re actually betting on.

Everything else is noise layered on noise.

Every investor/trader wants to believe they’re skilled.

In reality, returns are always a mix of skill and luck.

The uncomfortable truth is that without an edge — better data, better models, better networks — you’re mostly just rolling dice with confidence.

This is why I’m deeply skeptical of trading political events.
 Yes, politics moves markets.
 Yes, tariffs, elections, court rulings, and regulations matter.

But unless you’re inside the room, you don’t have an edge. You’re reacting to the same headlines as millions of others, usually after the initial move has already happened.

That doesn’t mean ignoring politics entirely. It means refusing to pretend you can trade it precisely.

If I have a strong view on a company’s fundamentals but don’t want macro or political risk to dominate the outcome, I hedge. I isolate the bet.

For example, if I’m bearish on a specific company but don’t want to bet against the entire market, I’ll short the stock and go long the index.

That’s not exciting — but it’s disciplined.

Crypto used to feel like a separate universe.

It no longer is.

Bitcoin’s correlation with the NASDAQ 100 has risen meaningfully. When risk-off hits equities, crypto usually suffers more.

That doesn’t mean crypto is useless. It means it’s no longer a clean hedge.

The recent crypto drawdown — nearly 50% from highs — was notable precisely because equities barely moved.

That tells me the damage was internal: leverage, positioning, long-term holders distributing, and weak marginal demand.

Crypto tends to punish long-term holders first.

That’s a structural difference from equities.

I don’t try to time traditional markets. I do time crypto within a diversified portfolio, because volatility makes timing more impactful — for better or worse.

I’ve become more humble about what I can predict and more focused on where I have an edge.

I’m less interested in narratives and more interested in structure. Less interested in conviction and more interested in probabilities.

I don’t want to be right. I want to be positioned correctly.

That means:

Markets don’t reward certainty. They reward adaptability.

And the longer I do this, the more I realize that thinking clearly beats thinking loudly.