10/06/2026
By Gabe Lopez
I had a conversation with a close friend recently who told me something I immediately disagreed with. He spoke. "I would want to invest with someone with the biggest IQ and has the intelligence and intellect of Elon Musk." I laughed and said good luck with that. Let me tell you why.
Isaac Newton (You know, the FATHER of Gravity) had South Sea Company shares that were climbing fast. He sold early, banked a nice profit, then watched the stock keep running as the whole of London piled in. Pamphlets promised that silver would soon be as common as iron. Newton could not stand being on the sidelines, so he bought back in near the top with a much larger position. When the bubble burst, he lost most of what he had. The man who gave us the laws of motion had no defense against the laws of a crowd. Newton did not lose money because he was bad at math. He lost money because he was human.
The Two kinds of risk:
One idea that I keep coming back to is the difference between risk tolerance and risk capacity. Capacity is how much risk your finances can absorb: your time horizon, your income, your savings. Tolerance is how much risk your stomach can absorb before you do something you will regret. Those are two very different numbers, and most people only ever think about the first one.
If you are the kind of investor who panics and sells at the bottom, you should take less risk, not because the market will punish you, but because you will punish yourself. Loss aversion, the tendency to feel a loss roughly twice as strongly as an equivalent gain, does not show up on a calm Tuesday. It shows up at 3 a.m. during a 25 percent drawdown, and it makes people do exactly the wrong thing at exactly the wrong moment.
There is a quote I love: “the speculator is the gambler, and the investor is the casino.” Speculating is deploying money in pursuit of risk to catch a short-term price move. Investing is deploying money in pursuit of gain, with the risk accepted because the math works in your favor over time. The casino does not know how any single hand will go. It just knows the odds, and it stays open.
What has actually worked:
I came up in this business studying Warren Buffett. Not the folksy quotes, but the method underneath them: read the annual report, understand how the company makes money, look at the balance sheet, figure out whether the business will be stronger in ten years than it is today, and only then decide whether the price makes sense. Underwrite the business the way a lender would, then hold it the way an owner would.
That approach has paid off for me. It has paid off for Buffett across six decades and every kind of market. And it has paid off for millions of everyday investors who never bought a share of Berkshire Hathaway but simply followed the principle: own good businesses, stay the course, and let time do the heavy lifting. None of that requires predicting the next crash. It requires not reacting to it.
My background is in personal training, and I see the same pattern in the gym that I see in portfolios. Nobody fails because the plan was wrong. They fail because they abandoned the plan the first week it felt uncomfortable.
Nobody wants to get rich slowly:
Jeff Bezos once asked Warren Buffett why, if his approach is so simple and so well documented, everybody does not just copy it. Buffett's answer: nobody wants to get rich slowly.
That is the whole thing. The method is not a secret. It is just boring, and boring is hard to stick with when your neighbor is bragging about a stock that tripled, or when the headlines say this time is different. Newton had the intellect to see through the South Sea bubble. What he did not have was the discipline to sit still while everyone around him got rich fast, and then poor faster.
So, if you take one thing from this: before you decide how much risk to take, be honest about how you behave when the market falls. Build a portfolio you can actually hold through the bad year. Then own good businesses, stay in your seat, and let the slow way work.
Be the casino.
