The Less You Know About Tomorrow, the More You Should Plan Today

Today is one of those days that crystallizes the nature of investing under maximum uncertainty.

In the next 24 hours: the Fed holds rates steady (Powell's last meeting before Warsh takes over), MSFT, GOOGL, META, and AMZN all report earnings, Iran enters week nine of its war with Israel, the Strait of Hormuz remains effectively closed (oil is north of $100), and tomorrow morning we get Q1 GDP data — expected 2.6%, likely to show 0.5% (a shock).

Meanwhile, SCOTUS just invalidated $175 billion in tariffs. Gold sits at $4,626, down from its January peak of $5,595.

Nobody knows what happens next.

This is the moment when I've learned that direction matters far less than position.

The Inversion of Control

Most investors — especially younger ones — obsess over being right. They build thesis after thesis: "Oil will stay high because of the Iran situation." "Tech will crush earnings because AI." "GDP miss will tank equities." And so on.

They're trying to control the outcome.

What I've learned over time is that this is backwards. You cannot control what the market does. You can only control what you do in response.

Specifically: you control two things.

First: the size of your bet. How much capital you expose to an outcome you're uncertain about.

Second: the structure of that bet. Whether you're protected if you're wrong.

When uncertainty is at maximum — days like today — direction becomes almost irrelevant. Your forecast could be perfect and you could still be ruined if you sized your position like you were certain. Or you could be wrong about direction and profit handsomely if you structured the bet correctly.

Position Sizing: The Only Number That Matters

A simple framework I use:

If I'm 95% confident in a thesis, I might deploy 5-10% of available capital. If I'm 60% confident, I deploy 1-2%. The difference is not in conviction — it's in humility about what I don't know.

Today's context — four mega-cap earnings, Fed decision, geopolitical escalation, economic data — illustrates why. I could construct a compelling narrative about any of these catalysts. But narratives are not predictions. The market will do what it does.

What I can do is size appropriately. If I believe equities are oversold here but I'm unsure about the GDP print tomorrow, I don't put 20% into a long position. I put 3-4%. That way, if I'm right, I capture most of the upside. If I'm wrong, I survive intact.

This is not hedging. This is humility.

Hedging: Insurance Against Your Own Blindness

Hedging is different. It's explicit protection. It's buying a put when you're long. It's holding some long-dated Treasuries when you're overweight equities. It's keeping cash.

Hedging costs money. It reduces your upside when you're right. But it lets you sleep — and think clearly — when everything feels precarious.

Today, with multiple catalyst clusters firing simultaneously, hedging isn't paranoia. It's clear-eyed.

A few positions I like here:

• If you're long equities: a small allocation to long-dated puts or VIX calls. Cost: 1-2% of upside, but you sleep.
• If you're long growth: some long-dated Treasuries or gold. Cost: yield drag, but you're not devastated if rates re-accelerate.
• If you're bullish: keep 15-20% cash. Sounds conservative? Yes. But after the GDP miss tomorrow, there will be dislocations. You'll want dry powder.

The Paradox of Clarity

Here's what I've come to believe: the more you admit you don't know, the clearer your decisions become.

When I was younger, I tried to predict earnings surprises. Fed intentions. Geopolitical outcomes. I was constantly wrong, constantly adjusting, constantly exposed.

Now? I size small, I hedge deliberately, and I sleep. And somehow — paradoxically — I make better returns. Not because I'm better at prediction. But because I'm not trying to be.

The market will reveal truth over time. My job isn't to guess the truth before it's revealed. My job is to structure my portfolio so that when truth emerges, I'm still standing. And ideally, positioned to benefit.

The Framework

So if you're staring at today's chaos — the earnings, the GDP, the geopolitical risk — and you feel frozen, here's what I do:

1. Size small. If you don't feel certain, you're not. Position accordingly.
2. Hedge deliberately. Not out of fear. Out of respect for what you don't know.
3. Keep dry powder. Uncertainty creates opportunities. You want capital ready to deploy them.
4. Move slowly. Major thesis changes happen quarterly or yearly, not intraday. Today's shocks become next week's baseline.

The irony is that this approach — rooted entirely in admitting ignorance — has been far more profitable than any thesis-driven strategy I've tried.

Maybe it's because markets reward humility. Or maybe it's just that when you're small and hedged, you're still around to play the next hand.

Either way, that's good enough for me.

— R.A.