Is the fear of good times creeping up? Learn to blink slowly

You begin to question your own thesis—at times to justify new price levels, at others to support an urge to lock in gains. Long-term holds feel brittle; short-term trades seduce. You read Benjamin Graham on the vanishing margin of safety; then read George Soros on reflexivity. For every conviction you hold, you can find the ghost of a great thinker to support it. And another to take it apart.

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As a young analyst, somewhat obsessed with the equational purity of abstraction, I was fascinated by the weak scaffolding under almost every concept in portfolio theory and valuation: Beta, PEG, WACC. Each hides hairline cracks in its own algebra. Most of these rest on a strange mix of untidy math and messy thumb rules. But their inventors were honest about shortcomings and conversations created space for doubt.

One great exception is the Sharpe ratio. This measure of portfolio efficiency—reward versus risk—is treated as gospel in many circles, but masks a subtle flaw. The more often you measure performance, the worse the Sharpe ratio tends to look. Daily ups and downs make things appear more volatile than they really are. And that’s the point: volatility isn’t just about the asset—it’s about how often we choose to look.

The result is misleading. A strong long-term performer can look fragile when viewed through a short-term lens. It tempts managers to reduce daily swings, even at the cost of long-term returns. It’s not just about the number. It’s about what the number encourages us to do.

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Agents, incentives and a mirror: Now the awkward part. The mismatch between those who own the money and those who manage it. Pension funds think in decades but people managing them think in quarters; their bonuses demand it. I say this without malice. I’m a fund manager too. It’s me in the mirror. This is the agency problem in its most common form. A fund’s mission demands a telescope while the incentives of its managers demand a microscope. 

To protect their careers, agents go to extraordinary lengths to cut downside risk in short periods—even before accounting for the lure of high-margin products. The result is excessive hedging and an obsession with minimizing volatility, even if it means dulling returns.

This is a tension I feel keenly. The pull between the portfolio’s true needs and the human need to manage the immediate is a constant, quiet struggle.

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Liquidity and the comfort of darkness: There is another way to solve the problem: turn off the lights. Buy an illiquid asset. Mark it to market once a quarter—or once a year—and call the silence ‘stability.’

This is the allure of private markets. There is no daily ticker. No constant, unnerving judgement of every macro headline or quarterly earnings blip. Private investments feel like an antidote. You invest in businesses, not daily drama.

But darkness brings its own hazards. Illiquidity corrodes optionality. Valuations ossify into lore. By the time price finally speaks, the story may have drifted far from that neatly pencilled internal rate of return. Embracing illiquidity worked wonders in the internet era. But in the GenAI era, we need to retain the option to adjust. No innovation trend is assured for more than a few quarters. The freedom to rethink is a feature, not a flaw.

Innovation’s roar against the ticker tape: In public markets, when you stare at prices tick by tick, you see only noise. Volatility, we learn, is not just a property of the asset—it’s a property of our gaze. Let’s lift that gaze. Web traffic is down by a third—not because people read less, but because answers arrive before the question fully forms. GenAI orchestrates half the product recommendations on the internet. A quarter of travel bookings begin with a chatbot. AI investments are rising fast.

Consumer behaviour is being rewritten. This isn’t just about tech. Cars are delivering themselves and the skies have flying taxis , while machines talk and see like humans. One could go breathless on what’s coming in diagnostics, drug discovery, climate management, material sciences or finance. 

What of price volatility. We can learn to breathe through it. The real risks are not 10% or 20% corrections every few quarters, but getting so obsessed with managing them that we miss the historic transformations unfolding before us.

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Learn to blink slowly: In the end, I’m as mortal as the next price-addled soul. I will refresh the screen again against my better judgement. To watch the ticker is to be human. To feel the pull of fear and greed as prices dance is unavoidable. The difference, I hope, is that afterwards, I will close the laptop and pick up a research note on generative proteins. Or a press release on a gigawatt data corridor. Blinking slowly is our edge.

We count raindrops, but only to remind ourselves of a flood. And when the next correction arrives, remember: the water was rising long before the alarm sounded. We can’t be perfect market timers.  But we can be steady partners in an era of change that will be studied centuries from now.

The author is a Singapore-based innovation investor for GenInnov Pte Ltd