Radicals for Capitalism - Part I
Risk Capacity is an Asset
On July 26, 2025, Forbes published a review written by John Tamny of my book, The Moneyball Method. It was also published on July 18, 2025, at RealClearMarkets.com. This brief essay will focus on a quote from their twenty-third paragraph:
In an investing sense, Shupe’s client-focused approach is to find out “how much downside market risk can be absorbed without changing the spending goals, savings habits, or the timing of events for the investor.” Which seems to ask how much money is the individual willing to lose in the near-term, and in recognition what the near-term losses could mean for the long-term.
That concept is a vital theme for The Moneyball Method. A primary objective is to anticipate the possibility of extreme market events, know their potential impact in terms of dollars of net worth, calculate those effects on your spending capacity – and have a contingency plan! Not only will you have confidence in the future you are creating for yourself, but you will have the comfort of knowing that there is a Plan B for large deviation market action.
While this set of procedures involves secondary market securities and being as conservative as you can afford to be, think of it in terms of the venture capitalist. Every investment they make will become an extreme market event. Most will fail to zero, some will deliver a modest reward – and the rare home run will wildly enrich everyone it touches. But they know the potential for each and have calibrated their commitments of risk capital accordingly.
Which brings us to one of the unique features of The Moneyball Method: to know your risk capacity and treat it like an asset. And just like your net worth, life expectancy, savings habits and the values that make life worth living – your risk capacity is unique - and it should be known to you before making any investment strategy decisions.
Furthermore, dealing with root causes and fundamentals is radical, by definition - and a big step toward independence.
To repeat, The Moneyball Method is not about primary wealth creation – you do that with your professional vocations and closely held business interests. But objective investors share something with venture capitalism: you anticipate outcomes at either extreme of the bell curve.
In other words, what happens within one standard deviation of median stock market returns doesn’t really matter much. But what happens at the extremes can be life changing – and the premises and practices of traditional investment management ignore them. We don’t. To learn more, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/