Philosophy Opportunity Insights Model About Contact

The framework in numbers.

Abstract principles become concrete when you run them. These calculators let you feel the mathematics that underlies the approach — the cost of drawdowns, the power of asymmetric positions, and the amplifying effect of concentrated bets.

Regime Playbook →

Avoiding a loss matters more than finding a gain.

A 40% drawdown doesn't require a 40% recovery. It requires 67%. The arithmetic is asymmetric — losses compound faster than gains unwind them. These two tools show why protecting capital is not defensive thinking. It is the most aggressive long-term strategy available.

Recovery mathematics

Drawdown Recovery Calculator

Portfolio loss −30%
Recovery required
42.9%
Years at 10% p.a.
3.7 yr
Years at 15% p.a.
2.5 yr
Years at 20% p.a.
1.9 yr

Compounding over time

Compounding Simulator — With vs. Without Drawdown

Protected
Unprotected
Annual return 10%
Drawdown depth 35%
Drawdown in year Yr 5
Protected (20yr)
6.7×
Unprotected (20yr)
3.9×
Gap at year 20
−41%
Lost years
4.2 yr

Positions that pay more as conditions worsen.

The Edge is designed to be asymmetric: capped cost, uncapped benefit. A correctly structured put doesn't just protect — it generates capital exactly when other assets are cheapest. These tools show how the payoff shape changes with structure, and how it reshapes the distribution of 20-year outcomes.

Payoff structure

Convexity Payoff Builder — Put Option at Expiry

Portfolio + Put
Unhedged
Strike (% out-of-money) 20% OTM
Annual premium cost 3%
Portfolio allocation to puts 5%
Floor (−50% market)
−38%
Annual drag
−0.08%
Max gain in crisis
+310%
Break-even move
−21.5%

Distribution of outcomes

Asymmetry Machine — 20-Year Return Distribution (2,000 simulations)

With tail hedges
Without tail hedges
Losses eliminated by hedge
Hedge strike (% out-of-money) 15%
Annual hedge cost 3%
Worst 5% (hedged)
−12%
Worst 5% (unhedged)
−38%
Median outcome (hedged)
4.1×
Simulations with loss
3.2%

Monte Carlo simulation. Assumes lognormal returns, annual rebalancing, tail events at 3× modeled frequency. Results are illustrative.

Position size determines how much the right call matters.

A 2% position in a 10-bagger moves the portfolio by 18%. A 15% position in the same idea moves it by 135%. Diversification limits loss — but it also limits the compounding that only exceptional businesses can deliver. The question is not whether to concentrate, but where to draw the line.

Position size vs. portfolio impact

Concentration Impact Calculator — Single Position Returns

Gain if position achieves 5×
Loss if position falls −80%
Position size 10%
Position multiple
Portfolio gain
+40%
Portfolio loss (−80%)
−8%
Gain-to-loss ratio
5.0×
Break-even positions
1-in-5 needed

Four architectures through the same storms.

Twenty-five years. Four portfolio structures. The same crashes, the same recoveries — but the compounding gap widens with every cycle. Not because one approach takes more risk, but because avoiding deep drawdowns means never needing a large recovery.

25-year compound growth — indexed to 100 at Jan 2000

Aeternia (parametric model)
Permanent Portfolio
All Weather
60/40

Aeternia model parameters — adjust to see how the thesis holds

Quality edge 1.5%/yr

Annual premium from quality-factor tilt vs. cap-weighted index

Hedge cost 3.0%/yr

Annual drag from systematic put-option overlay on portfolio

Crash payoff 7× cost

What the hedge returns when S&P 500 falls more than 20% in a year

Crisis zoom — % from pre-crisis peak

Peak Mar 2000. S&P fell 49% to trough in Oct 2002.

60/40 computed from S&P 500 total return and Bloomberg US Aggregate Bond Index annual returns 2000–2024. Permanent Portfolio computed from published 25/25/25/25 allocation (stocks / LT Treasuries / gold / cash). All Weather computed from published allocation (30% stocks · 40% LT bonds · 15% IT bonds · 7.5% gold · 7.5% commodities). Component data from publicly available index returns. Aeternia is a parametric model — not historical data — driven entirely by the sliders above; adjust assumptions to stress-test the thesis. Not a representation of actual or future performance.

Assemble the whole machine — then watch what it costs and what it survives.

Everything above showed the parts. This assembles them: choose a posture, a concentration, a hedge budget and today’s regime — the machine renders the full book and immediately stress-tests it. The core is structural — the strategy is the shape of the book, not the picks. The edge is shown at full instrument depth, because the mechanics are the point.

1 · Posture

2 · Core concentration

Largest position cap15%

3 · Hedge budget

Annual bleed budget3.0%/yr
Edge split · defensive share60%

4 · Regime at assembly

Playbook taxonomy — the options lens on the Kairos composite (see the playbook mapping). Post-audit this defaults from the live reading.

The assembled book

Consequences — every assembly is immediately stress-tested

Four storms, this exact book

Peak-to-trough drawdowns from the crisis-zoom charts above, recomputed for the current assembly — the market column is the S&P’s own fall from its pre-crisis high.

20-year parametric curve — this book vs the unhedged version of itself

Why the unhedged line can win: in a mostly-calm tape, insurance is a cost with no fire. The hedged line isn’t buying a higher ending — it’s buying the floor and the storm behavior above. Which one compounds better depends entirely on the storms you actually get, and no one chooses their tape.

A clean one-page printable of this assembly. Need the raw config? machine-readable config · YAML

Computed client-side from the same parametric assumptions disclosed above — not historical data, not a representation of actual or future performance. Structures shown are index/volatility instruments parameterized for illustration — not recommendations; core positions are archetypes, not securities.