No Mercy / No Malice: Think Slow

Portfolio Shifts

George Hahn's investment strategy has undergone a significant transformation, shifting from public stocks to private companies. He attributes this change to his belief in the market's collective loss aversion and his ability to absorb big losses due to his privileged position 1. Hahn's portfolio now consists of less than 20% publicly traded stocks, a stark contrast to the over 90% it once was. He explains, "I lean into my access to private companies as I can absorb big losses and withstand illiquidity."

My belief in the market's collective loss aversion has reshaped my investment portfolio over the past decade.

--- George Hahn

This shift allows him to focus more on storytelling and other creative pursuits, as he plans to outsource all investment decisions in the future 1.

   

Risk and Loss

The emotional and financial impacts of investment losses and gains are profound, as Hahn's experience illustrates. Despite achieving a net return that beats the market, he admits the emotional toll of significant losses, such as four investments dropping to zero in the past year 1. Hahn reflects on Kahneman's prospect theory, which highlights the emotional weight of losses over gains. He notes, "There have been periods of real pain," emphasizing the psychological challenges of his investment approach.

There have been periods of real pain.

--- George Hahn

Kahneman's concept of two thinking systems—fast for intuitive insights and slow for logical decisions—has been a crucial tool for Hahn in navigating these challenges 1.