Nordsight — learn to invest, properly

Most people obsess over what to buy and barely think about how much. That's backwards. Picking the right names matters, but the size of each position is the dial that actually decides how much a single mistake can hurt you. Two investors can hold the exact same stocks and have completely different portfolios, because one put 4% into the risky name and the other put 40%. This lesson is about that dial.

Sizing is a discipline, not a prediction. You don't need to know whether a position will go up — you can't. What you can control, before you ever click buy, is how much of your money rides on it. Get that right and you can be wrong on individual names repeatedly and still be fine. Get it wrong and one bad call can undo years of patient work.

The all-in mistake

The classic rookie move is the conviction all-in: you find a name you're sure about, the excitement builds, and you put a huge slice — sometimes everything — into it. The logic feels airtight in the moment. "If I'm this confident, why hold back?" The problem is that confidence and outcome are two different things. Markets routinely humble people who were genuinely, intelligently certain.

When one name carries most of your portfolio, you've quietly handed your entire financial result to a single company's fortunes — a profit warning, a fraud, a regulator, a CEO leaving, a sector falling out of favour. None of those are things you can foresee reliably. The all-in doesn't just risk a loss; it risks a loss large enough that you can't recover from it on your normal contributions. That's the line that matters: not "will I lose money" but "could this loss be one I can't come back from."

Conviction is not a sizing input on its own

Being sure about a name tells you nothing about whether you're right. The market is full of confident people who were wrong. Size so that even your highest-conviction pick, if it went to zero tomorrow, would be a bruise — not a catastrophe you spend years digging out of.

Four things that decide a position's size

Lever #1

A cap per single name

The simplest, most powerful rule is a hard ceiling on any one satellite holding. As an illustration only, some investors cap a single individual stock at something small — say no more than ~5% of the total portfolio. The exact number is yours to set; the point is that the cap exists beforeyou fall in love with a name, so emotion can't override it later.

Lever #2

Conviction (within the cap)

Among the names that pass your process, you can lean slightly larger on the ones you understand best and smaller on the speculative ones. Conviction tunes size inside the cap — it never lets you blow through it. A bigger slice for a steady idea, a token slice for a long shot.

Lever #3

How diversified the thing already is

A broad ETF holding hundreds of companies is already diversified inside one ticker, so it can responsibly be a much bigger slice than a single micro-cap. One company can go to zero; a broad index basically can't. So your "core" (broad funds) can be large, while each "satellite" (single name) stays small.

Lever #4

Volatility — size scales DOWN with it

The wilder a name swings, the smaller the slice. A stock that can drop 50% in a month needs a smaller allocation than one that drifts a few percent, because the same euro amount of risk takes far less position to reach. High-vol names — small caps, single crypto, themed bets — get sized down precisely because they can move so hard against you.

The core idea

Size scales up with how diversified and stable a holding is, and down with how volatile and concentrated it is. A broad fund earns a big slice; a single volatile micro-cap earns a tiny one. Conviction can nudge within those bounds — it never overrides the cap.

The math, in plain euros

Sizing becomes obvious once you turn percentages into money. Take a €10,000portfolio. If you cap a single satellite name at 5%, that's €500 in that position. Now run the two questions that matter.

What does it take to move the whole portfolio?A €500 position that doubles (+100%) adds €500 to your portfolio — a 5% gain on the total. Even a spectacular result on a small position only nudges the overall picture. That's the trade-off small sizing makes on purpose: you give up the dream of one position changing your life, in exchange for no single position being able to ruin it.

What does a wipeout cost you?If that same €500 name goes to zero, you lose 5% of the portfolio— painful, survivable, recoverable. Now compare the all-in version: put €4,000 (40%) into one name and a wipeout costs you 40%. A portfolio down 40% needs a ~67% gain just to get back to even. That asymmetry — small wins nudge, big losses maim — is the whole reason caps exist.

How to size a new position

Decide the size beforeyou buy, while you're calm. A rough order that works:

1
Start from your cap, not your enthusiasm
Before anything else, recall your hard ceiling for a single satellite name. That's your maximum — not your default. Everything below is about whether this name even deserves to get near it.
2
Ask how diversified the holding is
A broad ETF can sit in your larger "core" bucket. A single company is a "satellite" and lives under the small-name cap. Don't let one stock pretend to be as safe as a fund.
3
Size down for volatility
The harder it can swing, the smaller you go. A wild small-cap or single crypto might warrant only a fraction of the cap — a token slice — precisely because a small position can still deliver a large shock.
4
Tune for conviction, inside the cap
Among names that pass your process, lean a little larger on the ones you understand deeply, smaller on the speculative ones. Conviction adjusts within the ceiling; it never breaks it.
5
Sanity-check the wipeout
Last step, in euros: "if this goes to zero tomorrow, what % of my total is gone?" If that number makes you queasy, the position is too big. Shrink it until a total loss would be a bruise, not a wound.

How Nordsight thinks about sizing

Nordsight treats sizing as a set of deterministic rules you set and it enforces— not a tip or a prediction. You define your caps (a ceiling per single name, a larger band for broad funds) and a sense of how much volatility shrinks a slice. Nordsight then flags when a position drifts above its cap or when a single name is quietly dominating the portfolio, so the discipline holds even when you're excited. It never tells you what to buy or hands you a euro amount as advice; it keeps your rules visible and applied. This is the same core-and-satellite logic from the diversification and satellite lessons, expressed as numbers.

Try first

You run a €20,000 portfolio with a 5% cap on any single stock. A name you hold has run up and is now worth €2,400 — about 12% of the total. Nothing about the company has changed. What does sizing discipline say, and why?

See what one bad bet does

Drag a position up to all-in and crash it. The hit to your whole portfolio is just size times the drop — which is exactly why a cap on any single name protects you more than how sure you feel about it.

InteractivePosition sizing — what one bad bet can do

One position = this % of your portfolio40%

…and it drops by−50%

Your whole portfolio

wiped the position the rest

A 40% position down −50% takes your whole portfolio down −20.0%.

Portfolio hit = position size × the drop. That's why the all-in is so dangerous and why caps on any single name are the real risk control — not conviction. Illustrative arithmetic, not a recommendation about any position or amount.

Sizing — how much per name