March 2026 Random Ramblings

Summary

• Walker’s core market read is a contradiction he can’t resolve: fear gauges are screaming while indices barely budge. Recording March 20 with the Russell down 7% intra-month, the S&P down 5%, VIX around 26 and CNN Fear & Greed at “extreme fear,” he notes the Russell is only down 2% on the year while individual names are down “20, 30, 40%… 50, 60, 70, I’ll keep going higher.” His verdict: “Does that feel like extreme fear? Absolutely not.”
• His February call that Trump is “volatility personified” was followed faster and harder than he expected — “a couple weeks later we bombed Iran.” He flags a “perhaps energy crisis looming,” notes energy “infects everything in the economy,” and admits: “I don’t think I was quite positioned for this much volatility.”
• The provocative thesis of the episode: 2010–2025 software and GARP track records may be one long beta trade, analogous to energy specialists in 2008 or internet investors in 1999. Because software investing wasn’t commodity exposure and many software companies weren’t seen as a pure bubble mania, few people questioned the underlying drivers — but “maybe we’re all just riding one big beta wave.” The counter-signal he concedes: insider buying and aggressive buybacks appearing at some software companies “where you’ve never seen” either before.
• His 3-year rule — if a stock goes nowhere for 3 years, “maybe it’s not the market, maybe it’s me” — just got stress-tested by his own book. Energy names he punted 12–18 months ago at the 3-year mark have since “ridden a big Iran tailwind” and ripped, prompting him to refine the rule: it may matter most for crappy businesses where “it’s all about the unlock,” not compounders where value grows while you wait.
• The time-capsule analogy is the keeper: a buried $1,000 bought for $100 is “the best investment of all time” if it unlocks tomorrow — but a sub-3% IRR if it unlocks in 100 years. Buffett’s “time is the friend of a wonderful business” resolves it: buy a grower at 20 thinking it’s worth 40, and three years later it’s worth 55; buy a hairy small-cap and it’s still worth 40, so timing is everything.
• On sizing after blowups, his sharpest self-criticism: doing nothing after a 40% move is itself a decision, and almost certainly the wrong one. “It’s kind of crazy to be like, ‘it was right to be a 10% position yesterday… so the right position is a 6% position today’ — and lo and behold, I don’t have to trade a thing.” Force yourself to say add or subtract; if subtract, “the right answer might just be blow out of the whole position.”
• His biggest losses came from thesis-creep — riding a stock from 10 to 8 to 5 to 3 while morphing from quality thesis to value thesis to liquidation play. The fix is at-cost limits (for example, 5%, 8% or 10% of the book at cost, no adding even if the position shrinks to 50bps), which block the classic death spiral: “start off with 1% position, double down, double down, double down… all of a sudden you’ve lost 8% of the book.”

Deep dive

1. Extreme-fear readings next to all-time highs: “strange markets,” again

• Walker’s snapshot, recorded the afternoon of March 20: Russell down 7% intra-month, S&P 500 down 5%, VIX around 26, CNN Fear & Greed at extreme fear — he even saw a claim markets are more oversold than “the depths of the April tariff crisis,” which “I strongly doubt.” Yet year-to-date the Russell is only off 2%, the S&P 4%, “literally touching all-time highs on everything. Does that feel like extreme fear? Absolutely not.”
• The dissonance is in single names: “companies I see down 20, 30, 40% so far this year? 50, 60, 70, I’ll keep going higher” — none of which squares with “we’re going into a war and maybe having an energy crisis.” He owns the possibility that “maybe it’s just, hey Andrew, you follow crappy companies.”
• His tentative structural guess, via a basketball analogy: as games evolve they get stranger — optimal hoops became “you either shoot directly at the basket or directly behind the three-point line and everything else is excised from the playbook.” Maybe weird markets are “just the next level of game play.” He also revisits his February line that Trump is “volatility personified” — “a couple weeks later we bombed Iran… I don’t think I was quite positioned for this much volatility.” (Side observation in his sponsor read: Robinhood prediction-markets revenue went from $24M/year in June 2024 to $147M by December 2025, which he said made him think about prediction-markets growth, risk and craziness and the online-sports-betting comparison with DraftKings and Flutter.)

2. Were 15 years of software and GARP track records just beta?

• Walker’s framing: rewind to early 2008 and meet an energy specialist with a great 2004–2007 record (oil prices, he thought, peaking around $150), or to late 1999 and meet an all-in internet investor — “we would rightly look at each other and say, hey, is he great or was he enjoying a lot of beta?” He now asks the same of 2010–2025 software and GARP investors amid the “SaaS-pocalypse”: if these stocks do not rebound, “the track record’s going to look a lot different.”
• Why few people asked earlier: energy investors got tagged with commodity exposure, dot-com investors with bubble mania — but software investing was not commodity exposure, many software companies were not seen as being in a bubble, the trend lasted 12–15 years, and many were bought “with a business mindset.” So “I don’t think a lot of people have really looked at the track record and thought about the underlying drivers… maybe we’re all just riding one big beta wave.” He includes himself, noting that GARP and software investing have not generally been his strong suit.
• His hedge, stated in full: “maybe I’m a prisoner to the moment, maybe this is the greatest buying opportunity in history” — he’s seeing insider buying at some software companies where he had never seen it before, and aggressive buybacks at some where he had never seen those before. He expects someone may throw this podcast in his face in nine months.

3. The 3-year rule — and the Iran-tailwind exception that’s testing it

• The rule as stated: hold a stock 3 years with nothing to show and “it might be time for you to look in the mirror and say, maybe it’s not the market, maybe it’s me.” He admits “I don’t have backtests that say definitively 3 years is the marker,” and the archetype he’s guarding against is the pitch that arrives with “full disclosure, this has been my largest position for 12 years, the stock is down 20%… but now is the time.” His line: “I don’t want to be the person waging the same war for 10 or 12 years… at some point, I am the problem.”
• The uncomfortable other side: energy names he punted 12–18 months ago — bought around 2023 while thinking the cycle was toward its low and the assets looked cheap, then exited as the 3-year point approached because “I am not an expert in energy” — have since “ridden a big Iran tailwind” and are way higher. “How do you marry the two?”

4. The time capsule: why the rule may bite crappy businesses, not compounders

• His resolution runs through Buffett’s “time is the friend of a wonderful business”: buy a growing, value-creating business at 20 thinking it’s worth 40, and three years of flat stock later it’s worth 55 — versus his usual “smaller and crappier companies with hair on them,” where three years later it’s still worth 40 and “it’s all about the timing. It’s all about that unlock.”
• The analogy as told: a buried time capsule holding $1,000, bought for $100. Unlock it tomorrow and it’s an “insane IRR, the best investment of all time… outside of getting lucky at the casino, where do you do that? Nowhere.” Unlock it in 100 years and the guaranteed 10x is “a sub-3% IRR.” So the 3-year rule may matter more where the business isn’t compounding — with the caveat that “there is no simple rule in investing. It is very much marrying art and science and gut and math.”

5. Sizing after a 40% move: doing nothing is a choice, and probably the wrong one

• Using himself as the model: “I have an instinct, I know, to do nothing” after a stock moves 40% on earnings — not just that day, but the next day, the day after, and for the next month. But a 10% position down 40% is now 6%, and “it’s really unlikely that that specific share count… is the right sizing for the new news.” His fix: force a binary — “I must add or subtract” — and if subtract, “the right answer might just be blow out of the whole position” and re-evaluate next month.
• The anatomy of his worst losses is thesis-creep: buy at 10 as a good business worth 30; at 8 it’s “a little too cheap,” worth 20; at 5 it’s a crappy company but “strategic value to an acquirer who’d come in and fire everyone is 12 minimum”; at 3 it’s “just a liquidation play.” “You’ve rode a stock from 10 to 2, and you’ve changed your thesis the whole way. That’s the biggest mistakes I’ve ever made.”
• The risk tool he endorses but finds hard: at-cost limits of 5%, 8% or 10% of the book — even if a 5% position bought at 100 falls to 10 (now 50bps), you cannot add. It blocks the “famous” spiral: “start off with 1% position, double down, double down, double down. All of a sudden you’ve lost 8% of the book.” Though at 100→10, or even 100→40, “probably just time to sell.”
• A legitimate exception cuts the other way: a 10% position up 50% becomes ~15%, where adding runs into risk-weighting limits — “I should be adding, but I just can’t for sizing reasons… that’s absolutely a thing.” At-cost limits also force pre-planning: hold 3% at cost into a potentially volatile earnings print so “I’ve got another 2% to add.”