Most investors think the biggest risk right now is being under-invested. The bigger risk is being too comfortable with the most crowded trade in the world: passively long stocks.
Let me be clear: being long stocks isn’t wrong.
It’s just the least asymmetric bet on the board.
The S&P 500 is increasingly a top-10 trade.
A few simple facts explain why (we’ve touched on in previous Letters):
A handful of stocks now drive most of the market’s returns: the index is far more concentrated than it looks.
Market volatility sits near the low end of its historical range, even after a strong multi-year run.
At the same time, downside protection remains expensive, meaning the market still assigns meaningful probability to tail risk.
When stress arrives, correlations tend to rise, not fall: diversification shows up after it’s needed most.
Put differently: upside is incremental. Downside remains nonlinear (that’s not a good thing).
That’s not a doom and gloom forecast.
It’s a payoff profile.
The real opportunities right now aren’t directional.
Defined-risk spreads, convex setups, and bounded exposure offer something stocks don’t: better payoff for the same uncertainty.
If you’ve been “just long,” this Letter will explain how to pick better payoffs.
This Is a Crown Macro Special Edition
Think of this one as a reference note you’ll want to keep. It lays out the core framework behind how I think about asymmetry, structure, and payoff shape, so you can come back to it the next time you’re evaluating risk.
What This Special Edition Covers:
The Hidden Problem With Being “Just Long Stocks”
Why the most crowded position offers the weakest asymmetry and how to reframe what a “good bet” actually isStructure Before Thesis
Why defining downside first changes the opportunity set and the core ways professionals bound riskWhere Asymmetry Actually Comes From
The four main sources and what each one requires to workTwo Current Examples of Asymmetry (Not Predictions)
Breadth as market structure, and gold vs. silver as regime expression and how these look when payoff matters more than being rightWhy Being Right Still Loses Money
Where good ideas break in practice, and the exposure mistake that causes most failuresPassing the Asymmetry Test
Why most setups fail before they’re even considered
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