XII Capital

28/05/2026

Most investors run from bankrupt companies.
Distressed investors study them closely.

Why?

Because when fear peaks, assets can trade far below their underlying value.

Debt, restructuring, forced selling, panic—this is where distressed investing operates.

High risk.
Complex analysis.
Potentially massive upside if recovery happens.

Some investors look for growth.
Others look for mispriced chaos.

28/05/2026

VIX = Volatility Index.
Also known as the “Fear Index.”

Low VIX? Markets are calm.
High VIX? Fear and uncertainty are rising.

But here’s the important part:

The VIX doesn’t predict crashes.
It measures expected volatility and current market fear.

That’s a big difference.

Fear is a market signal.
Not a crystal ball.

27/05/2026

Stocks like GameStop and AMC didn’t just rise because of hype.
Derivatives played a major role.

Millions of call options were bought.
Market makers hedged by buying shares.
That buying pushed prices even higher… triggering even more buying.

That feedback loop is called a gamma squeeze.

At times, derivatives no longer simply reflect markets.
They can actively move them.

Sometimes the tail starts wagging the dog.

27/05/2026

Nick Leeson made unauthorized trades that eventually lost £827 million.

One person.
Too much control.
Too little oversight.

Within weeks, Britain’s oldest merchant bank collapsed.

The lesson wasn’t just about trading.
It was about systems, accountability, and concentration risk.

Risk doesn’t only exist in portfolios.
It exists in people too.

26/05/2026

Some companies aren’t truly growing.
They’re just surviving.

These are “zombie companies” — businesses earning enough to service debt, but not enough to meaningfully expand or strengthen.

Years of ultra-low interest rates kept many alive.
Cheap money delayed reality.

But when rates rise, weak balance sheets get exposed fast.

Easy money can hide problems.
Higher rates reveal them.

26/05/2026

Helicopter money sounds simple:

The government gives people cash directly.
No loans.
No repayment.
Just money entering the economy.

It can boost spending and support growth during crises.
We saw versions of it during COVID.

But more money chasing the same goods can also fuel inflation.

Every economic solution comes with trade-offs.
There’s no free lunch.

25/05/2026

The South Sea Company promised extraordinary wealth and endless opportunity.

Investors rushed in.
The stock soared nearly 900%.
Excitement replaced analysis.

Then reality arrived.

The profits never matched the hype, the bubble burst, and thousands were financially ruined.

Centuries later, the pattern still repeats.

Hype can drive prices temporarily.
Substance determines what survives.

25/05/2026

The Kelly Criterion asks a simple question:

How much should you risk?

Risk too much? You can wipe out your capital.
Risk too little? You waste opportunity.

Great investors don’t just think about returns.
They think about position sizing.

Because survival matters more than excitement.

In markets, the key isn’t just being right.
It’s sizing correctly when you are.

24/05/2026

One investment doing well can build wealth.
One investment going wrong can destroy it.

That’s concentration risk.

A portfolio heavily dependent on a single stock, sector, or theme may look strong—until conditions change.

Diversification isn’t exciting.
It’s protection.

The goal isn’t just making money.
It’s surviving long enough to keep compounding.

24/05/2026

Two investors can earn the exact same average return…
And end up with completely different outcomes.

Why?

Sequence risk.

If major market declines happen early in retirement while you’re withdrawing money, the damage can be hard to recover from—even if long-term returns eventually look “normal.”

Same returns.
Different timing.
Different future.

Timing luck matters more than most investors realize.

23/05/2026