Slugging percentage

Commentary2 months ago
This past week was an exceptionally strong reminder of the importance of slugging percentage, a metric foundational to baseball.
"In baseball statistics, slugging percentage is a measure of the batting productivity of a hitter. Unlike batting average, slugging percentage gives more weight to extra-base hits."  (FYI, Babe Ruth is the all-time leader).
In investing, slugging percentage is critical to success.
Many investments will do reasonably OK, but some will dramatically outperform.  These "home runs" tend to be critical in driving long-term outperformance as they tend to cover for (and then some) other bets that don't do quite as well.
This tendency is also why you have to be reasonably picky as an investor vs. being over-diversified if you're looking to outperform. 
Despite having a portion of its investments allocated to downside hedges, the Titan portfolio still dramatically outperformed the market this week.  Titan clients had less risk, but higher returns. The holy grail.
The key driver (or "home run") here was Twilio (TWLO).  Twilio surged almost +60% after reporting accelerating adoption of its services despite the difficult macro climate.  Since we initiated Titan clients in Twilio last August, it is up nearly +40% vs. the market being flat. 
What many sometimes fail to appreciate is that as investors, we won't just make a few poor investments, we're likely to make many poor investments despite smart reasoning and shrewd judgment.
That's just the nature of investing and hence why this sport, like baseball, requires humility. You're guaranteed to strike out sometimes at the plate.
But on the whole, the idea is that your winners should massively outperform your losers.  It's why you need to think through the concept of risk/reward from the beginning each investment. 
"If I'm wrong about this thesis, what happens? If I'm right, how big could this be?"

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