Gooaye EP683: You Cannot See the Mountain From Inside It

From the side, a range; from the end, a peak —
near and far, high and low, no two views the same.
I cannot know the true face of Mount Lu,
only because I am inside the mountain.
—— Su Shi, “Written on the Wall of West Forest Temple” (1084)

These are my personal notes on Gooaye EP683 (released 2026-07-29). This is not a transcript and not official content. Please support the original show for the full episode.

What the episode is about

In one line: this one is not about being right. It is about getting through it.

If the following episode explains the mechanism of the sell-off — leverage and liquidity — this one describes what it is like to be inside it. And the central observation is essentially Su Shi’s line in modern form: you cannot see the end from where you are standing, so what you feel now and what you will see in hindsight are two different things.

The main points

1. He disclosed his own numbers. Roughly a 25–28% maximum drawdown this cycle, after being up more than 200% earlier in the year. Peers who were up six to eight times are down more than fifty percent — which he considers reasonable, given how fast they made it.

2. Backtesting “could I have held on” is severely biased. This is the most valuable passage in the episode. People considering leveraged products go find the worst historical drawdown and test whether they could have stomached it. His answer: that test is badly distorted, because in real time you cannot see the end.

In a backtest you know which day was the bottom and you know it recovered. Living through it, what you see is another day of limit-down closes and no idea whether tomorrow brings more. That absence of a visible end is what actually breaks people — and it does not exist anywhere in the backtest data.

3. Last March was worse. Even where the absolute declines are larger now, that episode was a liquidity vacuum. He was calling banks to open credit lines despite having no immediate margin risk, simply because he did not know whether three limit-down days would become six or nine. He also asked to postpone an investment he had already committed to — something he now describes as shameful in hindsight.

4. Self-knowledge about leverage. He found that anything above roughly 1.8–2x makes the pressure unbearable for him, so he keeps actual leverage below 1.3x. The number is not the point. Knowing his own number is.

5. Why no capitulation volume. By historical precedent a decline this size should have produced forced selling and a volume spike. Instead most people are giving back profits rather than being liquidated — anyone who did not pile in over the last month or two is likely still up. Nobody is forced to surrender, so the volume never comes, and everyone just grinds on each other.

6. “You have been spoiled.” An older peer reminded him that these names have simply not gone up for two or three months, which historically is completely normal. Those weeks in spring when you could go play ball at the open and things rose anyway — in hindsight, that was the moment to be careful.

Extensions

A leverage limit you can actually compute

“Above 1.8x the pressure is too much, so I stay below 1.3x” is more useful than any risk textbook, because it converts an abstract question (how much leverage should I use) into an observable signal (when do I start sleeping badly).

His test is blunter still: if it is affecting your life, the position is too big. Not sleeping, not eating, getting up at night to check the overnight session — those are not failures of temperament. They are the position telling you the answer.

My own version: over the past two weeks, how many times did I check quotes outside trading hours without a reason? If it is above my normal rate, that is not diligence — the position is too heavy. That signal arrives far earlier than any post-hoc review.

Surviving a backtest is not surviving the real thing

Worth remembering for anyone who has ever run one: backtest data contains no variable for “not knowing.”

You look at a -30% stretch on a chart followed by a recovery, and because you can see the recovery, you conclude you could have held. But living it, you are not facing a completed curve. You are facing an open question: is this the bottom, or the halfway point?

This changed how I think about my own stop-loss discipline. I used to think of a stop as “sell if it reaches this price.” But the real function is not the number — it is that it spares you from having to answer “is this the bottom,” a question nobody can answer. You do not need to know where the end is. You only need to have decided in advance how far you are willing to walk.

No capitulation volume is information, not comfort

The observation cuts both ways.

The reassuring read: systemic risk is smaller than it looks, with no wave of forced selling.

The other read: if nobody surrenders, the shares have not changed hands. Historically the durable bounces come after the volume spike, because that is when cost bases reset. So thin volume means both “not as bad as it looks” and “not over yet.”

Holding both readings at once seems more valuable than memorising any indicator. The good news and the bad news inside one observation should be stated separately, rather than picking whichever one you prefer.

”Spoiled” is an honest diagnosis

What the older peer said — two or three flat months are normal — punctures a drift in expectations. After a few consecutive months of tailwind, you quietly reset that pace as your baseline, and an ordinary consolidation starts to feel abnormal.

My check is to lengthen the time axis: where does this drawdown rank among the last five years? If the answer is “not in the top few,” then my anxiety is out of proportion to the facts — and that gap is exactly how spoiled I have become.

Where my thinking has moved

Honestly, the reassuring part of this episode was: pain is normal; pain that affects your life is the warning.

My holdings are down anywhere from twenty to fifty percent in this move. My first instinct was to keep asking what I had judged wrongly. After this episode I can separate two things more cleanly: being wrong and being caught in a systemic drawdown are different problems requiring different responses. The first calls for reviewing your method; the second calls for checking your position size. Conflating them usually produces the worst decision at the worst moment.

The other thing that stayed with me was the confession about postponing that investment during last year’s panic. I respect him for telling it — that is what panic actually looks like. It does not make you do something dramatically stupid. It makes you take half a step back from a commitment you were sure about. And only afterwards do you realise how unlike yourself that half step was.

One honest boundary

The above is my synthesis, not advice to anyone. The figures mentioned (drawdown percentages, leverage ratios) are the host’s own self-reported situation; I cannot verify them and do not need to. I cite them to illustrate reasoning, not for anyone to copy.

Also: I am in this drawdown myself. I am writing this not because I got something right, but because I want to be clear about what I would like to have already decided the next time this happens.

References

• Gooaye EP683 (released 2026-07-29) — the source of inspiration for this piece. Please listen to the original episode and support the creator.
• Su Shi, “Written on the Wall of West Forest Temple” — origin of “I cannot know the true face of Mount Lu, only because I am inside the mountain”

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Disclaimer: This article contains personal listening notes and study reflections for educational purposes. It does not constitute investment advice, an offer, or a solicitation. No specific securities are recommended and no price targets are given. Investing involves risk; past performance does not indicate future results. Please make independent decisions based on your own financial circumstances and risk tolerance, and consult a qualified professional where appropriate. The author may hold positions in the types of assets discussed.

Raw Markdown

This article is an educational discussion of investment method. It is not advice to buy or sell any individual security, offers no target prices, and does not analyze any current holding. Investing carries risk; make your own decisions or consult a qualified professional.