Liquidity, drawdowns, and portfolio heat — a framework for when leadership rotates across the cap curve.
Cycle awareness
Smaller names can outperform in risk-on phases but draw down faster when liquidity tightens. Position size should reflect tradability and your max pain, not just upside stories.
Position sizing
- Cap single-name risk as a percent of portfolio.
- Stress-test for gaps and halts, not just smooth declines.