PREFACE

Most investors fail. Not because they pick the wrong stocks, but because they play the wrong game.

I spent twenty-five years learning this the hard way. I studied valuation, calculated intrinsic value, and believed I had become a serious investor when I could determine a margin of safety before buying. I was wrong. I had started at the end.

With time, I realized that valuation comes last, not first. As Munger used to say, there is always a limit to what you should pay—even for an exceptional business. But the exceptional business must come first. So I began to ask different questions: What makes a business compound internally? What characteristics matter before price ever enters the picture?

This shift led me from value investing toward growth—not the reckless kind, but the disciplined search for durable compounding machines.

And then, after two decades in the market, I began to question the forces behind compounding itself. Not the businesses. The mathematics. Why do most stocks fail while a tiny minority generates all the wealth? Why does volatility silently erode returns even when the average looks healthy? Why do intelligent investors with sound analysis still destroy their own portfolios?

The answers came from outside finance. From physics: ergodicity and path dependency. From biology: survival as prerequisite, not constraint. From psychology: the gap between knowing and doing. From mathematics: power laws, skewness, and the invisible tax of variance. From philosophy: the difference between finite games played to win and infinite games played to keep playing.

This book distils these ideas into a small number of mental models that, taken together, form an operating system for long-term wealth. Each model is introduced where it is needed, applied where it matters, and tested against real positions in a real portfolio.

The market does not reward intelligence. It rewards survival. It does not reward activity. It rewards stillness. It does not care about your analysis. It cares about your behavior.

This is the uncomfortable truth at the center of this book: the investor is often the deciding factor between success and ruin—not because of what they don’t know, but because of what they fail to execute. The weight of time. The logic of survival. The power of doing nothing. The danger of doing too much.

I built this system over those years. It works. My best positions have compounded untouched for over fifteen years, through corrections, through crashes, through every temptation to optimize. They compounded precisely because I did not interfere. But I also learned, at significant personal cost, that building a system and applying it are two very different disciplines. The framework you are about to read did not protect me from myself—not because it was flawed, but because I failed to follow it when it mattered most. That lesson, the most expensive of my investing life, appears in the conclusion.

Every concept in these pages has been tested against real positions in a real portfolio—some held for over a decade, others for weeks. The framework is not theoretical. It is operational. And the errors documented here are not hypothetical. They are mine.

This book offers no predictions, no stock picks, no shortcuts. Only a way of thinking—and a way of behaving—that tilts the odds in your favor over time.

It is free because I have nothing to sell. If it helps you stay in the game, that is enough.

admin@averagingup.com

Jocelyn Dubé, 2026

TABLE OF CONTENTS

I. The Lie of the Average — The broken promise of ‘buy and hold,’ the Bessembinder reality, and the invisible volatility tax

II. Ergodicity and Behavior — Path dependency, ergodicity, the Vase Principle, and why behavior destroys what selection builds

III. The Foundation — Why survival is the prerequisite for compounding, non-ergodicity, and the Barbell structure

IV. The Four Buckets — Cash, Index, Growth Selection, and Amplifiers as communicating vessels

V. The Lenses — Five calibration tools: Ergodicity, Duration, Power Law, Harvesting, and Behavior

VI. The Selection Process — Twin Engines, the 15/15 Rule, and identifying true compounders

VII. The Exceptions — When rules bend, the Coffee Can, and the five criteria of Untouchability

Conclusion: From Finite to Infinite — The system in one page

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This content is for educational purposes only and does not constitute financial advice. The author is not a licensed financial advisor. Readers should consult qualified professionals before making investment decisions.