In this solo monologue, Ndubuisi 'Andy' Egwim introduces his personal investing approach he calls “heartbreak insurance.” He explains that when he likes a company but believes its current share price is overvalued, he may purchase a very small stake—just enough to benefit if the stock soars, yet small enough that a potential loss won’t affect his financial future. This tactic lets him stay exposed to upside without succumbing to the fear of missing out (FOMO) that drives many new investors to over‑invest when a stock rallies. Andy stresses the importance of separating conviction (the belief a business is great) from position size (how much capital to allocate). He illustrates the idea with the upcoming Dangote Refinery IPO, suggesting a modest allocation rather than an all‑or‑nothing bet. The overall lesson is that investors can hedge against the emotional “heartbreak” of watching a stock they like rise while they stay disciplined and risk‑aware.
Chapters
I have something in my investment portfolio called heartbreak insurance. And no, your financial advisor probably hasn't ever mentioned it to you. They may have never even heard of it. Let me explain. Sometimes I find a company I really like, a great business, great future. But I look at the share price relative to, you know, their earnings and think, hmm, that's overpriced, that's expensive. So I don't buy. Then the share price goes up by 50%. Then it doubles and I double over in pain. Then it doubles again, and every time you check the share price, small heartbreak. Okay, I'm not saying we should pursue share price and capital appreciation. We're sound fundamental investors, but I mean, you're human, right? Now, this is where sometimes people make a mistake, new investors especially. They panic, they get FOMO, and they throw a huge amount of money at the investment because it's going up, because they are frightened of missing out. The fear of missing out. Don't do that. I don't do that. Occasionally, if there's a business I genuinely want to own, but I'm uncertain about the valuation, I think it's overpriced, I might buy a tiny position, small enough that if I'm completely wrong, it doesn't matter to my financial future, but just enough that if the company performs spectacularly, 10x or whatever, I use this with startups as well, then I'm participating. And if the share price eventually falls towards a valuation I find more attractive and the company is still earning, I can consider buying more. That's why I jokingly call my heartbreak insurance. And that's actually one of the things I sometimes consider with interesting opportunities like the Dangote Refinery IPO, which is going live on Monday. Not a massive investment, perhaps a small one, because here's the real investing lesson here: you don't have to choose between owning nothing and betting the whole house. Your conviction and your position size are 2 completely different decisions. So it doesn't have to be all or none. I hope you find that helpful. Let me know what you think. Do you do this as well? Heartbreak insurance? I'd like to know.
