A Letter to My Younger Self

My investing journey, Part 8, the last letter

Sep 28, 2026 · @Deniz Erkan

This series began with one chart: twenty-three years of my own money in the market. Since then I have walked through each part of it. The decade before I had a style. The flat years, when I had nothing to invest. The builder's edge. My own dot-com bust in 2022. The year of levered conviction. And the conviction I borrowed and lost.

This last letter is the one I wish someone had handed me in 2003, when I was a young engineer at Microsoft in Seattle and investing was a side project. I wrote it to him. I also wrote it for anyone who would like to walk a similar path. These are the crumbs I picked up along the way, and every one of them cost me something.

Dear Deniz,

1. Find your teachers early, and really study them

For your first years, you will copy whatever your friends are doing. It will not work, because none of it is yours. Go find the teachers instead. Peter Lynch, Warren Buffett and Charlie Munger wrote down almost everything they learned, and it costs you the price of a book.

Read them early. Reread them. Stay with them for years instead of sampling a new voice every month. We all stand on the shoulders of giants, so climb up sooner than I did.

2. Embrace your circle of competence

Pick one domain and become better at it than almost everyone. That only happens where you spend most of your day, which means your career. Mine was technology.

It took me until 2014 or 2015 to see that my daily work was my best research. When I chose Cloudflare to deliver a product's content, or picked chips for a workload, I was doing due diligence no analyst report could give me. Nearly everything I did well as an investor came from inside that circle.

3. Borrowed conviction never works

Friends you respect will hand you ideas that sound great. Mine were small biotech companies. When the news turned against them, I could not tell a broken thesis from a delayed one, because the thesis was never mine.

I also borrowed conviction from my own analogy. I called Farfetch the cloud of luxury fashion, and it became my largest single company loss. If you cannot explain why you own something without quoting someone else, the conviction is not yours. Do the work until it is, or let it go.

4. The “Am I ready?” test

Before you buy anything, ask yourself one question: can I pick a company that will grow its market share against its competitors, in a market that is itself growing?

Answering it honestly means knowing the rivals, their products, their plans and their execution. If you can answer it with confidence, trust that feeling. That is conviction you can build on. If you cannot, you are not ready yet, and that is fine. Keep learning until you are.

5. Leadership and execution matter just as much

I learned this running my own companies: the same strategy succeeds or fails depending on the people carrying it out. So look hard at the CEO and the head of product. Are they the founders, or do they run the company with a founder's mentality? Do they have skin in the game?

Watch their interviews and their talks on YouTube. Ask yourself whether you trust them. Ask whether you can see in their eyes that they will hustle and make it work. If you cannot, the rest of the story does not matter.

6. Know the limits of your own psychology

Knowing where you break matters as much as knowing any company. On paper, I could stomach anything. Then my accounts fell 60% from their peak, and I learned where my real limits were.

The flat years taught me the same thing about life: six years on a moonshot that failed, no money left outside a 401(k) I could not touch, and depression. Life will find your breaking point whether you look for it or not. Your job is to throw yourself into situations where you are likely to meet it, so you know it before the market finds it for you.

7. Skin in the game: live a consequential life

Nothing I did was with play money. In my companies and in my investing, I went all in with my own money, so every mistake was fully mine. Today nearly all of my net worth is invested alongside Runtime's investors.

That kind of exposure is frightening at first. Then you grow into the responsibility, and you start performing at a level you could not have imagined. Work becomes play. You are in a loop of learning, growing and widening your understanding, and it never ends. If you have that, you have a good life.

8. Knowledge compounds like interest

You will hear that Einstein called compound interest the eighth wonder of the world. He almost certainly never said it. The line first appeared in a 1925 savings-and-loan advertisement and borrowed a famous name later, which is fitting in a series about borrowed conviction.

The real observation is older. In 1772, the philosopher Richard Price wrote that money at compound interest grows slowly at first, then becomes “so rapid, as to mock all the powers of the imagination.” Knowledge works the same way. My builder's edge took about fourteen years to show up in my returns, and then it carried the decade.

Charlie Munger said the people who rise in life are learning machines. They go to bed every night “a little wiser than they were when they got up.” Keep compounding what you know. One day you will be at levels you cannot imagine from where you stand today.

9. Be guided by beauty

Seek beauty in what you build, what you study and how you live.

I have come to find beauty in a few principles that explain a great deal—a kind of compression of wisdom, with many experiences and observations distilled into a small set of ideas. In engineering, investing, and science, I’m drawn to ideas that account for many different situations without needing a new assumption for each one.

In physics, the deepest theories explain a vast range of phenomena with remarkably few principles. In good code, one sound abstraction absorbs cases that would otherwise need endless exceptions. In investing, a strategy built on a few durable principles survives more markets than one fitted to the past. For a company, one question—whether it is winning share in a growing market—can tell me more about its future than pages of quarterly results, P/E ratios and other financial metrics.

David Deutsch offers the test: a good explanation is hard to vary. When you have found the real cause, everything else falls into place. When you keep bending your story to fit what happens, you have not found it yet.

Einstein never called compound interest the eighth wonder of the world, but he did say that the aim of theory is to make the basic elements “as simple and as few as possible.” Apply the same standard to your life: remove what is unnecessary, and look for the principle beneath the particulars.

Seek what cannot be made simpler without losing the truth.

The path

I would not trade the path, flat years included. I would only walk it with these notes in my pocket.

This is the last letter in the series. Thank you for walking through twenty-three years with me. The journey goes on, in my own accounts and at Runtime, and so does the learning.

Earn your conviction, put your own money behind it, and keep learning. The rest compounds.

Engineered compounding,
Deniz Erkan

Disclosure: This letter describes my personal investment history and views. It is separate from the Runtime fund and its algorithmic strategy, whose positions are proprietary. Past performance does not predict future results. This is not investment advice.

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