Incentive system design matters enormously for management alignment, but incentive systems cannot overcome a lack of intrinsic mission/fanaticism; well-aligned compensation paired with a mission-driven CEO generates exceptional outcomes, but even generous equity-aligned compensation cannot motivate a mercenary executive.

Most investors erroneously believe that trimming winning positions back to target weights is prudent risk management; in reality, allowing winners to run and grow as a percentage of the portfolio is key to long-term wealth accumulation.