Message №2
May 2026

Dear subscribers,

this is Message No. 2 | May 2026.

The Stoic level in our system is eternal. This philosophy has already lasted around 2,500 years and, unlike many intellectual fads, hasn't become outdated — it's become more in demand.

In a world where the investor's main problem isn't "bad markets" but their own cognitive biases, Stoicism offers not comfort but a practical toolkit: what's within our control, what isn't, and how to deal with inevitable drawdowns and our own mistakes.

That's why for Epictetus Fund, Stoicism isn't decoration or "quotes for Telegram" — it's the operating system on which the entire architecture is built.

Seneca and the Progressors

One of our key reference points is Seneca with his "Letters to Lucilius." In one letter, he offers a simple but honest picture of how human learning works.

At the bottom of the pyramid are those who aren't interested in themselves or their thinking: for them, neither philosophy nor markets nor their own mistakes become a subject of work. Seneca calls them inquisitive-less.

A bit higher are those he calls progressors — people who already see their biases, track their mistakes, and try to fix them. Seneca included himself here.

At the very top are the sages. In classical Stoic tradition, almost all early Stoics assigned only Socrates to them — and no one else.

We consciously place Epictetus Fund and everyone reading these letters not among "ready-made sages" but in the layer of progressors. This is more honest both to the market and to history: we still make mistakes, but we no longer let them pass unnoticed.

The Epictetus Fund Manifesto is structured exactly in Seneca's style: it doesn't assume we're already sages. Instead, it gives a five-level framework where you can honestly admit: "here we performed as progressors, and here we slipped down a floor."

In this second message, dedicated to May 2026, we'll travel this route from top to bottom again: from the eternal Stoic level — to portfolio structure, specific trades, and the places where philosophy held up under market pressure, and where it didn't.

May 2026: Facts of the Month

Rebalancing

How This Looks Through the Manifesto Lens

Here, as in April, the main idea is bringing the portfolio to the right structure (Level 2 Manifesto). Structure matters more than local P&L: when the Architect makes a decision, their main task is reducing risk on the eternal portfolio (25+ years). This means structural weights are more significant than local realised returns on individual trades.

From this:

• Selling 100 META as an over-weighted position — structurally correct decision: we continued reducing risk on a name below entry price. From the Architect's view, this isn't an error but meeting Alpha block limits.
• Selling CRWD — executing the Architect's will to fix structure and reduce concentration. From entry/exit technique perspective, this decision might turn out not ideal: the position remains in a strong uptrend, but the Manifesto explicitly fixes that market timing isn't the system's competence and can't be the basis for decisions.
• Selling MSFT — reducing position to accepted limits. Probably, the reduction looks counterintuitive against the software sector reversal, but trying to "catch up" with the move and guess timing contradicts Stoic discipline: for the system, it's more important to meet limits than argue with our own rules for potential upside.
• Selling TSLA — a special case. Formally, the reduction lowers concentration in the Alpha block, but in essence, this is an error at Level 2: Tesla as a strategic name should be in the Stoic Core portfolio, and Tudor tactics trying to "buy back lower" can't be transferred to the conservative contour. Here we've recorded transferring a trader's reflex into a Stoic mandate, which directly violates the Stoic/Tudor level framework.
• Buying Apple — executing the Architect's decision on the limit for this position.

From the upper Manifesto levels (Levels 1–2), the Architect continued correctly bringing structure to target weights in May: limits by block were carefully adjusted. The TSLA error isn't a structural logic failure but a mandate violation at execution level: the Operator tried to apply aggressive Tudor tactics inside Stoic Core.

May Errors Through the Manifesto and Tversky–Kahneman Lens

Month Results and TWR

Overall, May went well: TWR for the month was 11.22%, the market continues to perform but its breadth remains low at around sixty percent. On one hand, this is a signal that only a few sectors are growing, but on the other, you can assume the remaining sectors will join and the rally may continue. For us, what matters more is:

• At structure level (Level 2), the Architect adjusted limits according to the Manifesto plan;
• At Levels 1–4, the Manager clearly recognised two fixed errors in May, both on the Micron instrument;
• At Level 5, the Steward correctly recorded the violations.

Tudor vs Stoic Core Project (Tudor Match) — 36 Months, Start 01.01.2026

So, the fifth month of the duel is complete. In May, TWR was 29.24% for Tudor vs 11.22% for Stoic Core. Total score for 2026: 41.79% vs 20.15%. As long as the strong trend in semiconductors continues, and software cyber security companies and databizs have joined, Tudor's advantage isn't due to the Operator's talent or their trading practices but the market regime itself.

The Stoic Core Architect confidently argues that "everything changes in 28 days" — Japanese proverb — and within 36 months until the duel ends, the score on the scoreboard will be different.

The Operator has already started thinking about trimming positions to not lose the accumulated result. TWR for the month and the year-to-date chart can be seen in the Archive.