A Current Compounder is a lower-risk investment. These aren't precommercial drug developers endlessly burning through cash. These are picks and shovels providers, diagnostics companies, or commercial-stage drug developers. They have operating cash flow and are near or at profitable operations. I don't expect Current Compounders to drive my portfolio's returns, but they provide protection against volatility. These are the dad sneakers of investing. Pragmatic, not flashy.

Your allocation to Current Compounder positions depends on your age, your conviction in each opportunity, and maybe even the individual portfolio itself. However, the finch recommends that even aggressive portfolios include an allocation of at least 20% to stable-and-steady businesses. Who knows, if you're lucky, businesses with healthy operations are usually above-average acquisition targets.

A Future Compounder is a higher-risk investment with the potential for a higher future return. That's how you envision it in your head anyway. But when you buy the damn thing there's more statistical fog, eye squinting, and general uncertainty about the investment thesis. These positions are inherently more volatile with the potential for huge drawdowns. Ever been down 50% or more for a high conviction position?

The best time to buy Future Compounders is either the scariest or most boring. The stock price is down in the dumps or doing absolutely nothing for a year or longer. Maybe there was a big pivot and everyone stopped paying attention. That could just give you more time to build a position. Or maybe it's just another crappy drug developer like all the rest and we're the suckers.