# Case: a user with everything in two bets

> A beta user holds 70% in the home index and 30% in a tech theme fund. Check the bet against the synthetic history and design what Zapas shows him, without telling him what to buy.

- Course: [Long-Term Investing: Index Funds, Risk and Your Own Behavior](https://productovi.com/courses/long-term-investing.md)
- Module: Why should one fund hold thousands of companies?
- Lesson 12/32, ~34 min
- Source: https://productovi.com/courses/long-term-investing/case-concentrated-user

## Victor's portfolio

**Grace:** End of April at Zapas. As the PM you close the month with a real case: a beta user, Victor, chose his own mix, 70% in Zapas Home Stock and 30% in a tech theme fund.

**Ethan:** And he's thrilled. He sent us a screenshot: his mix beat the world fund comfortably over the last five years. Honestly, maybe he's onto something.

**Sofia:** Did he build that mix himself, or did the app suggest it?

**Grace:** Himself. The beta shows the default and lets anyone edit freely, with no comment at all. That's today's real question: what should the edit screen say?

**Grace:** Let's replay his mix on our 40-year Tessaro history: 70% Tessaro Home, 30% Tessaro Tech Theme, set back to 70/30 at every year-end. His "last five years" look like years 30–34.

**1,000 dol. from the start of year 30, Victor's mix vs Tessaro World**

| End of year | Victor's mix | Tessaro World |
| --- | --- | --- |
| 29 | 1000 | 1000 |
| 30 | 1137 | 981 |
| 31 | 1255 | 1197 |
| 32 | 1338 | 1241 |
| 33 | 1464 | 1574 |
| 34 | 1990 | 1794 |
| 35 | 1957 | 1722 |
| 36 | 1687 | 1412 |
| 37 | 1519 | 1497 |
| 38 | 1918 | 2006 |
| 39 | 2503 | 2662 |
| 40 | 3365 | 3439 |

*Nominal dollars. Victor's mix: 70% Tessaro Home + 30% Tessaro Tech Theme, back to 70/30 each year-end. Computed from market_history.csv; synthetic.*

**Dataset (CSV):** [Tessaro market, 40 synthetic years (nominal %, inflation %)](https://productovi.com/datasets/long-term-investing/case-concentrated-user/market_history.csv)

**Dataset (CSV):** [1,000 dol. from year 30, the 70/30 mix vs Tessaro World](https://productovi.com/datasets/long-term-investing/case-concentrated-user/victor_vs_world.csv)

**Sofia:** Over years 30–34 he really did win.

**Grace:** Yes. Put a number on it first; then we look at what came next.

> **Exercise:** From the chart: 1,000 dol. in Victor's mix grew to 1,990 by the end of year 34; in Tessaro World to 1,794. By how many percentage points did Victor's mix beat the world over years 30–34?

## What came next

**Grace:** Now years 35–37. The theme index fell 55.3%, and the home market slipped too. Victor's mix went from 1,990 to 1,519. The world fund went from 1,794 to 1,497.

**Ethan:** Ouch. And by year 40?

**Grace:** 3,365 against 3,439: slightly behind, six years after a lead of almost 20 points. Cut the window at year 34 and he won; cut it at year 40 and he trails. The question for us isn't who won one window. It's what risk Victor carries, and whether he knows.

**Sofia:** So depending on where the window is cut, he either won or lost.

**Grace:** That's what a wide range of outcomes looks like. Measure the fall first.

> **Exercise:** In the chart, Victor's mix was worth 1,990 at the end of year 34 and 1,519 at the end of year 37. What was the change over years 35–37, in percent, to one decimal? Use a minus sign for a fall.

> **Exercise:** Which risks does Victor's mix (70% one home market, 30% one tech theme) carry that the default world fund dilutes? Select all that apply.

## What Zapas shows him

**Ethan:** So what do we do, block him? Users hate being told off. And he's our happiest beta user.

**Grace:** We don't block, and we don't tell him what to buy. We show what his mix is, with numbers, next to the default, and let him choose with open eyes.

**Ethan:** Can we at least make the World button big and green?

**Grace:** No. A nudge that looks like a recommendation is still a recommendation. Show both options plainly and let the numbers carry the message.

![Three checks for Victor's 70% home, 30% theme mix: one country, one theme, and 4.2% vs 5.9% real a year against the default world fund; show the bet and let him choose.](https://productovi.com/courses/long-term-investing/diagrams/m3-l4-kevin-check.png)

*Show the bet, the numbers and the default; the choice stays his.*

**Sofia:** And the screen should fire when the mix moves away from the default, not after a crash.

**Grace:** Exactly. Pick the tone first.

> **Exercise:** Which message should Zapas show Victor when he sets a 70/30 home-and-theme mix?

> **Exercise:** Started at year 30, Victor's mix was 19.6 points ahead of the world fund by the end of year 34, so it was the lower-risk choice.

**Ethan:** Victor will reply that he's beaten the world by almost 20 points. I need an answer that doesn't sound like a lecture.

**Grace:** Use the same numbers as the screen will, so the app and the support team tell one story. And start from what's true in his favour.

> **Exercise:** Victor writes: "My mix beat your world fund by almost 20 points in five years. Why should I listen to you?" In 2–3 sentences, reply as Zapas, respectfully and with numbers.

**Grace:** Now put it all together: the trigger, the words, the buttons and how we'll know it works. Write it so Ethan can hand it to design tomorrow.

> **Exercise:** Design what Zapas shows Victor about his concentrated mix: trigger, message, options, the default and a metric.

**Ethan:** Good. Victor stays, Victor knows. Next month I want to ask the bigger question: can anyone actually beat the market?

> **Key ideas**
>
> - A concentrated mix (one country, one theme) moves far from the market in both directions: in the synthetic history +99.0% vs +79.4% in years 30–34, then −23.7% vs −16.6% in years 35–37.
> - One winning window isn't evidence of lower risk; by year 40 the same start was behind (3,365 vs 3,439), and over 40 years the mix earned 4.2% vs 5.9% real a year.
> - The default stays broad, global and market-weighted: fewer avoidable risks, not a promise.
> - Zapas informs at the moment of the decision, names the bet, shows comparable numbers and leaves the choice with the user.

> **Educational, not advice**
>
> This course explains how long-term investing works; it never tells you what to buy. Investments can fall, and you can get back less than you put in. Check the current rules where you live or ask a licensed professional.

- Previous lesson: [One country or the world: home markets, currency and stagnation](https://productovi.com/courses/long-term-investing/home-or-world.md)
- Next lesson: [Before and after costs: the arithmetic of the average investor](https://productovi.com/courses/long-term-investing/average-investor-arithmetic.md)

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