Capability is a High Volatility Asset

A long-volatility asset:

• Looks boring or even inefficient in calm regimes

• May seem muted in low-variance, narrative-driven periods

• Suddenly dominates when conditions break, shift, or compress

• Pays off asymmetrically when stress reveals structure

Capability behaves the same way.

In smooth environments, everyone looks competent.

In noisy, performative environments, signaling dominates.

But when variance expands—time pressure, capital pressure, uncertainty, downside risk—capability starts to matter a lot.

That’s when:

• Judgment beats credentials

• Composure beats charisma

• Timing beats volume

• Structure beats style

This is why long-vol assets are uncomfortable to hold—but unbeatable to own.