This article was originally published in Asian Banking and Finance on 18th of June.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or legal advice. It does not take into account your individual circumstances, objectives, or financial situation. Any examples, securities, or indices mentioned are for illustration only and are not recommendations to buy, sell, or hold. Past performance is not indicative of future results. You should conduct your own research and consult a licensed financial advisor before making any investment decision. The author and publisher accept no liability for actions taken based on this content.

One of Warren Buffett’s most popular pieces of advice for amateur investors is to buy a low-cost index fund and forget about it.

In the United States, it is a reasonable thing to say. The S&P 500 has compounded steadily for decades, the market is genuinely efficient, and the costs of trying to beat it usually exceed the rewards. Even Berkshire Hathaway, which is run by professionals, has trailed the index over the past 10 to 15 years; the gap has widened noticeably since the rise of the mega-cap tech rally.

Well, drop the same advice into Indonesia, and it quietly fails.

Over the past five years, Indonesia’s real GDP has grown by about 18%. Over the same window, LQ45, the country’s most-watched index, has gone nowhere. A retail investor who bought the index in Jakarta has not captured the country’s economic growth. They have captured the dysfunctions of a market whose structure has not meaningfully changed for decades.

Buying the index does not eliminate the risk of investing. It only eliminates the risk of underperforming against the index. When the index itself goes nowhere, a portfolio that comprises the index follows suit.

The inefficient market is the point
Indonesia, like most emerging markets out there, runs on an inefficient market. Price manipulation remains common, whilst regulatory enforcement still requires improvement. Liquidity is thin compared to developed peers.

As a further illuminating example, Indonesia’s Finance Minister Purbaya recently declined to give fiscal incentives to the Indonesian Stock Exchange because the culture of “goreng-menggoreng” (artificially engineering stock prices) is still everywhere. Indonesia today has more in common with the American capital markets of the 1970s than today’s S&P 500.

Howard Marks, co-chairman of Oaktree Capital (managing well over US$100b), built his career exactly here. He delved into the US high-yield bond market when it was illiquid, ignored, and full of mispricings. It was so inefficient that people called it “junk bonds.”

His core lesson has aged well: Successful long-term investing comes down to buying an asset for less than what it is worth. The more inefficient a market is, the more often prices stray from underlying value, and the more room there is for active and disciplined work to outperform.

The information-era paradox
There is a generation of working professionals across Southeast Asia who, for the first time, know they should be investing. They have brokerage apps. They have podcasts. They have a thousand influencers and an unlimited supply of artificial intelligence (AI) chatbots willing to explain compounding.

What they do not have is a practical framework that rewards that very knowledge.

AI, in particular, is tempting but flawed. The economics of consumer AI products favour engagement, not returns.

The model is built to keep you typing and putting in prompts further. For example, if you feed it a hypothesis you already believe, it will help you justify it. True, you can ask AI to spit out a bunch of bear cases for you to be wary about. Or a list of unknowns. But you largely still need to build the conviction yourself. It is how their business model is designed. The more users engage, the more money they make.

So, you end up with a unique group of investors: People who understand the philosophy of long-term ownership through investments, who have easy access to investment instruments their parents never did, and who are well aware from firsthand experience that “investing in the index” is not a good enough solution to all this.

As a result, they get funnelled into either expensive, over-regulated mutual funds or do-it-yourself trading apps that wear them down emotionally during every drawdown.

Why the culture will evolve differently
Morgan Housel makes the point in The Psychology of Money: Our behaviour with money is shaped less by abstract theory than by the monetary events we — or our societies — have lived through. The collective memory of Weimar hyperinflation helped create a persistent preference for gold. Today, private German households hold more physical gold than the Bundesbank itself.

Indonesians and their neighbours also have unique formative experiences: The 1997–98 Asian financial crisis, repeated bank failures, multiple rupiah meltdowns, and a class of individuals burned by “blue-chip” stocks. That is the structural feature of Southeast Asian societies that rarely gets discussed in investing talks: We live in low-trust environments, and we will continue to do so for the foreseeable future.

That fact reshapes the whole map. In the United States, retail investing culture evolved around self-service, Vanguard, Schwab, ETFs, and robo-advisors. The implicit assumption was that the institution would behave, the disclosures would be honest, and the customer could safely automate their decisions.

Again, in Indonesia and most of its neighbours, that trust assumption does not hold. Customers have learned, often the hard way, that handing assets to an opaque counterparty is a real risk.

So, the services that require the least possible trust, full custody by the customer, transparent positions, lean cost structures, and no opacity around fees, are the ones that will scale. That is the inverse of how Western retail investing developed, and it is why the local solution will not look like a copy-paste of Robinhood or Vanguard.

What the local solution probably looks like
If the developed-market answer is to automate everything and trust the index, the Southeast Asian answer likely points the other way. It might look more like a small, human-mediated layer over a market that genuinely needs active interpretation. Lean enough to be affordable. Transparent enough that the customer never has to take anyone’s word for it. Disciplined enough to keep clients invested through the drawdowns the index itself will not protect them from.

Buffett was most probably right for his market. The interesting question for Southeast Asia is not whether to copy him. It is what to build instead after understanding the monetary and investment context in the society that we live in as it is.

We’ll find out soon enough.

This timely article is probably most important one I’ve written this year—maybe in years. If I don’t get it all right, I look forward to your comments and corrections. If you believe it can be of use to improve quality of your circle, please share it. As always, they are my opinion and they are not to be construed as financial advice.

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One morning, Hendra was the proudest man in Jakarta. He sipped his morning coffee and started his day swiftly.

He held an envelope in his jacket pocket. It contains the enrolment deposit for his daughter’s first semester at university. Hendra is a simple man. He works at Astra Graphia as a salesperson, selling Fuji Film printers to offices (mostly companies within the Astra Group as well). But his salary was enough for him to save for his daughter’s education.

A little every month, for years until his daughter got accepted to Universitas Indonesia. What a moment. He never made it to university himself, but his sacrifice and hard days in the office would soon pay off to something great in the future, through the life of his daughter.

He took the route he always took, down Jalan Gajah Mada toward Glodok. The same shophouses he had passed 10,000 times — the gold sellers, the electronics counters, the hardware stalls run by the same families for three generations.

Except today there was a gridlock. He sensed something wrong when he smelled a distinct smell of smoke on the streets.

He initially was still calm, but he grew restless as he overheard people from afar screaming and shouting.

Hendra decided to leave his car. As he started brisk walking towards the bank, he saw from a distance that Glodok Plaza was alight. Further down, the old market was alight. The street lamps had come on early, because the afternoon had gone black with smoke.

Hendra was delusional, maybe the bank is still open. He proceeded forward through a group of strangers carrying televisions and rice cookers and whatever they could carry. Only to finally learn that the bank building he wanted to pay a visit was literally on fire.

And the envelope was still in his pocket, worth 9 months of his salary at Astra Graphia. When he saw that the building was lit on fire, he finally realised that his plan had to wait. He must quickly go back home. He’d need to at the very least make sure that his daughter is safe.

He ran.

That is not the opening of a film.

That is May 1998, reconstructed as faithfully as I can through the eyes of one ordinary man who set out to do nothing more than deposit his daughter’s university tuition fee. Across the city that week, more than a thousand people would die — most of them burned, hundreds of them inside a single shopping centre in Klender.

And here is the cruelty that adds to it. Lets say Hendra made it out, got his daughter and a single bag to the airport to flee the country. The money had saved up already betrayed him too. Rupiah had collapsed from around 2,500 to the dollar to as much as 16,000. Even the escape was a loss.

The banks you trusted, gone

Start with the most reputable bank in the country.

It was owned by a mega business empire Indonesia, run by the tycoon sitting close to Soeharto himself. If any bank on earth appeared untouchable, it was this one. This is the bank the middle class handed their salaries to without thinking further.

During the riots, it suffered a violent run. In a matter of days, deposits collapsed from around Rp56.8 trillion to Rp34 trillion — and 122 of its branches were burned and damaged. It didn’t survive and the state had to step in to park it inside Badan Penyehatan Perbankan Nasional (BPPN), the bailout agency.

The deal to salvage the bank was messy and topsy turvy. But less than 30 years later, the bank went on to be the most valuable public company by market cap in Indonesia.

That company was BCA.

The state owned banks did not have it any better. There were four of them that went under:

• Bank Bumi Daya

• Bank Dagang Negara

• Bank Exim

• Bapindo

They were so broken they couldn’t survive on their own. They were fused together into a single entity. And again, less than 30 years later, it became the largest bank in Indonesia by assets.

You know that entity today as Bank Mandiri.

Let me stress this once and for all, because this is easy to skim past. These banks did not have a “rough quarter”, or “slower-than-expected growth”, or “NIM compression” or “made by government to channel money to villages”.

They died.

And the rescue?

The years after the fires didn’t restore anyone’s faith either.

The dead banks were swept into BPPN, the bailout agency, and the government had political will to save them. It just cost a fortune which was on the order of 50 to 60% of GDP to recapitalise banks whose books were garbage. Yeah, the initial capital for the government to setup Danantara is about 1.4% of GDP today. That number looks cute compared to the amount in proportion they had to spend to rescue the banks.

Was the intent good? Yes of course. Because you do not want a country with no functioning banks.

But how about the execution? Predictably, there was corruption involved.

You’d think every rupiah back then went purely toward saving the dead banks?

Well, the most famous example is the Bank Bali scandal. A businessman named Djoko Tjandra engineered a disputed “cessie” (debt-claim) deal that ended with Rp904.6 billion of public money being paid out through Bank Bali — funds tied to the very bailout that was meant to be stabilising the system.

Let me be careful here and stay strictly with what the courts and the press have established. Tjandra was acquitted at first, then convicted on review by the Supreme Court — sentenced to two years and ordered to forfeit roughly Rp546 billion to the state. The day before the ruling, he left the country. Here is how The Jakarta Post headlined it when he was finally caught, eleven years later:

“Indonesia brings graft fugitive Djoko Tjandra back from Malaysia.” — The Jakarta Post, 31 July 2020

So now put yourself back in Hendra’s shoes, assuming he made it home safely that day. He watched the violence, he watched his savings evaporate, he watched the most reputable bank in the country collapse. To put sprinkles onto the ice cream sundae, he then watched the rescue itself mired in a corruption scandal.

What more can you ask. I mean if I were to be Hendra, I might walk away and never trust a bank in Indonesia ever again. Let alone, becoming a minority shareholder in one. That would be max insanity.

His feelings would have been justified. In 1998, the skeptic was the smartest person in the room.

And then the world kept testing it

Fast forward ten years, 2008. We saw The Global Financial Crisis.

If you’d lived through 1998, perhaps your reaction was completely reasonable: Ah, sudahlah. Indonesia is finished. There is no chance this economy weathers a crisis of this size, not with this many corruption cases sitting at the top.

And the markets did get hit. IHSG went from 2,830 to 1,113 that October. The Rupiah weakened from Rp 9,000 to Rp 12,400 at its worst in November 2008.

How about BCA?

While banks in the US were imploding, BCA’s lending slowed but it remained profitable. It booked around Rp3.3 trillion in just the first half of 2009. And Indonesia grew +4.6% in 2009 — the third-fastest in the entire G20, one of only a handful of major economies on earth that didn’t shrink.

Fast forward 12 years later after the Global Financial Crisis

The economy is literally shut down. People can’t leave their homes. The country posts its first recession since 1998 — GDP −2.07%.

Surely this is the one that finally breaks the banks in Indonesia. Well quite the opposite. BCA printed money.

BCA’s net profit for 2020: Rp27.1 trillion.

Yes, that was a dip, down about 5% from Rp28.6 trillion in 2019. The bank deliberately parked enormous provisions against the loans it restructured for struggling borrowers. But read the number again. In the year the entire economy was switched off, BCA still earned twenty-seven trillion rupiah. It didn’t lose money. It didn’t wobble. It was certainly quite far from dying.

It earned slightly less for one year, then went straight back to compounding:

• 2021: Rp31.4 trillion

• 2022: Rp40.7 trillion

• 2023: Rp48.6 trillion

In three years it went from a COVID “low” of Rp27T to nearly Rp49T which is an all-time record. The share price followed, printing high after high (right up until the 2025 drawdown I wrote about in To those holding big banks — but that’s a story about price and sentiment, not about the business underneath it).

So by now, something genuinely strange had settled in. Owning banks was no longer the reckless move. It had become the prudent one. Virtually everyone — advisors, respected investors, your disciplined uncle — was urging you to hold banks as a core equity position.

How did that happen?

Let us sit with the seismic size of this shift for a second.

Picture a population that was traumatised into distrusting banks. They watched them collapse and they also watched the bailout get robbed by greedy elites. Yet they somehow turned into a population that treats banks as the bedrock of Indonesia’s capital market.

And this isn’t dumb money talking itself into a story.

If we take a look who actually owns BCA (you can take a look at the daftar pemegang saham). You have:

• Norway’s sovereign wealth fund is in there

• big global index and pension funds

• among others

They are not a random retail you’d find on a discord channel that broadcasts price predictions every minute.

Here’s the part where I think is rarely discussed.

While everyone was, correctly, furious about the corruption and the looting and the Djoko Tjandras of the world, something boring and durable was being built in the background.

They are real instruments:

• LPS / deposit insurance (2004) — the backstop Hendra didn’t have.

• Independent central bank (1999) — no more BLBI-style political liquidity hosing.

• Caps on connected lending (~10% of capital) — the big one; it outlaws the exact thing that killed the banks (owners lending to themselves).

• Higher capital floors + consolidation + Basel buffers — why CAR now sits north of 20%.

• OJK (2013) — dedicated bank watchdog.

• Crisis playbook (2016, the KSSK committee) — coordinated handling instead of a panicked scramble.

These things are not trendy to be discussed. The robbery and scandal make headlines, but I see that the rebuild happens in silence over decades.

And that’s the trap ladies and gentlemen. The bad news is loud but the repair is almost always slow and quiet. If you listen to the loud volume, you’d come to the conclusion that the country is ending even when it is quietly becoming the very thing foreign sovereign funds want to own for the long term.

I am not from La La Land

In this economy and bad sentiment today, you are probably thinking that Toby is starting a patriotic singalong. Not really.

Is the government free of corrupt officials? Of course not. You could take the most recent one — the Makan Bergizi Gratis (MBG) or free nutritious meals program. Just days ago, in June 2026, the Attorney General’s Office arrested the former head of the National Nutrition Agency and two of his deputies as suspects. The scheme prosecutors describe is too familiar: rig the vetting portal so affiliated foundations win the kitchen contracts, then mark up the procurement and pocket the difference.

Just like a normal taxpayer, I am absolutely furious that my tax money is being spent to feed these dreadful creatures instead of being spent to feed school children who can’t afford quality meals.

So no, I am not saying that corruption has been solved. Corruption is still being committed and the people who do it should be prosecuted. Full stop.

But here is a question that matters equally. Is it smart to expect government to eradicate corruption completely?

No, of course not. No matter how good the system gets, no matter how qualified the official, there will always be someone, somewhere, who does the awful thing. Even in developed nations!

So yeah, it is reasonable to disappointed, angry and upset about the corruption that inevitably happens. What I think is not reasonable is to:

• look at a SELL INDONESIA headlines

• listen to gossips at your tongkrongan on how bad some officials are conducting their affairs

• read too many Telegram groups’ negative opinions that contain too much logical gaps mixed in with unofficial news or rumors

• and many other ways you get your information from

and then conclude that the country is about to go bankrupt, or collapse back to what it was in 1998.

But can it go back to 1998 though?

Well of course it can. There is always that tail end possibility.

But can you reach financial independence by winning the lottery? Yes you can.

Do you stop work when you know that you can win the lottery? Well I hope not 🙂

So the question to ask is: are you a realist or a cynic?

When you see the next scary headline — another scandal, another half-baked policy implemented at a large scale — ask yourself that question honestly.

If you’re a realist, that’s healthy. I believe that people should treat every new government regulation, every new program, with suspicion, so that we stay critical of what they actually do. Pressure them in whatever means or capacity we have as a lawful citizen.

Contribute, deliver good work and teach good values by real example, to demonstrate that the bad examples we see in the media are just below our standards.

But being a realist is not the same as being a cynic. And the line between them is thinner than people think.

A cynic is someone who can only criticise — who assumes that whatever anyone does, it must end badly.

And here’s the uncomfortable truth: being cynical is much, much easier than being a realist. The realist still has to weigh the evidence. The cynic has already decided to believe in just the negative things. Any new information about some negativity just reinforces their beliefs without much critical thinking.

Any positive news? It’s fake bro, if they are a cynic.

Think about it like religion. Expecting no official to ever be corrupt is like expecting no priest to ever be caught in a scandal. If that’s your standard, you will be disappointed.

The cynic’s response is to stop going to church entirely. To declare the whole thing hypocritical and walk away. There is no point in religion if we can’t trust religious leaders who commit awful scandals.

But I strongly disagree with that. Practising religious values and actually living them is still a virtuous, worthwhile thing to do, no matter how many individuals fall short of them.

If we can see that so clearly with religion, why is it so hard to see it with our government?

The banks that failed the population in 1998 are the banks the world wants to own in 2026. Like it or not, both things are true. And the herculean effort to save them from the gutters seems to not be for nothing in the longer run.

There are other long term projects that are running now in Indonesia. Danantara, IKN, MBG and so on. Your realism in the form of eye balls, critical thinking and constructive discourse in good faith is very much needed. Your cynicism can probably take a back seat.

Perhaps corrupt officials will never ever be eradicated from this planet. But also perhaps if you play your cards right, future generations might thank your contribution in ways you will never be able to imagine.

Cheers.

If you feel that there has been too much cynicism in your circle, share this post, or restack it. Let’s build more critical thinkers around here.

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Disclaimer: This article is intended for educational and informational purposes only. Nothing in it constitutes — and it should not be construed as — financial, investment, tax, or legal advice, nor as an offer, solicitation, or recommendation to buy, sell, or hold any security or currency. Specific companies and tickers mentioned below (including the banks and blue chips in the tables) are used purely to illustrate a point, not as endorsements or recommendations.

Figures such as index levels, exchange rates, and valuation multiples move constantly and may be out of date by the time you read this. Any forward-looking statements are opinions, not predictions. All investing carries risk, including the possible loss of capital, and past performance never guarantees future results. Please do your own research, and consider speaking with a licensed professional before making any decision. Reader’s discretion is advised.

If you find it useful, restack or share this article to your circle :)

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We normally keep our monthly letters between us and our clients. This month we are making an exception, because the question landing in our WhatsApp groups is the same question landing in every Indonesian investor’s group chat right now. So we are publishing our answer for everyone.

First, what just happened. Since mid-May 2026, the broad market has fallen roughly -12%. On 5 June alone, the IHSG dropped -4% in a single day. Measured from the January 2026 peak, the index is now down about -39%. This is no longer an ordinary correction. By depth, it now sits alongside the worst Indonesian sell-offs of the last three decades.

We will not pretend this is comfortable. It is not. But we have been here before — not this exact scene, but this exact feeling.

The question everyone is asking

“I don’t really trust the government. So why keep holding, and not sell everything now?”

It is a fair question, and we want to answer it directly rather than wave it away. Distrust of policy is reasonable; many of you have lived through enough market cycles to have good reason for doubt. But notice that “I don’t trust the government” and “therefore I should sell everything now” are two different statements. The first is a worldview. The second is a market-timing decision — and market timing is a far harder, far less forgiving game than most people realize.

Below are five reasons we think panic-selling at this level is not the wise move.

Reason 1 — Nobody can time the exact bottom, and the news flow is the worst possible guide

We say this as people who watch this market every single day: we do not know where or when the bottom is, and neither does anyone shouting on social media. Kita bukan dewa. If we are honest, the loudest market “signals” — viral posts, doom threads, confident predictions — have historically been a contra-indicator, not a guide.

You don’t have to take this on faith. In early 2025, sentiment reached what we can only call absolute madness — the moment Danantara was first formed and Trump announced his tariffs, the consensus was that Indonesia was uninvestable. That precise moment of maximum skepticism marked the absolute bottom of that cycle. Those who sold into the panic locked in the loss. Those who held, and those who added, recovered and then some.

Right on cue: “Sell Indonesia” hits the front pages

On 5 June, the Straits Times ran a Bloomberg piece titled “’Sell Indonesia’ sweeps trading desks as Prabowo tightens grip”. Foreign investors are now openly giving up on Indonesia — what traders call capitulation. A detail worth noting: the fund manager quoted in the piece, by his own account, exited Indonesia back in 2024 — the bearish view is two years old. Only the megaphone is new. And that is how this genre works: the “investors flee” story gets written after the fall, once the gloomy narrative is safe to print.

The timing of these headlines tells us a lot. We went back through every Indonesian crisis since 2008 and matched the loudest foreign "giving-up" headline against the actual market bottom:

Read the middle column again. In all five resolved episodes, the loudest foreign capitulation printed within roughly three weeks of the bottom — sometimes just before it, sometimes just after. And a buyer on the very day the doom article ran — not at the perfect low — was up between +14% and +70% one year later, five out of five times. The lag is the signal: these stories need a large drawdown to already exist before they can be written. By the time they are printed, the sellers are usually almost done selling.

One honest caveat, because we promise no cherry-picking: 1998 is the counterexample — the year the apocalyptic coverage was right, the economy contracted ~13%, and buying the headlines was a value trap. The 1998 headlines read exactly like the 2026 ones; the difference sat in the fundamentals underneath, never in the headlines. Which is exactly why Reasons 2 and 3 below matter more than any base rate. (And on the specific fear that this is “the precursor of 1998”: the leading indicator of a 1998-style collapse is not the exchange rate — it is whether a “dollar bomb” of unhedged foreign-currency exposure sits on the banks’ balance sheets. FY2025 Net Open Positions: BBCA ~0.1%, BBNI 1.1%, BMRI 1.8%, BBRI 2.5% of capital, against a 20% regulatory cap, with industry capital adequacy around 26% and bad loans near 2%. The bomb is not on the balance sheets this time. Toby wrote the full analysis in The Dollar Bomb — worth ten minutes if 1998 is the fear keeping you up at night.)

A live example — beware of the hoaxes circulating right now

We wish this were hypothetical. It is not. In the past days, an edited screenshot of an MSCI document has been spreading on social media and group chats, claiming that Indonesia has been reclassified to MSCI Frontier Markets. It looks official. It is fake.

The authentic document — the MSCI Global Investable Market Indexes Methodology, May 2026 (page 100 of 192, available directly at msci.com) — lists Indonesia exactly where it has been: under Emerging Markets, alongside China, India, Korea and Taiwan. MSCI has made no announcement changing Indonesia’s market classification. The fabricated version even carries a document title MSCI does not use and strips the page numbering.

Think about what this means: someone created a fake official-looking document to spread panic in a falling market. Whatever their motive — driving prices lower to buy cheaper, or simply chasing clicks — the people who sold because of that screenshot turned a hoax into their own permanent loss. Before acting on any explosive claim, check the primary source. Stay safe out there.

Reason 2 — The domestic economy is still genuinely strong

This is the part the market narrative is currently ignoring. Strip away the headlines and look at what Indonesians actually bought, produced, and exported in the first four months of 2026. The real economy is not in crisis. It is growing.

We know some of you don’t trust government statistics right now. Fair enough. So notice what we did: none of the numbers below come from the government. Car sales come from GAIKINDO, the carmakers’ own association. Motorcycle sales come from AISI, the manufacturers’ association. The PMI is compiled by S&P Global, a private American firm. And the banking data comes from BCA’s own published monthly figures. These are private-sector bodies counting their own units sold and their own loans booked, with no incentive to flatter anyone.

Car sales (GAIKINDO, YTD Jan–Apr 2026 vs 2025):

Motorcycle sales (AISI, YTD Jan–Apr 2026 vs 2025):

Manufacturing is steady: Indonesia's S&P Global Manufacturing PMI rose to 50.0 in May 2026 from April's 49.1, with new orders expanding for a second straight month at the fastest pace since February. There is genuine pressure — export orders are softer on the Middle East conflict, and input-cost inflation is high — but this is an economy operating at, not below, capacity.

Commodities, which drive a large share of Indonesia's export earnings, are rising, not collapsing. The Indonesian Coal Index has turned firmly upward: GAR 65 is back to $127/ton and the lower grades have rallied hard off their mid-2025 lows (GAR 50 from ~$55 to $86).

And the bellwether of Indonesian banking is fine. BCA’s own 4M2026 figures show loans +4.5%, third-party funds +8.6%, operating profit +3.4%, and an annualized ROE of roughly 24.5% — essentially flat versus a year ago. The share price is down sharply; the bank’s earnings power is not.

Put plainly: the prices are behaving like a crisis. The economy is not. That gap is exactly where patient capital gets paid.

Reason 3 — Valuations are now back to GFC-2008 and Covid-2020 levels

Before the numbers, the simplest way to think about what a stock actually is.

Imagine someone offers you a house. Its fair value — the land and the building — is around Rp2 billion, and you have checked that it reliably rents out for Rp100 million a year. But the owner is trapped by debt and must sell fast, so he offers it to you for Rp1 billion. Would you take it? Of course. Now imagine that the day after you buy, a neighbour with an identical house panic-sells his for Rp900 million.

Do you rush to dump yours too — just because someone else sold cheaper, and maybe the next neighbour will sell at Rp700 million? Of course not. Your house still rents for Rp100 million a year. The falling sticker price next door changed nothing about what your house earns you.

A stock is exactly that house. It is a small ownership slice of a real business that earns real money. When the share price falls but the business keeps earning — keeps lending, selling, mining, paying dividends — a lower price is not a danger, it is a discount. This is the whole of value investing and nothing more: work out what a business is worth, and only buy when the price sits well below that.

So the only question that matters is how cheap that “rent” has become. This is the most striking finding of the month, and it surprised even us.

We pulled the full history for Indonesia’s largest, most systemically important “too big to fail” companies and compared today’s valuations against the two worst crises in living memory: the 2008 Global Financial Crisis and the 2020 Covid crash. Across the 25 biggest blue chips we measured, the aggregate price-to-book is now ~1.3x (at 5 Jun 2026 closing prices) — below the 2.0x at the end of 2008 and the 2.6x at the end of 2020. It is even below the price-to-book at the worst daily closes of both crises (~1.6x). On book value, these blue chips are cheaper today than they were at the bottom of 2009 and the bottom of 2020.

Here is the company-by-company picture:

Look at the banks — all 2026 multiples at 5 Jun 2026 closing prices. BBCA at 2.4x book versus 4.5x at end-2020. BBRI at 1.2x versus 2.6x. BBNI below book at 0.8x. Indofood at 3.5x earnings and 0.7x book — cheaper than at either crisis. These are not failing businesses. They are the same dominant franchises they were six months ago, now on sale.

We will be honest about the one exception in the table: Telkom (TLKM) is not cheaper than its crisis multiples on earnings — its Telkomsel profit has structurally declined, and we show it precisely because we are not cherry-picking. Cheap usually has a reason; the job is to separate the temporarily-cheap from the permanently-impaired. For most of this basket, we believe the cheapness is the market’s mood, not the businesses’ fundamentals.

“But 2008 and 2020 were global crises. This one is domestic!”

True — but it means less than it sounds. No crisis ever happens the same way twice. 2008 was a banking collapse imported from Wall Street. 2020 was a virus nobody had ever traded through. 1998 was a currency and political implosion. 2025 was a tariff shock plus a sovereign-wealth-fund scare. Each one had a brand-new shape, a brand-new reason why “this time it’s different and therefore unrecoverable” — that novelty is precisely what makes a crisis a crisis. If it looked exactly like the previous one, nobody would panic, and prices would never get this cheap.

What repeats is not the cause. What repeats is the arithmetic: dominant businesses, still earning, priced at or below book value — and the eventual reversion once fear runs out of sellers.

“You haven’t addressed the rupiah! USDIDR is past 18,000!”

No — and here history repeats itself very consistently. Look at every past time the rupiah weakened rapidly. 2008: USDIDR spiked +39% (to ~12,650) at the very same time the stock market crashed — then gave back -29% as the recovery took hold. 2013 taper tantrum: +26%, then -8% back. 2015: +27%, then -12% back. 2020 Covid: +21% in weeks (to ~16,500), then -16% back within months. The same shape, four times in a row: the currency spikes together with the equity bottom, then recovers swiftly.

Rapid rupiah depreciation is a byproduct of foreign capital rushing out — the same selling that crushes stock prices — not a precursor of some second crisis still waiting to happen. Historically, the moment the currency is falling fastest has been close to the moment of maximum fear, and therefore close to the moment of maximum opportunity in equities. We watch the rupiah — it matters for importers and for inflation — but we read today's 18,000 print as the thermometer of the panic, not the forecast of the next one.

Reason 4 — After crises settle, the market has always recovered

We are not asking you to take this on optimism. We are asking you to look at the record. Here is every major Indonesian market drawdown since 1997, the depth of each, and what happened afterward:

Twelve crises. Every single resolved one was followed by a recovery — and the deepest drawdowns produced the largest rebounds (GFC: -61% then +441%; AFC: -66% then +310%). We cannot promise this time follows the pattern, and we won’t. But the burden of proof sits with the person arguing “this time the recovery never comes” — not with the person who has three decades of Indonesian market history on their side.

Reason 5 — Even a frontier downgrade is already in the price

One fear deserves to be addressed head-on, because it is the engine of this whole sell-off: will MSCI demote Indonesia to Frontier Markets? Honestly — we think that is the wrong question. Whether the downgrade happens is MSCI’s decision, on MSCI’s timeline, and nobody on your feed knows it. The investable question is different: has today’s price already assumed the downgrade happens?

First, for the record: we think the odds of demotion are lower than the panic implies, because the exchange is not sitting still. In the space of months, BEI and OJK have delivered exactly the reforms MSCI asked for: disclosure of every shareholder above 1%, the minimum free float raised from 7.5% to 15% (compliance by March 2027–2029), and a Hong Kong-style High Shareholding Concentration list that names tightly-held companies publicly. MSCI’s May review kept Indonesia on hold, under restrictions — a yellow card, not a red card — while it assessed these reforms.

But let’s be conservative and assume the worst-case scenario anyway — with numbers, not feelings. Take Bank Mandiri (BMRI), one of Indonesia’s largest banks, as an example.

One of the textbook ways to ask “what multiple is fair for a company?” is the Gordon Growth Model:

In words: r is the yearly return an investor demands before bothering to own the stock. Its base is the 6.9% government bond yield — the risk-free alternative — and note that 6.9% is itself already a pessimistic number: it carries this year’s panic inside it. On top of that base, shareholders demand an extra premium: roughly the 4.3 points that even safe US equities command over bonds, plus another ~2.4 points for Indonesia-specific risk (derived from Indonesia’s sovereign default spread of ~1.8 points at its Baa2 rating, scaled up by ~1.3x because equities swing harder than bonds). Indonesia’s equity risk premium therefore sits near 6.7%, and the total hurdle at 13.6%.

Even against that already-pessimistic bar, with BMRI paying out 80% of earnings and growing at a deliberately harsh 3% — the bank compounded earnings at double digits over the past decade, and its retained profits alone fund ~4% — the fair multiple is 7.5x earnings.

BMRI actually trades at 5.8x (price as of 5 Jun 2026). Run the formula backwards: what hurdle rate would make 5.8x fair?

Today’s price is only “fair” if you demand a 16.6% return from Indonesian equities, permanently. That is three full percentage points of additional, permanent risk silently baked into the price. How big is three points? A BI rate hike is 0.25. A one-notch sovereign downgrade moves the risk premium by roughly half a point. The taper tantrum and Covid — real crises — lifted Indonesia’s equity risk premium by one to one-and-a-half points at their worst. Three points is not “more bad news”; it is a re-categorization — the market silently moving Indonesia into a different risk class altogether. And the only candidate event of that size on the table is the frontier downgrade. The fear is not hypothetical; it is literally the number inside the price.

Which leads to the fork: if the downgrade never comes, today’s prices are pure panic, and panic gets repriced. If it does come, today’s prices already contain it — the bomb has already gone off, and the market is trading at post-explosion prices. And while everyone waits, these companies keep paying: BMRI’s dividend yield alone is already in double digits — around 12% at the 5 Jun 2026 price, based on last year’s dividend.

“But won’t the forced selling cause another leg down?”

A sharp objection: the fear may be priced in, but the mechanical selling is not. Index funds do not sell on fear — they sell on the effective rebalancing date, when the rule says they must. We saw this in May: the MSCI changes were announced on 13 May, yet the roughly US$1.1 billion (~Rp19.5 trillion) of passive outflows hit on the 30 May effective date — and prices still moved on that day, even though everyone had known for two weeks. So yes: if a downgrade eventually happens, there will be forced selling that has not happened yet. Another leg down from that flow is a real possibility. Three things keep it in perspective.

First, the downgrade is a tail risk, not the base case — the exchange is visibly fixing what MSCI complained about, and reclassification is a slow, multi-review process. What the market is doing today is charging a near-certain discount for an unlikely event.

Second, even in that scenario the seller is limited. After the May purge, Indonesia is already down to roughly 0.5% of the EM index — the passive money that can still be forced out is a known, finite amount: a one-time seller with a deadline, not a permanent change in the businesses. The companies do not know they got downgraded. Index membership changes the price of a stock, not the business behind it.

Third, run the simple math on what a flow-driven crash actually does to a long-term owner. Imagine a stock at 1,000 paying a 100 dividend — a 10% yield. Forced selling cuts the price to 500: same business, same dividend, now a 20% yield — and every rupiah of dividend reinvested buys twice the earnings it bought before. A seller who must dump a cash-generating asset for non-business reasons is handing value to whoever buys it. The cost is a temporary drawdown; the gain is a permanently higher return on every rupiah invested at those prices.

Does any of this actually work? The honest scoreboard

You might reasonably say: these reasons are nice, but a philosophy is only as good as its behavior in a storm. Fair. So here is ours, in this storm.

Measured from the February 2026 peak, our clients’ overall portfolio drawdown is around -15% as of 5 June 2026, versus the broad market at roughly -40% — helped greatly by the dividends the companies kept paying through the chaos. (You can see the up-to-date comparison in the Portfolio Resilience section at www.recompound.id, updated daily. Past performance does not guarantee future results.)

In a market that fell -40% from its peak, holding the decline to well under half of that is not luck; it is the direct output of buying good businesses with a margin of safety and sizing every position so the bear case is survivable. And remember the arithmetic of holes: -15% needs +18% to climb out; -40% needs +64%. The portfolio that falls less needs far less heroism to recover.

Price swings are the entrance fee of long-term investing. The real risk is losing money permanently — not a price that is temporarily down.

So what should you do?

This is a public article, so we will not tell you to buy or sell anything. What we can do is leave you with the questions we ask ourselves, and the math that goes with them.

“Shouldn’t I just convert everything to USD?” Think through the mathematics of that switch. It means selling Indonesian businesses at 1.3x book — cheaper than the bottoms of 2009 and 2020 — in order to buy a currency at 18,000 (5 Jun 2026), after it has already risen +10.8% in a year. That is selling low and buying high, simultaneously. And as we showed in Reason 3, the rupiah’s sharpest weakness has historically arrived together with the equity bottom and then reversed. Currency diversification as a long-term structural decision is perfectly sensible — made calmly, in normal times. As a crisis response, it has usually meant locking in both sides of the loss at once.

“What’s the point of buying cheap when there’s no catalyst in sight?” The answer is counterintuitive: prices are only this cheap because no catalyst is visible. The moment a catalyst becomes obvious to everyone, the price has already moved and the discount is gone. 2025 was the textbook case: at the peak of Danantara skepticism and the Trump tariffs, no catalyst was in sight anywhere — that was precisely the bottom. Only after the market recovered did everyone busy themselves explaining what the “catalyst” had been. The market moves first; the narrative catches up later.

“And while waiting?” You are paid to wait. At roughly 8x earnings (5 Jun 2026 prices), the blue-chip basket’s earnings yield is about 12% against a ~6.5% government bond, and BBCA alone now pays a ~6.5% dividend yield — essentially the risk-free rate, with growth on top. Even in the skeptics’ sideways scenario, profits keep coming and dividends keep landing. Those who insist on visible signs of improvement will buy after the recovery, not before it.

What we will not do — and what we’d gently suggest nobody does — is panic-sell quality businesses into a fearful market to chase a bottom nobody can see. That is the one move with a reliable track record: of destroying long-term returns.

Closing

Look — we are humans too. We read the same headlines you do, every day, all day. Absorbing this much negative energy is draining, and we will not pretend otherwise.

But we have been doing this for four years — through the Covid hangover, the Russia-Ukraine war, the Danantara panic, the Trump tariffs, the Iran war, and now this. What carried us through every single one was not bold talk, and certainly not an ability to predict the future. It was discipline. Buy good businesses below their value, size them so the bear case is survivable, collect the dividends, and refuse — absolutely refuse — to panic-sell the bottoms or FOMO-buy the tops.

Tough times don’t last. Tough people do.

Cheers!

References

1. Bloomberg / The Straits Times (2026). “’Sell Indonesia’ sweeps trading desks as Prabowo tightens grip.” 5 June 2026. [The capitulation headline discussed in Reason 1.]

2. MSCI (2026). MSCI Global Investable Market Indexes Methodology, May 2026, p. 100. msci.com. [Indonesia’s authentic Emerging Markets classification; the basis for debunking the circulating hoax screenshot.]

3. GAIKINDO (2026). Indonesian automotive wholesales, retail, production and trade statistics, Jan–Apr 2026. gaikindo.or.id.

4. AISI (2026). Indonesian motorcycle domestic and export statistics, Jan–Apr 2026. aisi.or.id.

5. S&P Global (2026). Indonesia Manufacturing PMI, May 2026 release (50.0, up from 49.1).

6. Bank Central Asia (2026). Published monthly financial figures, 4M2026. [Loans +4.5%, third-party funds +8.6%, operating profit +3.4%, annualized ROE ~24.5%.]

7. Indomine (2026). Indonesian Coal Index by grade, Sep 2024 – Jun 2026. [GAR 65 at $127/ton; GAR 50 from ~$55 to $86.]

8. Stockbit; Recompound analysis (2026). Blue-chip P/E and P/B comparison, year-end 2008 and 2020 vs 5 June 2026.

9. Limanto, T. (2026). The Dollar Bomb. Recompound Blog, 5 June 2026. https://blog.recompound.id/p/the-dollar-bomb [Net Open Position analysis: why 2026’s banks are not 1998’s banks.]

10. Bloomberg via Free Malaysia Today (2026). BEI/OJK market reforms: >1% shareholder disclosure, 15% minimum free float, High Shareholding Concentration list. 3 April 2026.

11. Damodaran, A. (2026). Country risk premiums and sovereign default spreads. [Basis for the ~6.7% Indonesia equity risk premium used in the Gordon Growth exercise.]

Disclaimer: This article is intended for educational and informational purposes only. Nothing in it constitutes — and it should not be construed as — financial, investment, tax, or legal advice, nor as an offer, solicitation, or recommendation to buy, sell, hold, or convert any security, currency, or financial product. This includes any specific companies named above (and their tickers) and any discussion of the rupiah versus the US dollar; these are used purely to illustrate a point, not as endorsements or recommendations.

The information here is drawn from sources we believe to be reliable as of the date of writing, but we make no warranty as to its accuracy or completeness. Figures such as exchange rates, financial ratios, and fiscal numbers move constantly and may be out of date by the time you read this. Any forward-looking statements are opinions, not predictions.

All investing carries risk, including the possible loss of capital, and past performance is never a guarantee of future results. Please do your own research, and consider speaking with a licensed professional before making any decision. Ultimately, your financial decisions are your own.

Reader’s discretion is advised. Hope it is useful in some way :)

I was sitting down in one of my favorite bank branches while waiting my queue number. You know running errands in a bank like a proper adult ;) When it was my turn and I spoke to the teller about my banking needs, I asked them a number of questions regarding the behaviour of other patrons.

In light of the recent weakening Rupiah against the Dollar, I went straight to ask them

“How do you comfort people who are worried about Rupiah depreciation? People usually associate current levels of depreciation like what happened in the past in 1998 specifically.”

The response was

“ummm.. but it is very different now and then. Nowadays the fundamentals is stronger. and there are more regulation that is in place for the banks now.”

I wasn’t very satisfied with the answer. Because I could tell that people are not going to be comforted with that statement. Also, the teller went on telling me that there they have been busy facilitating transactions of people buying the Dollar lately. They could serve around 6 - 7 people in one branch making big dollar buys. So I could tell that such statement does not comfort people.

The fear is real and contagious

Here is the part I have to be upfront about. I did not remember 1998 (I was only 2 years old). So I am not going to present to people who did and create a debate arguing that their fear is irrational. Especially at that time people watched their savings evaporate and their city burn.

You do not argue someone out of a memory like that.

But the elephant on the room is not about the fear per se. It is about the contagiousness of the fear in the age of social media. A comedian Ronny Chieng has a major rant here summarised in a 90 seconds YouTube shorts:

No matter how ridiculous and funny this video might sound, it is painting a real picture of my experience with many boomers. For the first time in human history, we have a class of individuals who are no longer that productive anymore having access to so much information especially when last time (before the internet was around), information was the biggest edge.

Nowadays, too much information slows you down. It causes people to overthink, be indecisive and be worried about making wrong decisions. But we can’t blame the boomers for this because for most of their lives, information is something that allows them to gain a competitive edge. So it is very counterintuitive to unlearn that and it is very hard to have them be aware of their unhealthy levels of information diet.

Which probably makes the very feeling of fear very contagious

Robert Shiller wrote a whole book about exactly this — Narrative Economics — and his core claim is that economic stories spread like diseases. “Economic narratives,” he writes, “follow the same pattern as the spread of disease.” A story does not have to be true to move an economy. It only has to be infectious. And the 1998 story is beautifully infectious: a frightening number, a remembered trauma to pin it to, and a single simple instruction:

Rupiah is going to collapse so buy dollars, now.

But a story cannot spread that easily if there is no element of truth to it. And it is definitely not my style to make a strawman argument and then attempt to beat it down to say that these people are not rational.

So let me steelman the fear properly

If there are further points that you’d like to add, please add them in for my consideration. It might be an open discussion of some sort as well. The idea is not to dismiss it but it is also not to be consumed by it alive. We want to lean into the fear and see it for what it is. I think that is a much productive use of our time, to make household economic decisions on our daily lives.

Start with the budget (APBN)

In 2025, Indonesia ran a deficit of about 2.92% of GDP. This deficit is seen as the widest outside pandemic years and it is very close to the 3% ceiling. For context, the 3% was written into law after the last crisis in 98.

Plus, tax revenue came in roughly 8% under target in 2025.

So it follows that if government revenue does not hit target, we could expect that budget deficit could grow further surpassing the 3% ceiling. In fact, the government has put that 3% law into review. To me, that’s a clear sign that fiscal anchor is starting to drift.

Danantara

Now we have a new player as well which is designed as a sovereign vehicle to drive economic growth but their reporting is still quite unclear to this date.

• What’s their economics like

• What’s their balance sheet like

• Are they profitable, etc

So it is entirely possible that the liabilities could be accumulating off on the side. But not only that the government is running fiscal deficit, we are also seeing contentious policies that are being passed by the government. Such as free nutritious meals (MBG) that is highly controversial, arguing that this would exacerbate the deficit situation considerably.

I mean how it is not a fiscal monster? The budget in 2025 was Rp71tn and in 2026, it will be up to Rp335tn.

This is still being done despite the 3% ceiling limit. And don’t get me started about the unpredictability that the new export policy started. Yes it sounds great on paper, but it is obvious that investors are jittery about the ability for the entity to execute.

IDX

The situation with the stock market isn’t helping much either. Indonesia received a warning from MSCI in January 2026 that it would be downgraded to the frontier market because there was lack of transparency in the stock ownership which causes price engineering to be more rampant.

In response to that, there has been swift transformation in the ruling such as >1% shareholder disclosure rule, 15% free float minimum requirements and so on. But it remains to be seen if such efforts are sufficient to restore investor confidence.

All in all it seems to be like a perfect storm

Put it all together and it does read like the makings of a perfect storm. Every incentive is now lined up for money to leave Indonesia. And a sizeable chunk of the money in our stock market, by value, is in fact, owned by foreigners: locals now own roughly 61% of the equity market, with foreigners near 39%.

That is not nothing and it is a very serious issue of eroding trust. When you put it together, you get a coherent, sober worry: loosening fiscal discipline, money walking out the door, a central bank defending the rupiah, a currency at all-time lows.

So yes, I take all of this seriously in 2026. Now let’s look at how it started last time in 1998.

How it was back then

My parents’ memory of 1998 is the rupiah number. They said that it weakened from around 2,400 to roughly 16,000 against the dollar, with uglier spikes in the worst of the panic. But just like today in 2026, currency was the symptom, not the disease.

What made 1998 catastrophic rather than merely painful was that four crises stacked on top of one another and fed each other:

1. a currency that broke from its zone,

2. a banking system that was rotten with poor oversight,

3. a corporate sector exposed to dollar debt it could not repay,

4. and a government that collapsed politically while trying to manage all three at once.

We can dig deep into all four pillars above but I find it amusing that they are very consistent with the core finding of Carmen Reinhart and Kenneth Rogoff in their book: This Time Is Different: studies eight centuries of financial crises (banking, inflation, currency and sovereign debt).

They mention that banking crises tend to come before sovereign defaults, not after. In their research around their book, they put forth:

“banking crises... often precede or accompany sovereign debt crises. Indeed, we find they help predict them.” The hidden debts that sink a government, they note, often include “private debt that become public... as the crisis unfolds.”

So the order of events matters. The currency didn’t bankrupt the country directly. It blew up the banks, and then the banks blew up the state.

Let me repeat that, because it quietly reframes the whole fear. The leading indicator of a sovereign blowup is likely not the exchange rate. It is the banks. More precisely, it is whether the banks are carrying unhealthy levels of foreign-currency exposure that a falling currency can detonate.

So the honest question is not “what is the rupiah number?” It is “is that dollar bomb sitting on the balance sheets again?”

And the wonderful thing about that question is that, unlike the future of the rupiah, it has an answer you can simply look up in their annual reports.

You nervous? It could be a dollar bomb that explodes you know

Ok let’s take a look that one number which is net open position (NOP).

After 1998, Bank Indonesia introduced a hard cap on the exact thing that killed the banks last time. It is called the Net Open Position (Posisi Devisa Neto). The formula is:

(foreign currency assets - foreign currency liabilities) / bank’s capital

currency assets example:

• banks’ cash position in foreign currency

• banks’ loans given to customers in foreign currency

currency liabilities example:

• banks’ customer deposits in foreign currency

• banks’ debt in foreign currency

In plain language it means how exposed is this bank to a move in the currency.

But why does that matter so much? Think about what happens when a borrower goes bad. If a bank lends to a company and the company defaults, the bank eats the loss — some borrowers always default, and that part is normal.

That’s why we have provisioning so that writing out that debt will not cause liquidity issues. What made 1998 lethal was that the defaults and the currency crash arrived together. Banks had borrowed in dollars and lent in dollars.

When the rupiah collapsed, their borrowers couldn’t pay. Think about it, if you own a business and you take a USD loan, your loan would shoot up overnight because it is in USD but you earn in Rupiah. As a consequence you will default on your loans because your earnings couldn’t keep up with the ballooning debt.

But the banks? They still have to repay the liabilities they take in USD terms too. So they still owe people (depositors) in dollars but they don’t have the money to repay them back. Which ultimately caused banks to be insolvent.

So now we understand why Bank Indonesia caps the Net Open Position. It limits how far a bank's dollar assets and dollar liabilities are allowed to drift apart relative to its capital.

The dangerous side in a crisis is when a bank ends up owing more dollars than it holds: if the rupiah collapses, the value of what it owes balloons faster (USD) than the value of what it holds (Rupiah), and it has to buy dollars at a punishing exchange rate to settle up. This crystallises the loss on its balance sheet. So banks are to keep the gap small, so that loss stays small.

How much does Bank Indonesia allow?

The cap is 20% of capital. The higher the % is, the more vulnerable a bank is towards currency fluctuations. It is now a figure that is heavily monitored. Today it needs to be reported at the end of a working day by law.

Compare that to 1997, when, in the words of a former senior deputy governor of Bank Indonesia, Anwar Nasution, the rules on foreign borrowing “were generally violated” and corporate dollar debt simply “was not recorded.”

I tried digging the NOP numbers back then in 1998 but couldn’t really find a reliable one. Today the figure is as follows:

When we read the data, we see that the most dollar-exposed of the big four, BRI, is running currency risk at about 2.5% of its capital. The rest sits lower — from BCA’s rounding-error 0.1% up to Mandiri’s 1.8%. Industry-wide, bad loans sit a little above 2% and the capital adequacy ratio sits around 26% (roughly three times the global minimum).

If we look at it as it is, these are not 1998’s walking-zombie banks papering over bad loans with creative accounting. They are some of the best-capitalised banks in the region, and they are not holding the bomb.

But none of that makes the rupiah’s weakness fake. A weaker rupiah genuinely hurts importers, dollar-cost borrowers, anyone with bills denominated in foreign currency. That is a real cost, and I won’t wave it away. But it is a completely different from a banking collapse that precedes a sovereign default.

So what do you do with this

I am not going to tell you where the rupiah will go. Nobody can, and a confident “Relax bro, it won’t hit 50,000” is not entirely useful as well. The currency could keep weakening for entirely ordinary reasons — a strong dollar, higher oil prices, money chasing higher yields elsewhere. The fiscal drift I steelmanned earlier is genuinely worth watching.

What I am saying is that “the rupiah is at a record low” and “Indonesia is about to repeat 1998” are two completely different claims. The first is a price. The second is commonly preceded by a banking collapse.

Fortunately, for the second one you can check rather than predict, by reading the balance sheets. As of now, they read clean.

And I guess this is exactly why we do what we do. When your feed is screaming negativity and you are probably tempted to “convert everything to dollars” — at the worst possible exchange rate, paying the spread to the banks and then surrendering your rupiah. Our job is to give you the data and make sure that your decisions are driven by things that you could check and verify.

Because if that fear stops spreading for whatever reason, at the very least you know that you have made your decision without regret.

References

In case you’re interested in reading the materials consulted in writing this article, below are the entry points:

1. Bank Indonesia (2015). Peraturan Bank Indonesia No. 17/5/PBI/2015 — Perubahan Keempat atas PBI No. 5/13/PBI/2003 tentang Posisi Devisa Neto Bank Umum. https://peraturan.bpk.go.id/Details/135521/peraturan-bi-no-175pbi2015-tahun-2015 [The Net Open Position cap of 20% of capital, and the relaxation from 30-minute to end-of-working-day reporting.]

2. Reinhart, C. M. & Rogoff, K. S. (2009). This Time Is Different: Eight Centuries of Financial Folly. Princeton University Press. [The book-length thesis that banking crises and sovereign defaults travel together across history.]

3. Reinhart, C. M. & Rogoff, K. S. (2011). “From Financial Crash to Debt Crisis.” American Economic Review, 101(5), pp. 1676–1706 (NBER Working Paper No. 15795, 2010). https://www.nber.org/system/files/working_papers/w15795/w15795.pdf [Source of the exact quoted lines: “banking crises… often precede or accompany sovereign debt crises. Indeed, we find they help predict them,” and “private debt that become public… as the crisis unfolds.”]

4. Shiller, R. J. (2019). Narrative Economics: How Stories Go Viral and Drive Major Economic Events. Princeton University Press (NBER Working Paper No. 23075). https://www.nber.org/system/files/working_papers/w23075/w23075.pdf [“Economic narratives follow the same pattern as the spread of disease.”]

5. Nasution, A. (2015). “How Indonesia reformed its risky financial sector.” East Asia Forum, 24 April 2015. https://eastasiaforum.org/2015/04/24/how-indonesia-reformed-its-risky-financial-sector/ [Former BI Senior Deputy Governor on 1997–98: rules on foreign borrowing “were generally violated,” corporate dollar debt “was not recorded”; inflation ~58%, rates >80%, GDP −13.1%.]

6. Indonesia Investments. Asian Financial Crisis — Indonesia. https://www.indonesia-investments.com/culture/economy/asian-financial-crisis/item246 [Rupiah ~2,400/USD pre-crisis collapsing to ~16,000; managed band floated from August 1997; 16 banks closed in November 1997 triggering bank runs.]

7. IDNFinancials / Indonesia Stock Exchange (2026). Foreign outflows from Indonesian shares and bonds, 2026. https://www.idnfinancials.com/news/60974/foreign-dump-indonesian-shares-bonds-outflows-at-idr-12-55-trillion [Foreign net selling of Indonesian equities in 2026.]

8. Bloomberg (2026). Indonesia’s fiscal deficit reaches 2.92% of GDP, near legal limit. https://www.bloomberg.com/news/articles/2026-01-08/indonesia-fiscal-deficit-soars-to-2-92-of-gdp-near-legal-limit [2025 budget deficit of 2.92% of GDP, the widest outside the pandemic years.]

9. Bloomberg (2025). Indonesia adds State Finance Law to 2026 legislative priorities. https://www.bloomberg.com/news/articles/2025-09-19/indonesia-adds-state-finance-law-to-2026-legislative-priorities [The 3%-of-GDP deficit cap — set by Law No. 17/2003 after the 1998 crisis — placed under review.]

10. The Diplomat (2026). “Unpacking Indonesia’s 2025 Fiscal Revenue Shortfall.” https://thediplomat.com/2026/01/unpacking-indonesias-2025-fiscal-revenue-shortfall/ [2025 state revenue came in roughly 8% below target.]

11. East Asia Forum (2026). “Indonesia’s fiscal anchor begins to drift.” 15 March 2026. https://eastasiaforum.org/2026/03/15/indonesias-fiscal-anchor-begins-to-drift/ [Danantara’s borrowing sits outside the deficit rule, raising contingent-liability and transparency concerns.]

12. Kompas (2025). “Anggaran MBG Melonjak Jadi Rp 335 Triliun di APBN 2026.” https://money.kompas.com/read/2025/09/24/112056126/anggaran-mbg-melonjak-jadi-rp-335-triliun-di-apbn-2026 [Free Nutritious Meals (MBG) budget rising from Rp71 trillion in 2025 to Rp335 trillion in 2026.]

13. IDNFinancials / Bloomberg (2026). MSCI halts rebalancing; Indonesia risks downgrade to frontier market. https://www.idnfinancials.com/news/60811/msci-halts-rebalancing-indonesia-risks-downgrade-to-frontier-market [January 2026 MSCI warning over share-ownership/free-float transparency; reforms include 1% shareholder disclosure and raising the minimum free float to 15% from 7.5%.]

14. bne IntelliNews (2026). Indonesian rupiah drops to historic low of IDR18,000 per US dollar. https://www.intellinews.com/indonesian-rupiah-drops-to-historic-low-of-idr18-000-per-us-dollar-446678/ [Rupiah at a record low around 18,000/USD, roughly 10% weaker year-on-year.]

15. Annual Reports 2025 — BCA, BNI, Bank Mandiri, BRI. Risk Management / Net Open Position disclosures. [FY2025 Net Open Position ratios: BCA ~0.1%, BNI 1.1%, Bank Mandiri 1.76%, BRI 2.51%; industry CAR ~26%, gross NPL ~2%.]

Disclaimer: story written in this article not a real story. This story is fabricated based on many many calls that I take with potential customers. Also any mention of symbols, ticker or investment instrument is not to be construed as financial advice. This article is for educational purposes only to help readers reflect and see things from a different angle.

In a Gmeet meeting, a potential customer sat on his desk with a blurred background. I could tell from his expression that he was worried. I cordially invite him to share his investment experience. He muttered that he has two main investing portfolio comprising of Indo stocks. One is for long term and the other is for short term.

The idea for the long term portfolio is sound, he would only buy bluechip stocks that are perceived to always go up in price. This makes sense because the companies inside the portfolios are truly well known. Consumer juggernauts all the way to big banks. These aren’t the type of companies that go missing tomorrow.

Then, on the other hand, the short term portfolio is for him to do trades based on market psychology, employing various trading strategies. It tends to contain riskier plays. Often companies that are gossiped to be the next big thing in terms of its price action. The term for this changes depending on which class of investors they are.

Conglo 2025: cacing-cacing naga-naga

Covid 2021: saham pompom

Late 2010s: saham gorengan

1990s-early 2000s: saham bandar

Nowadays in light of the MSCI phenomenon, It is not uncommon at all to see -80%, -60% floating loss of “conglo stocks” that were popular in 2025.

From this, I could tell that most investors already have given up stocks completely. They usually will blame the government and everyone else but themselves about the current predicament. However, there is a small minority who’s brave enough to lean into the fear and take this moment as an opportunity to raise their standards in investing by calling us.

Meanwhile for big banks portfolio is now down 26.2% and the person is usually not too worried because they believe that big banks would grow in the long term. What becomes the point of contention is usually opportunity cost. Is my money working as hard as possible at the current moment? While they wait for the drawdowns to recover.

Now I have seen this a million times

So I thought that this is just the “norm”. Every other professional that I have spoken to over the last two years has the same two buckets (kantong investasi). But to me it is quite confusing.

Why when people have different financial goals, different time horizons, different family context, and so on, somehow converge on the same two buckets, weighted roughly the same way.

And they are smart enough to know that it doesn’t work for most people, perhaps including themselves

For the long term portfolio, they’d know that they are making the dangerous assumption that the price they pay for a share does not matter. The better and more popular the business, the more expensive it gets. And that’s fine by them because they believe that in the long term, the prices of these great companies will always go up. But they also know that when expectations are unmet, the share price could be severely punished. Famous example is Unilever.

Picture this in the mid 2010s, the stock has been rallying for well over a decade (see price chart above). It was championed by brokers, influential people as the stock that is considered evergreen. I still remember how the stock was sold to me personally (I was still in high school back then more than a decade ago).

Broker: Toby, do you know what people would still do during an economic crisis?

Gullible highschooler: What?

Broker: People would still take a shower. So companies selling soap like Unilever will always be relevant. That’s why it is an evergreen stock that will always go up in the long run.

Gullible highschooler: Wow!

Fast forward about 10 years later~

I am not saying that Unilever is a bad company. It is big and massively profitable. It’s just that I bought that company at a huge premium when I started my foray into stock investments. It taught me that you could not blindly buy an asset without caring about its price relative to the value of the company, no matter how good or famous or resilient they are.

For the short term portfolio, the flaw is easier to spot.

It fails the survivorship test

The successful trader on Instagram is a sample of one drawn from a pool of ten thousand. The other 9,999 abandoned their accounts and went back to work. The IG algorithm does not show the ones who went back to work. The trading course teacher does not talk about them. We build our worldview on a curated selection that is, by definition, statistically unrepresentative. And we know this.

The people I’ve met who run these two strategies are intelligent and genuinely knowledgeable. Many of them are doctors, engineers, consultants, founders. If you sat down with them and explained the flaws, they would nod and they will understand the risks of investing in this manner.

Yet they would go back to their portfolio and do the same thing especially at times when the strategy appears to be working.

So why do people want something, but they still do the opposite

Talk to the same people about FIRE. Financial independence, retire early. The movement that explicitly says the goal is freedom from financial obligation. Lower your costs, raise your savings rate, escape the salary trap and live from your investments.

Many of the people in the two-bucket portfolio also love FIRE.

And yet they still want to expose themselves to at least a decade long financial commitment with an uncertain (adjustable) expense that could elevate their future living expenses dramatically.

a.k.a.

They still want to buy a house.

Not just any house.

The house their peers, family, relatives, significant other would approve. These people believe in financial freedom. They want it. But they also sign the largest obligation of their lives, because of a widely held wisdom which is:

properti pasti naik (property will always go up)

Despite the elevated property prices especially high relative to average income earners. Despite the weakening demand. Despite the low yield. Properti pasti naik.

Therefore, they lock themselves up to a huge financial obligation. In their minds, if they need the money suddenly, they could always sell that property. Yet they also know that property is not a liquid asset.

Note: I am not saying that all property investments are bad here. But the kinds that I am hearing certainly is. The people I’ve heard about like to punch way above their pay grade to take up a huge mortgage and commit themselves to a long tenure of financial obligation.

So the puzzle seems to have layers here. Not just in investing in stocks.

I am seeing genuinely smart people making suboptimal decisions when they have rational knowledge that their decisions aren’t optimal. I mean you can agree with me that information is not the bottleneck here.

Even compute and analysis is not. You can ask Claude to make a financial projection for you for your purchase of a recent home. You could estimate your living expense and run simulations having 1, 2 or 3 kids now. If you don’t do it with AI, you could do it with a certified financial planner too. Its no longer expensive nor inaccessible for you to have this knowledge.

So something else is doing the steering of behaviour here.

What an academic says about this

Robert Cialdini is a social psychologist at Arizona State University. He is widely known for the book Influence: The Psychology of Persuasion, has sold millions of copies (hopefully I can sell that many books next time 😝). It is the foundational text on what he calls compliance. On how people behave.

There are many conditions in which people would be “obliged” to behave in a certain way. They are reciprocity, liking, consistency, authority and social proof. His point on social proof finally gave me some sense for what I have been watching all this while.

Cialdini starts with a grim example.

The name was Kitty Genovese in 1964, New York. She was attacked by a man that lasted for more than half an hour, outside her apartment building. The craziest thing is that there were 38 neighbours who saw or heard parts of it from their windows. None of them came down to help Ms Genovese. None of them called the police until it was too late. The journalists who wrote about it framed it as a story about people becoming more individualistic in New York. To be honest, I would probably write the same thing if I were to be the journalist.

But Cialdini does not agree with this. He argues that witnesses were not apathetic. They were reading each others’ action. Each person looked out their window, saw nobody else doing anything, and concluded from that absence: this must not be the kind of emergency that requires my action. The more witnesses there were, the less likely any single person was to act — because each additional silent observer made the social signal of inaction louder.

This case became very famous it earned a name called the bystander effect. When you don’t know that the situation is truly an emergency in public, you’d rather be a bystander and not do anything.

That is what Cialdini means by a behaviour that is driven by social proof. It activates under two specific conditions:

1. uncertainty about what to do,

2. and similarity to the people around you.

The Genovese witnesses had both. They were unsure what they were seeing — was it a domestic dispute, a prank, a real attack? The fact that the event occurred in the evening was a clear smoking gun. They assumed the other watchers were people with judgement roughly like theirs. So they used each other’s inaction as evidence. And Ms Genovese died in the incident.

To me the negative example showcases how powerful this social proof effect is in our behavior.

Another more grim example, we might think that we love our lives. But Cialdini puts forth another example of Jim Jones’s Peoples Temple in Guyana, 1978. Cult members voluntarily commit suicide by consuming poison after they receive the instruction from the leader and after seeing that others oblige. Over 900 people died that day. Many of them watched their neighbours drink first.

If people can kill themselves because of social proof, I’d bet my money that people can buy a house because of social proof 🙂

So here’s what you can observe

Remember that brilliant cousin or university friend you met for dinner the other day? Perhaps they announced that they have just recently purchased a house. An expensive one that is beyond their pay grade at the moment. They say that they take a 20 year mortgage to finance the house and the rates are adjustable after 5 years of instalments.

How do you feel?

Maybe after reading this blogpost you’d feel like:

Naahhh, I don’t want to buy that kinda house. That ain’t me Toby.

But imagine you meeting your parents and they naively ask,

David, when do you plan to buy a house for yourself? You’re not going to rent forever are you?

How would you feel then?

It is a similar innocent question as to when do you plan to have kids? Or when do you plan to get married? They mean well but it is still a loaded question. A question that requires deep thinking and deliberation instead of one that has to be acted upon after seeing your friends’ answers to them.

Stock investments is the same

How would you feel when you know that your smart friends are owning big banks alongside you and DCA-ing S&P500 religiously?

Remember that stock investment has 2 things that social proofs tend to work on really well:

1. Uncertainty

2. Similarity of what people around you do

You very well know that you don’t know what the US president would say or do tomorrow. And today you brush aside his brash actions because your AI stocks are still bringing in acceptable returns.

But what if they stop delivering the returns you’d expect?

How would you feel?

Will you be blaming the US government? Or will you realise that perhaps copying what others are doing at the moment is not the most prudent investment decision?

Most will do the former. A tiny minority will do the latter.

So arming yourself with knowledge is not enough

Social proof is a powerful force and I think that rationality is not a strong enough weapon to overcome it. I believe that combatting conformist thinking requires you to change which signal is closest to you.

Practically, that means three things.

First, get explicit about your own goals on paper, in your own words, before considering anyone else’s opinion. Read them more often than you read your family or friends’ WhatsApp group.

Second, surround yourself with at least one person who is a contrarian, and whose opinion you cannot easily ignore.

The third thing is ask yourself:

“Would I still want to own this thing if nobody knew?”

If the answer to owning something is yes based on your calculations and honest preference, then it is likely a good deal. But if the answer is no; then you probably have to think twice or thrice before pressing that buy button.

It is one thing to buy because you want it for your own interest (be it present or future). And it is a completely different thing for you to buy because you want to fit in.

Knowing the difference helps.

Cheers.

According to her, our experience building Recompound is very relatable to people who are also trying to build their own business.

So here goes. Raw, unfiltered, things presented just as they are.

Hope you enjoy.

Disclaimer: this post is for educational purposes only. It does not constitute investment advice. It is the author’s opinion regarding new export policy that is recently announced and it attempts to consult recent data that is not usually covered otherwise. We hope that our readers could learn a thing or two from the data that we are seeing and we continue to welcome level headed and constructive discussions. Lastly, if you are a client, check your investment thesis in the client dashboard. This write up has been incorporated there also.

This week, per this post is published, President Prabowo announced a PP (Government Regulation) mandating that all exports of palm oil, coal, and ferro alloys must be routed through a designated BUMN (”single-gate” system).

There are very differing opinions regarding this ambitious new export policy amongst pundits on social media. So we’d like to offer our thoughts being investors in the Indonesian capital market ourselves.

First things first

We refrain from making sensationalist comparisons between this current policy vs other failed government policies in the past like BPPC where clove farmers had to sell cloves at a fixed price to a single government entity during the Soeharto era. Just like how we refrain from rushing to extrapolate that a weakening Rupiah necessarily means that a Rupiah is going to fall in the fashion we see in 1998.

We believe that conditions of the present economy, technology, regulation, information and even governments are not the same. Therefore, just because there had been a precedent, it does not mean that it is definitely likely that we will see a repeat of history. For example, it goes without saying that just because we saw COVID in 2020, does not necessarily mean that Hantavirus will cause economies around the globe to see lockdowns again. It might go on a lockdown for real (I am not a public health expert here), but it does not have to be.

And of course this is not an investment recommendation or financial advice. We are first to disclose that we are not a macroeconomics policy expert too.

Why choose to not make sensationalist claims?

Well to be frank because we are not a media company. We don’t get anything from making sensationalist claims. If you like our Substack post or put a comment, we don’t get paid. And getting famous on social media is not our business model. So there’s almost 0 point for us to make such sensationalist alarmist/euphoric claims.

What helps is for us to analyse and reflect on the data that allows us to make an informed decision as a long term investor. Knowing fully our limitations about what the outcome will be in the future.

Don’t get me wrong, it is possible that the policy could be a huge failure. But I stress that it is not wise to dismiss the likelihood of it being successful as well. And we ought to look at both the negatives and the positives as it is so as to stay well informed of what is going on.

Now with that out of the way, let’s get into it.

Key Pointers and Questions

What does the policy actually do?

All exports of three commodities (palm oil US$23B, coal US$26B, ferro alloys US$16B — total US$65B/year, ~23% of national exports) must go through a designated state owned enterprise (BUMN). Implementation is phased: Phase I (June–August 2026) is documentation only — transactions still go directly between company and buyer, while Danantara Sumber Daya Alam (DSI) validates volume, pricing, and delivery. No margin taken. Phase II (September 2026+) is full implementation where DSI takes over all contracts, shipments, and payments. This is the phase the market fears — and the one that may involve a margin.

How massive is the underinvoicing problem?

Based on UN COMTRADE data, cumulative export underinvoicing from Indonesia over the past 34 years (1991–2024) totals US$908 billion (~Rp 15,400 trillion).

For reference, BCA’s profits is about Rp 50 trillion per year. So that 34 years of under invoicing is about 300 years of BCA’s net profits 🤯. Indonesia hasn’t even been around that long. We are in the less than 100 years club (1945 independence).

This is the gap between what Indonesia reported as exports versus what trade partners reported as imports. This isn’t an estimate — its recorded international trade data. From this, I think that the government’s motivation is clear: make more money (increase state revenue) by plugging a leak that is worth hundreds of billions of dollars that has been flowing offshore (primarily to Singapore).

If underinvoicing is successfully curtailed, more USD stays in Indonesia — which is also a positive for the rupiah.

The mechanism is textbook transfer pricing: an Indonesian producer sells to a Singapore affiliate at $100 (below benchmark), the affiliate re-sells to the real buyer at $150 (market price), and the $50 margin stays in Singapore. Finance Minister Purbaya himself stated that he randomly checked 10 CPO companies and selected 3 ships at random — all showed prices to Singapore at half the price to the US. That’s how widespread the practice is.

Who is being targeted?

Not “clean” mining companies — the target is companies that have been invoicing below benchmark. A documented example: Global Witness reported that Adaro used Coaltrade Services International (Singapore) to sell coal below benchmark prices from 2009–2017, avoiding an estimated ~US$125 million in Indonesian taxes. Profits were booked in Singapore (tax rate ~10%) instead of Indonesia (~50%). This policy forces all invoices to be verified against published benchmarks by the BUMN. If a company has always been invoicing at benchmark, the impact is minimal — it’s just a compliance layer.

Who benefits from the practice of under invoicing?

It follows that the ultimate beneficial owners (UBO) who owns the trading companies will benefit. The spread between the sales to the trading company and the sales to the importer gets to stay in the private trading companies (likely owned by majority shareholders).

Are there overseas precedents?

There are many, among others:

• China: Operates a “designated exporter whitelist” for strategic minerals (tungsten, antimony, rare earths). Only government-approved companies can export. Effective for revenue control, but China’s rare earth export quota was struck down by the WTO in 2014 after Japan/US/EU challenged it.

• Malaysia (PETRONAS): Full state control of oil & gas since 1974. Private companies (Shell, Exxon) still operated profitably via Production Sharing Contracts, but long-term investment declined ~40% from peak.

• Chile (CODELCO): Copper was nationalized in 1971, but later opened to a dual-track model — state-owned CODELCO alongside private miners (BHP, Freeport). Private companies remained profitable, just paying higher royalties (up to 46.5%).

• Zambia: The cautionary tale — full nationalization of copper in 1969 ended in disaster. Copper prices fell, the state entity couldn’t respond quickly, mining’s GDP contribution collapsed from 33% to 7.7%. Zambia eventually re-privatized.

Are there more recent local precedents?

PT Timah (TINS) — the most directly relevant domestic precedent: PT Timah formed an internal task force to crack down on illegal tin miners in Bangka Belitung who had been paying zero royalties and zero taxes. The result? Q1 2026 net profit surged

+1,184% YoY

(from Rp 117B to Rp 1.5T), revenue +160%, GPM expanded from 18% to 39%. When the playing field was levelled and illegal competitors were removed, the legitimate company’s profitability transformed overnight. This is the same mechanism as the export rules — when underinvoicing is eliminated, clean companies actually benefit.

There’s another one, Indonesia’s own Berdikari (single-gate importer for SBM / soybean meal): caused short-term price spikes during the transition period, but poultry and feed company GPMs actually improved once stabilized. Although we don’t see this positively (more neutral) because the GPM could also be pushed by increasing poultry prices and volume because of free meal for children policy.

Why is market dominance the key to this policy working?

The logic is straightforward: if buyers (foreigners) have sufficient alternative suppliers, they switch — the added bureaucracy from the BUMN gate becomes a reason to buy from another country. But if the country is dominant and buyers don’t have adequate substitutes, they have to comply.

Indonesia has this leverage in all three targeted commodities: — Thermal coal: #1 exporter globally, 40%+ of global seaborne supply — Palm oil: #1 exporter globally, 55%+ of global supply — Ferronickel: #1 exporter globally

India, China, Bangladesh, and Vietnam cannot replace their entire Indonesian coal supply with Australian or South African alternatives overnight — the volume gap is too large. So as long as the BUMN fee and bureaucratic friction remain reasonable, buyers will continue purchasing from Indonesia. This is fundamentally different from Zambia’s failure — Zambia held only ~7% of global copper supply, so buyers immediately shifted to Chile and Congo when ZCCM’s bureaucracy became burdensome.

Who is the designated BUMN intermediary?

While this can change from time to time, but the one that is identified now is PT Danantara Sumberdaya Indonesia (DSI) — a brand new entity incorporated on 18–19 May 2026 (one day before the announcement), under the Danantara sovereign wealth fund.

Luke Thomas Mahony has been appointed as Direktur Utama (CEO) of DSI. He’s an Australian national based in Jakarta, previously SEVP Business Performance & Optimization at Danantara Indonesia since September 2025. Before that, he was Chief Strategy and Technical Officer at PT Vale Indonesia (INCO) from July 2024 to September 2025, and held senior roles at Vale Base Metals (CTO, then Director-Technical). His earlier career includes stints at BHP Billiton and Xstrata Coal.

The bull case on Mahony: he’s a technical mining person with hands-on operational experience across multiple countries. He understands how multinational mining companies structure their export sales — which is exactly what DSI needs to police. Being a foreigner may also make him more neutral from domestic political pressure.

The skeptic’s case: you’re appointing a former Vale executive to oversee an entity that will audit companies like Vale. Vale Indonesia (INCO) sells ~80% of its output to Vale Canada Limited — this is exactly the kind of related-party export structure that DSI is supposed to scrutinize. There’s probably a potential conflict of interest.

To us, the appointment of a legitimate mining professional rather than a bureaucrat is a net positive signal for execution quality. It partially de-risks the “Zambia scenario” where incompetent state management destroys the industry. But the conflict of interest angle is worth monitoring — especially how DSI handles ferro alloy exports from IMIP/IWIP smelters and nickel shipments.

How will DSI make money?

Danantara CEO Rosan Perkasa Roeslani has confirmed that DSI will operate as a trading company — taking a margin from every export transaction. This is not a flat administrative fee; DSI will function as a commercial intermediary that buys from producers and sells to international buyers, capturing the spread. The stated purpose: to eliminate both

underinvoicing

(selling below benchmark to affiliates offshore) and

overpricing

(inflating import costs to shift profits out).

Where do we see the risk?

How could this hurt miner’s profitability? There are two main risks that we are thinking through:

Risk 1 — DSI’s spread margin is too large. Rosan has confirmed DSI will take a margin — so this is no longer hypothetical. If DSI’s spread exceeds whatever average selling price (ASP) improvement comes from eliminating underinvoicing, the net effect to the exporter is negative. Concrete example: if a miner’s operating profit margin is ~20% and DSI charges a 4% fee on revenue, that’s a ~20% drawdown in operating profit. That’s not trivial.

Risk 2 — DSI becomes a monopsonist and sets buy prices too low. As the sole intermediary, DSI has the power to dictate purchase prices from producers. Exporters lose bargaining power, and profit gets squeezed from the revenue side. This is a bad precedent for foreign investment too — the UNTR’s Martabe gold mine saga shows how this can backfire.

Two scenarios — Scenario 1 (Base case): Nothing changes materially. DSI takes a minimal fee during Phase I, Phase II implementation is gradual, and earnings are broadly unaffected. This is more likely for Phase I (June–August) which is just documentation. — Scenario 2 (Downside): DSI charges a meaningful margin. At a 4% fee on a 20% OPM business, you’re looking at ~20% profit drawdown. This needs to be watched closely once Phase II terms are announced.

The positive case — what if this actually works?

Finance Minister Purbaya’s view during his recent Konferensi Pers is bold: “Profitability must double. It’s time to buy.” Here’s the logic:

1. Win-win if executed well. Underinvoicing is eliminated → ASP rises to true benchmark levels → the government collects more tax and royalties, and minority shareholders get the earnings that were previously leaking to Singapore trading affiliates. More USD stays onshore in Indonesia, supporting the rupiah.

2. Single seller = higher negotiated prices. If DSI successfully consolidates Indonesia’s negotiating position as the world’s #1 exporter of these commodities, it could push global prices higher. Companies with good GCG (corporate governance) benefit directly — they weren’t underinvoicing anyway, so the ASP uplift is pure upside.

3. Non-GCG companies are definitely hurt — and that’s a good thing for the market. Companies that were playing the underinvoicing game lose their edge. The playing field levels. This is structurally positive for investors who pick well-governed companies (which is exactly what we do).

On balance, we believe the positive outcome outweighs the negative

But we are still cautious because there is execution risk. Although Danantara’s recent success in cleaning up PT Timah (TINS) delivered a +1,184% YoY net profit surge is a data point, more successes that lead to better profitability would prove crucial.

Insider signal: does the owner already know before the information was released?

Well we don’t know for sure and I sure wish I could give Mr Anthony Salim a quick call, but a couple months back, our president Prabowo did have a meeting with the conglomerates who own large mining sites. It wouldn’t be far fetched to assume that the bosses have also be briefed regarding the government initiative. Especially the topic of discussion as reported by Kompas: “Indonesia Incorporated”.

And another data point was around this time — when the market was fearful — TP Rachmat increased his personal stake in ADRO from 3.02% to 3.46%. That’s +125.4 million shares added.

Think about that. We acknowledge that this is pure speculation, but the conglomerate owners (TP Rachmat, Boy Thohir, Anthony Salim) likely had early visibility on this policy direction before the public announcement. These are individuals who attend the highest-level government briefings. If TP Rachmat — who would have understood the implications better than anyone — chose to buy more shares rather than sell, that’s not a signal to ignore.

Call it what it is, but to us, insider buying is a bullish signal especially in the middle of widespread market fear. And to be fair, we will check again in the coming months if there are more insider buying or less of insider buying.

But let’s remain level headed and not get carried away. We are investors with limited information anyways. Here are key questions that still need answers:

1. What will DSI’s margin be? Rosan mentioned DSI will take a trading margin, but the rate hasn’t been disclosed. Below 2% = manageable. Above 3% = needs re-evaluation. Worst case: At 4%+ on a 20% OPM business, we’re looking at a ~20% profit drawdown.

2. How will settlement payments work? If DSI adds 30+ days to the payment cycle, working capital can get squeezed.

3. How will DSI handle potential conflicts of interest given its leadership’s prior roles in the mining companies it’s meant to oversee?

Closing Remarks

We will continue monitoring every development that affects the profitability of companies in our portfolio. We think that it is helpful to have every investment decision made based on the best available information at the time — like assembling a puzzle, one piece at a time.

Being right or wrong on any single call is part of the investment business. What matters is that the process is disciplined, the logic is clear, and we keep learning from every outcome. Do our best and never get attached to the outcome. Especially when the outcome is really beyond our control.

I love this question.

Despite:

• transparency over the investment thesis we share

• long term incentive alignment between us and customers through a performance-based fee structure

• and the buying and selling executed independently in our customers’ own brokerage accounts

someone still asks this.

To me, this signals that I look rich (having so much equity that I need exit liquidity) even with my $10 Casio watch haha.

Jokes aside, this signals a deep-seated trust issue that is prevalent in the finance sector. And I get it. Finance has been mired with scandals, shadow banks, frauds and so on.

So instead of being defensive about the question, I want to take it seriously. Let me walk through it the way I’d walk through it in my own head if I were to be a potential customer myself.

First, what is exit liquidity?

You can skip this if you already know what is an exit liquidity.

Tom wants to sell his house in Senopati, South Jakarta. The house is riddled with spooky ghosts.

He bought it five years ago for Rp 17 billion (about USD 1 million). Now he wants out. He finds an agent. “Mr. Tom, I can realistically sell it for USD 800k.” Tom is not satisfied. “I want at least USD 2 million. I’ll double your commission if you pull it off.”

The agent nods and goes to find a buyer.

Not someone who knows Senopati — those people know about the ghosts and won’t pay anywhere near USD 2 million.

So the agent finds John, an American moving to Jakarta to work in SCBD as an expat. The agent pitches the area, the food, the hotels nearby.

John was convinced and John becomes Tom’s exit liquidity. John was ignorant about how bad the place was and he later finds out about the ghosts. He got furious. But the transaction is done.

Tying it back to stock investing, customers as exit liquidity essentially means that they are unsuspecting buyers (retail investors) to purchase our shares of a company at elevated prices.

Back to the question

So, are our customers our exit liquidity?

The answer is: no.

But “no” is not a good enough answer. Because again, it requires trust on your part toward the service provider. And the whole reason you’re asking the question is that you don’t want to extend that trust on faith.

So instead, let’s assume that yes, we want you to be our exit liquidity. That’s why we have a marketing budget. That’s why we work hard to acquire you.

What’s the cost? What’s the reward of doing it?

The reward

Let’s start with the reward and be generous.

Assume that we work with a public company with a market cap of Rp 1 trillion. They want to sell 1% of their shares to the public.

That means they want to sell Rp 10 billion worth of their shares.

Now let’s be generous. Let’s say that our commission is 50% of the sales value. Which means we will get Rp 5 billion. Big, ya?

Note: I want you to understand that if we actually did this, it would be a crazy unethical thing to do because of the conflict of interest. But let’s just play along.

So how many customers do we need to sell Rp 10 billion worth of shares to?

Our minimum committed fund is Rp 25 million. But let’s say that on average our customers have Rp 250 million (10x the minimum).

Also note: If Budi recommends to all-in on one stock, that would be disastrous.

But let’s run the cartoon version of the math first. Rp 10 billion / Rp 250 million per customer = 40 customers.

40 customers and we walk away with Rp 5 billion. That looks like the reward.

Except “all-in on one stock” is not a recommendation any responsible advisor would actually make. Because the customers will just say “no, I don’t want to all in”.

In reality, a position size for a single stock in a concentrated portfolio is more like 10%. At a 10% position size, each customer takes Rp 25 million of this one stock.

Rp 10 billion / Rp 25 million = 400 customers.

So the real number is 400. Four hundred of our customers, all simultaneously convinced that the same one stock deserves a tenth of their portfolio, all on the recommendation, all at the same time. That is what it would take to clear Rp 10 billion of inventory.

Now let me size that against our probable size of a customer base.

Let’s be generous again. Assume that 10% of our Instagram followers (16K) are customers — that is already a wildly optimistic conversion rate. That puts our customer count at around 1,600.

400 out of 1,600 = 25% of our entire customer base.

A whopping quarter of every customer we have ever earned, burned in a single transaction.

But at least we walk away with Rp 5 billion?

But how big is Rp 5 billion, actually?

Let me be honest about the reward side, because Rp 5 billion sounds big in isolation.

If I split it 50-50 with Budi, with no marketing budget set aside, we each walk away with Rp 2.5 billion.

We also have VC investors. I am pretty sure they would be super pissed if they only got a fraction of that Rp 5 billion. So another chunk of it gets eaten there.

And here is the part that actually grounds it for me personally.

If I worked at Goldman at Rp 100 million per month, I would earn Rp 2.5 billion in roughly two years. With none of the conflict-of-interest baggage. With no risk of losing 400 customers after a single transaction.

So the “reward” is not a transformative number. It is roughly two years of a Goldman salary, paid out once, in exchange for torching the business we are trying to build for the next few decades.

When you frame it that way, the question isn’t “is it ethical?” — that one is easy.

The question is, “who would even take that trade?”

The cost

Now the cost side. There are three layers.

Layer 1: the direct churn.

Those 400 customers are gone. Not in the polite, “I need this money” way. Its more of “I will never speak to Recompound folks again” way.

Because in their minds:

“Ni gara2 pake Recompound gua jadi nyangkut di saham X.”

Whatever lifetime value we would have earned from them — gone. With performance-based fees, the customers who stay the longest are the ones we earn the most from, because compounding does its work on both their portfolio and our fees.

400 customers, over a decade of fees, is not a “meaningful chunk of revenue.” For a business at our stage, it is the business.

Layer 2: the word of mouth.

Indonesia’s working professional / entrepreneur community is small. Really small. It runs on dinners. On WhatsApp groups. On who-introduced-whom at last weekend’s BBQ.

400 burned customers don’t leave quietly. They tell people.

Let’s say each one tells 7 people. That’s 2,800 prospects who have been pre-poisoned against us before we ever get a chance to talk to them.

Whats more, the prospects who matter most to us, the analytical, slow-to-trust, asks-hard-questions kind, are exactly the kind who weigh peer testimony heavily. Negative word of mouth doesn’t just lose us 2,800 names on a spreadsheet. It loses us the 2,800 names we most wanted on the spreadsheet.

CAC for that kind of prospect is not cheap. It is some of the hardest customer acquisition work in finance, because the kind of person who can tell the difference between a real fiduciary and a salesman is, by definition, hard to sell to.

Layer 3: the moat.

This is the worst one.

Trust is a moat, especially in finance. Trust is so much of a moat that, arguably, it is the product. The portfolio is the deliverable. The trust is what makes the deliverable worth anything.

Once we burn it, we cannot unburn it.

Every competitor who comes after us will use this story against us forever. “Remember when Recompound did X to their customers?” It becomes the first thing anyone hears about us.

So the full ledger:

• Reward: Rp 5 billion gross — which, after splitting with Budi and accounting for our VC investors, lands closer to two years of a Goldman salary per person, paid out once

• Cost: a decade of LTV from 400 of our hardest-won customers, plus ~2,800 poisoned prospects, plus the permanent destruction of the one moat that actually matters in this business

I suppose it is quite clear that the economics does not make sense 😅

But I insist that this question is a good one

Three things stand out to me when someone asks this question.

First, the fact that you’re even asking is a signal.

It’s a signal that you think analytically and that you don’t take claims at face value. That you want to see the incentives before you trust someone.

These are exactly the kind of people we want as customers. They are also, frankly, the hardest kind to acquire. Burning a customer who asks this question, just to make a one-off windfall, would be a fatal economic decision.

We work real hard to find you.

Second, one-off deals are bad fundamentals.

The kind of business we want to build is one where customers stay for a decade because economically speaking, the longer they stay, the more valuable they become to the business. Where their fund compounds. Where they invite their friends. Where they introduce their kids to us when their kids start earning.

That kind of business does not get built on burning people. It gets built on showing up well, repeatedly, for a very long time.

A one-off Rp 5 billion windfall, paid for by destroying the customer base, is not a business. It’s stupidity at its finest.

Third, again trust is a moat. Why would we destroy our own moat?

In a finance business, trust is the only durable competitive advantage. Anyone can buy the same Bloomberg terminal. Anyone can hire CFAs. Anyone can build a model. What they cannot easily buy is a decade of customers who say,

“These guys did right by me even when no one was looking.”

If we make you our exit liquidity, we are voluntarily destroying the only thing that makes Recompound worth more than the sum of its salaries.

So the answer is no

But more importantly: the answer is no, and you don’t have to trust me on it.

You can do the math and see if it makes sense for yourself 🙂 If you fancy, you can even play with the variables and assumptions on the cost and rewards that are made.

That’s the answer I’d rather put out. Because I believe that trust in finance shouldn’t be a leap of faith. It should be what’s left when you’ve done the analysis and the analysis still says: this is aligned with my goals.

If you’re the kind of person who wants to do that analysis — welcome. You are exactly who we built this for.

Disclaimer: this exposition is an editorial. It is not an academic paper and it should not be seen as facts. It is based on the author’s personal observation and experience. It does not constitute investment advice and is for educational purposes only.

I was playing with Instagram story and created a poll on Recompound. Market was horrendous. And I wanted to check our followers how worried they are about the market. It turns out that a good 30% of the responders were feeling worried. So perhaps this write up could be timely.

We all know where does the worry come from

First things first, we know that worry tends to come from the market itself. The modern stock market is not a place where real ownership exists for many people. It is a place where price movements gets sent to you every moment. Push notification, tickers, news commentary, now we have streams and social media, WhatsApp and Telegram groups among others.

You already know all of this. But it is important to repeat that the market ties you with a rope by design. You get pulled into it the moment you sign up.

Simple observation:

When you see the news saying anything good or bad about the macroeconomics, geopolitics, government policies, etc in whichever outlet, you would be pulled towards checking your investment application. You’d be wondering how does this news or event affect my investments?

This is normal because the market is in the business of transactions, and broadcasting prices loudly is what gets people to act. Feeling something every time prices move is what gets you to trade. Trades generate fees. Fees feed the entire chain.

So knowing where the worry comes from is a good starting point. But it is not good enough cure.

Where does this worry normally lead to?

Worry or anxiety is an unpleasant feeling. So when we are worried, we naturally seek for stimulus or information that counterbalances that worry.

How we do this is usually we search for answers to questions that we have in mind. Among others, these are primary questions that people have in mind:

1. How long is the market going to stay horrendous?

2. Have we made the right investments. I.e. will our holdings recover as the market gets better?

When these two answers are reliably answered by someone we trust, we’d find ourselves comforted. Someone we trust can literally be anyone:

1. It could be your financially savvy brother

2. It could be your capital market friend

3. It could be a YouTuber investment guru

4. It could be an intelligent guy on Substack

5. It could be your super smart colleague in the private equity space

6. You get the idea

While the claims and predictions from people you trust can make you less worried, I argue that the pleasant feeling tends to be fleeting. It is more similar to a pain killer that removes the pain. But likely that the underlying “sickness” is not attended to effectively yet.

Assume that my argument is valid, why do we look for claims and predictions as a natural response to cure our anxiety?

Let’s have a bit of fun first 🙂

Chris Williamson recently interviewed a mentalist named Oz Pearlman. Oz would guess names, birthdays, pin code or numbers they were just thinking about. By the end of the episode, Chris’ face was as red as cherry as he was defeated and felt like he’s a prey in water. Take a look, video is funny.

How do you feel after watching the video? I made Budi and Wilson watch the video at the office. Wilson was entertained. Budi was skeptical. Budi is way too analytical for this stuff. He thought that it must be set up. But I did observe both of them while they were watching. Both of them sat there momentarily in disbelief.

So why does this work? Why are we so intrigued?

Btw, if you say don’t feel anything, please stop trolling me haha.

My guess is because our brain is designed to assume that minds cannot be read. We go through our life thinking that our mind is private and ours alone to observe. What we consciously do not divulge, do not get known by others. So when somebody appears to be able to read minds, the experience feels like breaking law of nature.

Now let’s sit with this for a moment and draw parallel to investments.

Similarly, our brain is also designed to assume that markets cannot be predicted. So when a statement that “looks like” a prediction turns out to be true, the predictor becomes like a wizard. To wit, you could take a look to a conversation that was perceived to be a prediction.

But I promise I didn’t make a prediction. I didn’t say that a certain stock would go to a certain price. I just said that we would be more interested if the price becomes lower.

So here’s what I hope is clearly demonstrated. The feeling when you see a magic trick is very similar, nigh the same as that feeling when you see a market prediction comes true.

That feeling is called wonder.

Wonder is a pleasant feeling when what you thought was impossible, happens. Then you would continue to want to know how on earth does that impossible thing happen.

A mentalist sells wonder through the illusion of accurately reading minds.

An investment person sells wonder through the illusion of accurately predicting the market.

That is the trick.

So what have we learned from watching a mentalist in action

We’ve learned that:

• Worry comes from the market movement

• Our tendency is to search for people we trust who have previously predicted the market because it has generated a sense of wonder.

• When that trusted person makes another prediction that is in favour of your investments, you feel less worried.

So I hope that it is now clear why we naturally look for prediction from people we trust. Because accurate prediction generates wonder → which creates trust. The next time we feel worried, we would go again and seek for the prediction to alleviate our worries.

But here’s what Oz tells us about his tricks

Literally the first question of the podcast:

Chris: “You have said that your career is built on a lie. What’s the lie?”

Oz: “The lie is that I can read people’s minds. I can’t. I wish I could.”

Oz would be the first to tell you that what looks like mind-reading is a very sophisticated set of guesses, observations, and probabilities. The miracle, when you understand it, is just craft of creating an illusion that he’s reading minds.

He has nothing to gain by saying this. He says it anyway, because he is honest about what he does.

And I’d say this to everyone who happens to trust us as well. We believe that the market is too random to make predictions accurately 100% of the time. So we’d rather not make predictions. So when people ask:

“when is the market going to recover?”

“is the currency depreciation going to get better?”

“how is war uncertainty going to impact the market as a whole?”

We will be first to say that we don’t know.

But when we say we don’t know, it does not mean that you must be worried, quite the opposite

There is a neuroscientist named Lisa Feldman Barrett who wrote a book called How Emotions Are Made. She argues something that, if you take seriously, changes how you think about your own worry.

Her argument is that emotions are not universal, hardwired things that just happen to you. They are constructed in your brain, in real time, from concepts. And the most powerful thing is that concepts are not just built from experiences that you observe, but also from words of our language.

Human brains are very unique in the sense that we can construct a reality in our minds using words. The existence of reality depends on a perceiver. Think about it. What is money in a physical sense? Well it is a bunch of bits (or code) that is stored in the database of a bank. If you wire Rp 100.000,- to a monkey, the monkey will not feel a thing because that money to them is not real. But if you send that Rp 100.000,- to Toby. Toby will say thank you and go to Indomaret and buy a box of sparkling water. Indomaret would give Toby that box of sparkling water because they agree with Toby that his Rp 100.000,- is real.

Another example how we construct reality using words.

When you order from Domino’s, you do not say:

“Hi, I’d like a circular flatbread with tomato sauce, melted cheese, and pepperoni baked at 220 degrees. Please.”

You’d say:

“Hi, I’d like to order a pizza. Please”

The word makes the thing real, orderable, recognisable and most importantly gojek-able right to your door step. Without the word, you would have to assemble the concept from scratch every single time, and most of the time you would not bother.

Here is what this means for your worry. How to feel less worried

Barrett’s claim is that emotions as a reality are constructed the same way. The bodily sensations are real — a tightness in the chest, a tug in the stomach. The worrisome thoughts that occur on our mind is also real — I wonder if my investments are going to recover tomorrow or next week.

To feel less worried, you need a competing and name-able state. Btw, naming it is very important as I previously discussed the importance of names.

But what is a good competing state? One that has its own name? Without a competitor, worry has no rival and keeps running. We’d be looking for predictions to make us feel less worried and that’ll feel like a coping mechanism, rather than a long term solution.

Here is the awkward part. Many when asked to name the opposite of worry, would go for calm or peace of mind. But I think that these words are not good enough.

Calm does not specify what changed. If I tell you I am worried, and the next week I tell you I am calm, you do not know why. Did I take a holiday? Did I medicate? Did I just have a good day? Did the market rally? Did I sell everything? Calm describes a state of feeling without describing the underlying condition that produced it.

Peace of mind is something most people associate with a vague spiritual state. It does not feel achievable on a Tuesday morning while you are running a business.

Wonder, in case you are wondering, is not a good opposite too. Because wonder only happens when the predictions have come true. If I hear Warren Buffett says that market would recover, I’d feel wonder only after the market really recovers. Not when it takes another 5% plunge on a Tuesday morning.

So we need a different kind of opposite. Something more specific than calm. More human and grounded than peace. More present than wonder.

Let me propose a word.

Untethered

Most retail investors live with an invisible rope. The rope ties you to the price chart. You do not know the rope is there until it tugs — your stock dips and you feel it in your stomach, your stock jumps and you feel a sudden rush. You check at 9am. You check at lunch. You check at end of day. The rope is taut all day.

Untethered is the day the rope falls off.

It does not feel the same as detachment. Detachment is something you do — a discipline you cultivate. Untethered is something that happens to you once the conditions change. The rope falls off because it is no longer pulling on the other end.

The chart is still there though, just that you are not pulled towards it.

Level of worry depends on who is holding the rope

I want to be honest with you about why feeling untethered is, for me personally, easy.

It is not because I have superior willpower or a better meditation practice. It is because someone else is holding the rope. I use Recompound with whom I can interact with a dedicated advisor. So does my mom. So does my brother. None of us think about the market day in, day out — not because we are unusually disciplined, but because we know there is a dedicated advisor whose actual job is to do the watching. The pull is gone because it has been outsourced to people I trust.

That is the entire mechanism. There is no trick.

Which means the answer to what to do tonight if you feel worried depends on a question only you can answer.

Right now, if I did not look at my portfolio for three months, would I trust that someone is still watching it on my behalf?

If your answer is yes

if you have a wealth steward you genuinely trust, whether that is a finance-savvy sibling, an advisor you have worked with for years, or anyone else competent and aligned with your interests — then here is what to do. Understand them more.

If your financially savvy sibling is taking care of your investments, ask them questions. Understand their philosophy, the assumptions they make, the learnings they have experienced, the mistakes. When you realise that work has already been done, the rope is loose.

If you use Recompound and you feel worried, talk to Budi 🙂

If your answer is no, here is what you can do.

Your worry is not irrational. It is your nervous system accurately reporting that you are alone with the responsibility, in a system designed to keep you tugged. The rope is doing its job. The work is to find someone trustworthy to hold the rope together with you. It can be anyone, but ideally someone honest, competent and aligned with your interest. With whom you can verify their work. Your advisor, your sibling, your uncle, anyone.

P.s. It can be yourself as well. I believe that if you consistently commit to a strategy that is logical and has been proven to work for you, you will likely feel untethered from the volatility of the market overtime too.

Closing remarks

That someone could also be us or it might not. Again, what matters is that the person on the other end of the rope is honest, competent and genuinely on your side. They really don’t have to be a superhuman or a market wizard. But I believe that if those three conditions are met, you can feel untethered. Whoever is holding the rope, make sure they are holding it on a bad week, not just a good one. Because if they don’t hold on to it, you’d end up getting tugged again.

A rope you can name is a rope you can take off. But you take it off by handing the other end to someone competent you trust — not by pulling harder against a system that is built to pull back.

That is what we are doing for the people who work with us. Not predicting the market. Not chasing the trade. But really by helping them hold the rope on their behalf.

So that’s it. While seeking for prediction is an okay solution to feel better for a while, perhaps you could attempt to feel untethered from the market by handing the rope over to someone who’s honest, competent and aligned with your interest. Subsequently, you will feel less worried from market volatility, getting your life back in the process.

Cheers!

References

In case you’re interested in reading or watching the materials consulted in writing this article, below are the entry points:

1. Barrett, L. F. (2017). How Emotions Are Made: The Secret Life of the Brain. Houghton Mifflin Harcourt. [The construction theory of emotion, the role of words and concepts in shaping what we can feel, and the argument that emotions are predicted, not triggered. The pizza-style examples of how language constructs ordinary categories appear throughout.]

2. Williamson, C., interviewer. How to Steal Thoughts Out of Anyone’s Head — Oz Pearlman — #1088. Modern Wisdom Podcast. April 23, 2026. https://chriswillx.com/podcast/ [Source for the “the lie is that I can read people’s minds. I can’t. I wish I could” exchange in the opening minutes, and the “it’s not about me, it’s about them” line later in the episode.]

3. Taleb, N. N. (2001). Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. Random House. [Background reading on why streaks of correct predictions in finance are usually luck rather than skill, and why we are so easily fooled into mistaking the former for the latter.]