In theory, investments look simple: income is reinvested, capital grows, compound interest kicks in, and over time the exponential does its job. On graphs, it looks beautiful and convincing. But in practice, for most people, this effect does not manifest—not due to mistakes, but due to scale.
The key problem of small capitals is discreteness. Income is accrued, but it is too small to be immediately reinvested. Minimum lots, commissions, and instrument restrictions break growth into separate steps. Between them, there is a pause — an expectation, during which the exponent ceases to be continuous.
Instead of smooth acceleration, a stair-step appears. Income accumulates until the next action becomes possible. Formally, the strategy remains profitable, but in fact, growth slows down over time. This is not a mistake. This is the physics of small numbers.
Capital in this sense is not just money. It is compressed time. With a larger volume, income immediately covers minimal thresholds, and reinvestment becomes continuous. The exponent begins to work not on paper, but in reality — step by step, day by day.
Therefore, the same strategy at different scales gives fundamentally different trajectories. Small capital is forced to wait. Large capital acts immediately. On an annual basis, this looks like a difference in percentages, but in essence, it is a difference in speed.
From this arises a false sense that "the strategy does not work." In fact, it is the exponent that does not work under conditions of discreteness. The strategy itself fulfills its purpose — it maintains direction and accumulates potential until growth begins to accelerate.
This is where assets that can hold structure for a long time become important: with a clear economy, stable demand, and the ability to work within a range. They do not promise sharp movements, but allow capital to gradually overcome the thresholds of discreteness.
The exponent does not disappear. $ATOM
It simply waits for the scale to allow it to turn on.
