The recent correction has me thinking quite deeply about my next big play. There are some famous adages in this world about such events, where everyone has a plan until they get punched in the mouth. I believe Mike Tyson actually said that. The recent correction, or crash, whatever you wish to call it, surely punched a lot of people. Plans ruined! However, as the data shows time and time again, this is often where the opportunities are.

Enter the Pareto Principle, also known as the 80/20 Rule. Originally observed by Italian economist Vilfredo Pareto in the early 1900s (he noticed 80% of Italy’s land was owned by 20% of the population), it’s since shown up everywhere—from business to nature to portfolios. I’ll say it again, this kind of rule is seen everywhere, as well as in trading and investing, and also aspects of life where a small percentage of a one thing often accounts for the vast majority.

At major market turning points, this rule becomes especially important to remember. Even Warren Buffett famously earned over 80% of his wealth after turning 60. These kinds of power laws and asymmetric truths show up everywhere—often hiding in plain sight.

📈 Let’s Go Deeper Into The Pareto Principle

At its core:
Roughly 80% of outcomes come from 20% of causes.

Applied to your world:

• 80% of your portfolio gains may come from 20% of your holdings.
• 80% of your trading profits likely come from 20% of your trades.
• 80% of career growth can stem from 20% of your decisions—one great job, one mentor, one risk.
  

💼 Careers and Life: One Yes Changes Everything

Think about it. You grind every day, apply to countless roles, take dozens of calls—but one “yes” can change your entire trajectory.

That one manager who sees your potential.
That one startup where you take a leap.
That one project that lands you a seat at the table.

In hindsight, most people can point to one opportunity that outperformed all others. The key is being ready when it comes—and not getting discouraged when most things don’t pan out.

📈 Trading & Investing: Focus on the Outliers

The Pareto Principle shows up constantly in portfolios:

• Peter Lynch often said that “six out of ten winners” could drive a successful fund.
• Venture capitalists know that one unicorn can return an entire fund.
• Even in options or small-cap trading, a few outlier trades can define the year.

So why do we waste so much energy on the 80% that doesn’t move the needle?

👨‍🚀 Stef’s Conclusion

The 80/20 rule isn’t about waiting for luck. It’s about positioning.
By exploring widely, but investing deeply when something shows promise, you tilt the odds in your favor.

Whether it’s a stock, a startup, or a side hustle—the trick is knowing when you’ve found the 20% that deserves your all.

Even more important, and I must really stress this, if for example something has gone wrong in your life or career or investments, just remember the 80/20 rule because all you need is that one more chance, and you’ll get it all back and then some.