by On March 3rd, we hit the big red “Reset Button” on our entire portfolio.
While it felt heroic to lock in a 123% gain on TSM (you can read that victory lap here), looking at our Adobe ($ADBE) position felt more like accidentally stepping on a Lego in the dark.
We exited the trade with a 49.18% loss.
In the world of investing we usually talk about “wealth creation”, we do not talk enough about “wealth evaporation.”
But if I want you to trust our judgement when we are right, we owe it to you to be brutally honest when we’ve been spectacularly wrong.
Here is the autopsy of a creative giant that lost its way.
Why a “Digital Fortress” can still turn into a sandcastle
We bought Adobe because we thought their “Creative Cloud” was a fortress.
We imagined a deep, shark-filled moat protecting their software.
It turns out, that moat wasn’t filled with sharks, it was filled with evaporating water.
In the 2026 AI era, a moat is only useful if the ground stays still.
But when OpenAI dropped Sora, the ground didn’t just move; it opened up.
We’re not convinced that a premium-priced subscription model can survive when the “magic” of creation is becoming a commodity.
Watching your “fortress” turn into a “sandcastle” is a painful way to learn about disruption.
How to accidentally pay your rival to take your lunch money
Then there was the Figma fiasco.
After regulators blocked the merger, Adobe didn’t just lose their intended prize, they handed over a $1 billion breakup fee.
It was essentially like paying your most annoying rival to go to the gym, get stronger, and then come back to take your lunch money.
Figma used that cash to fuel a massive 2025 IPO.
They are now leaner, faster, and much cheaper for the next generation of designers.
This matters because it leaves Adobe fighting a defensive war on two fronts: high-end AI tools from above and nimble startups from below.
And in our experience, nobody ever got rich betting on the guy fighting from a crouch.
The siren song of the “Cheap” stock trap
The most dangerous thing an investor can do with a 49% loss is “average down.”
It’s the siren song of the stock market: “It’s so cheap now! Surely it can’t go lower!” .
Spoiler alert: It can.
The risk is that Adobe becomes a “value trap”, a stock that looks like a bargain but performs like a boat anchor.
In a portfolio, we don’t have room for anchors.
We would rather take the bruise, keep my remaining capital in the safety of cash, and wait for a business that actually has the wind at its back.
What we need to see before we ever “swipe right” on Adobe again
For us to even consider looking at Adobe again in the next 12 months, they have to prove that their “Firefly” AI is a profit-engine, not just a defensive shield.
They need to show that professional designers are still willing to pay the “Adobe Tax” in a world where AI prompts are free.
If the next two quarters show more users migrating to Figma or Canva, then the creative moat hasn’t just dried up, it’s been paved over. We are not waiting around to see the steamroller.
Losing money is a “growth opportunity,” though we would prefer to grow our portfolio instead of our character. We have stepped away from Adobe to keep our thinking clear and our capital safe.
Good investing isn’t about never falling down; it’s about making sure you aren’t tied to the rock when it sinks.
DISCLOSURE: we exited Adobe for a 49.18% loss in early March. We remain 100% in cash as of early April 2026.