No real model. But generally speaking, what are the odds I make money, in absolute terms. I honestly have never cared or played the “will this outperform t-bills/S&P/whatever” game…that’s stupid. If I see an investment, EBay for instance…I can say that at $42 a share there’s virtually no way I lose money on it with a 3-5 year timeline. If risk is low, reward does not need to be super high…but the real gems are where you can find something with super low risks and some upside call options. Nintendo at $10, same thing.
So I guess really, for the super majority of my portfolio, I look for things where at worst my money isn’t going anywhere and at best I can make a lot. Over time I’ve moved away from stuff like biotech or cigar butts where I might make a lot but I also might lose a lot.