Hysteresis
What wrenching on engines taught me about investing, patience, and not freaking out too early.
This post may seem timely given the circumstances of today. We have tariffs being implemented and have yet to feel the majority of the effects of them. That is of course, if they are implemented as announced and stay implemented.
Me: I fixed the issue. Why the hell isn’t the car running right?
Instructor: Hysteresis, dummy.
Me: Uh… what’s that?
Instructor: Takes time for sh*t to happen.
Wait… what’s hysteresis?
noun: hysteresis
The phenomenon where the effect lags behind the cause. Like when magnetic induction lags behind the magnetizing force.
Technically, the textbook definition is kind of physics-y. But the idea? It shows up all the time in real life. Especially when you're trying to make something better and wondering why nothing’s changing yet.
The auto shop version
I first heard the term back in trade school, pulling wrenches and trying to not break anything expensive.
You would do the job—head gaskets, MAF (mass airflow) sensor, brake pads, coolant flush—and the car would still run funky. Not because the repair was wrong. But because things hadn’t settled in yet.
Brake pads need to mate to the rotors. Sensors need to recalibrate. The system needs to stabilize.
A rookie tech (me): panics.
A seasoned one shrugs: “Takes time for sh*t to happen.”
You see it everywhere
Turns out, hysteresis isn’t just for cars. You’ll find it in every part of life that involves change and time.
Lose weight? It’s two weeks before the scale even moves. Two months before the mirror agrees.
Fertilize your lawn? Doesn’t green up the next morning. Takes a couple weeks.
Start investing? Feels like nothing’s happening—until compounding finally shows up.
Change company strategy? Your team needs to absorb it, act on it, and only then do results start showing on the P&L.
The problem?
Most of us know it takes time. But when we’re actually waiting, it feels like forever.
We say we’re patient. But we really mean, “I’ll give it like two weeks.”
But not everything is hysteresis
There’s a fine line between waiting for things to work… and ignoring the fact that they’re not.
If the car’s still broken two weeks after the repair? That’s not lag. That’s a miss.
If the CEO’s still flailing three years in? That’s not delayed results. That’s a problem.
How long is “long enough”?
It depends.
Being early and being wrong can look exactly the same—for a long time. The trick is figuring out when you’re still early… and when you’re just wrong.
How I avoid the “I’m just early” trap
This isn’t science. It’s feel, experience, and lots of small screwups. But here’s how I try to stay honest with myself:
🔍 Pre-mortem the position
Write down what I think will happen and how long I think it’ll take. If the timeline passes with no signs? That’s a flag.
📊 Track KPIs that matter (not just earnings)
New hires, trials, product momentum—stuff that shows progress. Numbers are nice, but activity speaks louder.
🐢 Build a position slowly, especially in turnarounds
I’ve gone in full-size too early before. Now I ease in, average down if it still makes sense, and keep my ego out of the sizing.
📉 Let discomfort be a signal
No rigid rules, but if I’m feeling queasy, I check in with myself. What changed? Is it just noise—or something deeper?
🗣️ Be a good shareholder
Ask smart questions. Build rapport. If management’s open, be curious and collaborative. Access matters when the story shifts mid-quarter.
🧠 Lean on my network
If I can’t get direct info, I turn to people I trust. Friends, niche groups, even paid Substacks. Curated signal beats scattered noise.
🧍♂️ Be kind—but real—with yourself
Nobody bats 1.000. Get enough right, avoid blowups, and stay in the game long enough to let compounding do the work.
Final thoughts
I’ve read this post a few times now and had different reactions.
Sometimes I think, “Yeah, this is a good reminder to be patient and trust the process.”
Other times, “Is this just mental gymnastics to justify bagholding?”
Occasionally, “Maybe I should’ve left this in drafts.”
But here’s the truth: the concept of hysteresis is real. Sometimes you’re early. Sometimes the system just needs to catch up. And sometimes, yeah—you were wrong.
Your job is to figure out which one it is. Then act accordingly.
If you made it this far—thanks for riding along.
Hope it gave you something useful to chew on.
— Dean