"Don't predict, respond" is among the oldest guiding principles behind how we invest at Capitalmind. I inherited it when I started here. But a Formula 1 race last year showed me what responding wins and what predicting loses.

It was the Qatar Grand Prix, 2025, the penultimate race of the season. Three drivers were still in the championship fight: McLaren's Lando Norris led the standings, with his teammate Oscar Piastri and Red Bull’s Max Verstappen's tied 24 points behind.

At lap 7, a crash brought out the safety car, a pace car that slows the field while the track is cleared. Within seconds, Verstappen peeled into the pit lane for fresh tires. So did most of the field. Both McLarens—Piastri leading the race and Norris running third—decided to stay out.

Verstappen won by 7.995 seconds, less than what a single pit stop costs. That decision, to stay or pit, took maybe four seconds to make. It halved Norris’ championship lead with just one race left, and all but ended Piastri's title hopes. McLaren had arrived in Qatar with a chance to clinch the title. They left it watching Red Bull close the gap.

The Arithmetic of a Pit Stop

In F1, tires degrade with every lap. They lose grip, drivers slow down to compensate, and at some point, you must pit for a fresh set. But a pit stop costs roughly 20-25 seconds, and races are decided by margins smaller than that. So, every stop is a trade-off: slower tires versus the time you lose pitting. That tension is often the deciding factor in the race.

And there's a hidden lever in this trade-off. The 20–25-second pit cost assumes the rest of the field is flying past while you're parked in the lane. Under a safety car, everyone is crawling, so the time you 'lose' pitting collapses. A pit stop under a safety car is the closest thing to a discount in F1 strategy, and teams often bet their entire race plan around the chance of one.

In Qatar, the game got tighter. The official tire supplier capped each set at a maximum of 25 laps, a safety restriction that made the race less about the fastest plan, and more about the permitted one.

Here's the math: A 57-lap race with a 25-lap max per set limit forces at least two mandatory pit stops. With the safety car on lap 7, if you pit immediately, you've burned just seven laps on your starting set. The remaining 50 laps split cleanly: 25 + 25. One more stop, no compromises. 7 + 25 + 25 = 57.

Red Bull pitted. The field followed. McLaren were leading in a tire-limited race where strategy mattered more than pace and were among the very few that chose to stay out. From that moment, their race became a heist movie where the safe was already empty.

Two Strategy Rooms, Two Philosophies

When asked about the strategy after the race, McLaren's CEO Zak Brown responded:

"Our evaluation if a Safety Car came out on that lap was clearly incorrect so we'll go back, study that, nothing we can do about it now. [...] I think it was a compound of decisions and data that didn't go our way."

McLaren had a plan. A script for how the race would unfold. They predicted a specific base-case scenario and anchored to it.

Contrast this with Red Bull's tire strategy philosophy. A few weeks before Qatar, Verstappen was asked how Red Bull decides their pit strategy. His answer:

"In our team, together with Oracle, we run over 8 billion simulations before the race basically starts. So, it gives us a lot of opportunities to make sure that we have the right strategy out there and know when to pit."

Eight billion simulations. Not to predict what the future will look like, but to have a response ready for whatever it throws at you. In Qatar, preparations paid off.

Hannah Schmitz, Red Bull's Principal Strategy Engineer, said after the race:

"Pre-race, that was exactly when our safety car and virtual car windows opened. And that was the plan. So, we would pit both cars if the safety car came out on lap 7. There's such an advantage to pitting under a safety car when you've got to do the two stops. That to us was a clear thing we should do."

The "window" she's referring to is the same arithmetic around lap 7. That was the earliest a two-stop race became viable, any sooner and the math forces a third pit stop. Lap 7 was also when the safety car came out, making that mandatory first pit an inexpensive one. Red Bull pitted immediately. McLaren let the moment pass and later ended up paying the full pit cost twice over.

In effect, Red Bull had multiple plans. They foresaw the possibility of a range of possible scenarios and were prepared to respond if any of them materialized.

Don't Predict, Respond

Don't predict. McLaren optimized for being right about one future. In markets, this approach has a familiar shape: the rigid forecast model with four decimal places, the macro call with rosy assumptions, the target price with a precise date. It feels rigorous, but the rigor is brittle. It's precision without robustness. It requires the world to behave exactly as you expect it to, and in markets, it never does for long.

The tariff shock last year. The Iran War and oil-related concerns this year. Neither was in anyone's base case, and both moved markets in ways that punished portfolios anchored to a single scenario.

There's a second cost to predictions. Once you say one out loud, you're stuck with it. Behavioral psychologists call this commitment bias: once a forecast becomes public, your brain quietly recruits evidence that defends it and discounts evidence that doesn't. The fund manager who declares a high conviction pick on a podcast finds it harder to trim the position when the thesis weakens. The cost isn't just the original wrong call; it's the chain of decisions afterward made to defend it.

The cost of anchoring your strategy on a single wrong assumption isn't just a bad quarter. It's that you have no second move. McLaren couldn't unpick their decision on lap 7. The race moved on without them, and they spent the remaining 50 laps trying to recover a position that was already lost. Portfolios built around a single conviction have the same problem. When the thesis breaks, there's no pre-built response. You're improvising under pressure, which is the worst possible time to be making new decisions.

To be fair, McLaren's approach works spectacularly when the race runs to script. The investor who called the bottom on value stocks or foresaw the silver rally looks like a genius. Predictions do work, and the asymmetric payoff of getting it right when no one else does is rewarding. But a great call doesn't give you a playbook for the next one, and you can't build a repeatable process on the back of getting individual forecasts right.

Instead, Respond. Red Bull optimized for reacting well to any future, and their rules-based philosophy aligns better with how we think about investing at Capitalmind. In markets, much of the environment lies outside your control. You cannot reliably predict geopolitical shocks, factor rotations, or regime shifts. But you can build adaptive strategies that map different market conditions to data-driven responses planned in advance. You do the work before the event, so that when the event arrives, you're following through on plans you've already vetted.

There’s a saying that goes “If the opportunity doesn’t knock, build a door”. To add to this, we’re saying: opportunity only knocks so often, so build as many doors as you can. When the moment arrives, you don't need to know which door it'll knock on.

This approach isn’t without trade-offs: a response-driven process will never be perfectly positioned for any single outcome. You are unlikely to be the investor that called it exactly right, and early. You're positioned for a wide range of outcomes, not the one that eventually turns out to be perfect.

At Capitalmind, we accept this trade-off. What stops you from being the hero of one race is also what saves you from being McLaren in Qatar, watching 50 laps slip away with no plan for what just happened.

Here’s how this looks in practice: when we launched the Flexi Cap Fund last year, momentum had started underperforming. So, the strategy adapted towards a broader multifactor tilt. When volatility spiked during the tariff shock and again during the Iran escalation, equity exposure came down. No one predicted tariffs. No one predicted the war. The portfolio responded anyway, because the responses were already baked in.

None of this is unique to markets. Most of life is response, not prediction. The rules get set by family, school, employers, communities, the people we live with. We rarely write the script, instead we improvise within one we've been handed. The people who do this well aren't the ones with the sharpest foresight. They are the ones who play the cards they’re dealt with well.

People hear 'systematic' and think constraint. McLaren had discretion and froze. Red Bull had rules and were free to move. We'll take the rules.