Lessons from the $TRY Currency Crisis

When the Turkish Lira $TRY plummeted a few years ago, I saw an opportunity because it had fallen so much that I felt it was extremely undervalued. So I bought more than I should have, hoping for a strong rebound. What I didn't consider were macroeconomic factors like government intervention and abnormal interest rates, which are more complex than just the chart saying 'cheap'. In the end, I held it longer than expected and lost a fair amount. It was an expensive lesson that relying solely on Technicals or just feeling something is 'cheap' in EM without understanding the deep and dynamic Macro context of that country can indeed lead to huge mistakes. Position sizing is extremely important, especially in such volatile markets.