Why You Need a Business Ontology to Survive a Market Crash

Smile while others panic

The past few days have been a rollercoaster. Markets are bleeding red, headlines are screaming chaos, and your portfolio might feel like it’s on life support. If you’re an investor in tech companies—or any company, really—you’ve probably felt that gut-wrenching urge to hit the sell button. It’s human nature: when prices plummet, panic sets in. But here’s the thing—price action is a terrible compass for navigating a crash. It’s noisy, emotional, and often completely untethered from the underlying business you’ve invested in.

That’s where my Business Ontology Framework comes in. I developed this framework after dissecting several tech companies from first principles—stripping them down to their core mechanics and building a thesis about what really matters. In a market crash like the one we’re living through right now, it’s not just a tool—it’s a lifeline. Without it, you’re at the mercy of the ticker tape. With it, you can tune out the noise and focus on what actually drives a company’s destiny.

What Is a Business Ontology Framework?

Think of it as a map of a company’s soul. It’s a condensed set of fundamental indicators—unique to each business—that tell you whether it’s moving in the right direction, regardless of what the stock price is doing. These aren’t generic metrics like P/E ratios or revenue growth that you can pull off a Yahoo Finance chart. They’re deeper, more specific, and tied to a thesis I’ve built from scratch about how the company creates value and competes in its market.

For example, if I’m analyzing a tech company like xAI, my Business Ontology might include indicators like:

• Rate of AI model improvement (are they staying ahead of the curve?).

• Customer adoption velocity (are users actually sticking around?).

• Talent retention in key R&D roles (because innovation dies without the right people).

These aren’t random data points—they’re the pulse of the business, derived from a first-principles breakdown of what makes xAI tick. Your ontology will look different for every company you invest in, and that’s the point. It’s bespoke, not one-size-fits-all.

Here you can find one of the latest Business Ontology I have built, specifically for HIMS 0.00%↑

Hims and Hers’ Business Ontology

Why It Matters in a Crash

When the market tanks, stock prices don’t just dip—they go haywire. A 10% drop might reflect a macroeconomic tremor, a tweet gone viral, or a hedge fund unwinding a position. It rarely means the company you own suddenly lost 10% of its intrinsic value overnight. But without a clear framework to anchor you, that’s exactly what it feels like—and that’s when panic selling kicks in.

Warren Buffett once said,

The stock market is a device for transferring money from the impatient to the patient

He’s right—and a crash is the ultimate test of patience. I’ve seen it too many times: investors who spent months researching a company abandon ship at the first sign of turbulence because they didn’t have a way to separate signal from noise. The Business Ontology Framework fixes that. It’s your North Star when the storm hits. By tracking the indicators that matter—your indicators—you can answer the only question that counts: “Is the business still on track?”

Let’s say you’re invested in a SaaS company, and your ontology focuses on churn rate, net dollar retention, and product release cadence. The market crashes, and the stock drops 20%. You check your indicators: churn is steady, retention is climbing, and the latest release is gaining traction. The business is fine—maybe even thriving. Selling now would be like abandoning a perfectly good ship because the waves got choppy.

Panic Selling: The Price Action Trap

Price action is a siren song. It’s seductive because it’s immediate—numbers flashing on a screen, telling you something’s wrong. But it’s a lousy proxy for a company’s health. Markets are emotional; businesses are not. A crash amplifies this disconnect. Fear drives prices down faster and further than fundamentals justify, and if you don’t have a framework to ground you, you’ll get swept up in the hysteria.

Buffett nailed this too:

Price is what you pay; value is what you get.

In a crash, the price might collapse, but the value—the underlying business—often doesn’t. Peter Lynch, another investing legend, put it even more bluntly:

Know what you own, and know why you own it.

That’s what the Business Ontology Framework forces you to do. It zooms you out from the daily gyrations and zooms you in on the machinery of the business. If your thesis still holds—if the indicators you’ve identified are trending the right way—then the price drop is just noise. It might even be an opportunity to buy more. But without that clarity, you’re guessing. And guessing in a crash is how you lose.

How to Build Your Own Ontology

Start with first principles. Forget the stock chart for a minute and ask: What makes this company work? What’s the engine of its value creation? If it’s a hardware company, maybe it’s supply chain resilience or manufacturing yield. If it’s a platform play, maybe it’s network effects or user engagement depth. Break it down to the atomic level, then build back up with a handful of measurable indicators that capture the essence of your thesis.

For my deep dives, I do this for every tech company I cover. It’s painstaking, but it’s worth it. Once you have your ontology, monitor it relentlessly—especially when the market freaks out. Data over drama. As Charlie Munger likes to say,

You have to keep learning if you want to become a great investor. When the world changes, you’ve got to change.

Your ontology isn’t static—it evolves with the business and the market.

Check all the Ontologies I have built here:

The Bottom Line

We’re in a market crash right now, and it’s testing every investor’s resolve. If you don’t have a Business Ontology Framework, you’re flying blind, reacting to price swings that have little to do with the companies you own. But if you’ve done the work—if you’ve built a thesis and distilled it into a set of fundamental indicators—you can sit tight. You might even smile while others panic.

The market will recover, as it always does. The question is whether you’ll still be holding your winners when it does. My framework isn’t just about surviving a crash—it’s about thriving through it. So, next time the ticker turns red, don’t ask what the price is doing. Ask what the business is doing. That’s where the truth lives.

Stay tuned for the next update!