Political capital is like financial capital. A politician invests it in ventures that may or may not pay off. The more bold the venture, the greater the risk—but also the greater the potential return if things go well. But the politician, like the financial investor, has to understand the market. If either makes an investment based on a faulty perception of the market, the investment almost surely will go south. Then the financial investor ends up with less financial capital to play with, just as the political investor ends up with less political capital.

President Trump and House Speaker Paul Ryan invested a large chunk of political capital in health care. They didn’t know the market. The investment went south, taking with it a large store of political capital. Now they have less to play with.

At least the financial investor can take a write-off on his or her taxes. No such benefit accrues to the politician. It’s a complete loss. The politician must start from scratch with whatever political resources he or she has left.

This analogy puts into stark relief the magnitude of the political debacle that has beset Trump, Ryan, and congressional Republicans. They proved incapable of redeeming the GOP promise of the last seven years that they would repeal and replace former President Barack Obama’s Affordable Care Act, also known as Obamacare.

There is one more element of the analogy that hasn’t received much attention since Trump’s stunning presidential victory last November and, more significantly, since his inauguration on January 20. He didn’t have much political capital to begin with. Minority presidents start off their administrations with a handicap—a dearth of political capital. The smart ones understand this and act accordingly. They husband their resources, make small bets, focus on the political imperatives that they can’t ignore and postpone discretionary issues, even the ones they most vehemently care about. They keep a close watch on the returns they get from small victories, pooling them for ever more risky political investments. Ultimately they position themselves for bold actions.

This was Richard Nixon after he was elected in 1968 with 43.4 percent of the vote. The issue he couldn’t ignore was Vietnam, and he put a huge part of his concentration on that. In November of his first year in office, when antiwar demonstrations threatened to sap his political capital, he rolled the dice with his now-famous “Silent Majority” speech. He had no choice because Vietnam threatened to destroy his presidency as it had destroyed Lyndon Johnson’s. But he pulled it off. He knew the market, with the result that he boosted his store of political capital. On domestic issues, understanding he was not flush with political resources, he moved cautiously and stealthily, calibrating carefully how much political capital he could invest here and there without risking too much.

Slowly, over the course of his first term, Nixon’s stores of political capital accumulated. His big Vietnam investment was a politically hazardous retreat from that country—one of the largest and most delicate military retreats in history. It paid off. So did his small domestic-policy investments, taken together. Soon he was positioned for huge and highly risky investments such as the trips to China and the Soviet Union in 1972—the year of his reelection bid. He even could afford to bomb Hanoi and Haiphong in the spring of 1972, when the North Vietnamese, with Soviet help, launched an invasion of the American-backed south. That put at risk his forthcoming trip to Moscow, but the bet paid off. The Soviets didn’t cancel. Nixon was well-positioned with his constituents by then, and hence, he was also powerful as a global figure.

Nixon won reelection that year with nearly 61 percent of the vote. By then he was sitting on a pile of political capital, which then accreted at an accelerating rate as he became engulfed in the Watergate scandal. Finally, he didn’t even have enough political capital left to govern at all. That’s when he resigned.

Compare Nixon’s record of political investment with that of Bill Clinton after his 1992 presidential election—also with just 43 percent of the vote. Clinton demonstrated a lack of understanding of how to handle political resources. With his wife managing his political portfolio, he invested hugely in the goal of universal health care. It was a laudable goal, but just about everything he might do to realize that goal could rile elements of the market. Clinton didn’t study the market sufficiently to know how to diversify his multiple health-care investments. The unsentimental market—all markets are unsentimental—bashed him. His investment turned south. At the next midterm election, his lack of political capital led to a political deluge, with opposition Republicans capturing both houses of Congress. They gained 54 House seats and nine in the Senate. The result: he had even less political capital than before.

But Clinton rallied. He brought in consultant Dick Morris, who showed him how to “triangulate” issues for maximum returns on his political investments. Morris knew the market, and Clinton avidly absorbed his advice. By election time, he was positioned to capture a second term. He had learned some important political lessons, particularly the one about knowing the market.

It is difficult to think of a president who ever suffered from a lack of political standing to match the situation of Donald Trump barely two months into his presidency. He began his tenure with only paltry stores of political capital, based in part on his 46 percent popular vote defeat (he was 2 percentage points behind Hillary Clinton but won in the Electoral College) and in part on the massive political divisions in the land. Like Bill Clinton, but unlike Nixon, Trump didn’t comprehend his own political situation. Like Clinton, he made a huge investment in health care. The investment went south.

Meanwhile, Trump conducted himself in questionable, often obnoxious ways, casually expending political capital just by opening his mouth—like a billionaire squandering financial capital on vacation homes he never uses. At least the billionaire can afford it.

Can Trump pull off a Clinton and get back into the investment game effectively and successfully? Or is it too late even at this early date? Well, it isn’t too late in strictly temporal terms. There’s time to turn things around. But it will take a great deal more political finesse, and a much more calibrated investment game if he is to avoid a political humiliation.

Robert W. Merry, editor of The American Conservative, is the author of Where They Stand: The American Presidents in the Eyes of Voters and Historians. His next book, President McKinley: Architect of the American Century, is due out from Simon & Schuster in September.