Max Koh Profile picture
30 Sep, 25 tweets, 3 min read
Investing is about connecting the dots.

Many investors fail terribly at this.

So here's a thread on developing Pattern Recognition:
When starting on my investing journey at first...

I only read about the companies that

i) I already owned, or

ii) planned to own
I tuned out all the rest that did not fall into either of the two buckets.

Bad move.
I realized that my growth as an investor was stagnant.

I didn’t have enough mental models in my head to spot new opportunities.
I needed to develop pattern recognition.

But that’s a big word.

How do we develop it?
Answer: It comes from reading. A lot.

Annual reports, deep dives, earnings call transcripts, industry reports, books.

Isn’t that too random and unstructured?

Yes, but so are our ideas and insights.
They come when we least expect it.

They happen out of luck and serendipity.

But is it simply lady luck smiling down on us?
Partly so, but it’s not the full story.

Good fortunes come to those with a prepared mind.
Thus the goal in investing should NEVER just be to accumulate returns...

But also to amass more business models in our minds over time.
Instead of just tracking our monthly or yearly returns…

We should make it a point to track:

1. number of business models we know

2. number of companies we deep dived into
But how do you build the motivation to do that?

You have to be happy putting in the reps.
Reading annual reports day after day, week after week...

while keeping faith that all these actions will pay dividends down the road.
You must enjoy the learning process.

If learning and reading is purely just a means to an end...

you will start keeping count.

And once you start counting, you lose patience.
Warren Buffett has more mental models in his head than most of us...

purely because he’s been doing this for the last 80 years.

and still does so today because he enjoys it.
No amount of intense cramming in a short time frame can match up to that.

You need patience.

You can’t make a baby in a month by getting nine women pregnant.
Patience aside, you also need CURIOSITY.

How do you develop that?
You start by reading what interests you.

If it’s fiction, start there.

If it’s biographies, start there.
The goal is to develop the reading habit and a love for reading.

Let your curiosities guide you.
Slowly, you will widen the mental models in your mind...

which gives you more hooks for future new knowledge to latch onto…
And the more you read, the more you realize how much you don’t know.

So you develop the curiosity to read more.

It starts the virtuous cycle.
Over time...

that’s how we form a mosaic of mental models in our heads.

And they come in handy when the right opportunity presents itself.
My breakdown:

1) To be a good investor, we need to develop pattern recognition...

2) Pattern recognition can only come from wide exposure...
3) Wide exposure can only come if we read a lot

4) To read a lot, we have to be curious

5) We can develop curiosity by reading the things that interest us
If you've found this to be useful, follow me here at @heymaxkoh.

I tweet about my personal investing journey, plus...

How I was able to achieve financial freedom before I turned 30.

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More from @heymaxkoh

1 Oct
How do you fire a long time employee?

And without looking like an a**hole?

For leaders and managers...

Here's my personal guide to firing a team member: Image
Before we begin, some background...

• I will share what I did, from experience

• I've only needed to execute 3 fires in my career, fortunately

• I'm a General Manager of an 8 figure digital marketing company in Singapore

Take what works for you. Dump the rest.

Let's go:
1/ Be mentally prepared to look like an ass

You have your own reasons to fire her.

It's likely logical to you.

But she could see things a different way.

As a leader, there are times you'll be deeply misunderstood.

It's part of the terrain.

Welcome to management.
Read 18 tweets
29 Sep
Why you do NOT need to quit your 9-5 job to get wealthy?

Read on...
Because you can marry someone rich. Kidding.

The real reason has to do with:

1. the type of job you pick

2. find other ways to own equity beyond starting a business.

Let's dig deeper...
FIRST: Get a job whose outputs do not match inputs.

Here's why:
Read 24 tweets
28 Sep
In early 2020, I discovered Fintwit.

I had a 6 figure portfolio.

Since then, I've grown it several fold.

And attained my own version of financial freedom before age 30.

I owe a lot to the investors here.

Here's a list of my favourite tweets I've bookmarked and revisit often:
Preface before I begin:

I come from Singapore and a family with strong asian tradition.

Since young I was taught NOT to talk about myself.

It was boastful to share my achievements in public.

I spent 1 whole year on twitter with a private account, using it only to read tweets.
I only gained courage after:

• watching @david_perell interviews that inspired me to learn in public.

• hearing @AliAbdaal recommend "Share Your Work" in his youtube videos

So here's the top tweets that have influenced my investing philosophy:
Read 29 tweets
27 Sep
Wanna quit your job to start a business? Read this FIRST.

Not everyone is cut out to be an entrepreneur.

Over the years, I've seen many smart people quit their jobs to start a business, only to see them struggle as broke entrepreneurs.

Here's the mistakes they made:
1. Technician vs Owner

Most people quit because they are good at their craft, and think they know what it takes to run a business.

Unfortunately, they don't.

To run a business, you need a range of skills like marketing, sales, operations, among many others. The full stack.
Working IN a business vs ON a business are completely different things.

One of them only requires you be a technician, the other requires you be a manager, operator, and owner all at the same time.

Most people are not prepared to wear so many hats. So they end up struggling.
Read 13 tweets
22 Sep
You don’t need to be the best. You just need to be different.

Instead of trying to be the best at one skill, aim to be decently good at several skills and combine them.

I learnt this from @ScottAdamsSays years ago and it’s fast-tracked my career and income.

Here’s why:
1/ Build your own personal monopoly

Monopoly = a niche that you can dominate.

In most companies, there will usually be somebody else who can do what you do. You're replaceable.

By mastering several skills and combining them, you become the only person who can do A+B+C.
This makes it hard to put you in a bucket.

While there are many who can do either A or B or C, you are the only one who can them all.

Because of this, there is no price anchor or comparison.

You can set your own value and it gives you leverage at the negotiation table.
Read 10 tweets
20 Sep
Best of Josh Tarasoff

@joshtarasoff is an investor who looks at businesses with a different coloured lens.

Knowing he wants to stay low key, I'm grateful he gave me the green light to write about him.

Here's my top 5 mental models from his interviews & letters over the years: Image
1. Bet on change instead of consistency

Classic Buffet: are people going to buy this product 50 years from now? Are people still gonna drink coke?

However, what I learnt from Josh is some types of changes can be predicted with more certainty.

a) Win win win

b) Dual value prop
Win Win Win

When there's a new way of doing things that benefits multiple parties, that change is more certain to endure.

Josh gives the example of Pet insurance benefiting:

• Pet owners (pay less $$)
• The vet (makes more $$)
• The pet itself

The ecosystem fluorishes.
Read 19 tweets

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