Thread by @heymaxkoh

I was down $200k in a day in May 2021.

But I slept like baby.

NO, I lied! It was painful to watch.

But I survived. My portfolio emerged stronger.

Here's 7 key lessons learnt that made me a wiser investor.

(*I hope this helps you endure the market correction happening NOW)

1. Think like an owner

No owner wakes up every morning asking questions like:

"how much am I worth today?"

"how much more or less is my business valued today vs yesterday?"

Instead, they focus on their business.

As an investor, you're a part owner too.

Behave like one.

2. Dislodge stock price from the business

The stock is NOT the business.

Real business change is slow.

It takes time. Doesn't happen overnight.

But stock prices can rise and fall sharply within minutes.

Don't fall for the illusion.

3. Think long term

In the short run, prices are driven by emotions like fear and greed.

But in the long run, they're driven by business fundamentals:

• revenue growth
• cash flow
• earnings

When you lengthen your time horizon, short term noise can't scare you.

4. Think in %, not absolutes

Do not see your losses in terms of figures.

Otherwise, you'll freak out.

Because $200k can buy you a house, or a nice car, or fund your kid's education.

Instead, see things in %.

Then a gain or loss becomes relative.

It helps you stay logical.

5. Deeply understand what you own

You can borrow someone else's stock ideas.

But you cannot borrow their conviction.

If you don't truly understand the businesses you own, you'll panic sell.

So take time to learn about the:

• Business model
• Financials
• Management team

6. Size your positions well

Do not go all in on day one.

For my positions, I built them over months and quarters.

As the management executes, I increase my stake.

This prevents me from holding large positions I don't understand...

So my risk of panic selling is almost zero.

7. Have hobbies outside of investing

If you look at stock prices 247, it'll be hard to detach from the markets.

Staring closely at a tree won't make it grow faster.

It will only make you fearful when the leaves rustle.

Pick up other hobbies to keep your mind occupied.

Recap of the 7 key mindsets:

1. Think like an owner
2. Dislodge price from the business
3. Think long term
4. Think in %
5. Understand what you own
6. Size your positions well
7. Have hobbies outside of investing

I hope this helps you endure the volatile market now.

2021 has been tough for many investors.

Myself included.

The key is to stay grounded.

Follow me at @heymaxkoh where I share my investing journey...

And tweet about how I attained financial freedom before age 30.