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Dec 6, 2021 11 tweets 4 min read Read on X
This is value investor, Allan Mecham.

He dropped out of college at age 22 to start his fund, Arlington Value.

From 2008-2016, they did a CAGR of 30% over 8.5 years!

And in his fund letters, he shared his best frameworks for investing in companies.

Here's a breakdown of each:
1. Adopt a mindset for longevity

He focuses on variables that affect a business' durability.

Stuff like valuation doesn't matter if the business quality is misjudged.

Since a company's value is determined by its future cash flows...

Hence evaluating its future is key
2. Stay within your circle of competence

Allan is aware that his CoC is tiny!

Thus, he rarely buys companies that he:

• Hasn't researched
• Hasn't followed for at least a few years.

Because the best way to study a business is to observe its execution overtime.
3. Embrace volatility as a gift

Public markets offer you amazing deals you will never get in the private markets!

It's all about being patient.

The underlying value of a business is much more stable than the stock.

So you can buy great businesses that are mispriced!
4. Avoid noise and news

More information can give you a false sense of confidence.

It can create an illusion of "knowledge", and make you think many things are important.

The key is to know what are the 3-5 main variables in the company, and focus on those.

Ignore the rest.
5. Extend your time horizon to see what's truly important

When you look years out, instead of next quarter:

• You place less emphasis on hiccups and fluctuations.

• You don't focus on what 99% of other analysts look at (guidance, beats).

This helps you think more clearly.
6. Dig below the numbers

Not everything that is in numbers gives you the full story.

The real returns are made from great business quality.

Many factors like psychology and customer love are what determines the longevity of the business.

Look beyond the financial statements!
7. Mentally prepare for speed bumps and ugly numbers

Learn to discern between:

Short term speed bumps VS. fundamental problems in the business.

Franchise value can still be firmly intact, even if the company is going through a rough patch.
8. Pick the easy fights

He looks for layup type of investments, basically those that are easy.

Simple to understand.

In this business, there are no bonus points for doing backflips and somersaults in the air.

K.I.S.S!!!
RECAP:

1. Adopt a mindset for longevity
2. Stay within your circle of competence
3. Embrace volatility as a gift
4. Avoid noise and news
5. Extend your time horizon
6. Dig below the numbers
7. Mentally prepare for speed bumps
8. Pick the easy fights
If you like this, follow me here at @heymaxkoh

I share how I crossed 7 figures before age 30, and achieved my own version of financial freedom.

Stuff I tweet about:

• My investing strategy
• Books that inspire me
• How I built high income skills i.e. public speaking

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More from @kintsugiinvest

Feb 28
$GOOG is the most obvious 2x opportunity in big tech.

• Cloud is exploding.
• YouTube is a sleeping giant.
• AI is accelerating beyond search.

Yet it’s the cheapest of the Magnificent 7—by far.

Here's what everyone is missing:🧵 Image
1. Dominance in Search is STILL unmatched.

Google owns 90%+ of global search.

Even if AI shifts search behavior, Google still has the distribution, user base, and data advantage to adapt.

And let’s not forget: Search ads = high-margin cash cow. Image
2. Google Cloud: Quietly becoming a $100B+ business

AWS and Azure get all the attention, but Google Cloud is growing faster than both.

Just hit profitability and is on track to be a major profit center by 2026.

Margins will expand, making it an absolute cash-printing machine. Image
Read 12 tweets
Feb 12
Charlie Munger once said:

“People calculate too much and think too little.”

Most investors obsess over numbers.
(PE ratios, margins, earnings growth)

But the best investors think differently.

Here’s how top investors use mental models to win: 🧵 Image
1) First Principles Thinking

Google’s Waymo built fully autonomous vehicles from scratch instead of improving driver-assist tech like Tesla.

Result: 20M+ driverless miles—leading the race for true self-driving.

Disruptors rethink industries, not just improve them.
2) Inversion: Solve Problems Backward

Munger: “Tell me where I’m going to die, so I never go there.”

Instead of chasing gains, avoid major losses.

• Don’t overpay
• Don’t buy hype
• Don’t ignore risks

Avoiding mistakes matters more than picking winners. Image
Read 14 tweets
Jan 29
Many believe DeepSeek will slow $NVDA ’s demand…

They’re missing some key facts.

Here’s what most people aren’t seeing: 🧵 Image
1. AI is expanding beyond chatbots:

• Multimodal models (video, images, audio) need more compute

• Industry-specific AI (finance, healthcare, robotics) is booming

• Autonomous AI agents are emerging, requiring constant GPU power
2. Inference will outpace training:

• Training is one-time—inference happens 24/7

• Every AI query, search result, and automation tool = GPU cycles

• More real-world AI use = sustained Nvidia demand
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Jan 17
Mohnish Pabrai was a personal friend to Charlie Munger.

He turned $1M into $600M using just 3 rules.

Started as an IT engineer, now outperforms 99% of hedge funds.

His strategy is surprisingly simple:🧵 Image
Rule #1: Only invest in businesses you fully understand.

Pabrai spent 6 months studying trucking before his 1st investment in 1994: Motor Cargo.

His reward: A 10x return.

If you can't explain a company in 1 sentence, don't invest.
Rule #2: Look for hidden clones of success.

Pabrai invests in companies copying proven business models in untapped markets.

Example: Repco Home Finance, an Indian "clone" of Fannie Mae, returned 7x in 5 years.

Proven ideas, adapted to new markets, win big. Image
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Jan 11
Buffett says Charlie Munger transformed him, from a value investor into a fortune builder.

Their shared secret?

Munger’s mental models that revolutionized their thinking.

I studied and distilled 15 of the best (out of 100s):

(You’d want to save this) Image
Image
1) Inversion

Start with what could go wrong.

Analyze potential failures before potential success.

When Munger evaluated BYD, he considered pitfalls like competition with Tesla.

Do this: List their key risks and mitigation strategies before any major decision.
2) Circle of Competence

Know your strengths

Focus on areas you excel in and avoid decisions outside your expertise.

Berkshire stuck to consumer goods, consistently achieving 20% returns for decades.

Do this: Identify your top 3 areas of expertise and work within them.
Read 19 tweets
Jan 8
Howard Marks just released his new memo.

Yes, the ones that even Buffett reads.

Here's a 2 min summary of the 5000-word masterpiece:🧵 Image
1) "What is a bubble?"

For Marks, a bubble is not just about high prices; it’s a state of mind.

Key signs:
• "No price too high" thinking
• FOMO driving investments
• Blind faith in "this time is different"

Psychology > numbers.
2) The 3 stages of a bull market

1️⃣ Few believe recovery is possible.
2️⃣ Improvement gains broader acceptance.
3️⃣ Everyone is convinced "things can only get better forever."

Marks warns: optimism can morph into dangerous euphoria.
Read 15 tweets

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