Investing = 90% psychology, 10% intellect

After being impacted by Mohnish Pabrai and Buffett, @GSpier wrote this book.

Beyond investing, it's a fine masterclass in human psychology!

Here's 10 psychology lessons you must internalize before investing your $$$ in the markets:
1. When given a choice, always choose INACTION!

Investing is one of the rare fields where doing more results in less optimal results.

Checking stock prices everyday makes you microscopic.

If you focus on price movements, you will have a hard time looking at the big picture.
2. Choose an environment that brings you peace

An environment filled with news and updates may not always be a good thing.

Because it overloads your brain with information that have a short shelf life.

Instead, choose surroundings that improve your logic and ability to think.
3. Investing with borrowed $$ is a sure way to mess with your head


Because debt creates stress and anxiety.

It increase the risk of you making stupid decisions during major drawdowns.

You end up clouding your judgment with fear!
4. Your willpower is NOT enough

Acknowledge your limitations as a human being.

Don't fight it.

• You cant control your emotions
• It takes a lot of effort and discipline

Instead, it's best to create "structures" in your environment that reduce exposure to emotions.
5. Guard against temptations of extreme wealth and lavishness

They make you greedy.

Even though you may not be that kind of person, they cause you to feel envious of your peers...

So you end up taking more risks than you need to in the markets.
6. Turn off the latest news in the markets!

They make you irrational and fearful.

But you know what's worse?

They are not even an accurate reflection of what's going on in reality!

They're narratives created to get more eyeballs. End of story.

So tune it out.
7. Look at your role models often

Having photos of people you admire and respect will:

• influence your thoughts
• impact your behaviour positively.

Because you subconsciously model their values and character.

It makes you ask the question "what would xxx do?"
Fun Fact #1:

I believe this is the statue of Charlie Munger that Mohnish Pabrai keeps in his office
Fun Fact #2:

Munger himself keeps a statue of Ben Franklin in his office as a positive role model.

Look at the left corner of the photo.
Fun Fact #3:

I don't keep statues.

But this has been my iphone wallpaper for the last 1 year.
8. Upgrade your portfolio, don't settle.

Always push yourself to raise your standards

Just because an existing investment idea is making you money, doesn't mean that it's the best.

Constantly seek to elevate the quality of businesses you own.
9. Stop looking at stock prices everyday

It initiates you to act, when you don't need to.

It uses up your willpower, which could be put to better use.

Worse of all, it tempts you to buy and sell based on emotions and not logic.
10. Consume information in the right order

Prioritize primary information first!

Do not let secondary information colour your lens.

You want to form YOUR OWN opinions, before you start reading others' analysis and letting it influence you.
"The Education of a Value Investor" ranks high up as one of my top investing books.

But it's not the only one.

Here are 2 more that I frequently revisit.

1. Richer Wiser Happier by @williamgreen72

2. Joys of Compounding by @Gautam__Baid

You should read them all!
Here's my summary of "Richer, Wiser, Happier" by William Green

And here's the summary of "Joys of Compounding" by Gautam Baid


1. Choose inaction
2. Environment matters
3. Don't invest borrowed $$
4. Willpower ain't enough
5. Guard against temptations
6. Turn off the news
7. Look at your role models
8. Upgrade your portfolio
9. Stop looking at prices daily
10. Consume primary information first
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 @heymaxkoh

6 Dec
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.
Read 11 tweets
5 Dec
2 weeks ago, I started reading "Fooled by Randomness" by Nassim Taleb.

WOW, It's been mindblowing!

Thanks to @dvassallo 's recommendation.

Inside, there's a part he talks about how to deal with volatility.

Here’s 6 big lessons that are useful in the current market crash: Image
Lesson #1:
Negative emotions of seeing your stocks drop > Positive emotion from seeing your stocks rise.
"A negative pang is not offset by a positive one...

Some psychologists estimate the negative effect for an average loss to be up to 2.5 the magnitude of a positive one)...
Read 18 tweets
2 Dec
I scored A- for Finance in college.

Even then, nothing could prepare me for the storm in the markets.

Thank god for FinTwit.

Even after hitting 7 figures before 30, I still feel like a student here.

These are 9 great threads on investing concepts every investor MUST know:
1. What makes a high quality company?

Here are 20 interesting traits to look for by @patrick_oshag

Read 12 tweets
1 Dec
Okay, I have done the unthinkable.

broke my own rules.

I decided to allocate a tiny % of my portfolio into a company I know nothing about!!!


Why? because I like dogs and they are cute. Who doesn't like dogs???


Let me share more about this canine $DDOG
This is a personal experiment.

After my recent trimming down and exit from Peloton, I've a fair bit of undeployed $$$.

I added a bit to some of my core positions.

But there's still quite some leftover.

So I'll use this chance to widen my circle of competence. Have some fun.
$DDOG Numbers so far

Revenue last 5 qtrs:
155m, 178, 199, 234, 270

YoY increase: 57%, 52, 67, 75! (pretty solid acceleration)

QoQ: 15%, 12, 18, 15
Read 6 tweets
30 Nov
My learning hack: How I take notes from podcasts:

Several people have DMed me asking how I learn from podcasts, after my recent tweet on top investing podcasts.

Here's my 3 part process you can copy:
1. I listen to the podcast first without taking any notes

I usually listen when I'm having a meal... on the way to work... at the gym with my airpods

So this first pass is like a filter for me. I listen just to see if it WOWs me and teaches me anything useful.

If it does...
2. I then google for the transcript online. Or use Otter to transcribe it.

Sometimes, the podcast host gives away the whole transcript. yay!

if there isn't, then I use Otter to transcribe it.

I only do this for podcasts that impress me after I listen.
Read 6 tweets
29 Nov
I got bitten by the investing bug years back.

Ever since, I've listened to >200 podcast episodes over the last 3 years.

Thank god for airpods!

Anyway, I found that 99% of them are so-so.

But here are my top 12 investing podcast episodes that have made a lasting impact:
1. Paul Black from WCM, interviewed by @tseides

IMO, the people at WCM including Paul Black, @mbtrigg , Mike Tian, Kurt are highly underrated!

Key concepts:

- Importance of tailwinds
- Moat trajectory > moat size
- Culture must be aligned with moat…
2. @DavidGFool on finding rule breaker stocks

David Gardner is an amazing investor who can simplify ideas well.

Key concepts:

- The 6 traits of rule breakers
- Why it's ok to buy "expensive" stocks
- What it truly means to call yourself an investor…
Read 14 tweets

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