BC MENTAL MODELS
Saved by @AnmolNarula11

"The best investments comes from the best businesses"

One of the investors who's made a big impact on me:

@JohnHuber72 of Saber Capital

I spent days pouring thru his articles and interviews in my early days...

Even had a doc with 20 pages of notes!

Here's my top 15 lessons:

 1. You don't need original or unique investing ideas

You can simply wait for great businesses to be mispriced.

And then pounce when that happens.

In the meanwhile, don't dilute your portfolio with simply "good ideas"

Only accept the "great" ones
2. John's investing criteria for idiots

• Easy to understand businesses

• Generate lots of FCF

• Partner with good management teams

And then...

Sit back and WAIT for the fat pitch
3. Distaste for strikeouts > Desire for homeruns

John is okay with not making 10x returns in a short time.

And he has come to accept that.

Every investment strategy comes with its own features.

The key is knowing what they are and making sure it fits your personality.
4. One years results don't mean much

This was taken from John's 2016 letter...

1 year results can be random.

Don't feel too sad if you underperform...

Or get too confident when you outperform.

Zoom out and look at your performance over multi year periods instead.
5. It's all about the value proposition

Don't just understand the moat or business model.

Seek to see things from the customer POV.

Why do customers use their products over others?

What is the value that people see in them?
6. Find businesses that do NOT take advantage of customers

Some businesses can be great...

But they are profiting off their customers' reliance on them.

They abuse their bargaining power.

These short term profits usually don't last long.
7. Long term focus is even more valuable in a short term world today

With so much focus purely on the next quarter...

It creates a lot of opportunities for investors who are not playing that game.

They can afford to buy into "weakness"...

They can afford to wait.
8. The limits of information advantage

Information is useful.

It helps you see where the company is trending the next few months.

It could even be profitable to invest that way.

But it also makes you think short term.

Be careful of placing too much weight on recent news.
9. Low risk, High uncertainty

You profit when you are willing to:

• buy the stock of a high quality company...

• when it is likely going to drop further in the short run

There is huge uncertainty.

But the risk is actually low.
10. Nobody likes short term pain

Nobody wants to buy a stock that will go down in the next 3 months...

Even if it will be worth way much more in 3 years.

That's the price you pay to find and ride big winners.

Are you willing to pay that price?

Most investors are not.
11. Moats are no longer impenetrable

The old school way of viewing moats as a fortress no longer stands.

Consumers today have much more choice.

The internet has given them power.

The best moat is a business who keeps giving more value to the customer over time.
12. Are customers getting a good deal?

It's no longer about brand advantages...

Distribution advantages...

Or dominating shelf space in a super market.

It's about whether customers genuinely feel happy buying from you
13. Study the businesses you have no intention to own

It develops pattern recognition.

Widens your mosaic of dots in your head...

Which then widens your opportunity set.

Plus, it gives you a blueprint of what future great businesses look like.
14. Size your positions according to risk of loss

John's biggest positions are not those with the highest possible return.

It's those he thinks have the lowest chance of losing $$.
15. The biggest mistakes come from picking the wrong business

Not from paying the wrong price

Always start with businesses that would first pass your quality filter.
Like this? Follow me at @heymaxkoh

I share how I crossed 7 figures before age 30 by investing in great companies.

Stuff I tweet about:

• My investing strategy
• Books that inspire me
• Stuff on personal growth
Still reading?

Geez. You really like me huh?

Then you should subscribe to my blog.

I write about all things Money, Investing, Financial Freedom.

But I'm lazy. So don't expect daily articles.

I write when inspiration strikes.

Or when I'm drunk.

https://t.co/vWvVqSnE0Y
Check out John's amazing blog here:

https://t.co/5pug8hDiJd
I also really enjoyed this interview with John:

https://t.co/xEB3WRizld
And also his podcast episode with Meb Faber.

One of my favourites I've listened to multiple times.

https://t.co/mG7wvqXCnj

More from Max Koh

Max Koh
Max Koh
@heymaxkoh
I'm lucky to attain financial freedom before 30.

I credit Fintwit for my learnings.

Here's 10 key concepts every investor must know:

1. $$ needed to retire
2. Researching a business
3. Reading annual reports
4. Reading earnings calls
5. Criteria of a multi bagger

(Read on...)

6. Holding a multi bagger
7. Economic moats
8. When to buy a stock
9. Earnings vs cashflow
10. Traits of quality companies

Here's my 10 favourite threads on these concepts:

1. How much $$ do you need to retire

Before you start, you must know the end game.

To meet your retirement goals...

How much $$ do you need in your portfolio?

10-K Diver does a good job explaining what's a safe withdrawl rate.

Hint: It's NOT


2. Research a business

Your investment returns are a lagging indicator.

Instead, your research skills are the leading predictor of your results.

Conclusion?

To be a good investor, you must be a great business researcher.

Start with


3. Reading annual reports

This is the bread and butter of a good business analyst.

You cannot just listen to opinions from others.

You must learn to deep dive a business and make your own judgments.

Start with the 10k.

Ming Zhao explains it
FINANCE
Max Koh
Max Koh
@heymaxkoh
One thing I'm always most excited about as an investor:

Watching CEO interviews.

Over the years, I’ve watched over 100s of them.

Here’s 25 traits I’ve seen in the very best leaders.

You can swipe these into your own framework to evaluate management teams:

1. They don’t rely on external motivation

Not status or money.

Instead, they seem to be driven an inner fire.

Sometimes it’s to make the world a better place.

Other times, it’s to prove themselves right.

And that's why they can keep going even after they're already rich AF.

2. They're not human

They don't see the world like 99% of us

Whether it’s creating a culture that’s a sports team vs a family...

Or thinking of everything from first principles…

They have a different modus operandi.

This helps them see solutions that 99% of us muggles miss.

3. They enjoy founder-company fit

The great leaders are great because:

They’re in a company that plays to their unique personality.

The stars have to align for a great leader to be made.

The product + business model + personality of the leader must match.

4. They give lots of freedom and autonomy

They know how to unleash the potential in their team

They know how to paint an exciting vision…

And then give their team the space to roam free.

They understand that people flourish when you give them room to explore and experiment.
STARTUP
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Max Koh
Max Koh
@heymaxkoh
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:


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)...

... At the end of every day the dentist will be emotionally drained.

If the unpleasurable minute is worse in reverse pleasure than the pleasurable minute is in pleasure terms, then the dentist incurs a large deficit when examining his performance at a high frequency."

Lesson #2:
When we zoom out and check the prices less frequently, we are less affected by negative emotions.

Because over a longer time horizon, the market tends to rise more than it goes down.
BOOKS
Max Koh
Max Koh
@heymaxkoh
I'm 31 years old.

10 years ago when I was 21, I had less than $1,000 in my bank.

If you told me I would cross my first $1 mil at age 29, I wouldn't believe you.

But it's not all about $$.

Here's the top lessons I've learnt about habits, happiness, life and death:

1. Wake up early

I learnt this 4 years ago after listening to Jocko Willink.

I’m not a morning person. Until now I'm still not.

But I force myself to rise early most days.

Knowing you’ve accomplished more than others by the morning is a good feeling.

It sets you up right.

2. Lift weights

Everyone in a competitive field should engage in some form of intense physical activity.

For me I lift weights 5-6x a week. But it could be any sport.

It teaches you valuable lessons like:

- showing up consistently
- putting in the reps
- pushing past boredom

3. Have dreams

I recall watching Tony Robbins when I was 16 years old, and that left an impression on me.

Seeing him speak and inspire others from stage, that’s what I wanted to do.

It gave my life a new purpose beyond video games...

I told all my friends about it.

Anyone who would listen, I publicly declared it.

Probably annoyed many of them.

Looking back, I'm blessed to have found what I wanted to do at an early age.

It gave me clarity in choosing my career, and where I chose to invest my time.
SCREENSHOT
Max Koh
Max Koh
@heymaxkoh
10 super simple steps to research a stock.

In just 3-4 hours:

Overview:

1. Find a sexy angle
2. Analyze the financials
3. Read the annual report
4. Get skin in the game
5. Read earnings calls
6. Understand the leader
7. Understand value prop
8. Read analysis by others
9. Monitor execution
10. Maintenance due diligence

Lets go!

1. Find a sexy story or angle

This is how I begin my research.

It starts with either:

• a product
• a story
• a founder

... that gets me curious.

I think stock screeners are helpful...

But I don’t use them.

I prefer to research companies that genuinely excite me.

2. Analyze the financials

I then proceed to analyze the numbers for the last 2-3 years.

Which is about 8-12 quarters.

Stuff like:

- Revenue growth
- Gross and EBIT margins
- Key customer metrics
- Free cash flow

Seeing the numbers tells me a story.

3. Read the annual report

If the numbers and story are exciting...

I dig deeper into the business through the 10K.

I want to understand the business model...

How they make money...

And the customers they serve.

A step by step guide for
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🌺श्री गरुड़ पुराण - संक्षिप्त वर्णन🌺

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Khatvaanga
Khatvaanga
@khatvaanga
Sri Gurubhyo Namah.
Some tweets on Adi Shankaracharya and in particular the Guru Parampara of @sringerimath. [I had done this series earlier 5 years ago on account of Shishya Sweekaram].


Adi Shankara established the Sringeri Peetham as the 1st of 4 amnaaya peetams.

The four being
1. Sarada Peetam at Sringeri.
2. Govardhana Peetam at Puri
3. Kalika at Dwaraka
4. Jyothir at Badarikashramam.

He installed his 4 most prominent shishyas as heads of the peetams.

Sureshwaracharya was assigned to Sringeri as its head.

Sringeri is a corruption of Rshyashrunga giri.

Rshyashrunga maharshi [and his father Sri Vibandhaka Maharshi] did their tapas at this place.

It is at Sringeri that Shankara spent 12 of His precious 32 years!!

That gives you and idea how much He loved this place.

Rshyashruga maharshi had a horn on his forehead, a result of being born to a deer. His mere presence was enough to shower rains!!

Rshyashrunga was one who led Putrakamesthi Yaagam of Dasaratha Maharaj and which resulted in Sri Rama's birth!!
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Anu Satheesh \U0001f1ee\U0001f1f3
Anu Satheesh 🇮🇳...
@AnuSatheesh5
Agastya Muni & Kaveri River
#story
This is a story which describes how River Kaveri was brought on earth by Agastya muni. There was a king named Kavera lived in the Brahmagiri hills who prayed to Brahma for a child. He was blessed with a daughter whom he named Kaveri.


Agastya muni married her. A demon, named Shoorapadma, wanted to trouble people so he prevented rain from reaching South India. As a result famine occurred in South India.
Agastya Muni who came that way was very sad seeing this. He started to pray Mahadeva for a solution.


Shiva gave him small amount of Ganga water in his Kamandalu (small pot) and said wherever you spill this water the river will flow from there. Agastya Muni travelled lot of places to find a suitable place to pour water. Feeling tired he kept his Kamandalu and took rest.


At that time Ganesha took a form of crow and perched on the Kamadalu and made a hole that water began to flow as river Kaveri. This place is now called as Talakaveri (Karnataka), located in the Brahmagiri hill.


Tala Kaveri has temple for Agastheeswara, which denotes the story between Kaveri and Agasthya muni. Kaveri is a part of Ganga, thus, also called Dakshina Ganga.
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