Max Koh

Max Koh

30-12-2021

14:22

I've studied 100s of investors and fund managers... I learnt why 99% of people are terrible investors. And why only 1% make it: Because they found a way to invest based on their... Unique PERSONALITY! Here's 15 of my best investing practices you can adapt for yourself:

1. I never look at valuation on my initial position If I like a company, I buy a small % just to get skin in the game. That makes me research more seriously. And I can also average out this price later. What hurts most is missing a great company because I was a cheapskate.

2. I allow myself to go down rabbit holes. Focus is important. But so is exploration. In this business, you only need 1-2 good ideas a year to do well. So give yourself the chance for serendipity to happen. Read widely. Let your curiosities guide you.

3. You can't build conviction just from research alone You need time to observe the management team's execution. Simply by following a company for 1-2 years, you will know them better than 99% of short term analysts. So I build my positions over time too. Don't rush it.

4. Spend more time on qualitative. 80% of my research is spent trying to understand why consumers like a product. If I can understand that, I will have more confidence in the business. I don't do much financial models. Rather, I spend most time reading customer reviews.

5. I don't look at P&L of a single stock Instead, I look at the % of a stock in my whole portfolio... And I ask myself: "Does this business deserve this % of my money?" If I don't think so, I trim it down. I worry more about allocation than P&L.

6. I sell without hesitation if I realize I made a wrong move. I don't look at the P&L and wait for it to come back to green. If I don't like it or realize my thesis was wrong, I get out. Even if it's at a loss. I want to train myself to be unemotional about $$.

7. I don't buy a stock just because the price drops 30% I only buy when it executes. Because of this, I build my positions over 1 year and more. Those that become a big % of my portfolio got there because they executed... NOT because I went all in with blind faith on day 1

8. I don't worry about missing market corrections to buy Because growth stocks are volatile. There will always be chances to enter. And if I believe a stock is going to be a 10 bagger from here, does it really matter if I entered a few dollars higher? This gives me peace.

9. I have entered and sold a position, realized I made a mistake selling out, and entered again and sold it later $ZM is one such company. I never ever allow myself to anchor to price, nor my past opinions. I sell if I'm wrong. And I buy back in readily if I'm wrong too.

10. I don't have a brokerage app on my phone. It screws with my ability to think like an owner. So I download it when I wanna buy a position, and I delete it right after. I want to reduce the temptations and call to actions in my environment. My friends think I'm crazy.

11. I have a rule where I don't ever check stock prices on weekdays. In fact, I get annoyed when friends tell me about stock prices on weekdays. I will literally tell them off. It messes with my head. So I wanna steer clear. I want to behave like an owner at ALL times.

12. I'm not trying to maximize my returns. Instead, I'm aiming to protect myself from my own stupidity. I realize the money I save by avoiding silly decisions > the money I make from optimizing. So I meddle as little as I can.

13. I don't buy or sell options. I tried it early this year and made some money. But realized it screws with my ownership thinking. Even with leap calls, I will still need to sell it eventually. This gets me in a "trading" mindset. I want to buy to keep and collect.

14. I don't like clutter. I love it when my portfolio looks clean and neat in my brokerage app. Because of that I only own 8 stocks in my whole portfolio. I get stressed when I see a bunch of tickers that I know little about. I'm weird like that.

15. I only hold companies that I'm madly in love with. You will have to pry them out of my hands. Without passion, I won't research them deeply. That's the reason I exited $ZM and $CRWD It was a painful decision. But I kept falling asleep. So I don't deserve to own them.

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


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