Below are my reflections for 2020 in my investing journey, I hope by sharing, it might help you in many ways as it did for me as well. Here goes…
(1) You can do it.
I used to have really horrible grades in English. To write a book, self-publishing it & being an Amazon Best Seller in 5 countries (US, Canada, Australia, Germany & UK) is no mean feat. Anyone can do anything, as long as you set your mind & heart to do it.
(2) Press On.
Writing the book during COVID in Mar20 with S&P -35% truly tested my belief. I just persevered & kept writing non-stop for 3 weeks for ~300 hours. The subsequent process to publication took 5X longer. With sheer grit & determination, it is done finally.
(3) Your Vision.
Make your portfolio reflect your best vision for your future. This drives the Vision Capital & Vision Investing to invest in companies that are shaping and changing the world for the better. The companies you own, ultimately reflect who you are.
(4) Aim Big.
Dare to aim big. Aim for the skies and you might land amongst the stars. Aim for excellence, and you will get excellence.
(5) Long-Term.
Always be thinking long-term. The short-term is filled with noise, emotions & algos. The individual focusing on the short-term has little long-term consistent edge there. Stocks are not lottery tickets, bets or ticker symbols, they are real businesses.
(6) Staying in the game.
The only reason why we will still be in the game for the long term, because my portfolio is not concentrated & we don’t use leverage or options. They might be great 80–95% of the time, but when it bites, it will take you out of the game, that’s not what we want.
(7) Be Bold.
Be bold and dare to be out there, make yourself available out there. Sometimes you never know who you can help, or what opportunities might arise out of it.
(8) Be Thoughtful.
Stick to the three rules of not (1) criticising, (2) blaming or (3) complaining. If it’s something you don’t want anyone else to write about you, you better not to write it. There’s a very fine line between being outright silly versus thoughtfully critical.
(9) Share.
Be willing to share first and give first with any open heart and open mind. Give first, the world eventually gives back in its own magical ways.
(10) Creating Value. For Others.
The sole purpose of the book was never for fame, recognition or the money. It was to help the world invest better in the the best companies, creating a flywheel of change, capital, investors, companies, culture & a new way of investing.
(11) Education
Education remains the biggest way to help people, to transform lives for lifetimes and generations. That’s what I want to do, to help in a bigger way.
(12) Network.
Dare to ask, dare to engage, dare to try. For there is little downside, & a lot of upside if you find a new meaningful interaction. Life is full of surprises. Luck & serendipity is when preparation meets opportunity. Dare to say yes sometimes. If it works out, great, if not, move on.
(13) Concentration vs Diversification.
Less than 1% of companies & only a small handful of companies will drive the majority of market returns, that’s why I don’t hold a concentrated portfolio. Also because they are so many great companies & opportunities. I sleep very well, and that’s works for me. Choose what works for you.
(14) Opportunities.
Opportunities abound, once the mind, eyes, ears are open. Observe first, research next, conviction after. When you are focused looking for multi-baggers, +5–20% price moves don’t matter. Don’t be penny wise, pound foolish.
(15) Opinions.
You are entitled to your own opinion, so as do others. But always allow your own opinions be backed by facts and logical arguments, and not quick judgements.
(16) Being right and wrong.
But know when it comes to Investing, one can never be 100% right, know that you can be wrong too. If you don’t know, check and revert later. There’s no rush. There’s no boat to miss.
(17) Time is the Best Judge.
Time in the short-term is always a poor judge of any performance, be it one day, one week, one month, one quarter or even one year. Focus on what matters that counts. Ask that you only be judged over the long-term, in years, not anything else.
(18) Adding to Winners.
Keep adding to winners, your highest convictions, because winners win and keep winning for years, and for far longer than you might even think.
(19) Selloffs.
There will always be selloffs, be numb to them. Volatility is the admission fee and the price to pay for Investing. Selloffs combined with conviction often provide some of the best opportunities.
(20) Doing Nothing.
The good thing in Investing, most of the time you do nothing if you are invested for the long-term. I spend less than 0.02% of my entire time in a year executing trades to buy or sell (rarely). Spend your time doing sometime else you love & enjoy.
(21) Learning.
There’s always something to learn from everything. Everything you hear, read, watch, do & experience. If you don’t, it is because you are not concentrating, reflecting and thinking about it enough.
(22) Mistakes.
Know that you will and can be wrong. You cannot be right all the time. And you don’t have to right in everything, to win and do well in Investing, because over the long-run ~20% of your winners will account for ~80% of your gains. Nothing is for sure.
(23) Listen more. Speak Less.
Everyone has a story. Find out what their story is. Learn about their story. People always want to tell you their story. Be interested, learn the best things, their success, their failures, apply what works and ignore what you think doesn’t.
(24) Try.
If you think there’s a reasonable chance that something might work, and does not involve you losing your life, too much time, or too much money, go for it. You might never know what you will learn or who you might meet.
(25) Gratitude.
Be grateful. Practice gratitude every day. Give thanks for the smallest things in life, the sun, the clear skies, the clean air, the greenery, the birds chirping, your loved ones, your kids, anything. There is beauty in everything.
(26) Scale.
Always be thinking about scale and impact in (almost) everything you do. The more you can reach, impact and help without corresponding more time and effort, the better.
(27) Time.
There will (almost) always be insufficient time to do everything, to research, to read 10K, financials, research articles, listen to podcasts, watch management interviews. Know that, understand that, acknowledge that, accept that.
(28) Journey.
Life is a journey, a marathon, not a sprint. You don’t have to complete everything right now today. Do what you can, to the best of your ability. Never do it until you end up neglecting your loved ones & family. It’s not worth it.
(29) Longevity.
Investing is my Ikigai, truly something I can keep doing until I am old and from anywhere around the world. Best of all, my approach should be scalable for me to at least US$500mil to US $1bn in AUM.
(30) Margin of Safety. Think FV not PV.
If businesses are growing revenues +20–75%, profits & cashflows even faster +25–100%, even as valuation multiples compress, stock prices could still rise over time. Sustainable re-investable growth is my margin of safety relative to future value, not current present value.
(31) Comparing.
You don’t need to be better than anyone else; you just need to be better than you used to be. There will always be people who will do better than you, be happy for them. Stay focused on what you can do to keep becoming better instead, to be a better version of yourself. Nothing else matters.
(32) Sell Mediocrity.
Sold for two reasons: (1) Investment thesis didn’t play out and (2) Better opportunities. Sold Entire Positions (4): (1) iQiyi, (2) Baozun, (3) Micro-Mechanics, (4) Euronet Worldwide, (5) Nano-X Imaging. Partial: Facebook, Alphabet, Align Technology, Arista Networks and reallocated to 25 other higher conviction companies that I wanted to increase my positions in.
(33) Saying No.
Didn’t invest in Slack, Stitch-Fix, Asana, Magnite yet. Know that you can’t and don’t want & don’t need to invest in everything. In some/most cases, I have been right thus far, but know that I can and will be wrong from time to time.
(34) Effortless.
The best stocks are easy to explain, if you have to spend too much effort to justify why you should be buying it and downplaying other reasons to support why you should, you are better off not doing so.
(35) Bias & Snap Judgements.
Missed out investing in Novocure, Carvana, Etsy, Unity Software, Pinterest earlier on. Without any deep drives & reading the 10K, I let my bias cloud my judgement to lead me to come to an incorrect conclusion. To not repeat this ever.
(36) When something is too good to be true, it probably is.
When it writes and smells like a fish, don’t ignore it. Weigh everything the pros and especially the Red Flags. Nano-X Imaging. Felt like a repeat of my mistake of oversight and confirmation bias with Wirecard.
(37) Pivoting.
Started with FB, IG , then decided to focus on Twitter where the format and engagement is much higher & easier. Started off with sharing quotes from others, ended up writing my own daily. It is becoming clearer, more concise & easier with time.
(38) Dare to Engage.
Dare to tweet, to like, to re-tweet, to reply, to engage, to DM. We are humans, we thrive on interactions. Sometimes it might bring opportunities.
(39) Write for Yourself.
Write for yourself, not for other reasons. If it is of value to you, and you are benefiting from it, ultimately (maybe) it will also be of value to others.
(40) Day One.
There’s always going to be new companies, new technologies, new products & services, keep learning, keep growing, keep thinking forward, keep focusing on the future.
01 Jan 2020 | Eugene Ng | Founder & CIO| Vision Capital
Find out more about Vision Capital where we have beaten the market by more than 4X over the last 3 years: https://visioncapital.group/
Check out our recently published book on Investing, “Vision Investing: How We Beat Wall Street & You Can, Too!”. We truly believe that the individual investor can beat the market over the long-run. The book chronicles our entire investment approach. It explains why we invest the way we do, how do we invest, what we are we looking out for in the companies, where do we find them and when do we invest in them. It is available for purchase via Amazon, currently available via two formats, Paperback and eBook
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This article is solely for informational purposes and is not an offer or solicitation for the purchase or sale of any security, nor is it to be construed as legal or tax advice. References to securities and strategies are for illustrative purposes only and do not constitute buy or sell recommendations. The information in this report should not be used as the basis for any investment decisions.
We make no representation or warranty as to the accuracy or completeness of the information contained in this report, including third-party data sources. The views expressed are as of the publication date and subject to change at any time.
Hypothetical performance has many significant limitations and no representation is being made that such performance is achievable in the future. Past performance is no guarantee of future performance.
