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:

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.

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.

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.

"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.

Jess Phillips is funded by a Luxury Property Developer behind a number of controversial schemes. The register of financial interests lists a donation totaling £6,000 from Court Consultants. Plus a £8,000 a year sideline from the Tories. #LabourLeaks

Jess Phillips MP’s office is funded by a property developer criticised for not including enough affordable housing in his tower blocks. #LabourLeaks

Court Consultants is controlled by Birmingham property developer Anthony McCourt. He is a longstanding financial backer of Jess Phillips. In 2017, Anthony McCourt also gave £3,000 to Phillips to help with the running of her local Labour party.

Councils try to oblige property developers to build some affordable housing in their new buildings in return for planning permission. But recent developments involving Antony McCourt failed to meet even these limited attempts by councils to increase the amount lower-cost housing.

McCourt runs his developments through his other company, Court Collaboration. Recent Court Collaboration schemes have also been criticised for not containing enough affordable housing. #LabourLeaks

Newbie traders after learning F&O, look for paper trading platforms to practise. It's like the itch to swim after you learn swimming but end up in a baby pool. Experience of an adult pool vs a baby pool is different, likewise with the real markets & paper trading 🧵 (1/11)

Agreed, without experience, loading your trading account to the tilt and trading can be disastrous 🌋, but that does not mean you will have to paper trade forever. No matter how much you paper trade, you will never get the experience of trading (2/11)

When I talk about trading, I’m not just talking about experiencing the P&L rush. IMHO, experiencing the P&L and how it can vary in real-time is the last thing. There are multiple other things that you need to get comfortable with before diving into full-fledged trading 🏊‍♂️(3/11)

Stuff like placing limit/market order, GTT, AMO. Practising how SL-L for long & short positions works, trailing stops, figuring how margins work, M2M, T+1, T+2 settlements - the list is endless😩 with several moving parts. No paper trading platform gives you the real deal (4/11)

Here is a hack, though - instead of paper trading, try and place an actual trade on a low-value futures contract. My favourite is USD INR 💱, it costs just under 2K per contract, but gives you the whole trading experience (5/11)

Do you keep your gold assets in bank locker? You are probably paying some fees every year for your lockers.

Instead, what if you could get a locker for free?

What if I said banks would pay you to keep your gold assets safe?

Time for a thread. 👇👇👇

1/ The major issue with having gold in bank lockers is

- You pay hefty fees on an annual basis to the bank.
- The lockers aren't insured
- There's no real safety/security in case of theft or an unfortunate event.

Is there a work around?

Yes.

Enter "Gold Monetisation Scheme".

2/ GOI introduced the Gold Monetisation Scheme in 2015. The main objective was to cut down India's gold imports.

How it works:

You deposit your gold in bank.
They keep it safe for a fixed number of years.
You get it back as physical gold or cash on maturity.

3/ What should you do to be eligible?

You should take the gold you want to deposit to a Collection and Purity Testing Centre (CPTC). GOI has established over 300 CPTC's across India.

They will take your gold, evaluate its purity, and provide a receipt for the gold quantity.

4/ You take the receipt to your bank.

Create a gold monetisation scheme account in your bank.

Give them the receipt provided by PTC.

Your bank will then convert that receipt to a scheme certificate as part of your GMS account.

1/16
Was reading upon #Biases & learnt a lot. Thought of sharing a few pointers .
Simply put Bias is a disproportionate weight in favour of or against any idea/thing in all aspects of life.
Few types of Biases ( out of the many) with not so random images. :)
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2/16
The #DunningKruger effect now is fairly well known , wherein people with limited knowledge overestimate their competence, whilst the actually knowledgeable question themselves often .
"Ignorance more frequently begets confidence than does knowledge".
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3/16
*#SelfServingBias*
A very interesting bias wherein we credit our successes to purely ourselves, but when things go awry we cite luck & external forces .
Rings any bells?
Basically a defence mechanism to protect our self esteem & eventually from personal responsibility.

4/16
* #ConfirmationBias *
We all favour ideas & beliefs that affirm to our existing ones' , rarely being open to contradictory opinions .
(Especially in markets !! 😬) Why?

Laziness? Mental block? Ego ?
No wonder, Birds of a feather flock together ... 😉

5/16
* #SunkCostBias *
As we know, sunk costs are irrecoverable , regardless of outcomes. (Eg Money expended towards R&D for a molecule which doesn't work out)
But this actually extends in any investment we make - Time,Money, Effort, Relationships ...😏
Interesting right?

Ten MF mistakes I recommend you avoid...

1. Too much love

A fund does well. You fall in love with the fund house. You have a large mid and small cap scheme from them. They all tank together! Diversify. And remember being good at one thing doesn’t make you good at the other.

2. One for all

Applying the same metrics to judge different asset classes. What matters to equity funds doesn’t matter to debt funds. Arb funds are fully hedged - the individual stocks don’t matter, they do in equities. Understand what matters for each asset class.

3. Perils of passive

Assuming all passive funds are good because they are cheap. There are terrible passive funds out there too. They track bad indices. Or they track good ones but have a lot of tracking error. Passive requires its own set of research.

4. Apples and kiwis 🍎 🥝

We have categories in MF but sadly all funds in a category are not comparable. Just because a website compares them doesn’t mean you should look beneath. BAF categories have funds that are static, dynamic bond funds have rolldowns. Just an example.