I'm keeping this short but important
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This morning, pay careful attention to this email. It’s short but important. Because there’s something subtle you need to know about investing. Look, we don’t need to be experts in everything. When I invest, I know I’m not qualified to talk about the latest material that could improve a sports shoes product. I’m not qualified to talk about how much money a foundry should spend on building a 7nm chip plant. I’m not qualified to talk about whether people should like the way a handbag should be designed. I’m not qualified to talk about Tesla’s latest FSD software performance. I’m not qualified to talk about how much “capital ratios” a bank should hold. I’m not qualified to talk about which chocolate bars should taste the best. That’s perfectly alright. I’m not a handbag designer. I’ve no idea how the leather should be stitched, what colours will be in trend next season. But I can still invest in a company that sells handbags. I know I can never be as good as an oil engineer, a technology expert or a pharmaceutical executive who knows their stuff way more than me. You don’t need to know how to make a handbag to recognize a great handbag business. This is the difference between an investor vs operator. You see, there’s so many ways to invest that we can learn to be good at - learning how to allocate my capital to the most suitable opportunities, learning how to diversify a portfolio, learning how we crave desires like sugary food and chasing social statuses, learning why we always love a good discount. Like what I've previously wrote about Charlie Munger's Psychology Biases. Our life experiences and observations - the things we’ve seen, the patterns we notice - all become part of our investing edge. What we need is a little guidance to nudge us in the right direction to invest. xoxo P.S. Our third newborn was out last week. Baby is couple of days old and spending a little more time working from home these few days :) Sometimes, investing can be simple. Willie Keng, CFA Founder, dividendtitan.com P.P.S. Like this issue? Click HERE to join other dividend investors reading my DT Compound Letter. I send my regular letters to your inbox. |
Dividend Titan
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I hated what I was about to do. “Ah, darn it.” I took a deep breath before I hit send. It was 2016 and I was a research analyst in a private bank. The report I wrote on the computer screen was glaring back at me: "Sell call" on Nam Cheong. Nam Cheong was one of the market darlings during the oil & gas boom. It built and chartered oil support vessels for big energy companies back then. Nam Cheong bonds sat in many of the private clients' portfolios. It wasn’t a popular call. Within days, my...