A Junior’s Thoughts on Investing

One thing I have come to realize by myself is that investing is much more of an art than what I thought before while trying to figure out exact calcs to reach a conclusion. Thus developing your framework – as Munger would say, wordily wisdom or mental models – is key to becoming a great investor. Perspective and curiosity are another two relevant characteristics. Naturally, perseverance must reign in your life so you can develop your mind.

Having read a book of the greatest CEOs of all time – if you are interested, just contact me, it made it easier for me to contemplate how they allocated capital: back of the envelope calculations, having a great knowledge of the specific market/segment they were investing in and knowing the two or three key issues on that topic. Therefore one reaches the conclusion that no complex DCF model is sharp enough predicting the future. Deep knowledge is the path to clarity and wise decision making.

Moreover elaborating on the above topic, portfolio turnover should be really low or none since your knowledge is so thorough you wouldn’t change your mind frequently.By the way, if you have any good books to recommend, please do not hesitate to share.


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