Eugene Ng's avatar

$3.9M follower assets

Eugene Ng's avatar
$3.9m follower assets
Results & Expectations.
Investing outcomes are driven not just by business results, but business results within the context of expectations.

The time frame also matters.

The shorter time frame is more volatile, less relevant, the longer time frame less volatile, more relevant.
Eugene Ng's avatar
$3.9m follower assets
The best way to think about market selloffs is that everything is almost the same as prior, except for valuations, which is significantly cheaper today.

Valuations drive the majority of near-term returns, but business results drive the majority of long-term returns.
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Always go back to basics.

Ask how, where, what and when value is created.

Ask if it is sustainable, repeatable and scalable over the long-run.

Keep asking these questions, and eventually you will get a rough enough answer as to if a business is worth investing in.

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Not every company will do well every time.

There will be brighter times, and more challenging times.

The key is to distinguish if it is more long-term structural, or short-term temporary.

If it is the former, don’t trade them through such times, hold on to them.
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Simplicity vs Complexity.
Distill the complex and the uncertain into the key things that really matter.

Focus on what is important and will move the needle that gives clarity, not the unimportant that do not.

Be more to be directionally correct, than to be precisely wrong.
Love it! "Directionally correct" is what lets us buy a multibagger that looks a little expensive but has a remarkable CEO and is firing all cylinders rather than missing a multibagger because the model said THIS--not that--price.
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Rules work on average, but often individual opportunities are not averages.

Every opportunity has its own nuance that is not cleanly measured, which is why they exist to begin.

Data is of the past & might or not persist into the future. View it as guidelines, not rules.
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Competitive Edge.
Discover what is yours, that is enduring and more durable.

Make sure you don’t lose it when you have one.

Always be like a beginner, keep an open mind, study new ideas, and stay unburdened by past preconceptions and biases.

Know that it is always in flux.
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It never full disappears, it just comes & go. That’s the beauty of it.

If you want clarity, the stock market is an expensive place to get it.

When there’s uncertainty or reduced clarity, it is cheap.

When there’s certainty or increased clarity, it is expensive.
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Know returns will come eventually, but do not know how much and when they will come.

Markets are uncertain and unpredictable, and that is the price of admission to pay to be invested.

It is not just what you know, but more of how you behave that matters.
The last point is so key. Your discipline to avoid making emotional decisions is the most important long term factor of investing success, I truly believe that. Good habits take a long time to build, but can erase in an instant off of one irrational behavior move.
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Dancing in the Rain.
Investing and in life is not about waiting for the storm to pass, instead dance in the rain.