I always enjoy reading other retail investors’ philosophies to:

If your goal is to generate wealth through the art of investing, you should think about your own investing philosophy regularly. It will help you stick with your process and keep your attention on the end game: financial freedom.

So, if you’re in search of establishing your own investing philosophy or looking to make improvements, I think you’ll achieve both by reading on!

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I haven’t always looked for extraordinary businesses.

My thinking has evolved on this. When I first invested over 6 years ago I was speculating. In 2020, when I found value investing I was beginning to find the type of investments that resonated with me. I’ve dabbled in:

I had moderate success in some of these simply because I bought them when they were really cheap in 2020.

The more I learned in 2021-2022, the more I started gravitating to the multi-bagger type business. This was because I like the idea of turning $1 into $100. I have no problem waiting for a long time to allow my investments to play out, so I may as well find businesses that can compound my money for many years.

At this point, I’m looking for an underlying business that has characteristics such as revenue growth rates, net income growth rates, free cash flow growth rates, returns on capital, and little to no debt. I look for companies that can compound revenue, net income, and FCF at ~15% over long time periods. I also want a high probability that high returns on equity (~20%) can be sustained in 10-20 years’ time. Lastly, I prefer companies with little need for outside capital to operate or grow.

The size of these businesses can vary.

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Check out the rest of my investing philosophy here: