Category: amazon-pollycast

Be wrong; but don’t stay wrong

In Investing, you can’t know everything. But once you understand the most important basics like a target company’s financials, moat (business’ ability to maintain competitive advantages over its competitors), product-market fit, management, risks than you have enough information to make an investing decision.

happy woman in headset sitting in cockpit during helicopter tour
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“An investment in knowledge pays the best interest.” – Benjamin Franklin

Lets dissect this:

  1. Invest in the best high-growth businesses
  2. Pay up for a compounding machine
    Quality > valuation investing
    Invest when management is top notch v. Hold onto winners
  3. Be ruthless in cutting losers
  4. Be wrong; but don’t stay wrong

Make luck your destiny by solving Principal-Agent Problem

If you’re able to hack Principal-Agent problem, you can run any businesses.

But I warn you, this is a very difficult problem to solve. So what is a Principal-Agent problem? Principal and Agent are highly separated until you solve the problem. Principal is an Owner, where as Agent is an Employee. As a principal, if you can make your employees think like you and embed founders mentality in your agents, it’s better half long term. if you’re an Agent, and if you operate like an owner, it’s just a matter of time before you become a principal.

Remember business biographies are useless for building a great business. They’re good for inspiration. They are not copyable. Without sincerity and obsession to solve the basic principal-agent problem, you won’t get there.

Rules are simple to Explain but Hard to Execute

“Invest, Rather Than Save”

The one important rule in finance to become wealthy: “Invest, Rather Than Save”.

The financial systems punishes savers, (ever heard of double digit savings rate?) and rewards investors. This is done systematically devaluing the USD every year, so you’re losing even though you think you’re winning. If you save, your money becomes less valuable. If you invest, your assets become more valuable.

Education is the great equalizer. Have skin in the game and understand the rules well enough to break it.