Have you ever had these questions before?
How should I invest so I can sleep at night and still aim to make at least 10% annually over the long-term?
When should I start investing and how do I begin?
How do I know when to sell my stocks?
Should I sell some or sell all?
How do I know what stock should I buy?
What price is considered cheap?
What do I do with my stocks that are at a paper loss now?
Are options dangerous?
What is The 4M1S Growth Framework?
On this page, I am going to share with you the framework that I created and personally use to make my investment decisions.
Every single part of the framework is vital.
All of them have to be thought through from second-level thinking. For example, it is not enough to know what is a great company, we must also know the price to buy it and the strategy to enter and exit them.
If every single part of the 4M1S Growth Framework is done right through deep understanding of them, our probability of beating the S&P500 return over the long run is high. So far, I have.
I will explain to you each part of the framework below.
To be a great investor, we need to have the right mindset.
We need to understand the right mindset to invest and sleep well at night.
I share some of my selected tools to gauge my emotions as well as the market with my students.
Understanding the right Mindset is important because this is one area that we need to control well to make the right buying, holding, and selling decisions.
One of the most important mindsets I teach my students to have is having an Owner mindset and not a gambler mindset.
Management and Business
We need to know if the company is running a high-quality business run by great management or it is not.
To know if the company is run by honest and capable people, there are a few things that I look at. Compensation structure is just one of them.
Understanding the difference between high quality and a so-so business is crucial. I teach my students how to analyze a company from both the qualitative and quantitative standpoints so they can make an informed investment decision.
Investing in a great business at a ridiculous price is still considered a bad investment.
The stock market is a voting machine in the short run. In the long run, however, it is a weighing machine.
A stock can run up say 400% in a short period of time due to hype or the Robinhood traders. But if fundamentals do not well support them, the valuation is clearly too high, it is just a matter of time before they come crumbling down.
I teach my student the three different types of valuation methods and pass them the calculator so they can value almost all companies listed in the stock market.
Money and Portfolio Management
We need to look at our investments from an individual stock level and from a portfolio management level.
Because I have learned that we need to make a whole lot more when we are right than when we are wrong. This is where understanding portfolio allocation is vital.
For example, your portfolio will still lose money if you make two times return on your stock that consists of only 5% of the portfolio while losing 50% on the stock that consists of 30% of your portfolio.
Alternatively, you will make a lot of money if you make two times return on your stock that consists of 30% of your portfolio even if you lose 50% on the stock that consists of just 5% of the portfolio.
I teach my student how to look at our portfolio and decide the level of stocks and cash that one should have in the portfolio.
This is one of the key 4M1S growth framework factors that one needs to apply and understand well to beat the S&P500 return over the long run.
Different kinds of investment opportunities require a different type of strategy.
I teach my student how to identify the nine different types of investment opportunities in the stock market.
For some investment opportunities, we should utilize options strategies such as selling puts or buying calls.
For some companies we should buy the stock.
While for some companies, we should sell it fast.
We need to know the winning Strategy required to enter and exit different kinds of investments.
Every investment is unique.
Understand them. Profit from them.
I have been working with Chris around value investing. And I find the 1:1 mentorship with him very productive because it guides me through the different steps. So even though I attended courses, I find that I still needed guidance to take actual action.
The VIM is a comprehensive and condense course in which it skips through all the “Fluff” you see on the internet and goes directly into the key information that we need to make an informed investment decision.
I’ve had the opportunity to participate in Chris’s Exclusive 1:1 Mentorship program, and that is easily one of my top 5 decisions that I’ve ever made in life. Not only I learnt so much about investing, but Chris has helped me to come up with my own personal investing methodology with Warren Buffett’s investing principles at its root.