Five Years as a Total Newbie in U.S. Stock Investing

Started dabbling in stock trading in 2019. It’s been five years, but I’m still a newbie. Time passing doesn’t mean gaining insight or experience if you don’t intentionally learn. I once read a joke: better to be a clueless newbie who makes money than an expert who knows what’s what but loses money. Of course, you should know a bit. So here’s my little newbie experience.

Basic Principles

Invest only surplus money, no more than a quarter of total assets. Even if you lose it all, it should only be disappointing, not devastating.

This one’s tough. If someone can’t stick to principles in other areas of life, there’s no point in expecting them to have principles in investing. Principles are often inflexible, rigid; that’s unfortunately (or conveniently) my personality—sometimes so rigid even my wife and kids complain.

Stock Selection

Familiar industries, like the internet.
Products you actually use.
Large companies with a market cap over $100 billion.

Trends

Trends (directions) are crucial. If you pick the wrong trend, efforts are useless.

Country: I made money with NIO (bought at $4, sold at over $50) and held Tencent, Meituan, Haidilao, Xiaomi, etc. But post-COVID, I gradually sold them all. I like these companies, use them a lot, appreciate their culture (from direct or indirect knowledge). But they can’t outmaneuver the powers that be. So, I don’t touch Chinese stocks.
Industry Direction: I don’t understand chips, but seeing Chat GPT’s capabilities, I believe AI will transform industries. So, I bought Nvidia in 2022, up nearly 800% now. Forgot to mention, read “Chip War” before buying.
Time: I use iStock on Mac as a reference tool—extremely simple. I look at a stock over 10 years (or as long as it’s been public if less). If it’s generally up over 10 years, I’ll likely choose it; short-term fluctuations don’t matter. I’m patient enough to hold through downs.

Mindset

The mindset of investing in beloved companies: “Buying stocks is buying companies” resonates with me. I joined Liulishuo on a half-salary, investing the other half. Feels cool. After reading “Elon Musk,” I think it’s interesting to invest in an entrepreneur who loves risk and delivers results.
Control the urge to be content with rising numbers: Sometimes I consciously avoid checking stocks in the app. It’s bad being controlled by numbers. The Bible says, “Above all else, guard your heart.”

Special thanks to my friend Forrest. Learned some basics from his recommended books and talks. Often think, if “stealing” this little bit makes money, how much would I make studying to his level? Then again, not keen on spending too much time here.