The purpose of AIN Member Highlights is to share knowledge with other investors, discuss different investor experiences, and encourage other AIN members.
Bibiana Lim shares her investing journey and tips for our latest feature!
Tell us a bit about you!
I graduated with a Degree in Biology, had completely zero knowledge or experience in stocks, finance or maths. Quit my first job without a backup plan within 6 months (to my parent’s horror haha… anyone can relate?), went jobless for a couple of weeks and ended up doing operations in an SME. Found my passion in videography and marketing along the way, and I’m specialized in video marketing now!
How did you get into investing? How did you come up with the initial capital?
When I was 13, my dad handed me a book called “Rich Dad, Poor Dad”. Since then, I have always been fascinated with the idea of investing, but didn’t really get serious about it until I graduated from university.
I tried to learn from my dad the moment I turned 18 (he was into technical analysis) but he was a terrible teacher and I couldn’t understand candles for nuts. (who even invented them?!). I begged him to take me to open a brokerage account… and I left the account empty for the next 5 years because I had absolutely no idea where to begin.
My investment journey truly started when I joined the SME as an operations executive. They were a financial education company that taught Value Investing… So I learned from them while I worked there. Best life choice ever.
Unfortunately, I didn’t win the lottery nor come from a wealthy family, so my first pot of gold came from savings. I saved a lot throughout my entire education years because I knew I was eventually going to put all this money into the stock market.
While my friends were cafe hopping, I was eating home-cooked food daily. I remember when I was on a student exchange in Seattle, a pack of pasta could last me 3 days. My friends were eating out daily, which cost about $20 per meal. That difference in savings really helped me to kickstart my journey much faster than others.
What’s your investing philosophy? What does success in investing look like to you?
Why invest in slow performing companies when you can invest in high growth companies with great fundamentals?
I started off with Value Investing (the typical cigar butt, deep value stuff). I was making pretty decent returns at 15-20%, but along the way I discovered high growth stocks (growing at 50-100% yearly).
These stocks have great fundamentals and huge cash in banks so I know that they’re not going to go bankrupt. I sold off all my deep value stocks and focused on high growth companies instead.
Success in investing for me is not just being able to have the freedom of choice in my life, but to also help more people get started in investing or get better results as well. It’s more fun when everyone can grow and get rich together
If you were to give high level tips on investing – the advice that provides the greatest results, what would it be?
Get a coach. In my beginning days, I tried to figure things out on my own because I refused to pay for people to teach me. It took me 5 years to figure things out… and I still did not start.
After I got a coach, I got started within a month. My first investment returned me 20% in 8 months. To be brutally honest, I wish I hired a coach 5 years earlier. Even if I just compounded my money at 10% for that 5 years…. I would have a pretty decent pot of gold now.
Time is the greatest asset you can have when it comes to investing. The best time to get started is now.
How do you analyze investments? How do you decide what to invest in?
I try my best to weigh a balance between the qualitative and quantitative aspects of a company. Over time, investment has become more of an art rather than a science for me.
Aside from the usual healthy financials (no debt, free cash flow, high operating earnings and margins etc), I go very deep into the business model and the management as well. If they have an insane competitive edge over their peers and are being managed by world-class management (along with strong quantitative fundamentals of course) then there’s a high chance I would invest in it.
HUGE plus point if the business model is extremely scalable. If they need huge capital in order for them to scale, I’m no longer interested. I’m looking for asset-light companies that can scale massively. Even if it is slightly overvalued, I’m more than happy to pay for it. Great companies always come at a price!
What’s your philosophy about risk in investing? How do you manage risk?
Whenever I speak to my mathematician friends about risk, they would roll their eyes at me. I like to keep things simple. Risk to me is not knowing what you don’t know. (Again, don’t throw rocks at me…. I know nothing about mathematical formulas haha). If you knew that the management of the company had a shady past/fraud history, would you still invest your money in them? I wouldn’t.
I try to dig as deep as I can into the company to research as much as possible. My friends and I will split roles and we find out about different things about the company. We talk to the employees, we talk to people in the industry, we also talk to the management themselves.
Of course, in life, there is no 100% guarantee. Just like sitting in a plane, even though it is very safe, we will never know if the pilot is on a suicide mission. So I cover my part of my portfolio with puts (like an insurance), just in case my investment thesis was wrong. That way, I still earn money even if I made an unforeseen mistake in my research.
What are some mistakes you’ve experienced during your investing journey, and what are the lessons you learned from them?
1. Never invest alone, never invest in hype, and never listen to people who’ve never had great investment track records.
Investing alone is the worst mistake you can make. All humans are bound to make mistakes, we can’t be perfect. Having a group or community (Like AIN!) to share your investment thesis/ideas with can cover your blind spots.
It’s just like falling in love. Sometimes we may end up liking a douchebag but we aren’t aware of it until our friends tell us that something’s wrong. Sometimes we fall in love too hard with a company without realizing that it’s nothing but hype. Which brings me to the next point.
2. DON’T. FALL. IN. LOVE. WITH. THE. STORY.
Fall in love with the numbers. The numbers can never lie. Anyone and everyone can paint a bright future of the company, but only a handful can execute to make it happen. Track record and results are very important. Always check up on the management background.
3. Take advice from people who have great track records.
If I listened to my parents’ advice to stay out of the stock market, I would have never gotten the freedom that I have today. They lost over 6 figures in the stock market and never invested since. They told me it was a scam, but I refused to believe it. If Warren Buffett could do it, why couldn’t I? (This was what I thought to myself when I was 18 haha).
People can say whatever they want, but always take advice from people who have great track records. Don’t listen to the ones who never had success. Things are ALWAYS possible. Just find the person who has done it and it will also be possible for you.
If you could go back in time and advise your 18-year-old self, what advice would you give?
START NOW AND DO GROWTH INVESTING!!! You’ll be a millionaire before 28.
What’s the best way to get started as a newer investor?
Get a coach.
You’ll see results 100x faster than trying to figure things out on your own. Stop watching Youtube videos or reading books thinking you can figure everything out on your own. It’s never going to get you any faster than getting someone to condense everything to teach you. You’ll also avoid LOTS of mistakes because your coach will be there to guide you and make sure you don’t make them.
Every single cent is worth it. Its knowledge and skill for a lifetime. You’ll learn to multiply your money forever. 10 years later when you look back, you’ll be thanking yourself for this decision. Don’t waste your time.
The GREATEST advantage any investor can have is time. The best time to get started is now.
Connect with Bibiana Lim through Instagram.