Good morning, let’s get into it!

I know you might be getting tired of the lessons I share from Substack, but they’re really good, and so simple that I have to share them. I spend my time on the platform a lot more these days and my favourite niche is investing.

Before committing capital, you should be able to explain the business model in simple terms. If you can't describe how the company makes money and why it exists to a non-investor, you likely don’t understand the mechanics well enough to own it.

Identify what could go wrong and exactly how much capital you stand to lose. In investing, the primary danger isn't volatility (price swings), but the permanent loss of capital. If the potential downside keeps you awake at night, the position is either too large or the business is too fragile for your risk tolerance.

Even a world-class business can be a terrible investment if you buy it at the wrong price. Price is the ultimate determinant of risk. To protect yourself, always look for a "margin of safety"—buying at a significant discount to the company's intrinsic value to account for unpredictable future events.

Consider how a new investment changes your total risk exposure. Does it provide necessary diversification, or does it create a dangerous concentration in one sector? A great individual idea can still be the "wrong" move if it doesn't align with your specific financial situation.

You should know when you plan to sell before you ever click buy. Determine your exit triggers early to keep emotions from taking over later. Common reasons to exit include:

Source: Noel Wieder’s substack