If I Had to Start Over: 10 Things I'd Tell My Younger Self About Investing
When I first got into investing, I went all in. I read everything I could get my hands on: Buffett's letters, the classic books, obscure blogs, old forum posts, anything I thought might help me figure out how to improve as an investor.
And honestly, it worked out pretty well. I didn't blow up. I didn't flail around for years. But I did waste time chasing things that didn't matter, or trying to learn lessons the hard way that I could've picked up faster if I'd just known where to look.
So if I could go back and hand a short list to my younger self, this would be it. And maybe it's useful to someone else just getting started and trying to sort through all the noise.
1. Use a Quantitative Framework from the Start
Follow a well-designed quantitative ranking system and stick with it for a while. Not a screener. A multifactor ranking system that does the heavy lifting while you develop your skills. Hug it tightly for at least a few years.
In the beginning, I relied entirely on discretionary analysis. I thought if I could just study hard enough, I'd develop the insight needed to pick winners. And I did okay. But I would have progressed faster and made fewer mistakes if I'd leaned on a disciplined, quantitative process from the start.
Today, I publish my own ranking system each week here on this Substack. It's the product of years of refinement. But if I were starting over now, I'd begin by selecting almost all my stocks from a model I trust, something like Portfolio123's Small & Micro Cap Focus ranking system. It combines value, quality, technical, and sentiment factors in a thoughtful, well-constructed way. It's much better than the ranking systems that were available when I was starting out.
Back then, I would have used Greenblatt's Magic Formula. Simple, effective, and still better than guessing. (I wouldn't use it today though, and I'll explain why in another post). But whatever the model, the point is the same: a strong quant system keeps you grounded. It forces you to think in probabilities.
And it gives you a benchmark. You can track how the model performs against your own discretionary choices, and that kind of feedback accelerates your learning. Start a paper portfolio that follows the quantitative system exactly and compare its performance to your own portfolio. This would have accelerated my learning while increasing my returns substantially.
The psychological benefit is enormous. When you're following a systematic process, you're less likely to second-guess yourself or chase whatever's hot. Instead, you can focus on understanding why certain companies rank highly and what makes them work. It teaches discipline naturally and breaks the habit of falling in love with your ideas.
2. Don't Overconcentrate — Use Diversification as a Training Ground
When I was starting out, I thought concentration was a badge of seriousness. If you found a great business and understood it deeply, why not bet big? That's what Buffett did, right?
But what I didn't appreciate at the time is how much harder that is to pull off than it looks. Just because something seems like a high-quality company trading at a good price doesn't mean you've uncovered a gem, especially early on. There are too many unknowns, and too much you don't realize you don't know.
In hindsight, I would've learned faster and with far fewer scars by spreading my bets across more positions. Not forever, just long enough to learn which instincts are right and which aren't.
When you're diversified across 20 or 30 names, you're not paralyzed every time one of them dips 10%. You're not so emotionally wrapped up in one idea that you miss what the rest of your portfolio is trying to teach you. You start to see patterns. You start to spot what tends to work and what doesn't.
Diversification also gives you room to test ideas. You can still run a concentrated "mock portfolio" on the side, maybe five names you've hand-picked from your quantitative list, and compare it to your full basket over time. But you're not staking everything on your unproven skill as an analyst.
Eventually, you may develop the judgment, discipline, and edge to earn the right to concentrate (or maybe you already have that in some area because of life experience). But early on, spread your bets. Learn broadly. Let the market teach you before you try to outsmart it.
3. Focus on Microcaps
If I could give my younger self just one piece of advice, it would be this: focus on microcaps. That's where the best opportunities are, and where you're not playing against the smartest people in the room.
Microcaps are inefficient. They're underfollowed, poorly covered, and often completely ignored by institutions. That means less competition, more mispricing, and more room for independent analysis to actually matter. You're not trying to out-think a BlackRock analyst team with perfect data and daily access to management. Sometimes, you're the only one paying attention.
They're also simpler. It's easier to understand how they make money, what the key levers are, and where the mispricing comes from. If something looks cheap, it's usually for a visible reason: low liquidity, a neglected industry, no IR effort. That transparency helps you build conviction.
I started out avoiding microcaps. The warnings made them sound radioactive. Fraud, delisting risk, illiquidity, massive drawdowns. But that hasn't matched my experience. I've had plenty of losers, sure. But I've only seen one outright fraud (it went to zero), and just once did a stock fall 70% overnight after losing a major customer. Everything else has been withing the realm of normal. The real risk isn't fraud; it's your own overconfidence.
Microcaps won't be a fit for everyone. The volatility is higher. Volume is trickier. You need to learn how they behave and why. But for investors with smaller portfolios, long time horizons, and a willingness to think independently, they offer something you don't often find in large caps: an uneven playing field tilted in your favor.
4. Be Extremely Picky with Large Caps
I wouldn't tell my younger self to avoid large-cap stocks entirely, but I would say to be ruthlessly selective. Only swing when the opportunity is ridiculously obvious.
Usually that means waiting for a market-wide selloff, a broad panic where even the best businesses get thrown out indiscriminately. That's what happened with Apple in 2019. The narrative at the time was that Apple had peaked. Analysts and investors were talking like the iPhone era was over, that people were walking away from the ecosystem. But if you looked around, you could see that wasn't true. The story had gotten detached from reality, and that disconnect created a huge opportunity.
Same with Google in 2022. It fell close to 50% during the broader tech drawdown, but the core business was still dominant, profitable, and growing. Sometimes the best companies in the world go on sale, but not often.
You shouldn't see many of these. They should be rare, and if they're showing up often, your filter isn't tight enough. But when one does come along, don't ignore it just because it's large. Just make sure it's a layup.
5. Build Your Own Quant Models
You don't need to become a quant. You just need to think more rigorously, and this is one of the best ways to get there. If I were starting over, I'd begin building right away. By building your own models you learn a lot about:
How to think about financials
What actually predicts returns?
What’s the best way to construct a factor?
Which factors interact with each other, and how?
Which ones work in which environments, and how does that change over time?
Why do some factors break down in certain market regimes?
And ultimately: how can I use this to better direct my discretionary search?
Because that's really what this is: an advanced form of screening. A better way to start your search process. Instead of starting with "What has a high ROIC?" you're learning how to layer those traits, how to build a composite profile of what tends to work, and why. And even when a company doesn't rank well, maybe because of a temporary setback, you'll be able to mentally normalize the business and see where it would rank if conditions were different. That kind of pattern recognition is hard-earned, and building models accelerates it.
It's one of the most honest feedback loops you can build.
In the long run, building your own quant framework teaches you how the numbers of a business interact, how market cycles affect returns, and where common myths break down. It gives you a structure to help you learn faster and make better decisions.
This process will sharpen your eye, even if it's years before you ever trust your model with real money. In a future post, I'll cover what to test first and how to avoid the most common modeling traps.
6. Read Widely — Don't Just Stick to the Classics
Most people start with the canon: Buffett, Graham, Greenblatt, Lynch. That's a great foundation. But you don't want to stop there. Take Munger's Latticework of Mental Models framework seriously.
The goal isn't just to become a good investor; it's to become a good thinker and decision maker. That means reading across disciplines. Psychology, history, biology, physics, mathematics, each field offers mental models that can sharpen your judgment. Understanding cognitive biases helps you spot market inefficiencies. Knowing how complex systems work helps you see how businesses really operate. Game theory clarifies competitive dynamics.
Some of the most valuable insights I've picked up came from outside the traditional value investing playbook. I used to dismiss traders completely. Later, I realized that many good traders were thinking carefully about crowd behavior, timing, and risk, and those tools helped sharpen my investment process. Even within classic value investing, there are many great resources that everyone doesn't already know about.
There are also great books that simply fly under the radar. Ian Cassel recently mentioned that his filter for investing books is to look for ones with excellent reviews but very few of them. That's a useful way to approach study, and it underscores the point: there's great information and ideas in places the crowd isn't.
Start with the classics, sure. I'd still point my younger self to Munger's recommended list. But over time, you should build your own. That might include obscure books, niche papers, Substack posts, online interviews, Twitter threads. Some of the best material now isn't in hardcover; it's scattered across the internet.
What matters is learning how to think. That happens faster when you read widely and apply the ideas in your own way. After a while you should have a list of valuable sources that aren’t on everyone’s top 20 investing books of all time.
7. Obsess Over Behavior, Not Just Valuation
One of the biggest shifts in my investing came when I stopped thinking of valuation as the whole game. Technical skills matter, but most of the damage I've done to my portfolio over the years came from behavior: overconfidence, attachment to narratives, ignoring reflexivity, or reacting emotionally to volatility.
I was once at lunch with Ben Raybould, who partnered with Allan Mecham, and asked him what kinds of books Allan would recommend. He said none of them would be about accounting or valuation (although of course he thinks that’s important too), but that they would all be about behavioral psychology and behavioral economics. He specifically mentioned Nudge and Think Twice.
Understanding how people make decisions under pressure, cognitive biases and heuristics, the psychology of influence, and how incentives, feedback loops, and market structure affect outcomes, is even more important than valuation and accounting.
If you can keep your head straight while others are losing theirs, and if you understand why they're losing theirs, you'll have an advantage.
8. Understand the Case for Market Efficiency
One thing I did get right early on is making a serious effort to understand the case for market efficiency. I did a good job of this when I first started but it would still be something I would emphasize if I could get a message to my younger self.
When you're new to investing and reading all the classic value texts, it's easy to come away thinking the market is just dumb, that prices are constantly wrong, and that beating it should be easy. But that framing can set you up for frustration. The truth is, markets are often more efficient than they look. If a stock drops 20%, it might not be "Mr. Market being emotional." It might be you missing something.
If you really want to understand investing, or any other important topic, you have to understand both sides of the argument. Study the academic case for efficient markets as seriously as you'd study the value investing greats. Books like A Random Walk Down Wall Street aren't perfect, but they force you to wrestle with uncomfortable questions, and those questions make you sharper.
You don't need to agree with every claim. But if you want a durable edge, you have to know what you're up against and where you should apply your efforts.
9. If You're Starting Today — Learn to Use AI
This isn't advice I could've given my younger self because it wasn't available at the time, but it matters now: learn how to use AI.
I've always leaned traditional: notebooks, filings, highlight pens. But the tools available today are too powerful to ignore. They can help you speed up research, summarize dense material, explore new ideas, and build smarter systems faster.
Used well, AI is an accelerant. Don't use it to replace your thinking though. Use it to check your thinking and speed up your research. It's a powerful tool, but you have to be the one in charge and applying it. Rely too heavily on it and you're going to get killed.
The sooner you figure out how to integrate it into your process, the more time you'll save and the faster you'll level up.
10. Find Your Own Voice
When you're starting out, you copy. Everyone does. I remember learning guitar by mimicking solos from Brian May, Stevie Ray Vaughan, Hendrix, Wes Montgomery. I didn't have my own sound yet; I just knew I wanted to get closer to theirs. By imitating, I picked up feel, structure, instinct, until eventually, something original started to emerge.
Investing works the same way.
You start by reading the classics, studying other people's models. You borrow their frameworks because yours hasn't formed yet. And that's fine; that's how you learn. But over time, if you're paying attention, you start to notice what fits you. Which pieces resonate. Where your edge might actually be. How to build an investment strategy that takes advantage of your strengths and compensates for your weaknesses.
That's where it gets interesting. Success in investing, like in music or writing, is about mastering the fundamentals deeply enough that you can start to improvise.
Eventually, you stop asking what Buffett would do and start trusting what you would do.
So that's the list: the ten things I'd hand to my younger self if I could only send one note back in time.
None of this is meant to be prescriptive. Everyone's path is different. But if you're just getting started, or working to update your process, maybe something here helps you get there faster.
I’m still working on a write-up for a company that is about as cheap as things get. Subscribe and you should have it in your inbox on Friday with the weekly list of Rational Formula top ranked stocks.