20 | Thomas Chua, Steady Compounding

My guest today is Thomas Chua (@SteadyCompound), founder and Lead Editor of Steady Compounding, where he now runs a stock research service focusing on Compounders and publishing his weekly newsletter.

In this conversation, we cover Thomas’ investment style and philosophy, and his story behind Steady Compounding.

I hope you enjoy my conversation with Thomas Chua.

Show Notes:

[00:00:31] – [First question] – Background
[00:06:11] – Was Thomas always keen on sharing his work?
[00:10:34] – What does Thomas’ process look like?
[00:13:04] – Thomas’ information diet
[00:20:23] – From value investing to growth
[00:24:36] – Idea generation process
[00:26:01] – Situations to avoid
[00:30:45] – Obscure and nitty-gritty research
[00:35:42] – Plans for Steady Compounding
[00:37:06] – Most undervalued life experience?
[00:38:01] – Influential books
[00:38:35] – Where might opportunities lie today?

Connect with Thomas:

Mentioned/Recommended Content:

Listen to this episode on Apple PodcastsSpotifyStitcherCastboxGoogle Podcasts, or on your favourite podcast platform.

Transcript:

Kalani Scarrott (00:31): All right, so my guest today is Thomas Chuah. Thomas is the lead editor and founder of Steady Compounding, where he runs a stock research service that focuses on compounders and also publishes his weekly newsletter. In today’s conversation, we cover Thomas’s investment style and philosophy, and also his story behind Steady Compounding. So please enjoy my conversation with Thomas Chuah.

Thomas, thank you so much for being here today. But maybe a good place to start might be the story behind Steady Compounding, and maybe why did you start it? So we’ll dive into the details, obviously. But I’d love to hear some background as well and context to your life prior to where you are now, and I guess we’ll go into the weeds from there.

Thomas Chuah (01:10): Yeah, sure. Thank you for having me, really happy to be here. So I have always enjoy investing but before Steady Compounding, I was actually employed by the Singapore Government. And this story actually goes a way back, like a decade back. That was when I was enrolled into military because all males in Singapore, we need to go through military. And that was when I started to receive acceptance from universities in Singapore. But during that time, because money was a constraint, my parents actually told me, “Don’t go to university,” right? “Just go straight to work,” so that I can provide more income for the family.

And so the money was always a question. And that was when I signed a scholarship with the Singapore Government, they paid for everything, including allowance. So very grateful for that because it really allowed me to enjoy my education while I was in university. The challenge with that is that it comes with a four years bond. And so right after I graduate, I have to work for the Singapore Government for quite a while.

Yeah, so I’ve always knew I like to be in the investment field. But because of challenges here and there, I ended up doing something else. And when I was about to leave the government service, there was a lot of fear, to be honest. Because when I came from a place where money was a concern, having a government job was seen by a lot of my family members as you finally made it, right? You’ve got this what we call iron rice bowl, which is really like a really, really stable job, and you will not lose your income or anything like that unless you screwed up. And I was doing decently at the time while working in the government sector. So it felt like I was doing something really foolish, at least to my family members.

And that was when I was reading a lot of materials. And as a investor, I always read Jeff Bezos’ work. And he shared with me this concept, which is called the regret minimization framework. So I’m sure many of us know Jeff Bezos in his earlier days, he was an investment banker and he was earning good amount of money. And when he said he wanted to start an internet bookstore, his boss told him, “Jeff, this is a great idea. But perhaps it is not for someone like you.” Yes, your earning good money, why do you want to do this?” And this was in the ’90s where the internet was super abstract and not many people knew what it was.

But this is when Jeff Bezos he used the regret minimization framework to make his decision, he try and envision himself to be 80 years old. And if he never do this, never started Amazon, would this be a regret? And his answer was a very conclusive yes. And off he go. It doesn’t mean that we will necessarily succeed, but this regret minimization framework is a good way to think about whether you should give your passion or something you really want to do a shot.

And another thing that I considered was, I also read up a lot on Tim Ferriss’ work, not sure but you got to check out his work. But he has this exercise called fear setting as well. So a lot of times we don’t take action because we are afraid. We’re afraid of failing, and sometimes there may be real consequences, financial consequences. And so I know I just set out all my fears on a piece of paper. And the truth is, most of the things we want to do, it will not damage us permanently or it will not cause us to setback permanently is usually recoverable.

And when I think of starting something online, like right now I’m writing Steady Compounding full-time, whereby I write about research reports for my subscribers. It is something that allows me to gain a lot of leverage, or what Novell, this is something I learned from Novell, right? Because when you do something on the internet, you only do the work once where you are able to scale infinitely, right? There’s no more incremental costs to generating that incremental amount of revenue.

And so when I think about the risk reward trade off, it’s probably just maybe two, three years of loss income. But from here, I gain a real shot at really creating something that could give me the right to and of the rewards. And that was very attractive to me. And worse come worse, I have my investments to cover my expenses or either that I can just go back to employment, there’s always that option left on the table for me.

Kalani Scarrott (06:11): Yes, how far back were you planning to start up Steady Compounding? Were you always inclined to write and share your work? What was your, I guess, early passions or decisions on doing that specifically?

Thomas Chuah (06:22): Yeah, so because my bond with the Singapore Government was four years, at the third year, I started to take action. Because a lot of times we talk about finding our passion in life but we can’t sit there and think about what our passion will be or we find what people like to call a key guy. The job that’s meaningful for you, but yet pay at the same time. We have to take action, then if it fails, we try again. And so that was where I started Steady Compounding. Initially, I started it out as a way for me to put my work out there, is like a online resume to find a job that would allow me to go into the investment sector.

Even though I studied finance in university, but because my work experience was tax related, when it comes to the Singapore Government, I thought putting my work out there, my thinking out there will put me in a better position to get a job in the investment view. But the gratifying thing was that after I started publishing online, I started to attract a lot of the people in the investment field who taught me writing good stuff. And then I just started to network from there.

I started to learn a lot from other investors in Singapore and abroad. We just set up Zoom call, and then we just discuss ideas. So there was a lot of very good feedback loop. And the more I write, the bigger the following, and that when I thought, perhaps I could take this somewhere else, because I was getting so much learning done. I was meeting a lot of great investors. Why not I try and be independent writer? And that was when I took pivot, from it becoming just online resume to becoming writing full-time and publishing research reports to my subscribers, almost on a monthly basis.

Kalani Scarrott (08:24): So you mentioned other people giving you compliments gave you a bit of inspiration or maybe gave you a bit of a push, but if you zoom out a little bit, are there any aspects of maybe writing or investments that you think are pretty easy or natural that come to you?

Thomas Chuah (08:37): Yes. So I’m a very curious person, like how things work, not just in investing, but in many other aspects of life as well like history or even biology and all that. So investing suited me really well, because it is like a method for me to get paid or grow my wealth while just satisfying that curiosity. And so like Charlie Munger always said like, he never seen anyone who’s intelligent but isn’t reading all the time. So that reading portion or satisfying my curiosity comes very naturally to me, and so I’m always eager to learn new things. And so I guess that part is easier for me. Yeah.

And so another way to satisfy that curiosity is really to just go out and meet people. Eugene was the one who connected us together. So I met him and a few other investors and so that is where the competitive advantage comes from writing online. It is only by writing online then I’m able to draw the different investors into my life and when the idea exchanges starts coming in, because I think there’s only so much time we’ve have and sometimes the highest return on investment way to spend our time is to bring our work, share it with others, and then others share their best work with us. And that’s what really provides a lot of really good investment ideas.

Kalani Scarrott (10:10): Yeah, it’s almost like a magnet sometimes, isn’t it? You can go find people, but if you put enough work out there, sometimes people come to you and makes it really, right?

Thomas Chuah (10:16): Yeah, yeah. So just by writing online, you will be attracting a lot of different people into your life. And some of them they are really, really good investors. So I know this term is used a lot but becomes like a flywheel. Yeah, ideas just keep coming, and then you have to evaluate them yourself as an investor.

Kalani Scarrott (10:34): Yeah, perfect. So what is your writing process look like then? What might a typical day look like for you then?

Thomas Chuah (10:41): Yeah, so I’m an early bird. I typically wake up around 5:00 am in the morning, and to me, the morning time is super important. I try to block out and really protect that timing. There’s a lot of research that shows that your mind actually learns the best the few hours upon waking up. So that’s where I do my learning and writing. I generally don’t eat once I wake up. Yeah, so my first meal will begin around 11:00 am or so. Yeah, so from 5:00 am all the way to 10:00 plus, it will be just learning, writing.

Journaling is also a big part of my routine. So I try to write once every morning and once at night. So in the morning, I will write down three things I’m grateful for. The reason for that is because humans, we are naturally wired to focus on problems because that is what helps us survive in the past. But in today’s society, in today’s time, that mechanisms kick into overdrive when there’s so much information, and the news is bombarding so many things at us. And it’s easy to go into overdrive and be depressed, stuff like that.

So, writing three things I’m grateful for just rewire my brain to focus on the optimistic aspect of things. And then I’ll write down three things I could be doing today to make my day go well, and so that’s how I start my day. And then from there, it’s reading, writing, and then I’ll hit the gym around afternoon time, because that’s why my productivity will take deep. And then in the afternoon, that’s where I schedule all my meetups, like this podcast is afternoon time right now. Yeah, and otherwise, I’ll just go back to working and writing.

My brain typically shut off in the evening or night time, I don’t think really well during that time. So that’s where I take a walk, bring a notepad with me, if there’s ideas, that’s where I’ll start writing down all my ideas. And then before I sleep, I’ll just write down to do list for tomorrow. And this habit is really copied by the Stephen Covey, the guy who wrote the Seven Habits of Highly Effective People, and that really help get my life in order and ensure that I’m productive and growing every day.

Kalani Scarrott (13:04): Yeah, you’re a machine. So in terms of reading, what do you like to read? Is it biographies, is it what type of newsletters, anything specific? Do you re-read much? I’d love to hear about your reading patterns and habits.

Thomas Chuah (13:16): Yes. So the way I go about reading, right, is if I find a good book, I get my next reading list from the appendix of that book. So like for example, the Joys of Compounding is really a great book. The author Gautam Baid, he really shared a lot about the investing concepts that he know. So when I chance upon a great book like this, I will go to the appendix and then that’s where I start to look for my next recommended book.

There are a few books that I would really recommend, especially for investors who are just starting out like Peter Lynch book is great. Joel Greenblatt is great. Gautam Baid is great. 100 Bagger by, I think it’s by Chris Mayer, if I remember his name correctly, yeah, his is also a great book. And a lot of times, right, if your priority is when it comes to is investing, these books they will also include the research papers that really shape their thinking. So I love reading all these white papers as well by Michael Mauboussin, if I’m pronouncing his name correctly, and Epoch Partners. These are really great sources of information for investors.

Then when it comes to growth philosophy, I usually like to follow folks like James Clear. And then there’s also Farnam Street, that’s also a great source of information. And because the quality of our mind is very much a function of the information we choose to consume, I’m always very cautious about what kind of information I allow. So when it comes to social media, I mute or unfollow very routinely. I always try and clear up my algorithm or my inbox, et cetera. I try to make sure that it is only high quality information that’s coming in.

Kalani Scarrott (15:10): Yeah, fair enough. And in terms of what you’ve learnt along the way since starting, what’s been the biggest lessons you’ve picked up writing wise or even just how your process is, I guess?

Thomas Chuah (15:22): I think writing wise, a good person to learn from would be David Parral. Not sure whether you’d come across him on Twitter. But one thing he mentioned struck up to me early on, which is really, we go to social media to seek the traffic flow, right. But it’s important to not just rely on social media like Twitter or Facebook, for example, or even YouTube, because we never know when the algorithm will change against us. So it’s important for us as writers to convert this traffic into subscribers, email subscribers. So that has been helpful when it comes to my starting out process.

Then other advices that I will usually give writers will be try to write extremely frequently when you’re starting out, because you’re trying to find your unique voice. And I find writing for yourself much more enjoyable, rather than writing for everyone because that’s where I learn the most. I only write things that’s helpful to my thinking. I try to compress them into ideas. And when I’m writing like investment theses, it really helps make sure I understand the concepts, otherwise I’ll go back to look at the annual report or talk to other investors to make sure I understand these concepts.

Investing wise, there are two things that really change for me over time. So when I first started out, right, I was really looking at dividend companies or deep value investing, because those are quantifiable. I wasn’t really into growth investing until maybe like four to five years back. So that was a big aha moment for me. If I started earlier, the results would have been even better. Because initially, when I was looking at, especially the dividend stocks company giving out a lot in dividends. They’re usually already big insights, and have already approached maturity, sometimes going downhill if you’re looking at the S-curve.

Yeah. And so I wasn’t very open minded to loss making companies, or companies that are super high PE. And that was really a mistake when it comes to the way I think about valuation. And I like the way Howard Marks put it, that there’s really not a difference between value investing and growth investing. What we are trying to do today is just buying something today that’s cheaper than tomorrow. We’re just trying to make that returns, and that really is the way to think about it.

It is only after I learned to focus on unit economics, and then learn about operating leverage, that’s where it really open my mind out to a different type of investing. And it took me like… So I started investing about 14 years ago, it took me many, many years before I arrived at this stage. And it always reminds me of a quote by Charlie Munger, “The human mind is a lot like the human egg.” Once an idea get incepted, it will automatically shut off to other ideas. And so I always try to keep an open mind. Like if an investor with a different investing style approach me, I try my best to listen with an open mind to see whether of my existing ideas that can be challenged.

Another idea that really change when it comes to investing is about options. So I always had the conception that options is something that’s super dangerous. But actually, when I went to learn how Warren Buffett use it, I thought he was super intelligent because the way he used it to buy Coca Cola in the past. So just a brief overview of option. Options, the pricing is based on volatility, interest rate duration, but mainly based on volatility.

So the way Warren Buffett uses it is, when he wishes to buy Coca Cola back then, he actually put options. Put options means if Coca Cola fall below a certain strike price, which is set by him, he will have to buy Coca Cola. And before we hit the expiration date, he actually collects the premium upfront, so it’s a lot like insurance, something which he likes. And with that premium, right, it lower down your purchase price when you account that into effect.

So I thought that’s just a really brilliant way of buying companies you already want. So rather than buying outright from the market, right, there are times where we could sell put options, collect the premium to offset our purchase price. So these are really the two biggest things that evolves since I started investing more than a decade ago.

Kalani Scarrott (20:23): Yeah, I love that you have an open mind because yeah, it’s very hard. I was the same as well, I was very much deep valley and I would just blow past any idea that wasn’t. But you mentioned that aha moment from deep valley to growth, what was that? Was there anything you read specifically or maybe someone who spoke to? What was that aha moment?

Thomas Chuah (20:40): Yeah. So the first one that made me question whether dividend stocks is the best is Terry Smith, right? Because he always talks about as investors, we shouldn’t be focusing on the dividend returns, we should be focusing on total shareholder returns, which is really a function of both your capital appreciation and the dividends we receive. And that just made a lot of sense to me. And the second thing that really change my mind is back in, I think 2017 or 2018, I saw a research paper that shows the intangible investments made by companies have actually way exceeded tangible investments.

And the cross point was in 2017, and since then, it has widened even more and more, and it just shows that a lot of these companies that’s capturing a lot of value nowadays, they are making intangible investing. And the old way of value investing may need some tweaks to its thinking, right. Because we used to be very focused on the tangible assets. But nowadays, when you look at the companies, a common one let’s say, Google or even Facebook, they don’t really have a lot of assets on their balance sheet, but yet they’re making a lot of money. And when we fall back to our more traditional metrics, especially for deep value investors, we love to look at maybe price to book.

The assumption is that these assets are generating income, but now there’s this group of company with very little assets, but they are generating even more income. But coming from a deep value investing background, I resisted against assigning a very high valuation for a company without that assets to back up. But that thinking has to change when I saw that. And the previous thinking was that without assets like these, what is their moat, but actually, a lot of these company has even stronger moat, like our network effects or very high switching costs. And so they’re able to capture their consumers in an even better way, and really deter against competition.

And the beauty about the newer breed of company nowadays is that they tend to have monopolistic or oligopolistic structure, instead of let’s say, restaurants, it is usually super competitive. The margins are low and all that. But when it comes to the Internet of platform, especially platform companies, they have a tendency to go towards a winner take all market. And this is where as shareholders, when you invest in companies like these, they’re able to generate a lot of returns for us as shareholders.

Kalani Scarrott (23:35): Yeah, and you don’t have a geographical focus or constraint do you, if I got that right? You’re pretty happy to invest anywhere?

Thomas Chuah (23:41): So the thing about being a Singaporean is that by default we have to go overseas because the market is just small here. Let’s say I invest in a company FMB here in Singapore, we only have a 5 million population. Just within a few years, it’s not going to grow anymore. And there’s this quote by Charlie Munger also which makes a lot of sense, like the rate at which we can compound our wealth is very much dependent on the return on capital and how much that company can grow. And so investing in Singapore companies is tough because we have to fish where the fishes are, and there’s just not a lot of fish. So I’m very comfortable with investing abroad; US, Australia, Hong Kong or even UK. Yeah, so these are typically the markets I look at.

Kalani Scarrott (24:36): Yeah, and maybe from then, what does your idea generation look like? Do you run screens? Is it just a function of reading and chat other people? What does that look like?

Thomas Chuah (24:44): Yes. So I enjoy reading, that’s where most of my ideas come about. Every time there’s a IPO or there’s a new company that come about, I generally don’t invest into IPO but I’m just naturally curious about what’s this company that coming online? And overtime, reading the earnings call, et cetera, it gives me a list of ideas or rather a watch list for me to dive deeper into. If they’re higher quality companies, that’s why I do a lot more research.

And then the other good source of idea generation is really coming from networking with other investors, because there’s only so much time we’ve have. And a lot of times, other investors, they come with different experiences, they may be able to see something that I’m not able to see. And so just by asking them a lot of questions, and a lot of times, these investors are very generous with sharing their ideas, especially like, I also share with then my ideas. So a lot of these ideas just keep coming in, and for me to work on and then decide whether I should initiate a investment, go into a deeper research, whether I should spend my time on them. Yeah.

Kalani Scarrott (26:01): Yeah. So you’ve mentioned about what maybe you look for and [inaudible 00:26:05] on the pauses, but to invert like Charlie Munger would say, is there any certain criteria or specific situations that you really avoid investing in? Is there anything you just refuse to touch? And maybe why?

Thomas Chuah (26:15): Yeah, so it’s not that we can’t make money in asset heavy companies, but generally, I try to avoid those. Then companies that don’t interest me, I avoid those also. And those that are too complicated, because there’s just so many companies we can look at, right? So I don’t look at pharmaceuticals or anything that’s too complicated.

I’ve been trying to look at these semicon industries, still working on this one. But it’s not as intuitive for me, as opposed to companies in the FMCG sector, or the SAS industry, or even e-commerce, those are really intuitive for me. But generally, when it comes to avoiding, I avoid asset heavy companies, because the way we grow our wealth is very determined by how fast this company can compound. And with asset heavy companies, a lot of the free cash flow would be lock up in inventory or in replacing the assets, for example. So even if they are showing profits, the free cash flow may not be coming out. And for us as investors, free cash flow is really what matters at the end of the day. They don’t have to show free cash flow today, but the question I always try to ask myself, would they be gushing with free cash flow in the future?

Kalani Scarrott (27:43): Yeah. So when you pull up the financial statements, when you’re looking at a company, is free cash flow the first thing you’re looking at? Just walk me through start to finish what you’re looking for? What gets you excited and down. Yeah.

Thomas Chuah (27:53): Yeah. So that’s a good question. So a lot of these internet companies, especially SAS company, they don’t have free cash flow at the moment, right, because they are just reinvesting so heavily. So the first question I always try to ask myself is whether they have a moat, because for them to be profitable for me as an investor, they must be able to sustain the competitive advantage, many years down the road. And then the second question I try and look up for is, whether their unit economics makes sense. The cash they’re spending out in terms of R&D and marketing today, are they able to bring those back. And that is really where the customer acquisition costs and the lifetime value analysis comes in.

If that matrix makes sense, then I’m actually alright with them not coming up with free cash flow or showing a net profit today. Because if the unit economics is positive, eventually it will show up. So when it comes to loss making companies, these are really the two factors I try to think about whether they have a very strong competitive advantage and whether their unit economics makes sense.

And a lot of times, this will tie back to the more qualitative aspect of our analysis, which is to analyze management. Whether they are driven is super important, because that is something you can’t train. Whether they’re ambitious or not. And when we look at the management team, we want to make sure they’re very upfront with us shareholders, and acquisitions actually makes sense. And we can do that by really delving into every single earnings call to listen to their tone, how they answer questions and stuff like that.

Kalani Scarrott (29:40): So how do you view founder led companies? And for example, do you prefer them? Is there a bias towards them against them? How do you view it?

Thomas Chuah (29:46): Yeah, so founder companies are definitely preferred, because they’re just more driven. But it becomes tricky when it comes to companies in Hong Kong, especially when they hand over their management position to their children, that’s where a lot of problem comes on. But when it comes to investing in the US, especially a SSS company, if it’s founder led and the founder has a large stake holding, that is always a plus. And then our goal onto Glassdoor and LinkedIn to really do the scuttlebutt to see what the employees are saying about the CEO. Whether they buy into his vision, because when it comes to going on earnings call or giving interviews, these CEOs are usually extremely charismatic. So we have to do the second level check to see what their employees are saying. And if those checks are good, then founder led is definitely a plus.

Kalani Scarrott (30:45): Yeah, so you mentioned doing the secondary level research like Glassdoor and stuff, do you have any other maybe obscure research methods that other people may not do? Is there anything you do in your research process that you think other people don’t maybe replicate and they could learn from?

Thomas Chuah (30:58): Yes. So frequently, I would actually talk to the employees of the companies. In fact, when I started writing online, my NLCs about these companies, the employees actually come to look for me and share with me more about their company. Otherwise, I’ll just go on LinkedIn to chat with the companies. Sometimes I will, not sure if I should be sharing this. Sometimes I will pose as a potential customer so that I can understand the product. And that’s where the salesperson will pitch to me. And then that is really a quick shortcut to understanding how their product work. And I was trying to ask questions to see whether this product, whether there’s high switching costs, et cetera.

Yeah, so and like what Peter Lynch do, usually you can ask the salesperson about the competitors. And if you know they have to choose a competitor product, which one would you choose? And that is usually a good indicator what is the next company you should be researching on? So I frequently go and speak to these salespeople, or sometimes if they’re willing to share what their working experiences is like, that’s where you get very real conversations beyond what is usually shared on the public by the management. Yeah.

Kalani Scarrott (32:19): Yeah, I love that. That’s so cool as well. Are people pretty receptive to that when you reach out? Do you know these people beforehand or is this total cold email reach out?

Thomas Chuah (32:28): Yeah. A lot of people will ignore you, but generally, there will be a few who would be very happy to share. Usually I don’t come across to them as an investor, I just come across as someone who’ll like to learn more about their company and what their job entails so that I can really consider whether maybe I want to be an employee, for example. So that’s how I approach it. And usually they’re quite willing to share on a 15 minute calls or something about what their job is like. And yeah, and that’s how a lot of this information, a lot of these answers will come in, which you usually will not get studying any reports or just listening to what management say.

Kalani Scarrott (33:18): Yeah, I love this research. Yeah, it’s great. You don’t have to mention the company names, but do you have any specific examples where this has come in handy? Do you have any moments where you’re like, “Ah, this is very useful or.”

Thomas Chuah (33:28): Okay, so I’m invested in Sea Limited, and so I write about Sea Limited a lot. I go on podcast to talk about Sea Limited a lot. Yeah. And so sometimes I have a lot of friends who are employed in Sea Limited as well. So this is where I get a better understanding about what the company’s strategies are. For example, if they’re going into FinTech, what are they planning to do, et cetera, so that I can better align these numbers to the stories, like what are the strategies the company really, really want to do? Of course, they don’t give me any insider information that is not supposed to be released, but it just help me piece the picture together in a better way.

And especially when the market is reacting extremely volatile, especially downwards volatility. Maybe they’re sayings company X, they are reinvesting so much is loss making. But when you’re able to understand why the company is losing money, because they’re reinvesting into extremely rapid growing sector, then as an investor, I’ll be more grounded in a sense because I understand what the company is trying to do and that will more likely very likely show up several years down the road. But Wall Street is usually very short sighted, so and when they can’t piece the picture together, that’s where as a retail investor or as someone who does a bit of scuttlebutt over, that’s where the edge comes in.

Kalani Scarrott (35:02): Yeah. And it’s great because here you’re piecing it all together. And even just like if you talk to employees, and they all hate working there no matter how good the business is [inaudible 00:35:10].

Thomas Chuah (35:11): Yeah.

Kalani Scarrott (35:11): And for Sea Limited, it’d be super handy because they’re so forward looking. So to get the employees perspectives on how things are going, that’s probably a huge edge that not many people are willing to do a bit.

Thomas Chuah (35:20): Right, exactly. But sometimes we have to discount what the employees say. We have to do our own judgment, because sometimes they just like to complain which I get that. They usually the chatty ones are the ones who like to complain, and so usually you have to talk to a few in order to have a more holistic view of what the company is trying to do.

Kalani Scarrott (35:42): I love that very specific advice, you got to watch out for management being over optimistic and overly chatty employees complaining too much. Before I get into my closing round of questions, I’d love just to hear, so with your content and Steady Compounding, what’s the plans going forward for that? And where do you see that going? And what do you hope for in it I guess?

Thomas Chuah (36:01): Yeah. Yeah. So my plan for Steady Compounding is really to keep growing my audience so that my work can reach out to more people, because I have been a beneficiary of many who have put out this information before me. For example, John Huber of Sabre Capital, or even what’s the other called Intrinsic Capital? Yeah, so a lot of these previous bloggers have put out so much in public so that I can benefit from it. And that is really what I’m trying to do to put out content out there so that others can benefit. And, of course, to grow my paying subscribers as well. Because I’m putting out a lot this research report out there which I think could really be beneficial to retail investors who are out there looking to invest in a lot of this, what I would call compounders. What Fin tweet will usually refer to as compounders companies, high quality companies that are able to compound at a very good clip for a long time.

Kalani Scarrott (37:06): Yeah. So to move into my closing round of questions, what do you think is the most undervalued life experience that university aged students don’t give weight to? What’s an underrated skill or an experience that you think they should have or that maybe you wish you had at the time?

Thomas Chuah (37:20): I think that there are two things. One is to network as much as you can, because people are just very receptive and willing to mentor young people. So try and reach out, don’t be afraid of rejection. Reach out to people, and they will share a lot of insights, which you may not otherwise get. And then the second thing is really to start publishing content instead of just consuming content. Because the best way to network is actually to be interesting. And by putting your ideas out there, you will attract a group of people who are willing to share their ideas with you as well. And that’s where you really start to grow and build up your brand equity.

Kalani Scarrott (38:01): Yeah, yeah. So we’ve spoken a little bit about the investment books that you’ve read in light, but has there been any other books that have been influential in shaping your worldview?

Thomas Chuah (38:09): I think the Poor Charlie’s Almanac has been one such book. And of course, from there, that’s how I know Ben Franklin, Ben Franklin’s biography. So that has been very instrumental as well. Then also James Clear Atomic Habits. I think that’s something everybody should check out because there’s just so many actionable tips inside that book that can just improve your life by a lot.

Kalani Scarrott (38:35): Yeah. And so yeah, where do you think maybe the biggest opportunities lie for today, for youth today? If you were ain’t today, where would you be spending your time and how do you think?

Thomas Chuah (38:45): I think I’ll spend a lot of time pushing content out rather than just focusing on doing internships, because I think, especially in Singapore, when you look at what your peers are doing, you have a tendency to feel stress and follow suit. And a lot of peers will be fighting for internships in investment banks or the tech companies. Those are good, but also do remember to dedicate a portion of time to publishing things online, because that’s where really the limitless leverage comes in. You’re able to push out your ideas at no cost to a limitless amount of people, and this is just a great time to be in today. Not just on Twitter or Reddit or Facebook, but I think recently there’s also the rise of Discord where a lot of people are just exchanging ideas over the platform.

Kalani Scarrott (39:42): Yeah, Discord, especially. I’m really trying to get into get my head around and get it going. You know what I mean? It’s just so much opportunity there.

Thomas Chuah (39:48): Yeah mate.

Kalani Scarrott (39:49): Thomas, I’ve had a blast. Anything else you want to plug or where can people find you?

Thomas Chuah (39:53): Yeah, so people can find me at steadycompounding.com. And also you can find me on Twitter @steadycompound.

Kalani Scarrott (40:01): Perfect. Thank you so much.Thomas Chuah (40:02): Awesome. Glad to be here.