I was listening to the financial news the other morning, and the commentators were all focused on Google. Since the start of the year, the stock had been all over the place, with frequent gaps and high volatility. The steady, organized climb it had enjoyed for years was starting to look more like the chaotic distribution phase you see after a bubble bursts.
It’s Friday morning, just before 7:30 A.M. EST, and I’m already watching the market. My main focus is a short position on the EUR/USD I’ve been managing since Wednesday. A big economic report, the Trade Balance number, is due at 8:30 A.M., which means things could get volatile. I’m preparing to use tight 60-second stops on any open trades to manage risk.
Welcome to my trading room. I’m kicking off this trading diary to document my process, and I’m excited to get started. Every day in the market offers its own unique lessons, and my goal here is to explain the thinking behind my decisions to enter or exit a trade.
People often ask where I find my investment ideas, assuming they’re some rare commodity. The truth is actually the opposite. After more than twenty-five years of hunting for good investments, my challenge isn’t finding ideas—it’s sorting through them. But I remember starting out and asking the same question you might be asking now: Where do I even begin?
I’ve spent a lot of time making the case for technology stocks, so it’s a bit ironic that my whole investment journey started with HEICO, a company that’s anything but digital. It was HEICO’s combination of a low-cost advantage and a tiny slice of a massive market that really opened my eyes. It taught me to hunt for businesses with both a competitive moat and the potential for exponential growth. As it turned out, when I applied this lens to the market in the early 2000s, about 90% of the companies that fit were in tech. But that other 10% was fascinating.
When you first start analyzing companies, it's easy to get bogged down in the details and feel a need for absolute certainty. To break free from that mindset, it helps to look at how Warren Buffett handles uncertainty—he’s a master at it. He often repeats the idea that it’s better to be “approximately right than precisely wrong.” This is a core lesson for anyone interested in .
If you look at Alphabet (Google's parent company) and Amazon, you might assume Alphabet is the better business. It's mostly software-based and doesn't require a lot of physical assets to run—a model of a modern, efficient company. Amazon, on the other hand, has old-school bones. It has poured billions into building out a massive physical network for its e-commerce business and has done the same for its cloud computing arm, Amazon Web Services.
If you're interested in , you eventually realize that a company's long-term performance is driven by its quality. To succeed, you have to get good at spotting what makes one business truly superior to another. This skill really comes down to one thing: identifying a company's competitive advantage.
When it comes to , price is the variable that can single-handedly veto any deal. You can love a business and admire its management, but if the price isn’t right, you have to walk away. This principle of triangulating between price and value—asking, “What am I getting for what I’m paying?”—is the backbone of any sound investment strategy. At a certain point, even the most incredible business becomes a bad investment if it’s overpriced.