Thomas Chua – Have a Proper Sell Thesis When Investing

<p><strong>BIO:</strong> Thomas Chua is the founder of SteadyCompounding.com, where he writes about business breakdowns, investment concepts, and timeless lessons from super investors.</p><p><strong>STORY:</strong> Thomas invested in a company that had a gaming and e-commerce business. The gaming business was his main attraction, but over time, it started faltering. Unfortunately, Thomas held on until the stock went too low.</p><p><strong>LEARNING:</strong> Have a proper sell thesis when it comes to investing, especially for smaller companies. Always write down why you should buy certain companies and what will cause you to sell them. When investing in small to mid-companies, ensure you’re adequately diversified.</p><p>&nbsp;</p><blockquote class="ql-align-center"><strong>“Start writing down what would cause you to sell the company to assess the risks and also to prepare yourself for the future.”</strong></blockquote><blockquote class="ql-align-center">Thomas Chua</blockquote><p>&nbsp;</p><h2>Guest profile</h2><p><a href="https://www.linkedin.com/in/chuathomas/" rel="noopener noreferrer" target="_blank"><strong>Thomas Chua</strong></a> is the founder of <a href="https://steadycompounding.com" rel="noopener noreferrer" target="_blank">SteadyCompounding.com</a>, where he writes about business breakdowns, investment concepts, and timeless lessons from super investors.</p><p><a href="https://steadycompounding.com" rel="noopener noreferrer" target="_blank">Steady Compounding</a> provides investing insights and business breakdowns every week to thousands of readers. You can sign up here for free.</p><h2>Worst investment ever</h2><p>Thomas started initiating a position in a company back in 2019. The company, Sea Limited, had two business arms, gaming and E-commerce. When Thomas first bought a position in this company, its market cap was about $14 billion. The gaming business, Garena, had a revenue figure of about 1.1 billion, and its operating income was 530 million, so the operating margins were high at about 50%. The