Part 1: 10x Investors And Their 10x Factors

Many investors start investing with little to zero knowledge of what it takes to be a successful investor.

As the money involved can be in the hundreds of thousands, even millions of dollars, this is a dangerous position to be in.

It’s not their fault, because there isn’t a simple diagram that shows them what factors make up a good investor.

And in particular, what 10x Factors make up a 10x investor.

Until now.

There are only 2 aspects to this:

1. Your 10x Investor Mindset

2. Your 10x Investor Strategies

There are five 10x Factors for mindset, and another five 10x Factors for strategies.

These ten 10x Factors make you more or less a complete investor with the highest chances of 10x’ing your investments.

Let’s get into them right now.

10x Factor No.1: Knowledge

Markets

10x investors dive deep into the nuances of the industry or sector they are investing in.

You will need to identify who the key players are — from major corporations to influential market movers.

You will also need to understand what factors really move the market.

Those factors include supply and demand, technological advancements, regulatory environments, consumer behaviour patterns and more.

Take the cryptocurrency world as an example.

It's not enough to know that bitcoin is the largest cryptocurrency by market cap.

You need to understand bitcoin’s dominance and how it affects the price movements of altcoins (alternative cryptocurrencies).

Regulatory news, like government stances on crypto taxation or bans, can have immediate and significant impacts on market prices.

When you know these factors, you're better positioned to anticipate significant market movements.

External factors also play a significant role — including world politics, who becomes the President of the US, economic indicators, and social trends.

If you invest in commodities, geopolitical tensions in oil-producing regions could affect oil prices, impacting your investments.

In the stock market, economic indicators like unemployment rates and GDP growth can signal potential market upswings or downturns.

For investors focusing on renewable energy stocks, a new government policy promoting clean energy initiatives, or international agreements like the Paris Climate Accord, can lead to increased investments in this sector.

Mastering your market also involves understanding historical trends and patterns.

Markets often move in cycles, and recognising these cycles can give you a strategic advantage.

For example, the real estate market typically follows a cycle of expansion, peak, contraction, and trough.

By understanding where the market currently sits within this cycle, you can make more informed decisions about when to buy or sell.

In essence, mastering your market means becoming an expert in the field, allowing you to make proactive, rather than reactive, investment decisions.

It enables you to connect the dots between seemingly unrelated events and the market's performance, giving you the foresight to act before others do.

Sectors

Specialisation is a powerful tool for the 10x investor.

By focusing on specific sectors, you can develop a level of expertise that generalist investors may lack.

This deep knowledge enables you to spot trends, opportunities, and risks that others might overlook.

In the real estate sector, understanding local market dynamics, zoning laws, and development plans can give you insights into property values that others not in that local market (even though they may be in the real estate market generally) don't see.

If you are aware of an upcoming infrastructure project, such as a new subway line or highway, you can anticipate which areas are likely to appreciate in value.

In addition, knowing the phases of property cycles like expansion, hyper-supply, recession and recovery allows you to time your investments more strategically, buying when prices are low and selling when they're high.

In the biotech sector, staying abreast of scientific advancements, clinical trial results, and regulatory approvals is crucial.

Biotech companies often experience significant stock price movements based on the success or failure of a single drug or therapy.

For example, if you have a deep understanding of gene therapy and know that a company is on the verge of a breakthrough that addresses a major unmet medical need, you can invest before the market fully prices in this potential.

Warren Buffett is a prime example of the power of specialisation.

He famously invests only in businesses he understands thoroughly.

This approach has led him to avoid the tech bubble of the late 1990s and invest heavily in sectors like insurance, consumer goods, and banking, where he has considerable expertise.

His deep understanding of these industries allows him to assess the intrinsic value of companies accurately, leading to more informed investment decisions.

That said, not specialising in the right sector can also mean huge missed opportunities.

For example, some years ago Buffett had famously announced to anyone who would listen that bitcoin is “rat poison squared”.

He said this either: 

1) Without any understanding at all of what its intrinsic value is (Buffett is famously not tech-savvy),

OR

2) Because the crypto industry very much threatens the banking industry (he just LOVES the business of banks).

As an investor, I go deep into the technology market generally.

In this market, I specialise in the crypto and AI sectors.

So I can very well tell you that, IMHO, the second reason is why he said what he said.

This gives specialists like me a huge advantage over the generalists, and even the specialists in other sectors.

This specialisation makes us aware that some market movers or influencers make very loud negative public statements about certain sectors they are not specialists in, to protect their own interests, not yours.

It would take time for things to happen to prove them wrong.

But by then these market movers or influencers had delayed things in their favour for a few more years that would benefit them, but to the huge detriment of investors who believed them.

Like:

1) Bitcoin now having appreciated more than 600 million percent (not a typo — that’s over six hundred million percent) since it first appeared in our lives in 2009. It was worth less than $0.01 each then. It’s now worth more than $60,000.

2) Nobody could stop the crypto market growing to between $2.2 - $3 TRILLION from zero.

3) The SEC approving multiple Bitcoin ETF licenses this year alone. This is like an implied acknowledgment by the SEC that it’s a legitimate asset.

So it isn’t surprising that you don’t hear much from Buffett and others like him about bitcoin these days.

Thus if you had followed non-crypto specialist Buffett’s advice not to invest in bitcoin years ago, you would have lost a huge opportunity to profit handsomely from bitcoin’s appreciation — which is the biggest appreciation of an asset in history in such a short period of time. 

And you would be able to make more money than Buffett and in a FRACTION of the time it took him to profit from his own investments at the beginning of his investing journey that focused on traditional assets.

Application

Knowledge without action is like your EV (electric vehicle) without a full charge.

You won't travel very far with it.

Applying what you know is the critical step that turns understanding into profit.

Perhaps you have observed that altcoins often experience significant price increases when bitcoin's price rallies.

Or perhaps they rise only when bitcoin’s price stabilises.

This knowledge is valuable, but it only benefits you if you act on it.

By reallocating some of your investment from bitcoin to promising altcoins during these phases, you can potentially achieve higher returns.

This requires not only understanding market patterns but also having the conviction to act on that understanding.

In the stock market, macroeconomic factors like interest rate changes can have profound effects on different sectors.

If you know that central banks are likely to raise interest rates to combat inflation, you might anticipate that growth stocks — companies that are valued based on future earnings — could decline because higher interest rates increase the cost of borrowing (resulting in these growth companies not borrowing more to grow) and reduce disposable income (their customers may not be spending as much which will affect their revenues).

Armed with this knowledge, you might shift your portfolio toward value stocks or sectors like utilities and consumer staples, which are generally more resilient during such periods.

Applying what you know also involves discipline and timing.

This could mean waiting patiently for the right market conditions or being prepared to act quickly when a sudden opportunity presents itself.

For example, during a market downturn, fear often leads to widespread selling.

An informed investor might recognise this as a chance to buy high-quality assets at discounted prices.

Continuous Learning

Markets are dynamic.

They are influenced by many factors that range from technological innovations to geopolitical shifts.

To stay ahead, you must be committed to lifelong learning, constantly updating your knowledge base to adapt to new trends and opportunities.

Take the rise of Artificial Intelligence (AI) as an example.

A decade ago, AI was largely confined to academic circles and specialised industries.

However, investors who took the time to immerse themselves into emerging technology trends recognised its transformative potential early on.

Companies like Nvidia, which produces GPUs essential for AI computing, became prime investment opportunities.

Early adopters who invested in such companies before AI became mainstream have seen substantial returns, often outpacing the broader market by significant margins.

Similarly, the cryptocurrency space is a hotbed of innovation.

Concepts like Decentralised Finance (DeFi) were virtually unheard of a few years ago.

DeFi aims to recreate traditional financial systems — like lending, borrowing, and trading — on decentralised platforms using blockchain technology.

10x investors who educated themselves on DeFi protocols like Uniswap or Aave early on had the opportunity to participate in explosive growth phases, sometimes yielding returns unheard of in traditional markets.

They will also realise why Buffett is so against the cryptocurrency industry as a whole, because DeFi applications, if they catch on with the public, will significantly lower the costs of borrowing and transferring money globally.

This will in turn greatly affect banks’ main revenue streams. And the banking sector is where Buffett and his company are heavily invested in.

Here’s how you continuously learn about the sector you are interested in:

1. Subscribe to industry-specific newsletters.
   They can provide curated insights and analyses. The 10x Factors newsletter (that you’re reading now) will give you some of those insights about entrepreneurship and investing in general, and online entrepreneurship and the AI and crypto markets specifically, respectively.
   

2. Follow thought leaders and influencers on social media.
   This will get you access to real-time updates and diverse perspectives.
   

3. Attend webinars, conferences, and workshops to expand your knowledge.
   Incidentally, I run a Web3 Club that gets updates on the most important developments and my personal experiences with AI, cryptocurrencies, DeFi, and more. Let me know if you want to join it to understand more about these areas so that you can future-proof yourself and your family.

Note that with the abundance of information available, discerning credible sources from unreliable ones is crucial.

Analysing data, questioning assumptions, and seeking out multiple viewpoints can help you form a well-rounded understanding of any topic.

10x Factor No.2: Vision

Being a visionary is the second 10x Factor that sets 10x investors apart from the rest.

10x investors possess the unique ability to look beyond the present and anticipate future trends, technologies, and market shifts.

They proactively position themselves to capitalise on what lies ahead, instead of just reacting to what’s current.

This forward-thinking approach enables them to identify opportunities that others might overlook, often leading to exponential returns on their investments.

Visionary 10x investors are not confined by conventional wisdom or the status quo.

Foresight

Foresight is the ability to anticipate future trends and understand the long-term effects of current developments.

10x investors with foresight recognise that by the time news become mainstream, the opportunity to capitalise on it may have already passed.

They focus on where the market or industry is headed, rather than where it currently stands.

For example, until about 15 years ago, the automotive industry was dominated by internal combustion engines.

The idea of electric cars becoming mainstream then seemed far-fetched to many.

Traditional automakers were heavily invested in gasoline-powered vehicles, with little interest in changing their established models.

However, Tesla foresaw a future where a cleaner mode of transportation would be essential.

Investors who recognised this shift early and invested in Tesla were able to reap significant rewards as the company grew from a niche player to a market leader.

Foresight also involves understanding broader societal and technological trends.

For example, the increasing focus on sustainability and environmental responsibility is affecting consumer behaviour and regulatory policies.

10x investors who anticipate stricter environmental regulations might invest in renewable energy companies or technologies that reduce carbon emissions, thus positioning themselves ahead of a significant market shift.

In essence, foresight allows investors to anticipate where value will be created in the future and to act on that insight before the majority of the market catches on.

The key to spotting overlooked opportunities is to look beyond current market sentiments and focus on underlying potentials.

This involves the following:

1. Researching emerging technologies
   

2. Understanding evolving consumer behaviours
   

3. Being willing to invest in unproven but promising ventures.

Visionary 10x investors are not deterred by scepticism from others.

Instead, they trust their analysis and are willing to back their convictions.

Think Big

Thinking big is an essential trait of visionary 10x investors.

It involves setting aside limitations and considering the transformative impact that an idea or company could have on the world.

10x investors are not satisfied with only incremental gains.

They seek out opportunities that can deliver exponential growth by fundamentally changing industries or creating new ones.

When Elon Musk founded SpaceX, the notion of a private enterprise handling space exploration and developing reusable rockets seemed implausible to many.

The space industry had long been dominated by government agencies with massive budgets.

However, Musk envisioned a future where space travel was more accessible and affordable, ultimately aiming for the colonisation of Mars.

Investors who shared this grand vision and were willing to support SpaceX in its early days have been rewarded as the company achieved groundbreaking successes, such as landing reusable rockets and securing contracts with NASA and other organisations.

Today, SpaceX is valued at billions of dollars and is a leader in the aerospace industry.

Another example is the investment in companies working on groundbreaking technologies like AI and biotechnology.

10x investors who think big might back startups aiming to cure diseases through gene editing or develop AI systems that can transform industries ranging from healthcare to transportation.

While these ventures carry significant risk, the potential rewards are substantial, both in terms of financial returns and societal impact.

Thinking big also means being willing to challenge conventional wisdom and to invest in ideas that may seem ahead of their time.

10x investors understand that today's niche markets can become tomorrow's dominant industries.

This requires not only imagination but also a deep analysis to distinguish between mere hype and genuine potential.

Scalability

Scalability is crucial for visionary 10x investors who aim for exponential growth rather than just steady returns.

These investors seek opportunities where a business or technology can expand rapidly without a significant increase in costs, allowing profits to multiply over time.

Take the early Internet as an example.

While many investors were satisfied with modest gains from established companies, those with a vision for scalability invested in startups like Amazon, Google, and Facebook.

These companies had business models that could easily scale up, reaching millions of users with relatively low incremental costs.

Amazon transformed retail by offering a vast selection of products online, Google revolutionised how we access information, and Facebook changed the way people connect globally.

Their ability to scale quickly turned them into dominant players in the digital economy.

In biotechnology, scalability is evident in advancements like CRISPR gene-editing technology.

CRISPR has the potential to revolutionise medicine by providing precise, efficient, and cost-effective ways to edit genes.

This technology can be applied to a wide range of genetic diseases, making its impact scalable across the entire field of medicine.

As a visionary 10x investor, focusing on scalability means identifying and investing in innovations that can create significant shifts in industries.

By doing so, you position yourself to benefit from the rapid expansion and growth that these scalable technologies or business models can achieve.

10x Factor No.3: Opportunistic

Being opportunistic is the third 10x Factor of 10x investors.

Opportunistic investors are always on the lookout for situations where they can capitalise on mispricings or emerging trends before others do.

They possess a keen sense of timing and are ready to act swiftly when opportunities present themselves.

Spotting Undervalued Assets

Spotting undervalued assets is fundamental for opportunistic investors.

Markets are never 100% efficient.

Assets can misprice due to fear, uncertainty, or lack of information.

Opportunistic 10x investors excel at identifying these mispricings and investing before the market corrects itself.

For example, after the dot-com bubble burst in the early 2000s, technology stocks were heavily sold off.

Companies like Amazon saw their stock prices plummet despite having solid business models and growth potential.

Investors who recognised that Amazon was fundamentally strong purchased shares at significantly reduced prices.

As the internet became integral to daily life, these investors benefited greatly from Amazon's subsequent growth.

Entering New Markets

Entering new markets can be daunting due to the uncertainties involved, but it also offers substantial growth potential.

Opportunistic 10x investors are willing to venture into uncharted territories to capitalise on emerging trends before they become mainstream.

For instance, when Netflix introduced its streaming service, it was entering a new market that many traditional media companies overlooked.

While competitors focused on physical DVD rentals, Netflix anticipated the shift towards on-demand digital content.

Early investors who supported Netflix's vision benefited as the company grew to dominate the streaming industry.

Similarly, early investors in the legal cannabis industry recognised the potential for significant growth despite regulatory hurdles.

As legalisation expanded, these investors reaped the rewards of being early entrants in a burgeoning market.

Good Timing

Good timing is a crucial skill for opportunistic investors.

Nobody can predict the exact market highs or lows and when they will occur, of course.

But 10x investors can recognise when assets are overvalued or undervalued and making the right decisions accordingly.

When COVID-19 first struck, markets plummeted, and many panicked.

But investors who saw this as an opportunity, buying stocks at record lows, were handsomely rewarded as markets recovered quickly.

For example, those who bought into travel or hospitality stocks when the world shut down saw impressive gains as businesses reopened (as they would eventually need to).

Timing is also crucial in commodities markets, such as gold.

Gold prices often spike during periods of economic uncertainty or high inflation.

Smart investors buy gold when inflation fears are rising and sell when those fears subside, locking in profits before prices stabilise.

Finally, cryptocurrency markets are another prime example.

With extreme volatility, buying during price dips and selling at peaks can turn modest investments into massive gains. 

For example, those who bought bitcoin during its dips and held on before its meteoric rise to new highs over and over again saw their investments grow exponentially.

Liquidity

Liquidity is a powerful tool for 10x investors because it allows them to move swiftly when the right opportunities present themselves.

For this reason, 10x investors will never put all their money in illiquid assets such as real estate or long-term bonds.

The ability to access cash quickly means they can take advantage of sudden market shifts, changes in sentiment, or emerging trends that others might miss due to a lack of available capital.

One of the key reasons liquidity is so crucial is the speed at which markets can change.

In today’s environment, market inefficiencies can open and close in a matter of hours, if not minutes.

For 10x investors, maintaining liquidity ensures they are in a position to capitalise on these fleeting moments.

They don’t have to wait for lengthy asset sales or refinancing to gather the capital needed for a move. Instead, they can strike when the iron is hot, entering and exiting positions with precision.

Liquidity also provides the flexibility to diversify and manage risk more effectively.

10x investors with liquid assets can easily shift their focus between different sectors, asset classes, or geographical markets as conditions evolve.

For example, if one sector becomes overheated, they can quickly redirect their capital to more undervalued areas without the constraints of having their money locked up in long-term investments.

This ability to adjust their portfolio based on real-time data is a key advantage.

Moreover, liquidity offers peace of mind.

10x investors know that if a better opportunity arises tomorrow, they won’t miss out because their funds are tied up.

They can afford to be patient, waiting for the right deal rather than being forced to hold or sell at the wrong time simply because they need cash.

This readiness to act instantly allows them to maintain a strategic edge in a competitive market.

Finally, liquidity enables opportunistic 10x investors to leverage downturns or crises to their advantage.

During the 2008 Subprime Crisis, a friend of mine profited handsomely as the value of homes in certain prime locations were down by between 20% - 50% or higher.

Imagine a house that was valued at $500,000 — going for $250,000!

He quickly formed a group of investors to quickly get all the cash they needed, to buy up as many homes as they could. They ended up with more than a hundred units in those prime locations during this time.

When I met him in 2014, he and his group were already multi-millionaires many times over.

Without liquidity, these golden opportunities pass by, leaving illiquid investors on the sidelines.

=======

In Part 2 I will reveal the next two 10x Factors that make up a 10x Investor under the Mindset category.

See you then!

Cheers

P.S. Do forward this issue to the people you care about!