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Interview: How Koki Started a Million Dollar Investment Firm in High School

05 FEB 2021

Running a successful investment firm isn’t only for finance pros with established careers. Crimson student, Koki Mashita, is the co-founder of Lallic Partners and recently shared his journey in investing on the Top of the Class podcast.

Koki’s business ventures began when he was only 12, and quickly evolved when he started investing in Bitcoin as a casual hobby in high school. He never would have guessed that by now, he would be managing more than a million dollars in investments with a group of other teenagers!

Below is an abbreviated transcript of the Top of the Class interview between Koki and podcast co-host, Alex Cork. Some quotes are edited to remove vocal filler. Click here to download the full episode.

Alex

How old were you when you actually started investing? And what were you investing in?

Koki

I bought some Bitcoin — that was my first investment. And it was totally just a gamble. Like, I researched 30 minutes about Bitcoin. And now I'm making money off like $300 worth of Bitcoin. But that's what got me started. I was checking my phone every single minute outside of class, and sometimes even in class, just looking at Bitcoin prices.

At that time, I was in Singapore; but when I moved to California, my friends were also interested in investing. So at the start, it was a lot of guessing because we weren't motivated to do a lot of research. So we kind of guessed, and we actually got lucky! But that actually drove us to do more work, so we started actually researching what investing is and we started doing our due diligence.

Alex

Yeah, I love the start with Bitcoin. I know that there have been some questions that you've been getting from other students like, how do you start when you don't have much capital? You only started with, as you said, like $300 bucks. Is that what you invested in Bitcoin at the very start?

Koki

When I was around 12, I started this company called Co-Lab in Singapore. We were buying used tech, like computers — I actually bought 10 used MacBook Airs from school because they were kind of like giving them away. So I collected them, I cleaned them, I posted them on the internet, and then I would get buyers. So I had some money off that.

From there, of course, with $300 in Bitcoin — even if it doubles — it's still $600. In investing, you need quite a lot of money to make substantial profits, so to do that I had some family help. My dad gave me $1,000, which meant I had to, like, prove myself because really, I was just guessing. So he loaned me the $1,000, and we made this contract, which was really important: of the profit I make, I take 60% and my dad takes 40%. That way, he would have incentive to invest more when I make money, which is actually really great. I like it better than just taking all the profit, because I would just feel bad for my dad.

Alex

So you've got a kind of early stage investment company in a way with your dad, and you're taking the fees — in this case, your fees are 60% which is high but it's a great deal. So when you're researching a stock, or when you're researching an investment, what are you looking for?

Koki

When I do research I look at companies that are written about on Motley Fool and a lot of the news articles on MarketWatch. For example, I found Beyond Meat and was so intrigued that I bought its stocks in IPO (Initial Public Offering). So I looked at all the financials to see their assets and how much cash they have, and how many liabilities they have. Then I actually ordered Beyond Meat to my house and ate it to see if it's actually edible and when I ate it, it was actually really good! So I was like, ‘Oh, this can work.’

For me, my kind of expertise was knowing what Gen Z is interested in. And so Beyond Meat is actually quite interesting, because a lot of my friends I saw were going vegetarian. And so I kind of bought into it with that idea and a lot of research, of course.

Alex

You bought it for around $65. But that’s at IPO, right?

Koki

Yes — at $70. And then I sold it at $220. And then I bought back in at $120 a week ago and now it's gone up!

Alex

It's gone up 17% just in the last day! Did you know that?

Koki

Yeah. I knew that.

Alex

So you have at least tripled your money or in some cases, four-exed your money when you sold it at $220! Stock investing is a pretty legit part-time job once you get a handle on it and you know exactly what you're doing. Do you feel like what you're doing now is helping you understand what you want to do after school as well?

Koki

Going into investing, I kind of thought of it as a skill that I would use throughout my life because I think no matter what job you have, you have to keep track of your money. But the thing about stocks is they actually build your character in terms of patience, and being able to manage stressful times, which is really important. Because even if the stock goes down, if I believe in that stock, I have to wait a year or two years for it to go up. And so it’s really taught me about patience.

Alex

What skills do you need to be a good stock investor? You mentioned patience but it’s more of a characteristic, or a quality rather, than a skill. When you're looking at stock investing from a skills perspective, which ones do you think would be advantageous for students?

Koki

Actually at my boarding school, everyone's good at maths and I'm on the not-so-good side! But being able to look at numbers is really important and knowing what company does best in the current environment is really important. Being able to look at like 200 pages of research, and then dissect what's important off that really quickly is important. For example, when I research a stock, I look at 10Ks and earnings and stuff — it's quite long. So being able to speed through it, and knowing the important parts and also understanding the market is really important.

Alex

So when you're going through those reports, how long did it take you to get good at knowing what to look for? And did you do any learning or financial courses and those kinds of things? Were those the kinds of things that helped you to understand what to look for? Or was it YouTube videos, or just experience or a combination of all of them?

Koki

It sounds very unprofessional, but YouTube is actually really great. YouTube taught me how to invest, how to look at companies, and how to read 10K reports. When I first started, it took me like five hours just to read one — but when you just keep reading and reading and reading the same thing all over, because there's a fixed format of 10Ks, you get used to it.

Alex

YouTube channel recommendations — what's your favorite one?

Koki

Learn to Invest is a great value investor. He focuses on margin of safety, which is kind of like comparing the actual value of a company. Like let's say Target is worth $10 per share, but it's actually trading at $5, then there's that 50% safety margin.

Alex

And what's your favorite metric for predicting a company's success?

Koki

For the long term, I wouldn't look at valuations too much; I would look at the potential of that business. To bring up Beyond Meat again, it has a lot of potential because tastes can improve, and more people might go vegetarian as the world becomes more fragile, so people will be more concerned. So I look at the 10- or 20-year prospects, because the stock market always tries to predict the future. So even if you predict for 10 or 20 years of growth, your returns might come in two years.

Alex

This is something that you've probably been able to apply to your organization Lallic Partners. It’s one thing to be investing your own money, but it’s a completely different thing to be investing other people's money. So talk me through the initial founding of Lallic Partners and how you started getting investors to invest in high school students?

Koki

When we started off just as students, we were at like, $5,000. And then in March of 2020, when we first formed the company, we were like, $50,000.

Alex

Where's this money coming from?

Koki

Mostly from our investments. And so from there, we formed our website and we started finding the clients. Right now we're at about $1.05 million — and what we did to get there was getting a pitch done, and getting a booklet done. To do those things, we had to register as an LLC (Limited Liability Company) and get a lawyer, which was pretty costly, but to make sure everything was legal because the last thing that clients want is to be part of an illegal organization.

Once we did all that, we were just focused on performance — nothing else. Because for us, we need to build credibility. We had like, zero or negative credibility, because we're young! But the unique part for us actually is when adults invest in supporting the youth; so when we're investing, we say that when you invest in us, you help us grow as investors and build our future.

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At just 16, like many other remarkable Crimson Students, Koki has already accomplished more than most! His authentic interest in finance and investing has helped him build an impressive extracurricular and leadership profile to strengthen the university applications he’ll be submitting to top business schools in just a few years.

Do you aspire to follow in his footsteps? To learn more about how Crimson can help set you on the path to success, click the link below to schedule a free one hour consultation with an Academic Advisor.

Alex is the co-host of the Top of the Class Podcast

Written by

Alex C.

Alex Cork manages the Top of the Class podcast and has worked in the education sector for 10 years. He has interviewed more than 300 students and has a genuine curiosity in student achievement whether this be in sport, music, extracurriculars, academics, business or activism.