Good investments can be summarized in one paragraph (or the front of one page). Computers, fancy models and algorithms are part of the problem, not the solution. Consider whether you could explain the investment to a 10 year old.
Don’t try to thread a needle between price and value. Find a gap you can drive a truck through. That’s the Margin of Safety (and margin for error in your analysis).
Filter out the noise. The amount of available information has increased exponentially. Most of it is useless. Filter it, and what’s left is common sense.
“Not everything that counts can be counted and not everything that can be counted counts.” - Unknown
Define a circle of competence. “It’s far more important to be clear about the edges of the circle (where your circle ends) than increasing the size of the circle.” – Warren Buffett
Think independently. “You are neither right nor wrong because people agree or disagree with you. You will be right if your facts and reasoning are correct.” - Ben Graham
Be contrarian and patient. In order to be up 100% over the long term you have to be willing to be down 20% (or even more in volatile times).
Value investors benefit from declining securities prices (much like regular buyers of food benefit from declining food prices). So, when markets decline significantly – as they do from time to time for all sorts of reasons – don’t panic. It’s good news for buyers of deeply discounted securities. – Warren Buffett said something like that.
Beta doesn’t measure risk. “Assets can fluctuate greatly in price and not be risky as long as they are reasonably certain to deliver increased purchasing power over their holding period. Non-fluctuating assets can be laden with risk.” - Warren Buffett
Be humble. Do the analysis, have a strong opinion, but always be open to the idea you might be wrong.
Seek the Truth. Be brutally honest with yourself and demand that others do the same with you (and you with them.) It is a great service to everyone involved.
Don’t be greedy (use leverage sparingly, if at all). “Markets can remain irrational longer than you can remain solvent.” - John Keynes
“… and markets can remain irrational longer than your equity investors are willing to hold off selling/withdrawing at exactly the wrong time.”
“To finish first, you must first finish.” – Indianapolis 500 Winner
Almost every financial debacle has been the result of borrowed money.
