“Investing successfully is really hard.” (Tadas Viskanta).
“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” (Mark Twain).
Manage risk first.
In the shorter-term, markets are voting machines; in the longer-term, they are weighing machines.
“Markets can remain irrational longer than you can remain solvent.” (John Maynard Keynes).
We like to think we see things as they really are, but we actually see things as we really are.
Information is cheap; meaning is expensive.
There is always someone on the other side of a trade and that someone is often smarter and more well-informed than you are.
Investing is both probabilistic and mean-reverting.
Cut your losses; let your winners run.
“Investment success accrues not so much to the brilliant as to the disciplined.” (William J. Bernstein).
When you’ve won, stop playing.
Diversification is the only free lunch in the markets.
Data is more reliable than your gut.
“The big money is not in the buying or the selling, but in the sitting.” (Jesse Livermore).
Various market approaches work…until they don’t.
Value process over outcome.
“We must base our asset allocation not on the probabilities of choosing the right allocation but on the consequences of choosing the wrong allocation.” (Jack Bogle).
It probably isn’t different this time.
Fight the current war, not the last one.
Make sure your facts are right and your data is good.
“The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” (Franklin Templeton).
Being exceptional requires doing things differently.
You can be and often are wrong.
Plan (and have contingency plans).
“For the simplicity on this side of complexity, I wouldn’t give you a fig. But for simplicity on the other side of complexity, for that I would give you anything I have.” (Oliver Wendell Holmes, Sr.).
Correlation is not causation; consensus is not truth; and what is conventional is rarely wisdom.
We always know less than we think.
“Never confuse genius with a bull market.” (Humphrey B. Neill).