RISKIncorporate an appropriate margin of safety Avoid dealing with people of questionable character Insist upon proper compensation for risk assumed Always beware of inflation and interest rate exposure Avoid big mistakes; shun permanent capital lossINDEPENDENCEObjectivity and rationally require independence of thought Remember that just because other people agree or disagree with you doesn't make you right or wrong - the only thing that matters is the correctness of your analysis and judgement Mimicking the herd invites regression to the mean (merely average performance)PREPARATIONDevelop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every dayMore important than the will to win is the will to prepare Develop fluency in mental models from the major academic disciplines (Business, Humanities, Natural and applied sciences, Social sciences)If you want to get smart, the question you have to keep asking is "why, why, why, why?"INTELLECTUAL HUMILITYStay within a well-defined circle of competenceIdentify and reconcile disconfirming evidenceResist the craving for false precision, false certainties etc. Above all, never fool yourself, and remember that you are the easiest person to foolANALYTICAL RIGORDetermine value apart from price; progress apart from activity; wealth apart from sizeIt is better to remember the obvious than to gasp the esoteric Be a business analyst, not a market, macroeconomic, or security analystConsider totality of risk and effect; look always at potential second order and higher-level impactsThink forwards and backwards - Invert, always invertALLOCATIONRemember that highest and best use is always measured by the next best use (opportunity cost)Good ideas are rare - when the odds are greatly in your favor, bet (allocate) heavilyDon't "fall in love" with an investment - be situation-dependent and opportunity-drivenDECISIVENESSBe fearful when other are greedy, and greedy when others are fearfulOpportunity doesn't come often, so seize it when it comes.Opportunity meeting the prepared mind; that's the gamePATIENCE"Compound interest is the eight wonder of the world (Einstein), never interrupt it unnecessarilyAvoid unnecessary transactional taxes and frictional costs; never take action for its own sakeBe alert for the arrival of luckEnjoy the process along with the proceeds, because the process is where you liveCHANGERecognize and adapt to the true nature of the world around you; don't expect it to adapt to youContinually challenge and willingly amend your "best-loved ideas"Recognize reality even when you don't like it - especially when you don't like itFOCUSRemember that reputation and integrity are your most valuable assets and can be lost in a heartbeatGuard against the effects of hubris (arrogance) and boredom Don't overlook the obvious drowning in minutiae (the small details)Be careful to exclude unneeded information or slop: "A small leak can sink a great ship"Face your big troubles, don't sweep them under the rugCreated by Brian Feroldi