• RISK

• Incorporate 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 loss

• INDEPENDENCE

• Objectivity 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)

• PREPARATION

• Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day
• More 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 HUMILITY

• Stay within a well-defined circle of competence
• Identify and reconcile disconfirming evidence
• Resist the craving for false precision, false certainties etc.
• Above all, never fool yourself, and remember that you are the easiest person to fool

• ANALYTICAL RIGOR

• Determine value apart from price; progress apart from activity; wealth apart from size
• It is better to remember the obvious than to gasp the esoteric
• Be a business analyst, not a market, macroeconomic, or security analyst
• Consider totality of risk and effect; look always at potential second order and higher-level impacts
• Think forwards and backwards - Invert, always invert

• ALLOCATION

• Remember 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) heavily
• Don't "fall in love" with an investment - be situation-dependent and opportunity-driven

• DECISIVENESS

• Be fearful when other are greedy, and greedy when others are fearful
• Opportunity doesn't come often, so seize it when it comes.
• Opportunity meeting the prepared mind; that's the game

• PATIENCE

• "Compound interest is the eight wonder of the world (Einstein), never interrupt it unnecessarily
• Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
• Be alert for the arrival of luck
• Enjoy the process along with the proceeds, because the process is where you live

• CHANGE

• Recognize and adapt to the true nature of the world around you; don't expect it to adapt to you
• Continually challenge and willingly amend your "best-loved ideas"
• Recognize reality even when you don't like it - especially when you don't like it

• FOCUS

• Remember that reputation and integrity are your most valuable assets and can be lost in a heartbeat
• Guard 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 rug
• Created by Brian Feroldi