Risk"All investment evaluations should begin by measuring risk, especially reputational." - 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"Only in fairy tales are emperors told they are naked." - Objectivity and rationality require independence of thought. - Remember that just because other people agree with you, that doesn’t make you right or wrong—the only thing that matters is the correctness of your analysis and judgment. - Mimicry is the root of the herd instinct and invites regression to the mean (merely average performance). Preparation"The only way to win is to work, work, work, and hope to have a few insights." - 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. - If you want to get smart, the question you have to keep asking is “Why, why, why?” Intellectual humility"Acknowledging what you don’t know is the dawning of wisdom." - 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. Patience"Resist the natural human bias to act." - “Compound interest is the eighth 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. Decisiveness"When proper circumstances present themselves, act with decisiveness and conviction." - Be fearful when others are greedy and greedy when others are fearful. - Opportunity doesn’t come often, so seize it when it does. -Opportunity meeting the prepared mind—that’s the game. Change"Live with change and accept unremovable complexity." - 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“Keep things simple and remember what you set out to do.” - Remember that reputation and integrity are your most valuable assets—and can be lost in a heartbeat. - Guard against the effects of hubris and boredom. - Don’t overlook the obvious by drowning in minutiae. - Be careful to exclude unneeded information or slop: “A small leak can sink a great ship.”