One of the things you should always be doing with your circles of competence is see if you can push it a little bit more, because the world changes. It keeps spinning, and things don’t stay the same, so you always need to be working and learning and studying to make sure that your circles of competence are relevant.
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The complexity of the world in which we live exceeds our capacity to comprehend it.
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To me our knowledge of the way things work, in society or in nature, comes trailing clouds of vagueness.
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My attitude towards business school is that there are six courses which are critical and most of those are accounting.
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I have a saying: “If everyone is going left, look right.” Conventional wisdom is nothing to me but a reference point.
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Knowledge of the past is indispensable to understanding and managing the future.
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It’s not the answers that make you good in this business, it’s the questions you ask. If you ask the right questions you will always find out more than the next guy.
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Nobody knows what the stock market is going to do or even what it ought to do. Hence, the most valuable asset in all business, which is knowledge, is necessarily absent.
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I’m a big fan of knowing the big ideas in pretty much all the disciplines — the ones that are pretty easy to assimilate — and then using those routinely in your judgments. That’s just my system.
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Nothing so gives the illusion of intelligence as personal association with large sums of money.
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The single most important thing, if you want to avoid a lot of stupid errors, is knowing where you’re competent and where you aren’t. Knowing the edge of your own competency. And that’s very hard to do because the human mind naturally tries to make you think you’re way smarter than you are.
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The only sound distinction in investment policies for one type of investor or another is based not on his financial position but on his financial competence and financial preparation.
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Diversification is protection against ignorance, but if you don’t feel ignorant, the need for it goes down drastically.
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When proper temperament joins with proper intellectual framework, then you get rational behavior.
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I really believe it’s better to learn from other people’s mistakes as much as possible.
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What you really want to do in investments is figure out what’s important and knowable. If it’s unimportant or unknowable, you forget about it.
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Investors who find an overly narrow niche to inhabit, prosper for a time but then usually stagnate. Those who move on when the world changes at least have the chance to adapt successfully.
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Our expectations of the future are not unbiased and do not reflect all available information.
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One of the illusions that people on Wall Street have is that they can have perfect information on a stock.
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Being extremely early is tantamount to being wrong, so contrarians are well advised to develop an understanding of the psychology of the sellers.
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As an investor you never have perfect information, and the biggest profits are always available when competition and information are scarce.
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It is not really within human nature to comprehend that you may not know everything you think you know, and, further, that what you believe in could change on a dime.
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I think investors always learn the lessons of the recent past. And that is the lesson.
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At its root, risk is about mystery. It focuses on the unknown, for there would be no such thing as risk if everything were known.
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No stock picker knows so much that he can’t learn a trick or a tip from a peer.
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I think a weakness of many people’s approach to investment is that they try to be jacks of all trades and masters of none.
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I have this motto in life as well as in business, which is: every day, I’m lucky if I have learned something new and I’m doubly lucky if it hadn’t cost too much.
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Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas.
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Crooks, crazies, egomaniacs, people full of resentment, people full of self-pity, people who feel like victims, there’s a lot of things that aren’t going to work for you. Figure out what they are and then avoid them like the plague.
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I think it’s part of a life lived right that you learn how to make some lemonade out of your lemons.
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Knowledge is only one ingredient on arriving at a stock’s proper price. The other ingredient, fully as important as information is sound judgment.
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They used to say about the Bourbons that they forgot nothing and they learned nothing, and I’ll say about the Wall Street people, typically, is that they learn nothing, and they forget everything.
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The market doesn’t know everything, but it doesn’t know nothing, and knowledge is cumulative. The market knows stuff now that it didn’t know forty years ago, so it’s harder to outperform.
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My definition of being properly educated is being right, when the professor is wrong.
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It’s not given to human beings to have such talent that they can just know everything about everything all the time.
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