Don’t let what you cannot do interfere with what you can

Don’t let what you cannot do interfere with what you can

“Investors should take note. Have a repeatable sound plan and stick to it. In the long term, mean reversion will be the great equalizer.”

Blaming the umpire does not work. If investors get caught looking at a called third strike, it is their own fault.

Sports, like investing, is about sticking to a repeatable routine through both bull and bear markets.

“It does not matter if your 0-for-4 or 4-for-4 the night before, just keep sticking to that routine and go out there and play hard.”

This is sound advice from (a sometimes unsound) ex-Yankee, Alex Rodriquez, to rookie, Aaron Judge. As is the case in sports, temporary outcomes should never overrule a long-term process, especially when it comes to investing.

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Ten Attributes of Great Investors By Michael Mauboussin

Mauboussin’s 10 Attributes of Great Investors

Perhaps the single greatest error in the investment business is a failure to distinguish between the knowledge of a company’s fundamentals and the expectations implied by the market price”

1.  Be numerate (and understand accounting).

2.  Understand value (the present value of free cash flow).

3.  Properly assess strategy (or how a business makes money).

4.  Compare effectively (expectations versus fundamentals).

5.  Think probabilistically (there are few sure things).

6.  Update your views effectively (beliefs are hypotheses to be tested, not treasures to be protected).

7.  Beware of behavioral biases (minimizing constraints to good thinking).

8.  Know the difference between information and influence.

9.  Position sizing (maximizing the payoff from edge).

10.  Read (and keep an open mind).

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