Arriving at a correct viewpoint for delivering superior investment performance, consistently over the years.
Above quote from Paul Johnson sums up aptly what is at the heart of Chapter 1: Second Level Thinking. That we have to think differently, and better (than the average investor in the market) is a NO-BRAINER, right? So what else did I notice?
One thing I immediately loved - the multiplicity of quotes I found particularly insightful - to reflect upon (from our active experience).
No rule always works, the environment isn’t controllable, and circumstances rarely repeat exactly. Psychology plays a major role in markets, and because it’s highly variable, cause-and-effect relationships aren’t reliable.
While intrinsically I am a pattern-seeking (business superiority) decision-models driven guy, my takeaway from this - re-inforcement of my intuitive observation that the most consistently successful investors around me are highly flexible, open individuals - who recognise the importance of market cycles - are intuitive and adaptive
“Because investing is at least as much art as it is science, it’s never my goal—in this book or elsewhere—to suggest it can be routinized. In fact, one of the things I most want to emphasize is how essential it is that one’s investment approach be intuitive and adaptive rather than be fixed and mechanistic.”
I have been lucky that at VP we are surrounded by successful folks with very different styles. The most successful among them have constantly adapted (also as we learnt more/got exposed to refinements) and thrived - forcing me to also strive to keep adapting.
“Counting on luck isn’t much of a plan, so you’d better concentrate on insight. In basketball they say, ‘You can’t coach height,’ meaning all the coaching in the world won’t make a player taller. It’s almost as hard to teach insight. As with any other art form, some people just understand investing better than others.They have—or manage to acquire—that necessary ‘trace of wisdom’ that Ben Graham so eloquently calls for.”
This is so true, when we think of say a Hitesh Patel amongst us. At the same time, I firmly believe superior insights can also come from a lot of hard work, and energy that we bring to the table - especially collaborative energy that feeds on one another. We can manage to acquire - some traces of wisdom - if we surround ourselves with folks smarter than us, and those who work harder than us - as we all have come to know 