Investing & Business Principles
I’ve decided to start an investment fund.
As a result, I wanted to put together a set of guiding investing and business principles for myself, and for those who ultimately choose to invest with me.
Why? Because I believe that one can gain a lot from trying to create and follow a principled approach to things. Principles are fundamental ideas that guide thought or behavior, and constitute a frame of reference by which to do things. Unlike rules, which are imposed from the outside, and obeyed simply to avoid a penalty, principles are internal, and force you to do what you think is right or correct. Although principles are rarely convenient, I believe that aligning with principles makes effort much more effective.
For example, I have always been impressed by Amazon’s Leadership Principles. These principles are deeply ingrained in Amazon’s culture. They describe how Amazon does business, how its leaders lead, and how they keep the customer at the center of their decisions.
Inspired by this, and by some investors I’ve come across, below is a first draft of the Playing For Doubles Investing & Business Principles. I plan to hold myself accountable to these.
1. Think Big
There is magic in thinking big.
Look back at the times when you thought you were thinking big, only to later realize you weren’t thinking big enough. This is a reminder to think bigger.
Let go of your self-imposed limitations. Stretch your vision: See what can be, not just what is.
2. Understand Your Risks
Uncertainty is an inherent part of investing. We are dealing with the future, which, by definition is unknowable.
Risk, on the other hand, is a function of price.
Although the two often overlap, they are different concepts.
Before investing, ask yourself:
Do you realize what risks you’re taking?
Are you taking them intentionally?
3. Dive Deep And Build Conviction
Good investors operate at all levels. They think of the big picture, but also stay connected to the details. They audit frequently. They are skeptical when metrics and anecdotes differ. And most importantly, they build their own conviction.
So Dive Deep and Build Conviction.
4. Find Courage And Be Brave
Markets are usually efficient. But sometimes they are not.
When they’re not, that creates opportunity. But no one knows how long such opportunities might last. Not only that, but the market usually doesn’t provide the same opportunity twice. Therefore, investing in the stock market requires one to have the courage to bet when opportunity arises.
So Find Courage and Be Brave.
5. Balance a Bias for Action with a Bias for In-Action
You will never have all the information you want. But in public markets investing, decisiveness matters. Since many public markets decisions and actions are reversible, it’s ok to make high expected value decisions reasonably quickly.
However, balance this bias for action with a bias for in-action.
Remember, human nature tends to make us want to act, usually at the wrong time, because it makes us feel like we’re in control and that we’re making progress. This can often lead to ill-timed or uninformed investment decisions. This can be very dangerous. Don’t forget this.
6. Foster Curiosity
An investor is never done learning. The impulse to seek new information and experiences, and explore novel possibilities is a basic human attribute. As a result, when curiosity is triggered, we think more deeply about decisions and come up with more-creative solutions.
So be curious about new possibilities and act to explore them.
7. Master Your Emotions
The world is a complex system. It behaves in unexpected ways. As a result, markets will undoubtedly test your emotions. During stressful times, they will try to overwhelm you. You must overcome this.
8. Play The Right Game
Investing is a game.
Your investment strategy is a game within this game.
So always look for ways to Level Up.
And only play games that are valuable, and ones you have a chance of winning.
9. Be Long Term
The stock market has attracted some of the smartest people in the world. But, most of them are impatient. The average stock is held for less than a few months!
Therein lies the opportunity. Measure yourself only in the long-term.
10. Insist on the Highest Standards
We live in a low-trust world. So be trustworthy, and have relentlessly high standards.
This should be easy.
11. Don’t Forget to Have Fun
“Dance while the music is playing” -- Alan Watts
Otherwise, what’s the point?
If you’re new to Playing For Doubles
Start by reading more about my Investment Philosophy here:
And as always, if you’d like to connect with me
Take care.