- When you have developed a well thought-out investment philosophy and process over time
- When the original logic that led to your initial conclusion is still valid when taking into account all of the new evidence.
- When there is new evidence that makes your original conclusion more likely.
- When sufficient counter-thesis evidence presents itself.
- It is important to re-examine your original logic at certain intervals, even in the absence of contrary evidence.
- Don’t anchor on the investment’s prior price
- Assume you have made some mistakes and aggressively search for them
You should stick to your conviction if your analysis is still correct and the facts are still consistent with your conclusion even if others disagree with you. You should also be hesitant to drastically change your overall investment process because of any short-term reason. On the other hand, you need to be flexible enough to look for contrary evidence and update your thesis when such information presents itself.
In The Prince, Machiavelli offered the following advice: “A wise man ought always to follow the paths beaten by great men, and to imitate those who have been supreme, so that if his ability does not equal theirs, at least it will savour of it.”
In reading, our head is, however, really only the arena of some one else’s thoughts. And so it happens that the person who reads a great deal — that is to say, almost the whole day, and recreates himself by spending the intervals in thoughtless diversion, gradually loses the ability to think for himself;
It's important to take time to think about what we're reading and not merely assume the thoughts of the author. We need to digest, synthesize, and organize the thoughts of others if we are to understand. This is the grunt work of thinking. It's how we acquire wisdom.
Every one has aims, but very few have anything approaching a system of thought. This is why such people do not take an objective interest in anything, and why they learn nothing from what they read: they remember nothing about it.
Any kind of important book should immediately be read twice, partly because one grasps the matter in its entirety the second time, and only really understands the beginning when the end is known; and partly because in reading it the second time one’s temper and mood are different, so that one gets another impression; it may be that one sees the matter in another light.
Ray Dalio found that most of these people can be characterized as shapers, and the identifier of a shaper is that they are both tactically and strategically astute in their decisions. Being a shaper gives you a wider lens through which to see the world.