“Good artist copy; great artist steal.”
Principles are foundational knowledge and understanding that help navigate decisions throughout life. This is my definition, but not my idea.
I am flat out stealing the wisdom of Warren, Charlie, and Richard for the rest of this newsletter.
Warren Buffett said, “It is good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
Here are a few principles that resonated with me:
Charlie Munger
Risk-
- Incorporate an appropriate amount of safety
- Avoid dealing with people of questionable character
- Avoid big mistakes
Independence– “Only in fairy tales are emperors told they are naked.”
- Just because other people agree or disagree doesn’t make you right or wrong- the only thing that matters is the correctness of your analysis and judgment.
Preparation-
- Be a lifelong self-learner
- Strive to be a little wiser every day
Intellectual humility– Acknowledging what you don’t know is the dawning of wisdom.
- Stay within a well-defined circle of competence
- Identify and reconcile disconfirming evidence
- It is better to be approximately right, instead of precisely wrong. The seeking of precision is often an excuse not to act.
Analytic rigor- Use the scientific method and checklists to reduce errors
- Determine value apart from price; progress apart from activity; wealth apart from size
- Think forwards and backwards- Invert, always invert. (I used this to save maze problems quickly. Start at the finish and work backwards.)
Patience- Resist the natural human bias to act
- “Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily. Both money and knowledge are capable of compounding
- Know the difference between luck and skill
- Enjoy the process along with the proceeds, because the process is where you live
Change– Live with change and accept unremovable complexity
- Adapt to the world; don’t expect it to adapt to you
- Recognize reality even when you don’t like it, especially when you don’t like it.
Focus– Keep things simple and remember what you set out to do
- Reputation and integrity are your most valuable assets, and they can be lost in an instant
- Guard against hubris and boredom
- Don’t overlook the obvious by drowning in the details
- Face your troubles; don’t sweep them under the rug
Richard Feynman on passion, curiosity, and living fully:
“Fall in love with some activity and do it! Nobody ever figures out what life is all about, and it doesn’t matter. Explore the world. Nearly everything is really interesting if you go into it deeply enough. Work as hard and as much as you want to on the things you like to do the best. Don’t think about what you want to be, but what you want to do. Keep up some kind of a minimum with other things so that society doesn’t stop you from doing anything at all.”
Did any of these resonate with you?
Our next YouTube video discusses a potentially costly retirement planning mistake.
