Invest — don’t trade or speculate: Trading leads to unforced errors.
Remain flexible and open-minded about types of investments.
Buy low: “Buying at the point of maximum pessimism” as Sir John put it, is critical to investment success. Panics and bear markets are a reliable source for excess return. Everyone wins in a bull market, and investor returns will be determined by their behavior in a bear market.
When buying stocks, search for bargains among quality stocks.
Buy value, not market trends or the economic outlook: Owning a rising stream of earnings and cash flows builds wealth, not guessing at market moves or economic outcomes
Diversify. In stocks and bonds, as in much else, there is safety in numbers.
Do your homework or hire wise experts to help you.
Aggressively monitor your investments: Even iconic blue-chips can unravel.
Don’t panic: Selling your portfolio amounts to market timing, and if you are thinking of selling following a share price panic then you have already proven that you are not a good market timer.
Learn from your mistakes: All investors make mistakes, and they should be expected.
Begin with a prayer: Sir John’s use of prayer to begin meetings was an act of mindfulness and focus.
Outperforming the market is a difficult task.
An investor who has all the answers doesn’t even understand all the questions.
