I think it’s important to learn from those who came before us. There are rarely any “new” occurrences. For instance, the Great Recession had some unique circumstances (complex securities mixed with a rare nationwide housing downturn), yet the root causes were nothing new (greed for more transactions, arrogance in assuming we can measure risk). Often times there’s more to gain from remembering then seeking something novel.
In this spirit of remembering, I think it’s important to talk about our principles. It forces us to formalize them, open them up for debate and refine them. What’s nice is the word “principle” is a bit softer and more open for interpretation than words like “rule” or “law”. It suggests a rule of thumb, a heuristic to test in a specific context, to be tweaked depending on performance.
I’d love to see a world where everyone publishes their principles (weighted by importance maybe), and some app crowdsourced them based on the “believability” of the user (to borrow a Ray Dalio term). e.g. Let’s take a bunch of successful investors, add up and merge their principles, and see what ideas are most prominent. For now, we’re stuck with the manually-intensive (and hopefully enjoyable) process of reading books and blogs, listening to podcasts or YouTube, to synthesize all of the available wisdom that we can and hopefully add to it based on our own experience.
Because that’s the whole point of wisdom. Every situation is different. It’s up to us as fallible human beings to make the best decisions we can with as much information as we can, while we can. If we do that enough times, hopefully that leads to a happy and fulfilling life.
So here are my principles (so far). I’ve only picked the ones that I’ve lived through, seen up close in actual situations, “dug out of the ground” as Ben Hogan would say. Because that’s often times the best way to learn. “The burned hand teaches best” as Gandalf said of Pippin after he stole the stone of Orthanc. Here’s mine.