"Beating the market matters, but limiting risk matters just as much. Ultimately, investors have to ask themselves whether they are interested in relative or absolute returns. Losing 45 percent while the market drops 50 percent qualifies as market outperformance, but what a pyrrhic victory this would be for most of us."
'If you don't know what you want, you end up with a lot you don't.'
Only if your behaviour is unconventional is your performance likely to be unconventional, and only if your judgments are superior is your performance likely to be above average. For your performance to diverge from the norm, your expectations— and thus your portfolio—have to diverge from the norm, and you have to be more right than the consensus. Different and better: that’s a pretty good description of second-level thinking.
“Read 500 pages like this every week. That’s how knowledge builds up, like compound interest.”
I always tell my students, “If you do a good job valuing a stock, I guarantee that the market will agree with you.” I just don’t tell them when. It could be weeks or years.