Lessons · time-tested wisdom
The mistakes worth learning from — before you make them.
Skills are workflows: what to DO. Lessons are principles: what to REMEMBER. Curated from decades of investing writing — Buffett, Munger, Bogle, Thorp, Taleb, Klarman, Marks — and the recurring mistakes that cost retail investors the most.
10 lessons in 6 categories. Growing daily toward 500 age-tested principles.
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Behavioral discipline
The market can stay irrational longer than you can stay solvent
You can be right about a valuation and still get carried out by the trade. Sizing and timing matter as much as the thesis — because the crowd sets the price for as long as it wants to.
Source: John Maynard Keynes (attributed, ~1930s)
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Risk management
Never average down on a broken thesis
If the reason you bought is gone, buying more is throwing good money after bad. Averaging down only makes sense if a NEW thesis appears at the new price — not to lower your average cost.
Source: General value-investing discipline (Klarman, Marks)
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Position sizing
Concentration builds wealth; diversification preserves it
Every big fortune came from a concentrated bet. Every fortune that survived came from later diversifying. Know which phase you are in — building or preserving — and size accordingly.
Source: Buffett + Munger; also Jerry Neumann, Ergodicity Economics
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Macro & history
"This time is different" is the four most dangerous words in investing
When a valuation, credit expansion, or narrative is defended with "this time is different," history says it almost never is. The unusual thing is usually the excess, not the escape.
Source: John Templeton; Reinhart & Rogoff, "This Time Is Different" (2009)
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Timing & cycles
Time in the market beats timing the market
Missing the 10 best days of the S&P 500 over 20 years cuts your total return roughly in half — and those days usually cluster inside the scariest periods, exactly when a timer would be out.
Source: J.P. Morgan Guide to the Markets; SPIVA studies
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Costs & taxes
Costs compound as much as returns do
A 1% annual fee sounds small. Over 30 years it eats roughly 26% of your terminal wealth. Fees, taxes, and turnover are the silent tax on compounding — and they hit before the market has a chance to.
Source: John Bogle, "The Little Book of Common Sense Investing"
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Risk management
Your first loss is your best loss
Cutting a broken position early beats holding hope. The pain of a 20% loss is manageable; the pain of an 80% loss that started as a 20% loss is what ruins accounts and careers.
Source: Trader-desk aphorism; formalized in Van Tharp position-sizing rules
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Behavioral discipline
The plural of anecdote is not data
One dividend-stock story from your uncle, one crypto win from a friend, one biotech tenbagger you read about — none of it is evidence. Base rates over hundreds of cases are what actually predict.
Source: Frank Kotsonis (attributed); repeated by Nassim Taleb, Philip Tetlock
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Position sizing
Position sizing matters more than being right
A 60%-win strategy with 2:1 payoff still blows up if you bet 30% of capital per trade. Edge without sizing discipline is a lottery ticket; sizing discipline without edge is at least survival.
Source: Ed Thorp, "A Man for All Markets"; Ralph Vince
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Behavioral discipline
Be fearful when others are greedy; be greedy when others are fearful
Bought at extreme optimism, most trades disappoint. Bought at extreme fear, most trades work. The rule is easy to state and psychologically almost impossible to follow — which is exactly why it pays.
Source: Warren Buffett (1986 Berkshire letter, repeatedly since)