“Defensive investing sounds very erudite, but I can simplify it: Invest scared! Worry about the possibility of loss. Worry that there’s something you don’t know. Worry that you can make high-quality decisions but still be hit by bad luck or surprise events.
Investing scared will prevent hubris; will keep your guard up and your mental adrenaline flowing; will make you insist on adequate margin of safety; and will increase the chances that your portfolio is prepared for things going wrong. And if nothing does go wrong, surely the winners will take care of themselves.” — The Most Important Thing: Uncommon Sense for the Thoughtful Investor (Columbia Business School Publishing) by Howard Marks
The ONE THING for today: Always think “worst-case scenario” and then proceed cautiously.
The key phrase in my ONE THING for today is not worst-case scenario, it is and then proceed cautiously.
Be assured that I am not advocating living in paralyzing fear that leads to stagnation and slow decline.
But courage does not require being recklessly optimistic and being cautious does not mean living in timidity and passivity. But proceeding cautiously does require being wise by honestly considering the cost and making sure it is worth the return so that you can give your life to something that really matters.
The ONE THING 