Discussion on Applying Deliberate

Practice to Investing and Learning

• Some of my thoughts:
– The importance of Darwinian objectivity
• What do I really need to get better at?
• Avoidance of overconfidence
• Search out disconfirming evidence and always take it very
seriously
– Continuously expand circle of competence and make
sure things currently within circle, stay within the
circle
• Learn about new businesses and industries
• Make sure you keep up to date on the businesses and
industries that you already know well
– Realize when past models/metrics are no longer valid (i.e.
financial companies’ balance sheets in early 1990’s compared
to today)
Discussion on Applying Deliberate
Practice to Investing and Learning
• More of my thoughts:
– Discipline, Discipline, Discipline
• Greenwald quote: “…you have to be incredibly
disciplined…If you don’t know, then you’ve got to
have the discipline not to do it. And that’s probably
where Seth [Klarman] is the best person in the
world at. It’s really what protected [First Eagle’s]
clients – because Jean Marie [Eveillard] didn’t
know – so he didn’t do any financials. You have to
be incredibly disciplined – and most people aren’t.
Most people fall in love with companies and
deceive themselves about things.”
Discussion on Applying Deliberate
Practice to Investing and Learning
• More:
– Continuous practice and learning throughout life
• Greenblatt said Ezra Merkin was a great analyst when he
worked for him. Klarman also thought something of his
abilities to ask him to write a section of SA 6th Edition. But he
quit practicing and just put clients’ money with Madoff.
– Keep close track of successes and errors of both
commission and omission, and try to find the true
reason why they were so
• Chris Davis’s Wall of Shame
– Don’t just go through the motions when
reading/studying – do it with a purpose by asking a lot
of the why and how questions.