5. Think probabilistically (there are few sure things).

1. Be numerate (and understand accounting).

Learning to focuson process and accept the periodic and inevitable bad outcomes is crucial.Great investors recognize another uncomfortable reality about probability: the frequency of correctnessdoes not really matter (batting average), what matters is how much money you make when you are rightversus how much money you lose when you are wrong (slugg... See more

Accounting is the language of business and you need to understand it to appreciate economic value and to assess competitive positioning. Investors face a slew of psychological challenges. Perhaps the most difficult is updating beliefs when new information arrives. Position sizing and portfolio construction still do not get the attention they warran... See more

The goals of  financial statement analysis are twofold. The first is to translate financial statements into free cash flow. The  second goal of financial statement analysis is to make a link between a company’s strategy and how  it creates value. One simple way to do this is to compare, line by line, two companies that are in the sam... See more

8. Know the difference between information and influence.

make a point of reading material you do not necessarily agree with. Find a thoughtful person whoholds a view different than yours, and then read his or her case carefully. This contributes to being activelyopen-minded.

The Santa Fe Institute (SFI) was founded in 1984 by a handful of eminent scientists, including a number of  winners of the Nobel Prize, who believed that many of the most vexing problems in the world lie at the  intersection of disciplines.

one concept that  is close to immutable for an investor is that the present value of future free cash flow determines the value  of a financial asset. This is true for stocks, bonds, and real estate. Valuation is challenging for equity  investors because each driver of value—cash flows, timing, and risk—are based on expectations wher... See more