Top Highlights

• Boiling things down to their most fundamental truths, that is, to first principles (deconstructing), and then reasoning up from there (reconstructing) enables us to look at the world from the perspective of physics. This type of reasoning removes complexity from the decision-making process so that we can focus on the most important aspects that per...
• To make good investing decisions, you need to actively look for reasons not to buy the stock in question. Invert, always invert. Simplifying helps us make better decisions by breaking down complex problems into component parts. For example, I ask four inverted questions whenever I am looking at a stock. These questions break the mind-set of trying ...
• In one short paragraph, Enron introduced six popular CEO clichés: Talented people, Global presence, Market knowledge, Financial strength, Leverage competitive advantages, Significant value for our shareholders. Each “competitive advantage” is an important business concept, but so many generalities are meaningless to the reader.
• It’s not the answers that make you good in the investing business; it’s the questions you ask. Ask the right questions; you’ll get valuable answers.
• It involves a lot of hard work, patience, discipline, and focus. Read. A lot. This is how Warren Buffett, one of the most successful people in the business world, describes his typical day: “I just sit in my office and read all day.”2 Sitting. Reading. Thinking.