55 Reflections on Becoming a Better Investor
55 powerful reflections to help you become a better long-term investor—practical, honest, and rooted in real experience.
Lately, I’ve been thinking deeply about how to become a better investor—not from a place of perfection, but from the humility of knowing there’s always more to learn or refine.
As part of that process, I’ve put together 55 ideas, principles, and reminders that I believe are essential for anyone who wants to improve as a long-term investor. This isn’t a definitive list, but it reflects what I currently consider to be foundational.
Over time, I’ll likely add more points as I continue learning and making mistakes. But for now, here are these 55 reflections.
Always think in terms of opportunity costs: does Company A or Company B have the better long-term upside?
You don’t need to be obsessive like Warren Buffett was. Learn as much as you can, but also make time for things you enjoy—like spending time with your family or a hobby you love.
You don’t need to know everything about a company or its industry. In fact, you’ll never know it all. If you’ve got a team of analysts who can cover the details, use them. If not, just learn the basics and the most important things; with time and experience, your knowledge will grow. Compound knowledge, my friend.
There’s a common misunderstanding about Buffett’s circle of competence. Yes, stick to what you know; but it’s even better to expand that circle. And if you don’t understand a company or an industry, just walk away and don’t waste your time.
Long-term investing is a marathon, not a sprint.
Don’t compare yourself to other investors: there will always be someone with more experience and more knowledge than you.
If you don’t have time to analyze companies, you’re better off investing long-term in ETFs.
Your temperament, emotional control, and resilience are the most important things in investing. As Ben Graham said almost 100 years ago: “The investor’s chief problem, and even his worst enemy, is likely to be himself”.
You don’t need complicated financial models to justify why you’re investing in a company.
Always follow the KISS principle: Keep It Simple, Stupid! As Buffett said: “The interesting thing about business, it’s not like the Olympics. You don’t get any extra points for the fact that something’s very hard to do. So you might as well just step over one-foot bars, instead of trying to jump over seven-foot bars.”
Whether you invest long-term in stocks or private companies, always remember the same mindset: you’re investing in real businesses, with real operations, real tangible and intangible assets, and real people behind them.
There are ~53.7k listed companies in the world. You don’t need to analyze them all (you’d never finish). Learn how to narrow down your investment universe. Apply your circle of competence. Choose the best ones according to your criteria and study them over the years.
You don’t need to invest right away in every company you analyze. Sometimes it’s better to watch how things play out, and when the opportunity comes, pull the trigger and buy.
Analyzing companies is also an intellectual activity, as Graham said. If you don’t enjoy it, don’t do it.
Stay curious all the time, and be willing to learn all the time.
Never take for granted what management or filings say about a company. Remember, their main goal is to “sell the company.”
Always have your own judgment. Trust your own analysis. As Clint Eastwood said: “Opinions are like assholes: Everybody has one.”
Accounting matters. Learn how listed companies use it.
Always look for red flags—both in accounting and in qualitative areas (management, board, etc.). Here’s an example.
Incentives are the most powerful tool insiders have. Not everyone is aligned with shareholders. Many are there to enrich themselves at the expense of shareholders.
Favor management with a long-term mindset, willing to sacrifice short-term results to create long-term value.
Don’t extrapolate too far into the future. The future is uncertain.
Be realistic and keep in mind that a high-growth company won’t grow forever.
Growth only creates long-term value if the company has a moat.
You don’t need to go all in on a company. You can start small, and as you learn more and things go well, you can build up your position.
A growing position means your conviction is growing.
Study the greatest investors in history. You’ll always learn something from them.
It’s better to learn from the mistakes of others. But the truth is, even if we try, we’ll make our own mistakes; sometimes we’ll learn from them, and sometimes we won’t. (Thanks, Charlie, for this great reflection.)
If you feel excited or hyped when analyzing a company—stop. Control your emotions. Investing is a rational act. Getting excited will only make you see the best side of the company.
Long-term investing is boring. If you want excitement, speculate short-term or bet on sports. (Thanks again, Charlie.)
If you don’t manage your personal finances well, don’t expect to be a good long-term investor.
Always apply Howard Marks’s Second-Level Thinking.
The 5Ws of journalism also apply to investing: Who, What, When, Where, and Why. Even more important than asking “why” is asking “why now?”
Understand behavioral biases. There are many, but learn and identify the most important ones.
When analyzing a company, always start with primary sources: shareholder letters, 10-Ks, and proxies. Never start with quarterly reports—or worse, conference calls.
Analyze at least the last 5 years of a company. Ideally: 10 years or more.
The investment community often thinks every company has a moat. That’s not true. Study moats and the companies that actually have them.
Invest in a concentrated way. Fewer than 20 holdings is ideal.
Understand this: you are not Warren Buffett, and you never will be. You don’t have his knowledge, his experience, or his unique way of investing. It’s better to develop your own investment philosophy.
Study cases of fraud—both accounting frauds and qualitative red flags.
Study cases of shareholder activism. Or even better: invest in a company with an ongoing activist campaign (as long as it meets your criteria). You’ll learn a lot.
Valuation matters, but so do qualitative factors.
Remember: a company creates long-term value for shareholders only if it invests in projects whose returns exceed the cost of capital.
Special situations, Deep value, GARP, Buy & hold, Growth, Value, Quality, Compounders… it doesn’t matter how you label yourself: “All intelligent investing is value investing.”
If you’re a businessman, you already have half of what it takes to be a good long-term investor (understanding how a business works and what it takes to keep it going).
Always invest with the main goal of losing less money rather than chasing the highest returns (Ben Graham).
You don’t need to know the exact value of a company. In fact, there is no such thing as an exact value.
Keep a Investing Decision Journal.
Always do a Pre-Mortem Analysis.
Always do a Post-Mortem Analysis.
The price you pay still matters. But if you find a company with a strong moat and good prospects, it’s okay to pay a small premium (10–15% above fair value).
Yes, you can fin companies with strong moats at cheap prices.
There are only two ways to get better as an investor: do your own analysis and study how other investors write and explain their analysis.
Be a polymath. Learn from other disciplines that help you understand how the world works (and more importantly, how people work).
Understand how an investment process works.
A very interesting post.
Great list! A lot of solid reflections here—thank you for sharing these insights. One thing I’d like to add, though, is the importance of understanding market cycles and the broader economic environment. While it's critical to focus on individual companies and their moats, being aware of macroeconomic factors—like inflation, interest rates, and market sentiment—can significantly influence the long-term performance of investments.
As much as we strive for long-term value creation, it’s important to remember that external economic conditions can create either tailwinds or headwinds for businesses. The best companies can sometimes be caught off guard in certain cycles. Understanding how these factors play into your analysis of a company’s growth trajectory is just as important as evaluating the company itself.
I'd argue that having a strong grasp on market cycles can help us position our portfolios better, even in volatile times, without being swayed by short-term noise.
Keep up the great work, and looking forward to your future insights!