Good investors are masters of “viewing situations as they…

Good investors are masters of “viewing situations as they are”. They enter investments with tempered expectations that are in line with long term trends within an asset class. For instance, good stock market investors will buy a stock portfolio aiming to achieve annualized returns of 15-20% over a 5-7 year period. If an unusual, sentiment driven bull market pushes their annualized returns to 50% or more in a year, that may prompt them to rebalance and book profits, but their expectations of the future will not change significantly. Good investors have learned to shut out the noise emanating from news channels (that is primarily meant to sensationalize) and calmly evaluate investment avenues based purely on what data and logic say about the “current situation”

— from The Instruments (Awareness/Perception/Expectations)

In the book

Cross-check every important perception against fact. Before you act on a reading, ask the two questions that have saved me more than any others: Is this actually true? and What is another way I could see this? Get the other side first — solicit the other person's point of view before deciding you have the whole picture — and hold the humility that there are four sides to every story. Set expectations you can survive being wrong about. Begin by being mindful that you even have expectations, which most people never notice; then deliberately temper them, the way a good investor enters a position seeing things as they are rather than as he hopes. Organize your expectations before a hard meeting the way an emergency doctor triages — most likely case, worst case, what you'll do either way. — The Instruments (Awareness/Perception/Expectations)

Also belongs to

Related