The production of ideas is just as definite a process as the production of Fords; that the production of ideas, too, runs on an assembly line; that in this production the mind follows an operative technique which can be learned and controlled; and that its effective use is just as much a matter of practice in the technique as is the effective use of any tool.
The game I play is a very interesting one. It’s imagination, in a tight straitjacket.
I see it from the supply side, the supply of computing power. And this is the miracle story of the microprocessor, where every two and a half years they can make a computer chip that’s twice as fast. If you look at an industry where you have such a rapid increase in supply, usually that’s pretty bad, like when radial tires were invented, people didn’t start driving their cars a lot more, and so it means the need for production capacity went way down, and things got all messed up. The tire industry is still messed up.
A few things have worked out very well for me. And the nice thing about the investment business is that you don’t need very many. You’ll see plenty of times when you get chances to do things that just shout at you. And the thing you have to do is, when that happens, you have to take a big swing. That is no time to be reading a book on the theory of diversification …. When you find something where you know the business is within your circle of competence, you understand it, the price is right, the people are right—then you take your thumb out of your mouth and you barrel in.
It is hard to explain to naive data-driven people that risk is in the future, not in the past.
– Nassim Nicholas Taleb, Antifragile
To be a disciplined investor you have to be willing to stand by and watch other people make money on things that you passed on.
