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| Slide Depicts Importance of Saying No to Investment Opportunities |
A Place for Learning and Practicing "Value Investing" Taught by Benjamin Graham and Successfully Executed by Warren Buffett.
Showing posts with label Say No. Show all posts
Showing posts with label Say No. Show all posts
Saturday, January 28, 2017
Importance of Saying No to Investment Opportunities
Saying No to Investment Opportunities
"It is more important to say "no"
to an opportunity, than say "yes."
Warren Buffett
While investing, especially during evaluation stocks a value
investor will confront with a number of opportunities seemingly attractive and
often tempting. Warren Buffett is advocating a bias towards rejection – saying
no, rather than saying yes.
This rule is similar to the rule for discarding junk at homes and
offices during the process of cleaning. We will come across a number of items
where our minds tell us to keep the items for potential future use. If we
follow the advice, we will accumulate unwanted junk. The rule to junk is simple
and harsh – if in doubt - discard! The rule is advocating a positive bias for
junking.
As with the rule for discarding, Warren Buffet is advocating a
positive bias towards rejecting – saying “no” to an opportunity than saying
“yes”. The logic behind this advice is far better to err on the side of caution
than otherwise.
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| Picture Conceptualises Bias Towards Saying No to Opportunities |
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