Motley Fool Money Buffett's Advantage
8 snips
Oct 22, 2023 
Shane Parrish, founder of Farnam Street and host of 'The Knowledge Project,' dives into the art of decision-making in investing. He shares invaluable lessons from legends like Warren Buffett and Charlie Munger, emphasizing the power of intuition and patience. Parrish discusses creating automatic rules to enhance discipline as an investor and the importance of documenting decision processes. He also highlights the need for self-awareness to overcome emotional biases, making clear thinking essential for financial success.
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Positioning for Strength
- Position yourself for strength, like Buffett and Munger, so circumstances don't dictate your decisions.
- Having a strong financial position, like $150B in cash, lets you win in any market condition.
Automatic Rules
- Create automatic rules to bypass emotional or impulsive decisions, like not selling stocks on the first thought.
- Rules turn desired behaviors into defaults, similar to following traffic laws.
Kahneman's 'No' Rule
- Daniel Kahneman uses a rule to avoid unwanted commitments: he never says 'yes' immediately on the phone.
- This rule helps him avoid social pressure and make more thoughtful decisions.
