Always start by identifying the dont’s. This is applicable in life and investing as well. Most of the ideas here came from the book of Billionaire Charlie Munger Poor Charlie’s Almanack. It is better to stay within the circle of your competencies and be consistently not stupid than to be intelligent with many things. In investing, identify the industries or niches wherein you have an edge. After you have identified your circle of competence work on expanding it. I can relate this to the ideas from the book Unfair Advantage wherein it was discussed that it is better to use and leverage your unfair advantage. Many successful entrepreneurs also say that focus on your strengths and delegate your weaknesses. It is counterintuitive to what I have learned in school. I was advised to always improve my weaknesses.
With this thinking model of identifying the don’ts. You may start by identifying the industries or niches that you have to avoid. You may also apply this in your career or business. For example, billionaires Charlie Munger and Warren Buffet have avoided tech companies for many years. To simplify this thinking model, Charlie Munger said “All I want to know is where I’m going to die so I’ll never go there.”
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