Tutorial 11-15 Recap
1) CHECKLISTS - While a checklist is not a substitute for thinking, an investment checklist can help overcome human biases and assist avoiding common mistakes investors make. Checklists should be developed to focus on situations where capital has a high probability of being lost or has been lost. Checklists are likely to cover many of the topics in the tutorials of the Investment Masters Class. An investor should screen an investment with a checklist prior to making an investment. An investment may not pass all the checklist items, however the checklist will identify potential risk areas which must be weighed against the investment's potential. Investors should constantly review their investments to ensure they merit retention.
2) STUDY HISTORY - Having an understanding of history can help an investor identify similar situations to current market events. There is not a lot new when it comes to investing. Many aspects of the the tech bubble and the Global Financial Crisis had parallels in history.
3) INVESTING MISTAKES - The Investment Masters make mistakes. Despite the fact most people study success, the majority of the Investment Masters believe you learn more from studying your failures. It is important to analyse and learn from unsuccessful investments to ensure you don't repeat those mistakes. You should study other investors mistakes to help improve your investment process.
4) INVESTING GENERALIST - having a broad view of investing helps to identify a broader range of investment options and can help to identify pricing risks in certain parts of the market. Sometimes credit investments offer a return profile more akin to an equity investment. At times a whole sector maybe over or undervalued which can be difficult to ascertain without a broader knowledge of the investment universe. Understanding a wide array of businesses can help identify investment opportunities.
5) UNDERSTAND - The Investment Masters understand the businesses they invest in. Without an understanding of the underlying business you will not be able to make an informed decision if it is a suitable investment or not. Not understanding a business can impose risks that you are not wary of. Don't invest in assets you do not understand.