Thread by @BrianFeroldi

20 Lessons from 20 Years of Investing

by John Rotonti (TMFEarlyRiser)

1 - Pay up for quality.

2 - Average up. Add to winners, not losers.

3 - If you want/need capital, sell your losers.

4 - Remain invested. Stocks go up most of the time, even after new highs.

5 - Keep cash on the side to take advantage of sell offs. Get aggressive with high-quality businesses when on sale

6 - Create a process and stick to it. Checklists/watchlist/journal are great free tools.

7 - Don't bother with low quality or turnarounds. Have a 'too hard' pile.

8 - Stocks follow earnings eventually. Buy long-duration, profitable growers.

9 - Buy 'best of breed'. Don't bother with the second-best.

10 - People build great businesses. Good management is important.

11 - Focus on what can go right AND wrong

12 - High gross margins, pricing power, and recurring revenue = high ROIC, but it is not the only way. $HD grew ROIC every year from 2009-2018.

13 - Write it down! If you can't express it with words, you don’t really understand the opportunity.

14 - Remain mentally flexible. Change your mind, especially when the facts change!

15 - Beating the market isn't the only goal.

16 - Concentration is overrated. Buying lots of stocks is a fine strategy.

17 - #ESGMatters, #IncentivesMatter, #CultureMatters

18 - Markets are generally efficient, but not always.

19 - We can win simply by having a much longer time horizon

20 - Take care of your mind and body!

h/t ProShopGuy for great note-taking