Thread by @jmikolay

Step into the world of @jposhaughnessy

I organized and distilled his last 3,000 tweets into a summary of his big ideas, in two parts: 

Part 1⃣: Successful Investing - Philosophy & Process

Successful investing is simple, but it’s not easy…
🔷There’s no sure thing
🔷There’s no secret to success
🔷🚨And there's a lot we know that just ain’t so🚨

Humans are designed to be bad investors…
🔷We’re crushed by uncertainty
🔷We’re not disciplined when things are bad
🔷And we’re emotional when our money’s at stake

Successful investing defies human nature…
🔷It combats quirks of the mind 
🔷It adopts external fail-safe measures
🔷And it sticks to a plan 
🔷(The last sustainable advantage is to arbitrage our nature)

Check your ego and search for the truth…
🔷(Truth doesn’t abide big ego)
🔷Have a beginner’s mind and keep it wide open
🔷Happily accept most of your beliefs are wrong
🔷Recognize how little you actually know and admit it
🔷The smartest of the smart are often the least arrogant

Actively develop a strong mental attitude…
🔷Don’t concern yourself with what others are saying
🔷Don’t attach self-worth to things people aspire to
🔷Allow yourself to be self-reliant
🔷Have control over your own fate
🔷And above all, believe you can do it

Think long-term…
🔷Take the long view on returns 
🔷Do not overweight short-term events
🔷Do not succumb to short-term volatility 
🔷Pay attention to what might happen in ten or twenty years

Unglue yourself from the present…
🔷The future flows from the past, and cycles repeat, with variations
🔷Read original books, journals, news articles, and diaries from other eras
🔷Focus on the ones that ring true 
🔷Study how markets have behaved and what moved people to act

Learn, learn, and learn some more…
🔷Read broadly outside of finance
🔷Read more than almost everyone else
🔷Study as much as you can about investing
🔷Seek to understand those you might have an aversion to

Build on what you learn…
🔷Sort out gems of knowledge 
🔷Separate wheat from the chaff
🔷Make a never-ending commitment to gain knowledge
🔷Read, synthesize, abandon ideas that aren't working, try new ones, read some more

Challenge your own beliefs…
🔷Don’t wed yourself to an idea or treasured belief 
🔷Constantly and ruthlessly challenge each belief, no matter how basic
🔷Guard your brain from noxious ideas living there rent-free
🔷The more certain you sound, the less certain you should be

Discard beliefs that are no longer useful…
🔷Ruthlessly remove bad ideas and advice
🔷Improve your mental maps by deleting misperceptions
🔷Throw away poor filters and replace them with better ones

Ask why a lot (then keep asking why)…
🔷Continually ask "Why do I believe this?"
🔷Continually ask, “Am I seeing things correctly?" 
🔷People who don’t ask questions don’t get answers

Challenge conventional thought…
🔷Most historical beliefs and commonly accepted “truths” have been wrong
🔷Many of a today’s cherished beliefs are castles built on sand
🔷Don’t accept these default settings
🔷Remove yourself from the dominant thinking of our era

In other words, don’t follow the crowd…
🔷Be willing to hold uncomfortable opinions
🔷Make your investment portfolio very different than the market 
🔷(Just know this will create far higher career risk that the alternative)

Document your thoughts…
🔷Keep a handwritten journal 
🔷Record your decisions and beliefs over time
🔷Write about every worry, frustration, and uncertainty
🔷Date it, put it away, and review it later
🔷You’ll be surprised by your words after pressure & emotion have dissipated

Be dispassionate in your judgment…
🔷Maintain a “we’ll see” disposition 
🔷Never let emotions dictate decisions
🔷You can negate your entire track record by just once emotionally overriding your investment model
🔷Real discipline kicks in when things are going against you

Search instead for a methodology that’s…
🔷Simple
🔷Passive
🔷Concrete
🔷Cohesive
🔷Consistent
🔷Systematic
🔷Explainable
🔷Rules-based
🔷To the point
🔷Time-tested
🔷And quantitative
(Don't believe willpower will allow you to overcome your fears and emotions)

Enjoy vivid stories, but ask for proof…
🔷Invest in dull facts 
🔷Apply analytical tests 
🔷Favor reams of statistical data
🔷Look for evidence that odds are in your favor 
🔷Prefer impersonal statistics to descriptive data
🔷Prefer options that have huge empirical support

Don’t chase sugar highs…
🔷Ignore predictions
🔷Don’t watch television news
🔷Don’t pay attention to financial forecasts
🔷Distractions sap your mental and even physical energy
🔷People tend to take recent events and forecast similar returns into the future

Take advantage of the spot Karma places you…
🔷Look for rare, favorable, and fortunate circumstances…
🔷Recognize when a situation not of your own making is conducive to a favorable outcome
🔷Jump in, act quickly, & try things
🔷Smart luck involves awareness followed by action

Persevere…
🔷Remember, this too shall pass
🔷Persist even after you're knocked down ten times
🔷Continue on in a rigorous, unemotional, and consistent manner

Enjoy and embrace the music while it lasts…
🔷Be a pragmatic optimist 
🔷Even if you're wrong, you'll enjoy life a lot more
🔷Be open, be kind, treat people well, and Karma will get your back

Find the rest here...

Part 2⃣: Quotes on Investing Mindset and The Search for Truth

Follow me for more Big Idea Summaries, and massive thanks to @yawyr_vk for compiling Jim's best threads!🙌

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