I just turned 40. If I could visit my 25 year-old self and give him professional investment advice, this would be it: Focus *exclusively* on where companies might be in 10 or 20 years. Nothing else matters. Befriend those who think on that timeline.
Only consider investing in companies that feel *inevitable* to you over that time frame, which should be very few companies. If you don't, you'll be more likely to lose faith at the wrong times and lose money regardless of whether you would have been right over the long term.
For those few companies, do several iterations of long-term scenario analysis, discount the cash flows for each scenario, and see what sort of future is baked in to the current price and what sort of future is required to achieve strong forward returns. Invest when it is obvious.
If you invest in dog shit, you can never be too conservative with your assumptions. If you invest in great businesses, you'll often end up too conservative.
Closely study disruptive business models with open-ended growth opportunities. Understand scale advantages and then understand them better. Focus on incremental margins. Talk to industry participants to gain a more complete perspective.
The hurdle required to have a strong opinion about anything should be extraordinarily high. Avoid making premature conclusions -- you know nothing. Have no sacred cows. Talk less, listen more.
Sit and think a lot. It's fine to follow a company for years without buying it if it hasn't proven its "inevitability" to you yet. If it's going to be a 20-bagger over 20 years, it doesn't even remotely matter if you miss the first bag if you needed that time to get there.
