Thread by @SahilBloom

Use inversion to balance out your natural disposition as an investor.

If you’re naturally optimistic: how is this company going to spectacularly fail?

If you’re naturally pessimistic: how is this company going to wildly succeed?

It’s a simple—yet effective—mental trick.

One takeaway from this: Self-awareness is just as important as intelligence when it comes to achieving investing success.

Another takeaway from this: if you’re building a firm or investing partnership, seek out those with natural dispositions that complement your own.

Example: If you’re great at seeing the upside, you may want to find a partner who is great at seeing the downside.

To bring this to life…

I’m aware that my natural disposition is highly-optimistic—I like dreaming on ideas. I’m able to easily convince myself that X is going to be huge.

So I have to make a conscious effort to balance that with a deliberately pessimistic line of questioning.

I won’t do it naturally, so it became part of my “checklist” in my investment process.

How does this fail?
Why does the market stop growing?
What are the team’s deficiencies?

It’s hard for me to do, but being deliberate about the practice is critical.

I’ve also developed a habit of calling a smart friend and asking them to “talk me down” off of it.

It’s been @gregisenberg or @bobakemamian recently. The conversation often goes something like:

“Hey - I’m really excited about X. Tell me why I’m an idiot? What am I missing?”

All of this applies much more broadly than just with investing:

Know thyself.
Leverage community.
Act accordingly.

Ok, that’s all for today’s Sunday Musings. Thanks for reading!

Here’s a picture of my beautiful grandma that I absolutely love.

Here’s a newsletter piece I wrote on inversion a few months back that you might enjoy: sahilbloom.substack.com/p/invert-alway…