Principled investors distinguish themselves through the strict observance of a simple but powerful set of virtues, of which discipline, fortitude, resilience and craftsmanship shape the foundations.
They endeavor the taking of calculated risk upon a few selected occasions, oftentimes betting against the herd’s suffrages, and customarily after having identified an appreciable margin of safety, the latter assumed capable of absorbing possible unfortunate developments.
These practitioners of sound judgement, at all times mindful of their own fallibility, insist on never revolving too remote from their actual circle of competence, by nature limited, for they noticed well how whoever caught exalting himself will be promptly humbled.
Yet whenever a qualified prospect surfaces, their keen business logic commands to pounce on it with vigor. In doing so, they typically seek to profit from urgent, distressed or emotional sellers, thereby evidencing that the contender who is prudent and lies in wait for an opponent who is not stacks the odds in his favor.
Instructed by observation and experience — see 31 Lessons Learnt (Sometimes Painfully) About Value Investing And The Money Management Business — I try to pursue mispriced gambles off the beaten path, sifting through financial carnage and out-of-favor securities.
Sometimes there are valid reasons to hope amidst a climate of total abdication, and that is when I like to act.