Decision-Making and Diversification

"No matter how great the talent or efforts, some things take time. You can't produce a baby in one month by getting nine women pregnant."  — Warren Buffett

Welcome to my blog and thank you for checking it out! My vision is to periodically share ideas that our investment committee has been discussing. No set schedule—I’ll wait until there’s something timely.

I wanted to set the stage with thinking about how we approach stock market events and in a larger sense, our lives. It starts with focusing on what we can control (our decisions and temperament) and what we can’t control (most everything else).

Follow the Serenity Prayer, “Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

Knowing the difference between what you can and can’t control is important in how you measure results. When you boil down why an event turned out the way it did, it is typically not productive to waste time and energy focusing on things outside of your control. We can’t control whether the market went up or down, if interest rates rose or fell, or which way our home’s value went. In investing, what we can control and manage is the quality of our decisions. How do we make decisions? Is our decision making process objective or based on our emotions? Are there behavioral biases that may be skewing our view? Is there historical evidence that supports our decisions?