When making decisions, prioritize not losing money, starting in reverse like a doctor’s ‘do no harm’ principle, because if you lose a lot, you need a really great deal to make it up, and never losing money leads to better long-term performance with the same upside.
For critical decisions, gather all partners, ensure proposals detail all risks and their potential outcomes, then have each person at the table critically ‘attack’ the thesis and risks, as this collaborative approach uncovers more insights than a single interrogator.
When hiring, never compromise on quality; ‘good enough’ is not sufficient, as high-performance organizations require exceptional talent.
Do things for internal satisfaction, not external validation, because if an accomplishment feels good or worthwhile to you, you must own that feeling yourself and not depend on others to affirm its value.
Always keep trying in your endeavors, as persistence is a fundamental lesson learned from formative experiences.
Cultivate an intellectually rigorous culture where teams are not blamed for suboptimal outcomes if the collective assessment of risk factors was incorrect, as this ‘protective system’ frees everyone up and encourages open participation.
View running an organization as a continuous exercise in learning from failures, focusing on developing new rules and changing processes to prevent repeating the same mistakes rather than assigning blame.
When choosing a life’s endeavor, wait for a truly big idea that addresses a significant opportunity, as you’ll make a heroic effort regardless, and a large vision allows for huge wins and inspires others to join your journey.
Focus your efforts on a unique vision within a huge field where all trends are favorable, as this alignment makes it easier to recruit talent, ensures significant success, and allows for continuous growth by catching market waves.
Embrace worrying about potential downsides, as this constant vigilance helps you avoid perilous actions, price things more accurately, and once the correct action is determined, it leads to a better outcome.
In your personal life, make foundational choices like who you are with or what you love doing very carefully, as getting these wrong can lead to unfixable problems, whereas getting them right eliminates the need to worry about downsides.
Engage in intense, limit-pushing training (‘make deposits’) so that you are well-prepared and can perform effortlessly (‘make withdrawals’) when it truly matters, such as on game day or in real-world challenges.
When facing a challenge, push through the barrier of pain to build endurance, enabling you to find an ’extra gear’ and compete effectively against strong opponents.
Engage in foundational, even ’excruciating’ work that requires fighting for every bit of learning, as this process builds a deeper, visceral understanding of data and processes compared to instantaneous, automated results.
Strive to understand where every number and piece of data originates and how it’s produced, as this deep, visceral understanding allows you to appreciate its nuances more fully than merely viewing instantaneously generated results.
When facing severe financial problems, act very quickly to either secure additional capital discreetly or sell the firm on a fire-sale basis to a larger institution, as this prevents panic among lenders and avoids collapse.
As an entrepreneur, understand that expenses begin immediately, so focus intensely on securing revenue quickly to avoid being consumed by overhead costs and the fear of financial failure.
To succeed as an entrepreneur, especially with a new concept and strong competition, you must pour your heart into the venture, as it’s not a leisure-time activity and requires immense dedication to survive and thrive.
If someone trusts you and that trust is misplaced, take full responsibility for the negative outcome, as it is your problem for asking them to trust you, not theirs for doing so.
Demand written proposals well in advance of meetings to allow for thorough review and absorption, preventing persuasive talkers from ‘conning’ you or themselves on risks, thereby protecting investors and the firm.
Prioritize avoiding losses, as consistently not losing money, even with the same upside potential as others, leads to significantly better performance over time compared to needing to make up for large losses.
When borrowing money, ensure you can always pay the interest, even during recessions, and critically avoid situations where you would need to refinance debt during an economic downturn, as lenders will be unwilling to provide capital.
To develop executives, train and coach them by having them discuss difficult, ambiguous situations where they must make the ‘best bad choice,’ mobilizing collective experience and judgment to guide their learning and decision-making.
Do not assume new hires know things just because they claim to; instead, provide thorough training, onboarding, and quality control to ensure their psychological comfort and actual competence in their roles.
To accurately assess employee performance and foster a culture of truth, implement anonymous 360-degree reviews (upward, peer, downward) across multiple categories, as numerous observation points will provide a clear picture of capabilities.
When pursuing entrepreneurial ventures, frame your big vision as a ‘sure thing’ to attract others, as entrepreneurs don’t like taking risks with their lives and need to believe in the high probability of success.
Invest in opportunities that are fundamentally sound and safe, but always know where you are in the economic cycle; if near the top, demand a strong momentum thesis and historic safety standards to ensure it can power through a downturn.
In real estate, constantly monitor visible supply (via permits) and demand, and if you identify an area or asset class with excessive incoming supply, strategically sell your holdings to avoid being caught in a downturn.
When a real estate market is characterized by widespread optimism and a surge in supply, sell your properties, as the fundamental rules of supply and demand will likely lead to a downturn that impacts optimists.
When raising children, encourage them to do their best in endeavors of their own choice, prioritizing their happiness over specific achievements or external pressures.
When seeking a job, consider the enthusiasm of the people already working there, as their excitement about their work can be a good enough reason to pursue a similar path.
Be wary of work cultures where asking questions is not encouraged, as this can hinder learning and lead to feelings of unpreparedness and isolation.
If offered a significant position, it’s acceptable to decline if you genuinely feel you are not yet old enough or capable enough to handle that level of responsibility, prioritizing readiness over immediate advancement.
Ensure that every component of an integrated system is well-coordinated, as a lack of coordination will prevent the entire system from functioning effectively.
When contemplating a significant decision like dropping out of a program, seek advice from experienced mentors who can offer perspective and encourage you to ‘gut it through’ if they believe it’s the right long-term path.
When leaving an established firm to start your own venture, recognize that clients often value the firm’s history, prestige, and services more than individual capabilities, so don’t mistake your past success at a large firm as solely your own.
Recognize that intense financial fear can make it difficult to be emotionally present in other areas of your life, highlighting the importance of managing this stress.
Be aware that individuals can sometimes be delusional about their own capabilities, making it crucial not to solely rely on self-assessments when evaluating talent.
Consider making major relationship commitments when you are older and have a better sense of yourself, as people and their objectives change over time, making it challenging to match two individuals for a lifetime when young.
During market collapses, maintain a detached perspective, recognizing that extreme imbalances between sellers and buyers are temporary and prices will normalize when the financial system recovers.
Avoid getting emotionally tied to large-scale market movements or global economic forces that are beyond your control, as personal emotional investment is unhelpful when you didn’t cause the situation.