‘Avoid the Losers, the Winners will take Care of Themselves.’

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10th Feb, 2022

Peter Bevelin, is one of my favourite writers and has written these wonderful books titled, ‘Seeking Wisdom’ and  “All I Want To Know where I die so I never go there” apart from others. He’s spent the better part of his life collecting and distilling timeless principles about how we can improve our thinking.

Peter Bevelin begins ‘Seeking Wisdom’ with Confucius’ great wisdom: “A man who has committed a mistake and doesn’t correct it, is committing another mistake.” Seeking Wisdom is the result of Bevelin’s learning about attaining wisdom. His quest for wisdom originated partly from making mistakes himself and observing those of others but also from the philosophy of super-investor and Berkshire Hathaway Vice Chairman Charles Munger.

Though he wrote mainly about investing, his lessons are equally applicable to all aspects of life.

In an interview he was asked, What was the original impetus for writing these books?

And he replied, “To improve my thinking. And when I started writing on what later became ‘Seeking Wisdom’ I can express it even simpler: “I was dumb and wanted to be less dumb.” And I had done some stupid things and I had seen a lot of stupidity being done by people in life and in business.”

He further added, “I learn and write because I want to be a little wiser day by day. I don’t want to be a great-problem-solver. I want to avoid problems – prevent them from happening and doing right from the beginning. And I focus on consequential decisions. To paraphrase Buffett and Munger – decision-making is not about making brilliant decisions, but avoiding terrible ones. Mistakes and dumb decisions are a fact of life and I’m going to make more, but as long as I can avoid the big or “fatal” mistakes, Iam fine.”

He went on to add, “The best foundation for above-average long-term performance is the absence of disasters. There will always be cases and years in which, when all goes right, those who take on more risk will do better than others. In the long run, however, I feel strongly, that seeking relative performance which is just a little bit above average on a consistent basis – with protection against poor absolute results in tough times – will prove more effective than ‘swinging for the fences.

In his book, he tells the story of Napoleon’s mother, Letizia. She couldn’t understand why Napoleon should take on the British since things were going so well. So, she sold all her French holdings and exchanged them for British pounds.

Why? She reasoned, if her son won, she should have a good life in the victorious nation. But if Napoleon lost, she would not be wiped out but still be ok since she had the pounds. She hedged against the possibility of facing a zero.

Letizia’s story is the perfect example of how to arrange our affairs in life to protect against the downside.

The benefit of looking at the downside or what can go wrong is efficiency, If you first eliminate what doesn’t work or what won’t achieve what you want, you don’t have to spend a lot of time and attention on it.

So, the important mantra of life and sensible investing is – ‘If you avoid the losers, the winners will take care of themselves.’

Avoid the losers and Stay Blessed Forever.