process
The reject pile first
The rule
A good method says no cheaply and often, so the rare yes has truly earned your attention. Like sorting mangoes and tossing the bruised ones fast.
Where it flips
But a reject pile can become fear in a mask. If every idea is thrown out for vague reasons, the filter is no longer doing real thinking.
You are usually hurt by studying too many exciting ideas at once. A quick reason to say no saves your attention for the few ideas that pass the first safety checks.
A worked example
A watchlist of 80 names becomes 12 after checks on debt, honesty of management, how complex it is, and price range. The point is not to look clever; it is to save attention.
How to spot it
- ·one clear disqualifier written down
- ·the reason specific enough to check later
- ·rejects looked at again only when the facts change
Pulak Prasad · What I Learned About Investing from Darwin