process
Rejection as the primary skill
The rule
The best investors say no to almost everything. The rare yes matters only because the no pile is huge.
Where it flips
Saying no can go too far. A filter so tight that nothing ever passes is its own failure. That is not care, it is being stuck.
Most ideas should be dropped fast, and without any regret. Say no the moment you spot one clear problem. This heavy filtering is what makes the few you keep worth keeping. A small, careful yes-pile is the whole point.
A worked example
A sample screen: 500 companies come in. 480 are dropped, each for one red flag. 20 are studied closely, and 3 are finally held. [illustrative]
How to spot it
- ·quick, cheap reasons to reject used first
- ·a written reason for saying no to each name
- ·a small, chosen set that you keep
Pulak Prasad · What I Learned About Investing from Darwin