I am constantly challenging myself to get my applications of “first things” right in the investment world, but my principles themselves are not constantly changing. I say that with pride. The challenge that exists for the investment professional who has done the work of developing operative principles is to constantly evaluate their application of said principles, to alter, change, adjust, or modify as needed. And here is the other piece to that: To thoughtfully consider what it would mean to their client’s capital if they were wrong. Investing client funds as if one can not be wrong in investment application/execution/implementation is the height of arrogance. The humility to constantly check one’s work and one’s strategic thinking is a money-saving character trait. Sometimes it gets forced upon you in my business.
So this week’s Dividend Cafe focuses on many first principles in investing, and many beliefs we have about executing on our principles. But it also hopefully reflects the humility that is needed in risk management.