“If you care about yourself, care for yourself. Demand information when you know it will help you make informed choices; it doesn’t cost anything extra except merely finding out.” - Roy M. Cohn.
That’s from the opening chapter of How to Stand Up for Your Rights and Win by Roy M. Cohn, a lawyer who made his mark as counsel to Senator McCarthy during the Red Scare and later became Donald Trump’s attorney and mentor. He built a reputation as one of the most aggressive power lawyers in New York.
The first chapter is called “Embarrassment: A Foreword on Being Forward.” Cohn pushes the idea that protecting yourself starts with refusing to stay in the dark. Knowledge and information aren’t luxuries, they’re leverage.
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"Let's not pursue any ideas that we don't think genuinely make humanity better off as a whole". - Andrew Ng
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"You don't have to make it back where you lost it" - WARREN BUFFETT
This quote offers insight into investment strategy and psychological resilience in the face of financial losses. It can be understood in several key ways:
Avoiding Emotional Decision-Making
When investors experience losses, there's often a strong emotional urge to recoup those losses by doubling down on the same investment or strategy that led to the initial loss. Buffett's quote cautions against this impulse. He suggests that trying to recover losses through the same means that caused them can be a mistake, as it may lead to further losses or missed opportunities elsewhere.
Embracing Flexibility
Buffett's advice encourages investors to be flexible and open-minded in their approach to recovering from losses. Instead of fixating on a particular investment or sector that has underperformed, investors should be willing to explore other opportunities that may offer better prospects for returns.
Recognizing Opportunity Cost
By emphasizing that you don't need to make money back in the same way you lost it, Buffett highlights the importance of considering opportunity cost. If there are more promising investment opportunities available, it may be more prudent to allocate capital to those rather than trying to recoup losses from past investments.
Avoiding Sunk Cost Fallacy
This quote also touches on the concept of the sunk cost fallacy. Investors sometimes feel compelled to stick with losing investments because they've already invested time, money, or emotional energy into them. Buffett's advice encourages investors to evaluate each opportunity based on its future potential rather than past performance or emotional attachment.
Emphasizing Risk Management
Implicitly, this quote underscores the importance of risk management. By suggesting that investors don't need to recover losses through the same means, Buffett is advocating for a more measured approach to investing that prioritizes capital preservation and rational decision-making over emotional reactions to losses.
In essence, Warren Buffett's quote reminds investors to remain objective, flexible, and forward-looking in their investment approach, especially when dealing with losses. It encourages a broader perspective on wealth creation and emphasizes the importance of making decisions based on future prospects rather than past performance or emotional attachments to specific investments.
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Dream big and build
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It's better to be a year early than a day late.
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Those who keep learning, will keep rising in life. - Charlie Munger
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The opportunity of defeating the enemy is provided by the enemy himself." - Sun Tzu
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The name Pink "Pooba," is inspired by the Flintstones and represents a mammoth-sized bullish attitude while learning about money. In this business diary, I’ll share ideas that I find interesting and hope to enrich your life.
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- Pink Pooba