James Montier of GMO, LLC recently penned a piece titled “The Seven Immutable Laws of Investing.” These “laws” are certainly not new to adherents of value investing. However, I believe we need to constantly reinforce these laws, especially since they are often inconsistent with our natural tendencies.
So, now, for the moment of truth, I present a set of principles that together form what I call The Seven Immutable Laws of Investing.
1. Always insist on a margin of safety
2. This time is never different
3. Be patient and wait for the fat pitch
4. Be contrarian
5. Risk is the permanent loss of capital, never a number
6. Be leery of leverage
7. Never invest in something you don’t understand
You can find the entire report here. (Free registration is required)