Ian\nCassel writes that an investor learns\nfrom hindsight and get paid for foresight. Often times an opportunity exists\nbecause the conditions aren\u2019t perfect yet. Investor has to pull the trigger in\nadvance of all the pieces coming together. Investment success is determined by\ntwo things: First, How well you assimilate imperfect information and Second, Your\nability to identify when you are wrong quicker. <\/p>\n\n\n\n
Jeff Bezos of Amazon said the following about\ndecision making. Cassel thinks that it is the perfect description of investing:\n\u201cMost decisions should probably be made with somewhere around 70% of the\ninformation you wish you had. If you wait for 90%, in most cases, you\u2019re probably\nbeing slow. Plus, either way, you need to be good at quickly recognizing and\ncorrecting bad decisions. If you\u2019re good at course correcting, being wrong may\nbe less costly than you think, whereas being slow is going to be expensive for\nsure.\u201d<\/p>\n\n\n\n
The price of certainty is expensive because it\nslows you down. We want to know everything. If I just knew a little more. A\nlittle more. A little more. But knowing more often times breeds confidence but\nnot accuracy. <\/p>\n\n\n\n
Cassel thinks if Bezos would have continued\nhis quote he would have said focus on the 70% that matters and be okay if the\n30% you don\u2019t know hurts you. You have to live with the possibility that you\ncould be wrong. You can\u2019t let the fear of the 30% steal your courage to move\nforward if you believe the odds are in your favor. <\/p>\n\n\n\n
How can you be both quick and accurate?\u00a0\u00a0Cassel applies four filters to every new company he evaluates:\u00a0An organization with signs of\u00a0intelligent fanaticism<\/a>; A business that can\u00a0grow through a recession<\/a>; A balance sheet that can weather a storm and act with occasional boldness; A stock that can\u00a0conservatively double in 3 years<\/a>. <\/p>\n\n\n\n When Cassel applies these four filters he might miss something, but it cuts to the core of what is important. He can normally size up a new opportunity that he is attracted to in a few hours. Over the years Cassel found being quick has served better than being slow. If it takes a long time to get to a buy decision then it probably isn\u2019t a buy.\u00a0The great opportunities are normally obvious, at least to an investor.<\/p>\n\n\n\n