ACT I: FOUNDATIONS OF BEHAVIOUR
1. PATIENCE WITHOUT PASSIVITY
The Discipline: The ability to wait without boredom until the rare, obvious opportunity appears.
Why it Endures: Markets punish activity, but reward restraint. Time is your greatest edge.
In Practice: Buffett waiting years for a purchase; Munger reminding that four ideas in a lifetime can make you wealthy.
The Signal:
“The stock market is designed to transfer money from the active to the patient.”
— Warren Buffett
2. PROCESS OVER PREDICTION
The Discipline: A repeatable system that governs every decision, regardless of mood or market noise.
Why it Endures: Predictions collapse under uncertainty; process survives every cycle.
In Practice: A checklist before each decision — even under pressure — to protect against blind spots.
The Signal:
“Invert, always invert. The way to avoid mistakes is to have a system that doesn’t depend on brilliance in the moment.”
— Charlie Munger
3. RATIONAL ALWAYS
The Discipline: Cold decisions based on facts, valuation, and probabilities — not headlines or hype.
Why it Endures: Reason cuts through the panic and mania that destroy most investors.
In Practice: Buying quality in a panic, avoiding hype in euphoria.
The Signal:
“The market is there to serve you, not to instruct you.”
— Benjamin Graham
4. MASTER YOURSELF
The Discipline: Structure your habits and environment to protect you from your own impulses.
Why it Endures: The greatest risk in investing is the mirror. Discipline beats willpower.
In Practice: Automating contributions, removing trading apps, limiting portfolio checks.
The Signal:
“The big money is not in the buying and the selling, but in the waiting.”
— Charlie Munger
ACT II: DEPLOYMENT OF CAPITAL
5. SIZE FOR IMPACT
The Discipline: Bet with weight only when the odds are decisively in your favor.
Why it Endures: Great ideas are rare — when they appear, they must move the needle.
In Practice: Munger’s bucket, not thimble, when it rains gold.
The Signal:
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”
— Warren Buffett
6. MARGIN OF SAFETY & QUALITY
The Discipline: Only act when the downside is protected and the upside endures — through discount or durable quality.
Why it Endures: Price shields you on day one; quality shields you for decades.
In Practice: Buffett buying Coca-Cola at a fair price, knowing its brand would compound for decades.
The Signal:
“It’s far better to buy a wonderful company at a fair price than a fair
company at a wonderful price.”
— Warren Buffett
7. CIRCLE OF COMPETENCE
The Discipline: Operate only within domains you truly understand. Say no to everything else.
Why it Endures: Edges vanish outside your circle. Knowing limits is itself an edge.
In Practice: Passing on a biotech IPO outside your expertise.
The Signal:
“The size of your circle of competence is less important than knowing its boundaries.”
— Warren Buffett
8. OPPORTUNITY COST DISCIPLINE
The Discipline: Every holding must justify itself against the best available alternative.
Why it Endures: Capital is finite. Owning “good” blocks you from owning “great.”
In Practice: Selling a decent stock to reallocate into a higher-conviction idea.
The Signal:
“The most important thing in evaluating businesses is understanding the opportunity cost.” — Warren Buffett
ACT III: ENDURANCE & REVIEW
9. SURVIVAL FIRST
The Discipline: Avoid ruin at all costs. No leverage abuse, no fragile businesses, no reckless concentration.
Why it Endures: You can’t compound if you blow up. Survival is the foundation of wealth.
In Practice: Refusing to back a fragile balance sheet even if the upside looks tempting.
The Signal:
“The first rule of compounding: never interrupt it unnecessarily.”
— Charlie Munger
10. REVIEW WITH RIGOUR
The Discipline: Re-test every thesis with brutal honesty. Kill it when the facts change.
Why it Endures: Even the best are wrong half the time; catching decay early prevents destruction.
In Practice: Selling when a moat erodes, before the price reflects it.
The Signal:
“When the facts change, I change my mind. What do you do, sir?”
— John Maynard Keynes
11. RELENTLESS LEARNING
The Discipline: Compound knowledge as relentlessly as capital. Read, reflect, refine.
Why it Endures: Markets shift; principles don’t. Advantage flows to those who keep learning.
In Practice: Buffett’s daily reading; Marks adapting after every cycle.
The Signal:
“The more you learn, the more you earn.”
— Warren Buffett