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The Most Important Thing: Uncommon Sense for the Thoughtful Investor Page 6 (20 of 194)
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6 S E C O N D - L E V E L T H I N K I N G
and only if your judgments are superior is your per for mance
likely to be above average.
“Dare to Be Great,” September 7, 2006
Th e upshot is simple: to achieve superior investment results, you have
to hold nonconsensus views regarding value, and they have to be accurate.
Th at’s not easy.
Th e attractiveness of buying something for less than it’s worth
makes eminent sense. So how is one to fi cient nd bargains in effi
markets? You must bring exceptional analytical ability, insight or
foresight. But because it’s exceptional, few people have it.
“Returns and How They Get That Way,” November 11, 2002
For your per for mance to diverge from the norm, your expectations—
and thus your portfolio— have to diverge from the norm, and you have to
be more right than the consensus. Diff erent and better: that’s a pretty good
description of second- level thinking.
Th ose who consider the investment pro cess simple generally aren’t
aware of the need for— or even the existence of—second- level thinking.
Th us, many people are misled into believing that everyone can be a success-
ful investor. Not everyone can. But the good news is that the prevalence of
fi rst- level thinkers increases the returns available to second- level thinkers.
To consistently achieve superior investment returns, you must be one of
them.
