STREET DOGS

Ashoemaker makes shoes. You have to stick with what you’re good at. ”— Steve Cohen

“The game of investing is one of making better predictions about the future than other people. How are you going to do that? One way is to limit your tries to areas of competence. If you try to predict the future of everything, you attempt too much. If you have competence, you pretty much know its boundaries already. To ask the question [of whether you are past the boundary] is to answer it.” — Charles Munger

“Circle of competence essentially comes down to whether we understand the business. There are several subquestions: do we know the right people in the industry? How well do we understand the products and customer decision making process? Are there unanalysable things that could have a big impact? ”— James Chrichton

“Knowing you don’t know something is nearly as valuable as knowing it. The worst situation is thinking you know something when you don’t. ”— Ray Dalio

“You have to be an expert in what you invest in. You need to understand why you are invested. If you don’t understand why you are in a trade, you won’t understand the right time to sell, which means you will only sell when the price action scares you.” — Martin Taylor

“My mistake was to project my skill beyond the limits of experience. I began investing outside the industries that I believe I thoroughly understood, in completely different spheres of activity; situations where I did not have sufficient information. An analyst must learn the limits of his or her competence and tend well the sheep at hand. ”— Philip Fisher

“The beauty of the stock market is that it gives us the luxury to avoid sectors and/or businesses that are outside our circle of understanding. ”— Mohnish Pabrai