Thursday, August 20, 2015

Learning from mistakes...

From Tren Griffin in his book Charlie Munger: The Complete Investor:
Buffett has said that if you cannot explain why you failed after you have made a mistake, the business was too complex for you. In other words, Munger and Buffett like to understand why they made a mistake so they can learn from the experience. If you cannot understand the business, then you cannot determine what you did wrong. If you cannot determine what you did wrong, then you cannot learn. If you cannot learn, you will not know what you’re doing, which is the real cause of risk.   
"Forgetting your mistakes is a terrible error if you’re trying to improve your cognition. Reality doesn’t remind you. Why not celebrate stupidities in both categories?" —CHARLIE MUNGER, WESCO ANNUAL MEETING, 2006