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Warren Buffett Explains Why Investors Should Favor 'Approximately Right' Over Precise Mistakes
['Adam Hayes', 'Ph.D.', 'Cfa', 'Is A Financial Writer With', 'Years Wall Street Experience As A Derivatives Trader. Besides His Extensive Derivative Trading Expertise', 'Adam Is An Expert In Economics', "Behavioral Finance. Adam Received His Master'S In Economics The New School For Social Research", 'His Ph.D. The University Of Wisconsin-Madison In Sociology. He Is A Cfa Charterholder As Well As Holding Finra Series', 'Licenses. He Currently Researches', 'Teaches Economic Sociology']
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Key Takeaways Warren Buffett has said, "It's better to be approximately right than precisely wrong."
That’s “approximately right” thinking put into action: look for situations where you don’t need to have the next few years mapped out just to break even.
How To Be 'Approximately Right' in Your PortfolioYou don’t have to be Buffett to apply his “approximately right” approach.
Keep your thesis simple : If your reason for owning a stock requires a multi-tab Excel model to justify, it might be fragile.
: If your reason for owning a stock requires a multi-tab Excel model to justify, it might be fragile.