Improving the odds of being right

By thoroughly understanding relationships between securities and their key drivers of returns

Investment is just like doing business. No business becomes successful by targeting only profits or doing what one is not familiar with.
In order to get return for investors, we focus on the metrics that will inevitably give us the return. By studying the drivers behind the performance, we invest only in the areas we understand, so we have the confidence from the beginning of the investment that the return will be realised.

Investment is about improving the odds rather than playing a game of chance. We do not place a bet in hope of making a great windfall, but invest when we know the probability of winning is high. So over time, we achieve "asymmetry" better performance on the upside versus the downside.

It makes perfect sense to buy something when you find it good and worthwhile. However, if nothing fits what you are looking for, do you still buy for the sake of buying?
We are willing to hold cash for some periods of time rather than always being fully invested. When we are unable to find investment choices that meet our criteria, holding onto the cash is a risk-free investment decision. It may not generate a return right now, but it is an exceptionally good asset to have when the market presents us with right investment opportunities.