“You have to stick within your circle of competence. You have to know what you understand and what you don’t understand. It’s not terribly important how big the circle is. But it is terribly important that you know where the perimeter is.”
Munger, long-time friend and business partner of the legendary investor Warren Buffett, died a few years ago, just shy of his 100th birthday. Although he kept a rather lower public profile than his illustrious peer, he did become well-known in business circles for his pithy wisdom, such as the above. He produced a particularly useful breakdown of the 25 most common and dangerous human cognitive biases, originally a lecture which later became formalised into an essay he titled The Psychology of Human Misjudgement. (If you read one thing this year to help you with your FPL endeavours, it should be this!)
He also collated his witty insights into a book, Poor Charlie's Almanack, which is a cracking read.
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