James Montier on The Seven Immutable Laws of Investing

gmo behavioral financeIn a previous article by James Montier, he emphasized the importance of investors sticking true to sensible guidelines for investing. However, Montier did not state what these principals were. In this piece, Montier describes seven rules of investing, which he calls “Immutable Laws of Investing.”

They are as follows:

1. Always insist on a margin of safety

2. This time is never different

3. Be patient and wait for the fat pitch

4. Be contrarian

5. Risk is the permanent loss of capital, never a number

6. Be leery of leverage

7. Never invest in something you don’t understand

Below Montier goes into detail regarding each of these seven rules:

James Montier: Immutable Laws of Investing