Plan for success; know you’ll fail

There is this common wisdom that you should plan for failure and hope for success. The best case doesn’t need preparation, so you should focus all your time planning for the worst.

And yet, if you look at the best investors, they tend to hold a different view. Great investors fail often, so often, in fact, that it’s their daily business to cut losses short. They know they’ll fail.

But at the same time, they focus all of their time on understanding how to get the most out of their wins! They optimize trailing stop losses and build up rules for them to get out of a trade.

Great investors know they’ll fail, but that’s the easy part. They spend more time planning for success than planning for failure because you need to plan and optimize these rare chances to generate value rather than get better at the common failures you already know how to handle.