Some companies execute a 3-5 year plan and then revert to average returns. Others 'win by winning'—their success creates new opportunities and network effects, turning them into decade-long compounders that investors often sell too early.

Common wisdom to rapidly pay off a mortgage is suboptimal. Due to compounding, investing extra cash—even if the return rate merely matches your mortgage interest—will generate significantly more wealth over time. One investment compounds up while the other debt amortizes down, creating a large wealth gap.

Top growth investors deliberately allocate more of their diligence effort to understanding and underwriting massive upside scenarios (10x+ returns) rather than concentrating on mitigating potential downside. The power-law nature of venture returns makes this a rational focus for generating exceptional performance.

While Buffett's 22% annual returns are impressive, his fortune is primarily a result of starting at age 11 and continuing into his 90s. Had he followed a typical career timeline (age 25 to 65), his net worth would be millions, not billions, demonstrating that time is the most powerful force in compounding.

Top tennis players like Rafael Nadal win only ~55% of total points but triumph by winning the *important* ones. This analogy illustrates that successful investing isn't about being right every time. It's about consistently tilting small odds in your favor across many bets, like a casino, to ensure long-term success.

The asymmetrical nature of stock returns, driven by power laws, means a handful of massive winners can more than compensate for numerous losers, even if half your investments fail. This is due to convex compounding, where upside is unlimited but downside is capped at 100%.

The smooth exponential curve of compounding is a myth. In reality, it occurs in a world of shocks and uncertainty. True long-term compounding isn't just about picking winners; it's the result of having a robust process that allows you to survive the inevitable randomness and volatility along the way.

The effort to consistently make small, correct short-term trades is immense and error-prone. A better strategy is focusing on finding a few exceptional businesses that compound value at high rates for years, effectively doing the hard work on your behalf.

A 50% portfolio loss requires a 100% gain just to break even. The wealthy use low-volatility strategies to protect against massive downturns. By experiencing smaller losses (e.g., -10% vs. -40%), their portfolios recover faster and compound more effectively over the long term.