Drawing from Sun Tzu and Charlie Munger, the key to long-term investment success is not brilliance in stock picking, but systematically avoiding common causes of failure. By identifying and steering clear of ruinous risks like excessive debt, leverage, and options, an investor is already in a superior position.

Analysis of Keynes's portfolio reveals a subtle skill: his true value-add came from ensuring his lowest-conviction ideas received minimal capital. Over his career, his bottom five positions shrank from 11.7% to just 6% of his portfolio, demonstrating a disciplined approach to managing risk on less-certain bets.

This "via negativa" approach, inspired by Sun Tzu and Charlie Munger, posits that the easiest way to improve returns is by systematically avoiding common mistakes. Instead of trying to be brilliant, investors should focus on not doing "dumb stuff," as it's easier to identify what leads to failure than what guarantees success.

Smaller initial positions can generate better returns because investors are less emotionally attached. This distance allows the investment thesis the time it needs to mature without being derailed by over-analysis of every minor news event or price fluctuation.

Success in investing relies on controlling emotional urges, like herd mentality, rather than high intelligence. Buffett's famous quote and his actions during the dot-com bubble illustrate that emotional discipline is the key differentiator for great investors.

Drawing on a religious analogy, David Kaiser explains that striving for a "perfect" portfolio is a fool's errand. Instead, his rules-based approach is built on the idea of being human and fallible ("missing the mark"). The goal is a good, robust portfolio that can withstand errors, rather than a fragile, optimized-for-perfection one.

Despite his genius-level intellect, Keynes went broke twice due to emotional flaws like overconfidence and impatience. This taught him that controlling one's urges and developing the right temperament is more crucial for long-term investing success than raw intelligence, a lesson learned through painful, real-world experience.

Methodical Investment's David Kaiser suggests that the primary benefit of a rules-based system isn't just performance, but the psychological comfort it provides. It establishes a clear process (if X happens, do Y), removing emotional decision-making and making strategy easier to communicate, especially during volatile periods.

To avoid emotional decision-making, especially with losing positions, write down the specific criteria for any investment. Then, backtest those rules against historical data. This replaces emotional struggle with a systematic, data-driven process.