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.

True investment prowess isn't complex strategies; it's emotional discipline. Citing Napoleon, the ability to simply do the average thing—like not panic selling—when everyone else is losing their mind is what defines top-tier performance. Behavioral fortitude during a crisis is the ultimate financial advantage.

During profound economic instability, the winning strategy isn't chasing the highest returns, but rather avoiding catastrophic loss. The greatest risks are not missed upside, but holding only cash as inflation erodes its value or relying solely on a paycheck.

The common bias of loss aversion doesn't affect investors who have done exhaustive upfront work. Their conviction is based on a clear understanding of an asset's intrinsic value, allowing them to view price drops as opportunities rather than signals of a flawed decision.

In 2008, Howard Marks invested billions with conviction while markets crashed, yet he wasn't certain of the outcome. He held the paradox of needing to act decisively against the crowd while simultaneously accepting the real possibility of being wrong. This mental balance is crucial for high-stakes decisions.

To combat the emotional burden of binary sell-or-hold decisions, use the "Go Havsies" method. Instead of selling a full position, sell half. This simple algorithm diversifies potential outcomes—you benefit if it rises and are protected if it falls—which significantly reduces the psychological pain of regret from making the "wrong" choice.

Hetty Green's famous strategy to "buy when things are low" was enabled by two key factors: always having cash on hand and possessing the emotional stability to act decisively when others were panicking. Having liquidity is useless without the courage to deploy it during a crisis, a combination few possess.

In frothy markets with multi-billion dollar valuations, a key learned behavior from 2021 is for VCs to sell 10-20% of their stake during a large funding round. This provides early liquidity and distributions (DPI) to LPs, who are grateful for the cash back, and de-risks the fund's position.

Contrary to the retail investor's focus on high-yield funds, the 'smart money' first ensures the safety of their capital. They allocate the majority of their portfolio (50-70%) to secure assets, protecting their core fortune before taking calculated risks with the remainder.