- The energy to make decisions is finite and in making too many decisions we reduce our willpower. The more decisions we make, the more likely we are to make crucial mistakes. "One solution," says Alice Schroeder (Warren Buffett's Biographer) "is an unbending set of investing rules, which minimize the need to make decisions. Making fewer decisions improves willpower so much that it should have a major effect on investing performance."
- It's best to make decisions early in the day as well. Schroeder writes "this indicates that in investing, you should get better results from a systematic process of studying an investment until you you have enough evidence, then actually making the decision the next morning. The "sleep on it" principle."
If you're an investor who wants to make better decisions, you should buy Willpower: Rediscovering the Greatest Human Strength. Purchasing the book through the amazon link doesn't cost you any extra and it helps support this blog.