Mental Models discussed in this podcast:

• Due Diligence

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Show Outline

The full show notes for this episode are available at https://www.diyinvesting.org/Episode123

Due Diligence Thought Process

• I can't accurately predict the future, so I know I will make mistakes, but I do make estimates on future performance AND management decision-making. Therefore, I attempt to monitor where future performance deviates from my estimate. That allows me to steadily inform myself whether the company is a mistake OR a success from an investment process standpoint.
• Short: I want to know where I was wrong when I predicted the future and to validate or destroy my thesis.

Summary:

Maintenance due diligence is a critical skill that experienced investors practice in order to minimize potential mistakes after buying a stock. This ongoing effort is spent validating or proving wrong the original stock buy thesis.