Think Like A Lawyer

In a day and age where people tend to surround themselves with people and research that only confirm their own already-held opinions, they do so at their own peril.

I learn far more from people who disagree with me than the other way around. In fact, I try to seek out opposing opinions as much as I can. My goal is always to fully understand the "other side" of any trade and opinion I have about the market. You probably can figure that out also by the various links I share with you at the website. It is also one of the reasons I have this website because there are many people who love to take advantage of every opportunity to explain how I'm wrong. :)

Warren Buffett once said that one characteristic he likes to find in investors is the ability to "think like a lawyer." Lawyers are trained to be able to defend any position, even positions that go against their own moral values and opinions. That is what they train you to do in law school. And, frankly, it was the best skill I acquired in law school. By knowing and learning everything I can about the "other" side, I frequently see gaps of logic, poor reasoning, and weak areas within my own strategies and positions.

Clearly, many folks don't like to go through that process. They'd rather look for any evidence they are right than take even a moment to question whether they are wrong. It is difficult for many of us to admit that we're wrong but you'll find that ability within any good investor and trader. That's why hubris is the downfall of so many. Their egos get in the way of making rational good decisions because their decision-making process is critically flawed. They think they're always infallible, while they are anything but.

The best thing you can do for yourself and your future (both personal and financial) is to play the devil's advocate as much as you possibly can. If you're not already doing it, take time to consider reasons you are wrong in your positions, even if you disagree with them. Only by going through that reasoning process will you really understand your opinions, have good reason to be confident in your views, and be in the right position to accept risks worth taking.