Philosophy

The Resolute Way: Tom Stanley’s Investment Philosophy

There are many ways to be a successful investor. I have no claim that what has worked for me in the past will continue to work in the future, but I would like to share with you some of the principles I have learned over the past 30 years that have helped me become a better investor.

1. Be a Long Term Investor
   Too much emphasis is placed on short-term fluctuations. It is easier to anticipate long-term trends.
2. Have a Flexible Approach
   Change is the only certainty and as markets change, one should change as well.
3. Actively Look for Ideas
   I find many of my best ideas; they don't find me.
4. Don't Rely on a Single Perspective
   Understand biases and conflicts of interest from information sources.
5. Be Skeptical
   Check facts directly.
6. I Eat my Own Cooking
   My only stock market investment is the Resolute Performance Fund. This aligns my interests with the rest of the unitholders.
7. I Buy my Best Ideas
   I prefer to buy only my best ideas.
8. Filter out the Noise
   One of the greatest challenges is to filter out the noise and use only what is relevant.
9. Be Thrifty
   Moderate costs facilitate moderate fees. Moderate fees facilitate performance.
10. Outperform by Being Different
    To have a chance of outperforming the market, invest differently than the market.
11. Know Your Limits
    It is just as important for me to know what I don't know as it is to know what I know.
12. Stay Humble
    Stay humble or the market will make you humble.
13. Being Small is an Advantage
    It is easier to outperform being small.
14. Apply Spiritual Principles
    An important measure of one's success is how much he benefited his fellow man.
15. Investing is Not a Team Sport
    The best decisions are rarely made by committee.
16. A Good Card Player Does Not Show His Hand
    Confidentiality is essential for successful small cap investing.
17. Too Much Emphasis is Placed on Precision
    I don't need exact numbers to make decisions.
18. You Don't Have to Win by being Original
    You win by being right.
19. Be a Contrarian
    Being a contrarian is harder in practice than in theory.
20. Strive for Effective Rationality
    Do the homework; know the facts; and make decisions based on the facts.