#1
Know Your Limits
"The most successful investors stay within their circle of competence. Know what you understand well and resist the temptation to venture outside it."
Stay within your circle of competence.
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John Bogle⭕ Circle of Competence
John Bogle's Circle of Competence Rules
John Clifton "Jack" Bogle (May 8, 1929 – January 16, 2019) was an American investor, business magnate, and philanthropist. He founded The Vanguard Group in 1975 and created the first index mutual fund available to individual investors, revolutionizing the investment industry. Bogle is credited with pioneering low-cost investing and championing the rights of individual investors against Wall Street's high fees....
3 principles·Circle of Competence
3 Key Circle of Competence Principles
#2
Deep Understanding Required
"Surface-level knowledge is dangerous in investing. Develop deep expertise in your areas of focus. True understanding means knowing what could go wrong."
Develop deep expertise, not surface knowledge.
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Expand Knowledge Gradually
"Expand your circle of competence gradually over time. Each new area of expertise adds potential opportunities, but only if mastered thoroughly."
Expand expertise gradually, one area at a time.
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What are John Bogle's key circle of competence principles?
John Bogle has 3 key principles on circle of competence. The most important one is "Know Your Limits" — The most successful investors stay within their circle of competence.
How does John Bogle apply circle of competence in practice?
John Bogle applies circle of competence through several key principles including "Know Your Limits" and "Deep Understanding Required". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes John Bogle's approach to circle of competence unique?
John Bogle's approach to circle of competence is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, John Bogle provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
