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With a picture of each one?
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WHAT I LEARNED FROM DARWIN - 1 TABLE SUMMARY
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EVOLUTIONINVESTING
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AVOID BIG RISKS1Bumblee's avoid risk. They have been around for 30 million years.Say no often. Prefer errors of ommission vs commission
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BUY HIGH QUALITY AT A FAIR PRICE2Silverfoxes were bred using 1 trait. This led to other expressions related to that trait.Do your first selection on 1 metric. ROCE. A high ROCE company usually shows other positive traits.
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3Sea Urchins have evolved over millions of years. They have weathered much by staying robust at multiple levels but adapting to their niche environment.Invest in businesses with multiple levels of robustness. High ROCE, low debt, wide MOAT etc.
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4Evolution of dung beetle horns can be explained by asking proximate questions (which gene was expressed) and ultimate questions (Why is that type of horn more valuable?)Focus on ultimate causes (historical fundamentals) instead of proximate causes (the macro, interest rates, …) to understand the value and price.
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5Evolutionary biology does not make predictions. It aims to understand the past.Only use historical data. Understand the present based on this. Do not try to predict the future.
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6Unrelated organisms develop the same solutions to similar problems/environments. This is convergence.Convergence also exists in the business world. Look for patterns of success and failure instead of single businesses.
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7In nature there are honest and dishonest signals. A green frog mimicking the croack of a large rival is dishonest. The bright red coloration of a healthy guppy is honest.If a signal costs nothing (press release, interviews) it can be dishonest. If a signal costs a lot to produce it is probably honest (high ROCE). Only take into account honest signals in your analysis.
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DON'T BE LAZY, BE VERY LAZY8Evolution can be fast over shorter periods and slow over longer ones. Businesses seems to change a lot or not, depending on your time frame. During short timeframes there can be opportunities to buy high quality businesses at a great price. These are rare, so buying is rare. Be lazy.
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9Evolution occurs a punctuated equilibrium. A whole lot of stasis with short bursts of change. Stasis is the default state.Great businesses stay great. Weak businesses stay weak. There is stasis. Profit from price fluctutations.
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10In Australia, 24 rabbits became 10 billion in 66 years. After 55 years, it didn't look like a problem.Understqnd compounding. For a long period of time, it will seem nothing is happening. Then, it all happens in an instant. Doing nothing is hard.
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