The Meb Faber Show - Better Investing

Annie Duke – Why Great Investors Are Great Quitters | #448

Oct 8, 2022
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INSIGHT

Quitting Is Mischaracterized As A Vice

  • Quitting has a negative cultural bias while grit is universally praised, skewing decisions toward sticking too long.
  • Science shows people usually persist past the optimal exit point, so quitting can be a virtue.
ADVICE

Set Kill Criteria Before Starting

  • Define a time-based tolerance and explicit success metrics before you start any major pursuit.
  • Write down kill criteria up front and commit to walking away if you don't meet them.
ADVICE

Embed Exit Rules With Every Entry

  • Attach exit rules like stop-losses when you enter investments or projects to counter sunk-cost bias.
  • Making the exit decision in advance removes emotional paralysis when losses appear.
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