As Martin learned in the navy, “adherence to process” is an indispensable safeguard: “Always honor it because that’s going to keep you out of trouble.”* This idea of adopting a few standard practices and unbendable rules is our fourth technique for reducing stupidity. Buffett and Munger may not need formal constraints to maintain their discipline. But you and I are not them. Martin has another rule that he observes “religiously” as a protection against calamity. He never invests more than 3 percent of his assets in a stock at the time of purchase. Typically, he owns forty-five to fifty stocks.
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