In this post, I share the key principles I try to consistently apply in my investment process.
1. Position sizing matters.
Position sizing is a key driver of investment success. While it’s easy to keep low-conviction ideas small, it’s equally important to reflect when those ideas work. If a small position becomes a winner, it’s worth asking: should it have been larger? Can you make it a bigger size the next time such situation comes around?
2. Embrace “I don’t know.”
It’s important not to invest hard-earned money in businesses you don’t understand. True understanding goes beyond surface-level familiarity—it includes understanding the economics of the business and its competitive positioning. Too often, people invest for weak reasons: “a friend recommended it,” “it’s already gone up,” “the price is down so it must be cheap,” or “I just want to take a punt.” These are not sound foundations for investing.
3. Avoid rigid adherence to a single style.
Public markets are largely driven by human behavior, as participants are price setters. This naturally creates pockets of irrationality. An open-minded investor who is not overly constrained by a single style is better positioned to identify and capitalize on such opportunities.
4. Stay disciplined.
Breaking your own investing principles—especially those that have worked over time—can be costly .At the same time, discipline around sizing—whether at the sector, industry, or individual stock level—is critical and should not be compromised. Discipline is often the difference between long-term success and failure.
Source: Custom illustration generated using AI (ChatGPT)
5. Patience is an edge.
You don’t have to act immediately. Waiting for a price that offers an adequate margin of safety can lead to better outcomes. Acting in haste often results in suboptimal decisions.
6. Be skeptical of macro excuses.
When companies report weak results, management teams often attribute them to macroeconomic factors. This should be examined carefully. In many cases, the real issues are company-specific—such as internal conflicts, bloated cost structures, or misaligned priorities that do not serve shareholders well.
7. Think in probabilities.
Estimating upside and downside is a useful starting point, but assigning probabilities to different outcomes is equally important. These probabilities are often subjective and tied to your level of conviction, but they help frame decisions more rigorously.
8. Follow turnarounds, but with caution.
Turnaround situations can be risky. However, tracking them as they begin to de-risk—through improving fundamentals, low valuations, strong balance sheets, or early signs of strategic success—can uncover attractive opportunities.
9. Avoid blanket exclusions.
There are always exceptions in investing. Dismissing entire industries or companies based on labels (e.g., “cyclical” or “poor historical performance”) can lead to missed opportunities. Each situation deserves individual analysis.
Abhay Srivastava is the Founder and Managing Member of AS Investment Partners LLC, a value investing firm (www.asinvpartners.com).
Abhay can be reached at abhay@asinvpartners.com
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