5) Be aware when you get too comfortable
During a 2010 interview, Klarman stated that he believed investing is the intersection of economics and psychology. "The economics – the valuation of the business — is not that hard. The psychology – how much do you buy, do you buy it at this price, do you wait for a lower price, what do you do when it looks like the world might end – those things are harder. Knowing whether you stand there, buy more, or something legitimately has gone wrong and you need to sell, those are harder things. That you learn with experience. You learn by having the right psychological makeup."
Klarman has often stated that a key element in designing a sound investment approach is to consider the competitive landscape and the behavior of other market participants.
When observing your competitors, your focus should be on their approach and process, not their results. Short-term performance envy causes many of the shortcomings that lock most investors into a perpetual cycle of underachievement. You should watch your competitors not out of jealousy, but out of respect, and focus your efforts not on replicating others' portfolios, but on looking for opportunities where they are not.