What went wrong, said precisely, usually by the people who were there.
A compelling story is a claim to test, and the test for a technology is watching it work.
Venture and growth diligence, and any investment where the case rests on a founder's account of something that cannot yet be seen.
From The Inventor: Out for Blood in Silicon Valley · 2019
Separate a bad year into your errors and the market's mood, name the errors specifically, and say whether the method changes.
Reviewing your own record, reading any manager's bad year, and the interview question about a mistake.
From Giverny Capital's 2025 annual letter, on a year of underperformance · François Rochon
Ask what period a model was fitted to, and whether that period contained the event you are worried about.
Any risk model, stress test or structured product that reports a probability of loss.
From Berkshire Hathaway's 2008 letter to shareholders · Warren Buffett
Cost discipline has a limit, and the cost of crossing it arrives years after the reward for approaching it.
Any capital allocation discussion where the case for cuts and buybacks seems unanswerable, and any post-mortem on an engineering or safety failure.
From Downfall: The Case Against Boeing · 2022
Follow the incentives through every institution in the chain, including the ones that were supposed to be the check.
When a conversation about a failure stops at the most visible actor, and when assessing any system where the checker is paid by the checked.
From Inside Job · 2010
Whoever can take a position must not be the person who confirms it. Separate the hands, and the rest of the controls become possible.
Risk, operations and compliance questions, and any time a process lets one person both act and verify.
From Rogue Trader · 1999
Profit is an opinion about the future; cash is a fact. When they diverge for long, find out why.
Any question about quality of earnings, accrual accounting or how a fraud can pass an audit.
From Enron: The Smartest Guys in the Room · 2005
Protecting a secret and refusing to demonstrate a result are different things; a company that cannot tell them apart may have no result.
Technology diligence, and any situation where access to evidence is being refused on grounds of confidentiality.
From Bad Blood · John Carreyrou
A hedge is a premium paid every year; over a long bull market the premium is the whole story, so account for it as a cost from the start.
Portfolio hedging decisions, insurance company analysis, and any discussion of tail protection.
From Fairfax Financial's 2016 letter to shareholders · Prem Watsa
In a post-mortem, separate the direction from the pace and the explanation, and say which one failed.
Subscription pricing, crisis communication, and the behavioural question about a mistake you made.
From Netflix's third-quarter 2011 letter to shareholders · Reed Hastings and David Wells