Howard Marks explains why thinking like everyone else leads to mediocre business decisions. For smarter decisions, always ask yourself, “And then what?”

Choices, Options, Dilemma, Judgment, Selection, Analysis, Consequences, Evaluation, Alternatives, Process, Rational, Intuition, Critical, Weighing, Effective

The most important thing is second level thinking. If you think the same as everybody else, you're going to act the same. If you act the same as everybody else, you're going to perform the same. That's not a very good performance formula for being a superior investor. If you want to be a superior investor, you have to think different from others, you have to act different, and maybe then you can have different performance, and then the only question is your performance different and right, or difference and wrong, relative to the average. But clearly, if you think the same as everybody else, you can't outperform. So you have to have an organization which is based on what I consider second level thinking, which is thinking different from others and better. So when my son was studying investing, and he would come to me and he'd say, by repetition, you can get your lessons across. So my answer to him was always the same. Who doesn't know that? If Ford's going to come out with a great Mustang, and it's going to be a killer car, and it's going to make a lot of money, but everybody who follows Ford knows that, then that piece of knowledge is not profitable. So in order to outperform others, you have to know something they don't know. You have to look at things in a different way than they look at them. Second level thinking, different and better. And just one brief example. The first level thinker says, this is a great company, we should buy the stock. The second level thinker says, it's a great company, but it's not as great as everybody thinks we should sell the stock. And that's the thing I hope you'll think about.