The Only Three Questions That Count

by Fischer, Chou & Hoffmans

The Only Three Questions That Count is a great books about the technique of questioning yourself before committing to investments.

The Only Three Questions That Count

The main message to investor readers is that before you invest make sure you answer the only three questions that count. These are:

Which of my beliefs are false?
What can I understand that others cannot understand?
What cognitive illusions are fooling me now?

Each of these key 3 questioning techniques for the investor to make are covered below.

Question 1: Which of My Beliefs are False?

This investor questioning technique is designed to challenged our false underlying investor assumptions. For example P/E ratios and financial accounts are not as clear cut as they may appear to investors. There are many other examples of false investor assumptions, such as rising oil prices are bad for the economy and therefore the investor. This is compulsive investor reading.

Question 2: What Can I Understand that Others Cannot Understand?

This investor questioning technique is designed to make the investor think outside of the investor box. Its main message to the investor is that to beat the investment market the individual investor must have and use information which the rest of the investment market does not have. The book acknowledges that it is difficult for the individual investor to spot what the crowd misses.

Question 3: What Cognitive Illusions are Fooling Me Now?

This investor questioning technique is designed to build on the old investor phrase “buy low & sell high”. It is worth noting however that investors in investment markets often do exactly the opposite.

How to Make the Three Questions Investor Technique Work

The Only Three Questions That Count tries to emphasise that to make the three investor questions work an individual investor must always base their investment decisions on some fact. It also emphasises how important investor discipline, investor benchmarking and many investment ratio techniques are all required to help the investor be successful in the investment markets.

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