The New England Patriots have been among the most successful sports franchises in the past twenty years. The Patriot’s formula for success is fairly simple yet nearly impossible to replicate. They don’t follow the herd or what is currently in vogue. In fact, the Patriots are often the team creating the trend, with other teams copying them. In regards to managing their roster and game planning, they have a set of principles that they tend to follow every year:

• Re-sign players to fair market deals, if not, trade, release them or let them walk
• Accumulate lots of draft picks despite not having a top-ten draft pick since 2001
• Trade for players with favorable contracts who provide high-reward, low-risk.
• Draft and sign players who can play multiple positions.
• Prioritize drafting and signing players who are under the radar. I am unsure if any other team finds more value in late-round draft picks and undrafted free agents.
• Open-minded: The Patriots will tweak and improvise on schemes.

All of these principles/concepts seem fairly simple, yet in reality, very difficult to implement in real life. Mike Tyson said, “Everybody has a plan until they get punched in the mouth.” If you have a plan of running into a burning building and know that is the right plan yet see everyone running away from the burning building, you will probably question that original plan.

The Patriots are unique. They won their seventh straight victory on Monday night against the Buffalo Bills by attempting only three passes. The last team to do that was in 1974. “We don’t sit around listening to what everybody else says,” Belichick said. “With all due respect, I mean really. Look, we have a job to do. We’re focused on doing that job. We’re not going to sit around and listen to what everybody else says. We try to do the best we can.”

After the win, they celebrated but in a very workmanlike manner. They don’t get too high after victories or are too low after defeats. This contrasts with teams like the Detroit Lions, who won their first game of the season and celebrated like they had won the Super Bowl.

Patriots celebrate a win over the Bills:

Lions celebrate a win against the Vikings:

You don’t see bearhugs with the team owner and coach or choreographed dance celebrations in the Patriots locker room. They tend to do things differently. Humans are generally hard-wired to want to belong to a group. Back when humans were all in tribes, this was necessary to survive. The Patriots have been great for so long because they have been able to turn off the noise and do it the Patriot Way.

The Patriots adhere to a specific process that has created a long-term successful winning strategy. The process is not fixed but dynamic, which has safeguarded them from falling out of contention. If the Patriots were a stock, they would be the best-performing company in the past twenty years. They have been the standard of the NFL. Most importantly, the Patriots do not follow the herd. As Charlie Munger once said, “crowd folly, the tendency of humans, under some circumstances, to resemble lemmings, explains much foolish thinking of brilliant men and much foolish behavior.”

Being a great investor requires turning off the noise. This doesn’t mean being a contrarian but not following the herd and executing your own set of procedures. There are some principles that I try to implement in my own investing strategy.

• No matter how bullish the market is, a good portion of my portfolio is in safe and reliable stocks. In times of euphoria, I do not buy, instead, I sell and build on my cash position.
• No matter how bearish the market is, a small-medium portion of my portfolio will go into higher-risk higher-rewards stocks. In times of despair, I start deploying my cash into assets.
• Often our performance is based on simply holding a stock, not buying or selling. When there is uncertainty in the market, the best thing to do is nothing and be patient. Investors often overreact and panic. I try to ignore the noise. There is a reason why it is said patience is a virtue.
• Margin contracts, buying on credit, and leveraging assets to buy or short the stock market are high-risk.
• Although it can be difficult to determine when to buy a stock, I would rather buy a stock at its 52-week low than its 52-week high. If a stock is at or near its 52-week high, there is a good chance you will be allowed to buy it at a much lower price if you wait.
• I never go into buying a stock thinking I will hold it for a short time period. I generally buy a stock with the plan to hold it for at least 3-5 years. This will save lots of money in tax advantages.
• Never take a risk that can wipe me out completely.
• Take simple steps to diversify.
• Look for founder-led companies. Although not all founder-led companies succeed or are good investments, companies still led by their founder or founders tend to have an intrinsic edge over non-founder-led companies.
• Every month try to read a book related to investment strategy.
• Create my inner circle for investing counsel and advice. With social media, this is a lot easier to do today. I am not looking for stock pick recommendations, more so understanding the thesis and formulation for certain investing decisions.
• Stay neutral and remain calm. Munger once said, “heavy ideology is one of the most extreme distorters of human cognition.” Keep your politics, religion, and ego out of your investing philosophy. Safeguarding your emotions will prevent you from buying in bubbles and selling during a panic. This, perhaps, is the most difficult part of investing: acknowledging and overcoming your own cognitive bias.

This is not a complete list, but I have found this framework to work for me.