The Anderson Latticework
Every investment framework Anderson articulated — ranked by frequency across all 24 letters.
Long-Termism
The investment discipline of holding positions for five, ten, or twenty years — long enough for a company's underlying growth to compound and for short-term price volatility to become irrelevant. Anderson operated Scottish Mortgage on an explicit five-to-ten-year investment horizon.
Explore →Transformative Companies
Businesses with the potential to fundamentally alter the economics of an industry or the behavior of millions of people — rather than merely competing within an existing market structure. Anderson made identifying these companies the central task of Scottish Mortgage.
Explore →Power Law of Returns
The empirical observation that investment returns in equity markets are not normally distributed but follow a power law: the overwhelming majority of aggregate stock market wealth is generated by an extremely small number of companies — perhaps 1–2% of all stocks account for all net wealth creation.
Explore →Refusal to Forecast
The principled rejection of precise short-term predictions about stock prices, earnings, or macroeconomic outcomes — grounded in a Popperian epistemology that treats such forecasting as pseudo-science in a complex adaptive system.
Explore →Patient Capital
Capital deployed with no expectation of near-term returns, specifically structured to give transformative businesses the time they need to realize their potential without the distorting pressure of short-term performance benchmarks.
Explore →Imagination in Investing
The capacity to envision genuinely extreme outcomes — both positive and negative — that lie outside the distribution of historical precedent and cannot be captured in conventional financial models. Anderson argued this is the rarest and most valuable cognitive skill in investment.
Explore →Benchmark Irrelevance
The conviction that managing a portfolio relative to a market benchmark (e.g., the MSCI World or the FTSE All-Share) is structurally incompatible with genuine long-term thinking, because it forces portfolio decisions to be driven by index composition rather than underlying business quality.
Explore →Epistemic Humility
The intellectual disposition of acknowledging the limits of one's knowledge — especially about the future — and structuring decisions accordingly. For Anderson, epistemic humility was not a counsel of inaction but an argument for a specific kind of portfolio construction: wide outcome distributions, long time horizons, and acceptance of uncertainty.
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