The Decision Journal Practice

The fastest way to improve decision quality is to review your decisions systematically. Not outcomes—decisions.

Most investors skip this. They track returns, but that measures outcomes, not decision quality. And in investing, good decisions sometimes have bad outcomes, and bad decisions sometimes get lucky.

Why Decision Journals Matter

You can't learn from what you don't document. Memory is reconstructive—your brain rewrites the story after you know the outcome. You remember being more confident in winners and less confident in losers than you actually were.

Outcomes arrive with delay. By the time you know if an investment worked, you've forgotten your reasoning. You can't connect decision quality to outcomes months or years later without documentation.

Patterns emerge from data. One decision tells you nothing. Twenty decisions reveal patterns about when your judgment is reliable and when it fails.

What to Capture

Your thesis. Why is this a good investment? What needs to be true for it to work? Be specific. "Strong team in big market" isn't a thesis—it's a template.

Your conviction level. On a scale of 1-10, how confident are you? This matters for position sizing and later review.

Your concerns. What could go wrong? What would change your mind? If you have no concerns, you haven't thought it through.

The alternative. What else did you consider? Why did you choose this over alternatives? This context matters for understanding your decision.

Expected outcome. What return do you expect? Over what timeframe? Against what benchmark? Make your predictions falsifiable.

Key assumptions. What are you betting on? Market size, adoption rate, competitive dynamics? List the 2-3 assumptions that, if wrong, kill the investment.

The Review Process

Scheduled reviews. Not when you feel like it—systematically. Quarterly works for most portfolios.

Compare decision quality to outcomes. This is the crucial distinction:

• Good decision, good outcome = reinforce that process
• Good decision, bad outcome = bad luck or wrong thesis
• Bad decision, good outcome = got lucky, don't repeat
• Bad decision, bad outcome = learn and adjust

Look for patterns. After 10-20 decisions, ask:

• When do I overestimate probability of success?
• What types of companies do I consistently misjudge?
• Do I follow my process more or less when I'm excited?
• What concerns that I note actually materialize?

Update your process. The point isn't to beat yourself up—it's to calibrate. If you find you consistently overweight team quality and underweight market timing, adjust.

Common Mistakes

Only journaling winners. You learn more from failures. Force yourself to document everything—especially passes you later regret.

Rewriting history. "I always had concerns about X" when your journal shows you rated it 9/10. Be honest—the only person you're lying to is yourself.

Focusing on outcomes. A 10x return on a terrible decision doesn't make it good—it makes you lucky. Don't let outcomes corrupt your evaluation of process.

No action items. If reviewing decisions doesn't change how you make future decisions, you're wasting time. Each review should produce 1-3 specific adjustments.

The Template

Keep it simple. Complex systems don't get used.

Investment Decision Journal Entry

Date:
Company:
Thesis (2-3 sentences):
Conviction (1-10):
Key assumptions (2-3):
Main concerns (2-3):
Expected return / timeframe:
Alternative considered:
Decision: Invest/Pass
Position size (if investing):

Review Entry (3-6 months later)

Current status:
Was thesis right/wrong? Why:
Which assumptions held/broke:
What did I miss:
What would I do differently:
Process adjustment needed:

Advanced Practice

Record passes too. Some of your best decisions are what you don't invest in. Track why you passed and whether that judgment held up.

Share with accountability partner. Having someone else read your entries forces intellectual honesty. You can't hand-wave with an audience.

Calibrate your confidence. Track how often your 9/10 conviction investments work vs. your 6/10. You should see correlation—if not, your self-assessment is broken.

Review your reviews. Quarterly, look at your recent reviews. Are you actually adjusting process based on learnings? Or are you making the same mistakes repeatedly?

The Compounding Effect

Year one, the practice feels tedious. You're documenting but not seeing clear patterns yet.

Year three, you start noticing recurring mistakes. Your decision process improves.

Year five, the compound effect becomes obvious. You make fewer unforced errors. Your hit rate improves. Your conviction calibration is better.

This isn't magic—it's systematic learning from your own experience rather than hoping osmotic improvement happens.

Why People Skip This

It's uncomfortable. Reviewing failed decisions means confronting your mistakes. Most people would rather move on.

It's boring. Writing documentation doesn't feel like doing real work. But it's one of the highest ROI activities in investing.

The benefit is delayed. You don't see immediate payoff. The compounding happens over years. Most people optimize for immediate gratification.

It requires honesty. You have to document what you actually thought, not what you wish you'd thought. This is harder than it sounds.

The Commitment

Try this for one year. Twenty decisions, four reviews.

Track:

• Did my conviction match outcomes?
• Did my stated concerns materialize?
• What patterns emerged in my mistakes?
• How did my process change based on learnings?

If after a year you haven't measurably improved your decision quality, you're doing it wrong—but it's more likely you'll find it's the highest-leverage practice you can adopt.

The Meta-Lesson

Decision journals work because they create a feedback loop that doesn't naturally exist in investing.

Outcomes arrive late. Memory is unreliable. Attribution is hard. Without documentation, you can't learn systematically—you just accumulate experience and hope it produces wisdom.

The journal closes the loop. It forces honesty. It reveals patterns. It compounds judgment.

And in investing, better judgment is the only sustainable edge.

Start today. Document your next decision. Review it in three months.

A year from now, you'll wish you'd started sooner.