What is first principles investing?

First principles investing involves breaking down complex problems into their most fundamental basics and building up from there. Mike Maples Jr. discusses this approach as being crucial for making informed pivots in business and investing. He emphasizes sticking to first principles reasoning and evaluating if these principles hold true based on new data, which can guide decisions and adjustments 1.

For example, understanding the core reasons behind an investment and continuously verifying them against current data, rather than solely relying on historical patterns or external opinions, reflects a first principles mindset. This approach can help investors like Maples make strategic decisions and remain grounded in fundamental truths 1.