Poor Charlie's Almanack: The Essential Wit and Wisdom of Charles T. Munger · chapter 3 · id poor-charlies-almanack-c3-06-mungers-circle-of-competence-c

“Munger's 'circle of competence' concept -- only investing in businesses you deeply understand -- is the single most important risk management principle in value investing.”

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Receipts

Coval & Moskowitz, 'The Geography of Investment,' JPE (2001)DOI registry: valid

Fund managers earn substantially higher returns on local investments, consistent with informational advantages from proximity.

Buffett, Berkshire Hathaway Annual Letter (1996)source alive

You don't have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence.

This claim is a stable, citable object. If you can falsify a verdict, tell us — corrections are loud here.