The Work of Unlearning: Why Disciplined Investors Strive to Be Less Wrong

“The way to get as close to truth as we’re going to get is to be less wrong.” — Adam Grant

In capital markets and leadership, certainty is often mistaken for competence. Markets change. Operating realities evolve. Assumptions that felt stable twelve months ago can quietly become embedded risk. The discipline that protects capital is not confidence — it is the willingness to revisit assumptions.

One of the most understated risks in decision-making is inherited thinking. Many of the ideas shaping our judgment were introduced by prior success, mentors, institutional culture, industry norms, or earlier market cycles. Over time, repetition turns adoption into ownership. Familiarity turns inheritance into identity.

In investing, this dynamic appears in underwriting models that rely on historical performance without re-testing demand drivers. It appears in operating projections built on legacy cost structures. It appears in capital stacks assumed to “always work” because they performed in a different interest rate environment.

An idea does not become conviction until it has been stress-tested.

Disciplined thinking begins when assumptions are examined under pressure. Effective capital allocation requires asking difficult questions:

• What would disprove this thesis?

• Where does this model break?

• Which variables are we assuming are stable?

• What happens if they are not?

Without this process, we are not evaluating risk — we are defending familiarity.

The scientific method provides a useful posture for investors. Scientists begin with hypotheses, not conclusions. Hypotheses are provisional. They are tested against evidence and refined accordingly. Being proven wrong is not humiliation; it is progress toward clarity.

Capital allocation requires the same intellectual humility. Markets reward adaptation, not ego.

At Mainstay Financial Services, this philosophy informs how we evaluate acquisitions, reposition assets, and structure capital. Assumptions are treated as working hypotheses rather than permanent truths. We distinguish between foundational principles, which anchor judgment, and working assumptions, which must remain adaptable as information evolves.

Foundational principles provide stability:

• Demand supported by demographic trends

• Operational alignment as the primary driver of value creation

• Conservative leverage discipline

• Transparent investor communication

Working assumptions, however, must remain flexible:

• Lease-up velocity

• Expense normalization

• Exit cap rate expectations

• Debt market liquidity and pricing

Confusing principles with assumptions create fragility. Distinguishing between them creates resilience.

Leadership posture compounds over time. Teams that tie identity to being right often resist recalibration. Teams that tie identity to learning compound insight. Markets eventually expose rigidity; they reward disciplined refinement.

The question is not whether we will ever be wrong. We will.

The question is whether we are structured to become less wrong over time.

In investing, that distinction determines durability.

As capital markets continue to recalibrate, the most resilient organizations will not be those who defend yesterday’s models, but those who refine them deliberately and transparently. Progress in capital allocation is rarely about dramatic insight; it is about incremental correction — less wrong today than yesterday, less wrong tomorrow than today.

That is the work of disciplined investing.

If you would like to learn more about how this philosophy informs our acquisition and underwriting framework, we welcome a direct conversation.

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About the Author: Tod Petty serves as Chief Investment Officer at Mainstay Financial Services & Mainstay Senior Living, where he leads capital strategy, investor alignment, and portfolio growth across an operationally informed senior housing platform. With more than three decades of experience as an owner, operator, and executive, he focuses on disciplined acquisitions, resilient middle-market communities, and capital structures designed to perform across cycles.