What is Willie Sutton’s rule?

The Willie Sutton Rule is based on a statement by notorious American bank robber Willie Sutton, who, when asked why he stole from banks, replied, “Because that’s where the silver”.

In other words, his end goal was money, so why waste time looking for it in obscure or questionable places instead of taking the path of least resistance and most success and going straight to the source ? The rule can be applied in many different disciplines, from investing to medicine, science, business, and accounting.

Key points to remember

  • Willie Sutton’s rule states that the first choice should be to choose the most obvious route.
  • Named after bank robber William Sutton, the rule applies to investors in that they should most often look for low-hanging fruits before trying more obscure strategies.
  • In medicine, the rule suggests that the most likely diagnosis of a disease should be ruled out before exploring rare conditions.

Understanding Willie Sutton’s Rule

Some historians explain Willie Sutton’s rule by Arthur Conan Doyle’s famous detective, Sherlock Holmes, who once said, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.” Both quotes mean the same thing; they just drew conclusions from opposite directions.

In the financial world, the rule is similar to “choose the ripe fruit.In other words, if you’re looking to make money in the stock market, start by picking positions that you can clearly see for what they are. It might not be the biggest chunks of fruit, but at least you know what you’re getting. Only after looking for the most obvious choices should you venture further down the tree and choose something that may be rotten or never fully develop.

Another school of thought regarding investing and Willie Sutton’s rule is that it emphasizes the need for an individual to focus on activities that generate high returns, rather than actions that might be frivolous or produce lower yields. The same goes for accounting. The rule regarding management accounting indicates that activity-based costing (prioritizing by necessity and budgeting accordingly) should be applied to the highest costs, as this is ultimately where the greatest savings will be made.

Willie Sutton’s Rule and Medicine

In medicine, it’s referred to when doctors make a diagnosis, suggesting that it’s worth focusing on the obvious first and performing medical tests that can confirm the most likely diagnosis, rather than trying to diagnose a relatively rare medical condition. This approach can provide faster and more accurate results, while avoiding unnecessary costs that would be incurred by performing unnecessary medical tests.

Willie Sutton’s rule is often taught to medical students as Sutton’s Law. It indicates that when making a diagnosis, it is worth focusing on the obvious first and performing medical tests that can confirm the most likely diagnosis, rather than trying to diagnose a relatively rare medical condition. This approach can provide faster and more accurate results, while avoiding unnecessary costs that would be incurred by performing unnecessary medical tests.

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