What Do the Best Investors Do That the Rest Don’t?

View online | Unsubscribe (one-click). For inquiries/unsubscribe issues, Contact Us

Don't like ads? Go ad-free with TradeBriefs Premium What Do the Best Investors Do That the Rest Don't?    Charlie Munger, the Vice Chairman of Berkshire Hathaway and Warren Buffett’s partner said something simple yet profound at the 2017 Berkshire Hathaway Annual Meeting: “A lot of other people are trying to be brilliant and we are just trying to stay rational. And it’s a big advantage.” Some might think that becoming an excellent investor requires off-the-charts intelligence or some highly proprietary model that leads to an edge that nobody else can replicate. That is not what experience has shown. 1.   Temperament. Temperament is the most important quality for an investor to have. My observation of many investors over my 20+ years of professional investing has led me to believe that temperament cannot be learned, but rather it is an innate characteristic of one’s personality. Some people are able to remain rational and continue to follow their process even under great duress or during periods of external upheaval. Others get swept up in the emotion that typically runs amok during such circumstances, and abandon their discipline. 2.   Ability to do nothing most of the time. Most of the time there are few good investments that combine sufficient business quality with a large margin of safety in the form of a large gap between price and intrinsic value. That doesn’t mean that great investors are spending all of their time relaxing on the beach – to the contrary, they are typically avariciously reading and studying business and industries, preparing for the moment when securities of companies they understand well can be purchased at attractive prices. It does mean that they make investments infrequently, and that most of the time when they look at a potential opportunity they end up passing. Those who are unable to maintain this state of low activity frequently end up making questionable investments to satisfy their desire to do something, and more often than not it is their brokers who are the biggest beneficiaries of their elevated activity levels. Continued here

You are receiving this mailer as a TradeBriefs subscriber. We fight fake/biased news through human curation & independent editorials. Your support of ads like these makes it possible. Alternatively, get TradeBriefs Premium (ad-free) for only $2/month If you still wish to unsubscribe, you can unsubscribe from all our emails here Our address is 309 Town Center 1, Andheri Kurla Road, Andheri East, Mumbai 400059 - 433006120