I’m not here to teach you how to be a great investor. On the contrary, I’m here to tell you why very few of you can ever hope to achieve this status.
It doesn’t matter how intelligent you are, how many books you’ve read or how good you are with numbers. The truth is that you may never be as good as you think.
Sorry for the shock but this was a speech given by Mark Sellers of Sellers Capital to Harvard MBA student’s in 2007. It is a speech that helps to expose weaknesses and build on your strengths.
You can read all the Berkshire letters you want, but when it comes to crunch time, the majority of people end up buying high and selling low.
The past 11 trading days has proved just that. If you survived so far, well done, but expect to see more red and be excited about it, because this could another 1 in 10 year opportunity to stockpile stellar companies and ride it up when the economy gets better.
Here’s a quote I shared on my facebook page.
“You make your money during bear markets; you just don’t know it at the time.” – Shelby Cullom Davis
So here we go with 7 things you need to blow the market out of the water.
Trait #1 – Ability to buy and sell stocks against the market
Everyone thinks they can do this…[when] the market is crashing all around you, almost no one has the stomach to buy.
Trait #2 – Obsession
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The second character trait of a great investor is that he is obsessive about playing the game and wanting to win.
Trait #3 – Willingness to learn from past mistakes
What sets some investors apart is an intense desire to learn from their own mistakes so they can avoid repeating them.
Trait #4 – Inherent sense of risk based on common sense
I believe the greatest risk control is common sense, but people fall into the habit of sleeping well at night because the computer says they should. The thing about common sense is that it isn’t very common.
Trait #5 – Confidence and Conviction
Great investors have confidence in their own convictions and stick with them, even when facing criticism.
Trait #6 – Get both sides of your brain working
If you don’t think clearly, you’re in trouble. There are a lot of people who have genius IQs who can’t think clearly.
Trait #7 – Ability to live through volatility
Number 7 is the most important, and rarest, investor trait of all.
To make money, you have to cope with volatility. Volatility is not risk.
Good luck during this difficult period. I hope to see you on the other end victorious.
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