Have You Got It In You To Be A Good Stock Market Investor ?
February 23, 2011 5 Comments
Can you honestly say ‘YES’ to the following questions ? If so, you are cut out to be a good investor if you have good systems in place,cultivate good investing habits and gain sufficient experience.
- Are You A Businesspeson ? Warren Buffett has been known to say”I am a better investor because I am a businessman, and a better businessman because I am an investor.”A businessperson understands how his/her own companies work and respond to their environments.He/she can then extrapolate this experience to look beyond the numbers of other companies.And this makes them better investors.
- Are You Sufficiently Brainy ? Being a top notch investor requires a certain amount of brains-the sort of IQ that the average college graduate might have.But EQ is equally important.Too much IQ and a person will handicap himself and too little might make the constant learning associated with investing a drag.Warren Buffett has been know to say that”Success in investing doesn’t correlate with I.Q. once you’re above the level of 125. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.”
- Are you good with numbers ? Advanced math such as calculus is irrelevant to your success as an investor.But you do need to master pre-university math concepts and constantly apply them in daily life while thinking about your investments.Also you should be able to seize on the most important nuggets of information in a sea of data and act upon them
- Can you remain confident and humble at the same time? You need the confidence to act on your independent analysis,literally put your money on the line despite what the world round you might be doing.But on the other hand you need to be able to accept that you are not above making mistakes or missing out on something that’s obvious to others.You need the humbleness to listen to others,to stick to stocks and businesses that you understand,to stick to investing methods you know , to avoid excessive leverage and to diversify sufficiently to avoid being wiped out by a wrong call. Read more of this post