Warren Buffet Looks For a Successor
Check the want-ads! Warren Buffet is looking for an understudy and successor for Warren himself as the Chief Investment Officer of Berkshire Hathaway. The person will be responsible for investing about $100 billion or more.
What does Mr. Buffet say he is looking for in a successor and great investor? What are the most important traits to look for? He says, “The right person must be able to think independently, and to be able to recognize and avoid significant risks. Temperament is also very important. Emotional stability and a keen understanding of human and institutional behavior are vital to long-term investment success. I’ve seen a lot of very smart people who have lacked these virtues”. The person must also not be driven primarily by money and must be committed to the long-term and working at Berkshire for the long-term.
What are the most important traits of successful investors?
1. Independent thinker. You must be able to think different from the crowd on a regular basis.
2. Emotional stability. Successful investors are not emotional roller coasters. They think rationally like a computer at all times, even when others all around them are losing their heads. Good investors are calm, rational, and level-headed at all times.
3. Self-confident (but not arrogant). You need to be self-confident to hold on to your positions or to buy more when investments are going against you in the short-term. You can’t be so arrogant and stubborn that you think you are always right. The markets have the ability to stay irrational for longer than you can stay solvent.
4. Passionate about investing. As with any endeavor, successful investors are passionate about it and are always trying to learn more and continuously improve. Is difficult to be consistently successful as an investor over the long-term doing it “part-time”.
5. Long-term thinker. Most successful investors have been long-term fundamentally based thinkers that are willing to hold their positions for years (or longer) to realize success. Successful investors do not get too greedy and take too much short-term risk. Good investors must be patient.
6. Good common-sense and a strong ability to determine what’s important and what’s not with respect to each investment.
7. Curious. Good investors are always asking “why?” They are always trying to learn more about how the world works, how the markets work, why certain stocks and companies succeed and others don’t. Curious investors are always keeping up with what’s new and what’s changing in the world and in the markets.
8. Disciplined. Great investors stick to their investment philosophy, their strategies, and their investment plans through thick and thin. They pay attention to details, stay diversified, and are consistent in their approach. Usually these good investors also have a very disciplined pattern of saving money and investing more on a regular basis as well.
Did we just describe you?
If so, then you have the personal attributes and the potential to be a successful long-term investor. These personality attributes alone may or may not be enough for you to be successful. You may also need a little bit of luck, and some experience and investment expertise as well. Do the above personality attributes definitely NOT describe you? Don’t feel bad. Many people do not have the time, interest, expertise, personality or discipline to be good long-term investors on their own.