The 10 Traits of A Great Investor

For 35 years since the day I started giving horse racing tips to seventeen year olds willing to lose their pocket money, I have been fascinated by what makes a great investor beyond the obvious (trust). While the skills, and expertise should, and will, vary dependent on the discipline, I have come to observe from watching hundreds of investors that behaviour is arguably the most important factor.

Whether you are evaluating an investor to back your business, invest in their fund, co-invest with them or hire an investor, I think you want to see a high level of the following traits:

  1. Intellectual Curiosity: they have a depth and breadth of curiosity that is unlike most people. Most people have a concentration in particular areas in business, science, culture, sports and so forth.
  2. Commitment to constant learning: they are ferocious in their continual search for new ideas, insights and new ways of doing things that challenge their past beliefs. They assertively find people who have got something to say, aggregate and connect the dots.
  3. Creativity: they are particularly interested in the future, and how that works and what are the change agents in the future. Their inclination is to think, feel and act on lessons learned from past successes, failures, recombinations and so forth and apply that to the future.
  4. Resilience: their beliefs and attitudes demonstrably enhance their resilience. They rebound relatively quickly and they are not damaged “permanently” by losses or failed investment decisions.
  5. Self-esteem: they are able to continually feel good about themselves irrespective of whether they are experiencing success or failure.
  6. Perseverance: they possess the personal focus and discipline to see investments through to a natural conclusion. They are not rolled over by unforeseen events, easily distracted or quit at the first sign of failure.
  7. Love: they implicitly love what they do. I draw a distinction from “blind” or “fake” love. The investor who even though they know it to be wrong ignores reality or feigns interest.
  8. Faith: at the heart of an investor is a belief system and an implicit faith in their own judgement. It is based on a set of shared values, which others will readily sign up to.
  9. Courage: they are not afraid to provoke and indeed, they seek contrarian positions and points of view. They are willing to lead when everyone else sees just fog. For the investor ambiguity spells opportunity, not fear. 
  10. Forgiveness: they don’t hold personal grudges. They are supportive and willingly reward people, who show the right behaviour not just those who achieve success.

You are right if you say there are very few people with this combination of behavioural traits. That is why there are so few exceptional investors. Choose carefully, you’ll profit from reading this before investing a dime, penny or euro.

© James Berkeley 2015. All Rights Reserved.

 

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