Are You an Anxious, Impatient, Irrational Person?
Show me an anxious, impatient, irrational person, and I’ll show you a lousy investor. Your emotions are key when it comes to investing. Successful investors don’t let their emotions get in the way.
You’ve probably heard of Warren Buffett, he’s a famous value investor and a self-made billionaire with a successful track record of over 50 years. But what you may not know is that most of what Warren Buffet learned came from Ben Graham. Ben Graham was Warren Buffett’s teacher and mentor at Columbia University, and here’s what Ben Graham had to say about the temperament of a true investor.
“Ben Graham, as we know, fiercely urged his students to learn the basic difference between an investor and a speculator. The speculator, he said, tries to anticipate and profit from price changes; the investor seeks only to acquire companies at reasonable prices. Then he explained further: The successful investor is often the person who has achieved a certain temperament – calm, patient, rational. Speculators have the opposite temperament: anxious, impatient, and irrational. Their worst enemy is not the stock market, but themselves. They may well have superior abilities in mathematics, finance, and accounting, but if they cannot master their emotions, they are ill suited to profit from the investment process.”*
Remember to be a successful investor: remain calm, patient, and rational and invest in quality dividend paying stocks when they are undervalued.
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* page 178, "The Warren Buffett Way" by Robert G. Hagstrom