12 habits of successful investors!
I personally practice few of these & wish to implement those which I don't.
A thread 🧵
I personally practice few of these & wish to implement those which I don't.
A thread 🧵
1. Independence of opinion
Successful investors avoid stock tips, biased views & media predictions.
They develop their own opinions based on facts
"To be a better investor, you have to stand on your own.You just can’t copy other people’s insights."
--Li Lu
Successful investors avoid stock tips, biased views & media predictions.
They develop their own opinions based on facts
"To be a better investor, you have to stand on your own.You just can’t copy other people’s insights."
--Li Lu
2. Learning Machines
Be a life-long learner.
To be a good investor read books on:
~ Investing
~ Controlling emotions
~ Human psychology & behavior
"All successful investors have a common habit. They just love to read all the time."
-- The Joys of Compounding by @Gautam__Baid
Be a life-long learner.
To be a good investor read books on:
~ Investing
~ Controlling emotions
~ Human psychology & behavior
"All successful investors have a common habit. They just love to read all the time."
-- The Joys of Compounding by @Gautam__Baid
3. Circle of Competence
Knowing the boundaries and limitations of one's knowledge is the hallmark of a good investor.
They stay within the boundaries while picking businesses.
"It's not a competency if you don't know the edge of it."
-- Charlie Munger
Knowing the boundaries and limitations of one's knowledge is the hallmark of a good investor.
They stay within the boundaries while picking businesses.
"It's not a competency if you don't know the edge of it."
-- Charlie Munger
4. Self study & research
To know a business an investor must:
~ Track results
~ Attend concalls
~ Study annual reports
~ Read rating rationales
~ Physically visit the business location
~ Talk with the management & ask questions
To know a business an investor must:
~ Track results
~ Attend concalls
~ Study annual reports
~ Read rating rationales
~ Physically visit the business location
~ Talk with the management & ask questions
5. Checklists
Checklists helps avoid mistakes & focus on important aspects while selecting a business.
Great investors have their own checklists for selecting business
"No wise pilot, no matter how great his talent and experience, fails to use his checklist.”
– Charlie Munger
Checklists helps avoid mistakes & focus on important aspects while selecting a business.
Great investors have their own checklists for selecting business
"No wise pilot, no matter how great his talent and experience, fails to use his checklist.”
– Charlie Munger
6. Record keeping
Successful investors record:
~ Buy & sell decisions
~ Logic behind the decisions
~ Emotions while taking decisions
This helps them improve over time & correct their mistakes.
Successful investors record:
~ Buy & sell decisions
~ Logic behind the decisions
~ Emotions while taking decisions
This helps them improve over time & correct their mistakes.
7. Long term thinking
Investors who have found success from the markets have always played the long term game.
They select businesses, make decisions & keep their emotions in check considering long term performance.
Investors who have found success from the markets have always played the long term game.
They select businesses, make decisions & keep their emotions in check considering long term performance.
8. Taking time
Good investors never jump upon an investment idea.
They take sufficient time to study the business & build conviction.
Here's an example by Peter Lynch from his 1994 talk:
Good investors never jump upon an investment idea.
They take sufficient time to study the business & build conviction.
Here's an example by Peter Lynch from his 1994 talk:
https://twitter.com/Finalysis20/status/1423429326788124672?s=20
9. Waiting
Waiting is an underrated trait.
Successful investors wait till they get the right opportunity to buy the business. They ensure margin of safety in the price.
They then wait for the markets to realise the true value of the business. This wait could be for years!
Waiting is an underrated trait.
Successful investors wait till they get the right opportunity to buy the business. They ensure margin of safety in the price.
They then wait for the markets to realise the true value of the business. This wait could be for years!
10. Business ownership
Good investors are in the markets to own businesses. They never consider their holding as simple paper scrips.
This makes them look beyond the stock price to the true value of the business!
"Price is what you pay; value is what you get."
-- Ben Graham
Good investors are in the markets to own businesses. They never consider their holding as simple paper scrips.
This makes them look beyond the stock price to the true value of the business!
"Price is what you pay; value is what you get."
-- Ben Graham
11. Emotional detachment
Another underrated quality of investors.
There is a fine line between:
Owning a business
&
being detached from it.
Being detached is important, to sell & exit, when the business fundamentals deteriorate!
Another underrated quality of investors.
There is a fine line between:
Owning a business
&
being detached from it.
Being detached is important, to sell & exit, when the business fundamentals deteriorate!
12. Doing less
Highly successful investors never engage in frequent buy/sell. They act rarely but decisively!
They thus take few quality decisions & also reduce the chances of errors!
Here's a tweet by @dmuthuk on this:
Highly successful investors never engage in frequent buy/sell. They act rarely but decisively!
They thus take few quality decisions & also reduce the chances of errors!
Here's a tweet by @dmuthuk on this:
https://twitter.com/dmuthuk/status/1406838072763772930?s=19
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