Successful investors are not the smartest people on earth.

Remember, it was Warren Buffett who said that;

You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.

However, there are certain characteristics that you need to have in order to be successful.

While reading up on the background of gurus, we’ve collected and organized certain traits.

Here they are.

Characteristic Traits of Successful Investors and Tips on How to Acquire Them

Warren Buffett

  • Leadership – Buffett’s staff is made of 24 people strong. It’s not many, but these are authentic and loyal people who Buffett trusts. It’s proof that as a leader, he knows how to surround himself with capable and trustworthy people.
  • Thirst for knowledge – Ask Buffett how you can get smarter. Read. Read a lot. “I just sit in my office and read all day.”
  • Patience – “The Stock Market is designed to transfer money from the Active to the Patient.”
  • Free-thinking – There are times when we want to form our opinions based on other people’s insight. Buffett is someone who values forming his own opinion based on facts and his own thoughts.
  • Frugality – People think that frugality is about saving your money to buy only the essentials. Frugality for Buffett is more behavioral. It is about mastering your impulses to dive into what seems easy and comfortable.

    • Charlie Munger

  • Integrity – Buffett has been working with Munger for around 54 years now. That’s a testament to Munger’s honesty, integrity, and authenticity. This is important for an investor indirectly, as integrity is also about facing problems out in the open.
  • Humility – In the sense that you should have good metacognitive skills. A lot of people lack this skill to actually recognize and admit the things they don’t understand. So they continue to believe facts when what are completely false. You need humility to accept that there are many things in this world that you just don’t understand yet and the willingness to pursue that knowledge.
  • Adaptive – Munger has been dubbed as an expert generalist. Being such makes one always quick to adapt to any change. It’s Munger’s philosophy to replace an idea if a better one comes along. He doesn’t set anything in stone because mostly everything changes and that includes our own ideas and what we believe.
  • Analytical – Read this quote from Munger: “What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ‘em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have models in your head. And you’ve got to array your experience ? both vicarious and direct ? on this latticework of models. You may have noticed students who just try to remember and pound back what is remembered.”
  • Focus – Here’s Munger again with a sweet but short quip: “A majority of life’s errors are caused by forgetting what one is really trying to do.”
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