What makes a good investor?
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Benjamin Graham, the investment guru, tells it as it is: "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative". In his book, the Intelligent Investor he differentiates between an "investor" and a "speculator". Investors are long term buyers of shares, while speculators are simply trying to make a "quick buck".
But what character traits do the best investors have in common?
Contrarians - The best investors are contrarian thinkers, always thinking out-the-box and trying to buck the trend, as opposed to going with the trend.
Patient - Patience comes with this key, and long term patient investing is necessary to become a successful investor.
Good versus evil - Another trait that a good investor will have is the ability to distinguish between good and bad. Some things like a "50% increase in HEPS" seems to be good news to most, but the good investor can analyse more deeply than that and distinguish how good, or how bad information is.
Risk - An understanding of risk is a vital component of a good investor. A good investor can determine how risky an investment is, and what the required relative returns are. A return of 100% sounds great, but what was the related risk?
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