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Doing investment, IQ and temperament which is more important

Author: , Created: 2019-02-15 12:04:20, Updated:

Charlie Munger said:

“A long time ago, when I realized that owning a certain temperament could make people successful, I tried to strengthen this temperament. For the financial industry, the importance of temperament far exceeds IQ. If you do this, you don’t need to be a Genius, but it really needs to have the right temperament."

Are the following phenomena happening to you?

Indulge in the daily rise and fall of stocks.

I can’t stand not to care quotes every single day. Even when I am chatting with friends, at a meeting, waiting a red light in my car, going to the bathroom, I have to take out my mobile phone from time to time to see the stock trend. I’d rather trading time lasts 24/7.

Cannot bear a temporary loss.

When stocks rise, you are smug, and when stocks fall, you are scratching your hearts. The rise and fall of stocks even affects your normal work and life.

Want to make quick money in the stock market.

Always thinking about getting rich in the stock market overnight, when losing money, wanting to get back quickly, when earning money, anxiously wanting more.

Pay special attention to stocks invested by others.

Once others make mistakes, you criticize. If others’ stocks rise, you sigh alone or have the urge to chase.

It is difficult to tolerate different views of other investors.

When the investment ideas are different, the bad words are out. I am deeply impressed by this. If you post a point on the forum or platform that is slightly different from other personal judgment or the next day’s trend, taunt voices are coming to you. There is no bigger view at all (even waiting to the next three days).

Try to explain every accidental fluctuation in the market.

Trying to blame the “natural disaster” on the poor investment results. For example, the central bank’s monetary policy is chaotic, politicians do not understand economics, and improper rescue measures.

Constantly collect new data to support one of your own investment perspectives.

Ignore data that cannot support your point.

Constantly compare yourself with various indicators.

Compare whether you have outperformed a certain index and whether you have outperformed a certain fund.

Lack of independent thinking.

You don’t do homework, listen to the “so-called” expert gossip, blindly believe in celebrities, and can’t tell the difference between TV shows and real investment ideas.

Are the above phenomena familiar? Or is it happening to you? If you have already got a few of them in the above situations, I am sorry, I can give you a positive answer–say goodbye to the stock market. You can’t stand on this market for a long time. Maybe you are lucky to run into bull market and make a fortune, but the big probability would cut your profits or you even lose money in the subsequent adjustments.

So, what can we do to remain invincible in the stock market for a long time? How to be a successful investor?

Develop the investment character of successor.

The development of “vision”

The stock market is wonderful. It allows you to buy things value 2 yuan or even 5 yuan using 1 yuan. The premise is that you must have enough vision. Statistics show that the stock market has a major opportunity to change its life track every 10 years, an opportunity every two or four years. The key is that you have vision to see this and put it into action, instead of staring at your stocks every day, If an investor doesn’t have the vision to see in 2-4 years, he won’t be able to wait for the big bottom of the history to seize the big money-making opportunity. Of course, if you have a vision of ten years, it is better.

  1. the development of “mentality”

When you have enough vision, it’s easy to be mentally calm. When you have the feeling that money fluctuations in the stock account has nothing to do with you, you are close to making money. When you got this calm and indifferent mentality, you will not drift with most others.

  1. “Patience” development

The arrival of investment opportunities requires patience. In order to wait for Disney’s investment opportunities, Buffett has been paying attention for 30 years; in order to wait for silver investment opportunities, he has another 30 years, and his efforts have paid off. His waiting allowed him to get the lowest price of silver price for 650 years; Coca-Cola–the only big blue chip, Buffett paid attention for 52 years, until 1988, the brain and the eyes established contacts, putting it into his heavy positions. Yes, the stock market is always full of opportunities. The patient investor just needs to wait quietly until the turtle falls into the jar and the money is piled up in the corner. All we need to do is go to pick it up.

Holding shares also requires patience. As long as the chosen quality company can continue to improve its intrinsic value at a previous rate, you should be patient. Buffett holds CEICO, which has been more than 20 years old; the Washington Post, which has been more than 30 years. Time is friend of excellent companies. Buffett’s patience has been greatly rewarded. CEICO has increased its value by more than 50 times and the Washington Post has more than 120 times.

  1. The development of “self-discipline”

When you have mastered some investment methods, what you need to do is being united of knowledge and practice, otherwise everything will be a bubble.

Establish an investment system that suits you

Both small and medium-sized investors and institutions, funds, including Masters such as Buffett and Soros, they all have their own investment systems. Buffett and Soros are the world’s top two investment masters. They have earned tens of billions of wealth through investment speculation and proved their success with practice.

But the two masters are different investment systems. Buffett took Graham’s value investment and combines Fisher’s and Munger’s ideas to form a mature system of his own, sticking to it and achieved great success in his life. Soros was inspired by the philosophical mentor to present his own reflexive theory and use this as a core to guide his speculation, and he also achieved extraordinary success. Although the investment systems and profit models are quite different, they have achieved success by forming their own systems and adhering to their own systems.

In the stock market, it is not high IQs earn money from low IQs, nor people highly educated earn from those in low educational background. The past is not in this way, also it’s impossible in the future.

Buffett and Soros can have their great investment performance not because they’re smarter than others.

Developing the character of successor and building an investment system that suits you is the key to determining your success.

Investment is not the whole of life, we also have poetry and wonderland, as well as family and friends.


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