Thursday, 2 October 2014

Top six investor's success skills

Are you a lucky or skillful investor?

Investing can be both luck and skills if you are to be a successful investor. But you must have some attributes that enable you to find that lucky spot that will allow you to exercise that skill. These attributes are:

Ability to exercise Patience - wait on the investment opportunity and gradually invest into the investment over a time period. This is akin to loading a shot gun and waiting, as you sit, for slow moving elephant passing by to make a few shots at it, going after the kill.

Ability to Recognize the right Price - when the price of the invest-able asset is right, move in for the kill and load up for a good meal.

Ability to Concentrate Capital Deployment - with a high degree of certainty on the intrinsic value of the investment and a good margin of safety on the investment class/asset intensifying your capital deployment should be preferred as oppose to diversification. Don't diversify your capital deployment merely for the sake of diversification. Doing so may satisfy diversification at the expense of making good return on capital deployed.

Research, Research, Research - spend your time investigating and researching an investment worth doing well. If an investment is not an excellent investment opportunity don't waste your time researching it. 

Ability to Identify Scale-able Investment Opportunity - An excellent investment opportunity is one that scales well into the future. It should have progressive scale in sales/revenue, scale in market share, and scale in demand.

Ability to Recognize a Defensible Barrier of Entry Business - a worthwhile investment is one with a solid market protection nestled around it and is more suited for a long term holding. That moat around a business with good market protection must be such that no amount of capital will threaten its economic existence unless acquired by another business at a premium price from you. 

At the end of the day if you exercise these attributes and practice them your luck and skills will matter. but not all that much.

Have a look at Warren Buffett's success formula:


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