Great investors have many traits which I explained here yesterday & this is follow up on the same:
1. They cut the risk. You won’t see them leveraging. You won’t see them buying junk businesses & penny stocks. Cutting risk is highest priority. Returns automatically come.
2. They are unconventional & do what they want to do. They read a lot & this helps them making decisions in more refined way with their own mental models rather than being dependent on someone else’s opinion.
3. Being contrarian is another trait. When market wants to sell, they buy stocks cheap. When everyone’s scared they’re courageous.
4. They understand compounding better. Good & bad things both compound. Let winners ride high. Cut the losers.
5. Independent thinking is what keeps them floating. The world may be buying that hot stock or hot sector but great investors are okay to miss something rather than being a victim of FOMO (Fear of missing out).
6. They have a checklist & process. Anything outside of checklist is ruthlessly avoided.
7. They’re mostly unemotional when it comes to market. They think logically & don’t allow their emotions overpower the logic. They understand the risk rewards well.
