Learning to be a better Investor
In the last 2 weeks, 3 people have contacted me and asked a version of the same question. Interestingly, all 3 were at radically different stages of their careers.
One was a high-flying 40 year old executive of a European defence business in line for the ‘top job’ where he would have to allocate capital, another was a mid twenties MBA information systems graduate wanting to ‘trade for a living’, the third a part-time board chairman and prolific angel investor who was sick of the fees he was paying to hedge funds for sub-optimal outcomes.
The question was something like the following, …… I want to improve my competency as an investor, have read a long list of literature on ‘how to’, but there doesn’t seem to be a consistent message or methodology from all these successful investors! Who would you advise I follow in order to become a better investor?
In these 3 cases (as with all active investors I work with) there isn’t a ‘silver bullet’ response, akin to - oh Ray Dalio or Howard Marks. However, there is a consistent starting point that I discussed with the ‘3’ and would equally apply to anyone interested in improving their investment skill.
Rather than explain this using my own words I will refer to an excerpt from a book I recently re-read, ‘Hedge Fund Market Wizards’ by Jack Schwager, in chapter 14 Jack writes:
'Over the years, I have received many inquiries that read something like:
Dear Mr. Schwager,
I wonder whether you know of any traders who are looking for apprentices. I'm willing to work long hours without pay to be able to learn from one of the Market Wizards.'
This type of query reflects a misdirected quest. You cannot succeed in the markets by copying some-one else's approach because the odds are remote that their method will fit your personality. The answer lies not in copying someone else's method, but in finding your own.'
We can all grow our skill as investors, either as a part-timer or as a professional, but the non -negotiable foundation, common to all the Market Wizards are - fit ‘what you do’ with ‘who you are’. The rewards of raising investment skill are large but few think it starts and continues with self-awareness.