I have studied hundreds of successful traders and investors. They all share some common characteristics. On the top of the list comes the ability to THINK creatively, artistically, flexibly, and most importantly, INDEPENDENTLY. They are all true “Thinkers”.
I do not think the Thndr team could have picked a better name for this section!
After doing some research on what makes a Thinker, I noted the personality traits that most Thinkers have and wanted to link them to investing (and trading). Here we go:
Detail-oriented & thoroughly researches the facts. Even though stock investing/trading can be very rewarding, it is not easy and requires a lot of time, effort, and practice. There are statistics that state that 80-90% (if not more) of individual investors/traders lose money. It is not because it is impossible, it all comes down to simply the willingness to put in the work.
Every bit of detail in the market matters. Focus is key. ONLY invest in what you know.
The best way to know something is to study it, study it, and study it really hard until you are comfortable. Research is a MUST.
The more an investor knows about a stock, the better and easier it can be handled.
Ability to think for oneself and hard to understand and relate to at times. “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.” Steve Jobs, Stanford Commencement Address. June 12, 2005.
One of the biggest challenges investors/traders face nowadays is the abundance of information, news, opinions, tips, etc. Let me give a clear message here, as much as these can be useful to others, THESE ARE USELESS TO YOU.
In the market, it is you, your money, your investments, and your research. Everything else Is noise.
In the 90s, when all the financial analysis, Gurus, and economics/finance academics came out warning of an instant crash, Mark Minervini (one of the world’s top traders, multiple times US Investing Champion, and author of multiple investing/trading/mindset books) done his research and based his decisions on facts and was pounding the table about the greatest buying opportunity the market was showing. Sure enough, they all were wrong and he was 100% right.
A similar thing happened during the Subprime mortgage crisis in 2008, everybody was confident and happy with the economy and the housing market. Only Michael Burry saw the flaws and warned of one of the greatest markets crashes ever happening. And he was surely correct (watch the Big Short movie).
I am not mentioning those examples to ask you to just contradict them for the sake of it. Instead, I am asking you to trust and independently think for yourself and not let other opinions affect yours.
Sets own high standards & seek and respects quality and fine things. You have hundreds and thousands of stocks/companies listed in the stock market. They differ from the A+ quality all the way up to the junk F (and Z if I may say). Why settle for the junk when you can stick to the top 0.1% quality stocks/companies? Those are financially strong, innovative, disruptive, and run by great, fearless, and trustworthy leaders.
Able to avert disastrous situations Do you have to sit through 50%, 60%, or 80% market declines? OF COURSE NOT, and you SHOULD NOT. You avoid market crashes like the 2000, 2008, and 2020 crashes, and you probably will be a happy investor. Very happy.
Can a successful investor avoid market crashes, participate at the right time, and get out before losing an arm and a leg while becoming a hopeful one saying it will all come back? Of course, you can. This is where constant studying, monitoring, and observation come into place.
Good at controlling emotions. Last but not least. In fact, it is the MOST IMPORTANT. Investing involves emotions, lots of it. I will take it a little further. It is 90% emotions and behavioral control, and the rest is research, work, stock picking, buying, and selling.
Things are different when real money is on the line. Know yourself and learn how to control your emotions. Each one will have his own investing style and tolerance. Yours is different from mine and both of us are different from everybody else. Stick to what you are comfortable with as long as you can have a good handle on your emotions.
Most of the thinker’s personality traits were borrowed from the below article