In a recent post on his website JasonZweig.com, Jason Zweig recaps past newsletters he wrote for The Wall Street Journal in which he posits the essential virtues that all successful investors seem too possess. Those seven virtues are:
- Curiosity. Successful investors aren’t afraid of what they don’t know in the way that ordinary investors seem to be. Rather, good investors are more afraid of what they do know and are willing to explore the possibility that their knowledge may be biased, incorrect, or missing something. Therefore, they’re always searching to gain more knowledge instead of resting on the laurels of what they’ve already learned.
- Skepticism. It’s easy to be taken in by the propaganda put forth by the financial industry, but smart investors know better than to believe everything they read or hear.
- Independence. The most valuable asset that an investor possesses is their mind, Zweig contends. Building upon the skepticism virtue, great investors do their own thinking and aren’t swayed by the loudest voices in the industry.
- Humility. Zweig calls humility a “paradoxical blessing that you can possess…only if you believe…you do not possess it.” And once you believe you possess, you have to work hard not to “puff up with pride at being humble.” In the newsletter where he discusses possessing humility at length, Zweig maintains that humility is about being honest with yourself, being able to evaluate yourself without illusion, and understanding the limits of your knowledge and what you still have yet to learn.
- Discipline. Good investors are able to put the market’s ups and downs into perspective and not overreact. As an example, Zweig tells the story of Sir John Templeton, whose copies of The Wall Street Journal would arrive days late to his home in the Bahamas. As a result, he prevented himself from acting rashly and emotionally to market news.
- Patience. One of the keys to successful investing is the ability to look past short-term losses and focus on the long view. Patience, Zweig writes, “is often measured not in months or years but in decades.”
- Courage. The final virtue that Zweig believes all successful investors possess is the ability to gather courage in the face of a tumultuous market. Being afraid to make an investment and then doing it anyway is a sign of a brave investor, Zweig says, writing that “manifesting courage as an investor [is] when you listen to what your gut tells you—and then do the opposite.”