In 1948, Benjamin Graham wrote in Security Analysis: “In order for security analysts to achieve a really satisfactory standing in the community, they must be prepared to subject themselves to a mental discipline that corresponds in some degree to that of recognized professions. The closest analogy, we think, is with medicine.”
Almost 60 years later, most security analysts are homemade, self-professed analysts like you and me, who analyze securities and try to predict their future.
One problem is that very few of us are full-time investors. Most of us have day jobs, which take most of our time. The rest is devoted to spending time with our loved ones and sleeping.
With so little time left for investing, can we say that we know the subject of security analysis as well as doctors know the human body?
I don’t think so.
The stock market battlefield is littered with the corpses of premature “investors.” Throwing spare cash at the stock market does not make one an investor. Sadly, that’s what most of us do.
When I read about past or current investment masters, there’s one thing that always jumps at me. I’ve found it in books on Warren Buffett, Peter Lynch, John Neff, and George Soros. It is the thing that, in my opinion, makes them investment gurus:
These men know themselves.
This is the foundation upon which these men built their fortunes. They know their strengths and weaknesses, they know their limits, they know their habits that make them successful, they know the stocks they buy and sell, and they know their market niche of operation.
How many of us know that about ourselves? Judging by our annual returns, not many.
To be a force like Bill Miller or John Templeton, one needs almost religious dedication. One needs market creativity. One needs balls.
Do you ever wonder what’s behind the dedication of great investors? In other words, why do these men and women spend their lives making billions?
The answer had been before my eyes for years, but I finally realized it last year when Warren Buffett announced that he was donating 43 billion dollars to charity. And then I remembered George Soros’s Open Society Foundation, and Peter Lynch’s The Lynch Foundation, and Bill & Melinda Gates Foundation, and Oprah Winfrey’s Foundation.
And then it hit me.
All these investors—and if you’ve never thought of Oprah as an investor, think again—are great because they are driven by a purpose. They make billions because they want to give away billions. What makes them incredibly successful is the fact that, above all, they want to help, serve, and give to the world.
Investing with a purpose beyond self is the key to guru-level investing.
Once we know what our purpose is, everything else falls into place—we have the patience to wait for the best buying and selling price, we have the strength to weather out the bear markets, and we have the great power of money to make the world a better place.
Invest with numbers and ratios and curves in mind and you will fail. Invest out of care and desire to give it all away and you will be unstoppable.
I know that some of you may think that what I say is drivel. But I guarantee you that software programs, Ph.D. in mathematics, M.B.A. in Economics, and newsletters will not make you the next Warren Buffett.
What will make you a great investor is very simple: know yourself.
__________
Krasimir Karamfilov is the manager of Pirgos Mirgos LLC, an investment company in Santa Monica, CA. He holds two Master's degrees in the arts, which helps him invest creatively.
Almost 60 years later, most security analysts are homemade, self-professed analysts like you and me, who analyze securities and try to predict their future.
One problem is that very few of us are full-time investors. Most of us have day jobs, which take most of our time. The rest is devoted to spending time with our loved ones and sleeping.
With so little time left for investing, can we say that we know the subject of security analysis as well as doctors know the human body?
I don’t think so.
The stock market battlefield is littered with the corpses of premature “investors.” Throwing spare cash at the stock market does not make one an investor. Sadly, that’s what most of us do.
When I read about past or current investment masters, there’s one thing that always jumps at me. I’ve found it in books on Warren Buffett, Peter Lynch, John Neff, and George Soros. It is the thing that, in my opinion, makes them investment gurus:
These men know themselves.
This is the foundation upon which these men built their fortunes. They know their strengths and weaknesses, they know their limits, they know their habits that make them successful, they know the stocks they buy and sell, and they know their market niche of operation.
How many of us know that about ourselves? Judging by our annual returns, not many.
To be a force like Bill Miller or John Templeton, one needs almost religious dedication. One needs market creativity. One needs balls.
Do you ever wonder what’s behind the dedication of great investors? In other words, why do these men and women spend their lives making billions?
The answer had been before my eyes for years, but I finally realized it last year when Warren Buffett announced that he was donating 43 billion dollars to charity. And then I remembered George Soros’s Open Society Foundation, and Peter Lynch’s The Lynch Foundation, and Bill & Melinda Gates Foundation, and Oprah Winfrey’s Foundation.
And then it hit me.
All these investors—and if you’ve never thought of Oprah as an investor, think again—are great because they are driven by a purpose. They make billions because they want to give away billions. What makes them incredibly successful is the fact that, above all, they want to help, serve, and give to the world.
Investing with a purpose beyond self is the key to guru-level investing.
Once we know what our purpose is, everything else falls into place—we have the patience to wait for the best buying and selling price, we have the strength to weather out the bear markets, and we have the great power of money to make the world a better place.
Invest with numbers and ratios and curves in mind and you will fail. Invest out of care and desire to give it all away and you will be unstoppable.
I know that some of you may think that what I say is drivel. But I guarantee you that software programs, Ph.D. in mathematics, M.B.A. in Economics, and newsletters will not make you the next Warren Buffett.
What will make you a great investor is very simple: know yourself.
__________
Krasimir Karamfilov is the manager of Pirgos Mirgos LLC, an investment company in Santa Monica, CA. He holds two Master's degrees in the arts, which helps him invest creatively.
