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Krasimir Karamfilov
Krasimir Karamfilov


April 03, 2007

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.

About the author:

Krasimir Karamfilov
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 3.5/5 (4 votes)


Jsp9999 - 10 years ago    Report SPAM
Dear Krasimir,

Although your observation makes some sense, I don't know if it's that clear cut as "knowing thyself" Isn't it always the result that shows who you are in this society? If those guys you mentioned did not achieve what they achieved, people would not even mention them. They are just one of us who do not know who we are. So there goes my conclusion. Until proven either by money or power or knowledge, we don't know who we are
Wildcat - 10 years ago    Report SPAM
Krasimir - 10 years ago    Report SPAM
Dear Jsp9999,

Thank you for your comment. What I'll say is this:

1) In my opinion, nothing in life is clear cut. I expressed a point of view in my article, which either rings true to you or not. It does to me.

2) My life experience has led me to believe that the result is not what shows who we are in a society. There are millions of people, who know who they are, and do great things in their own ways, and the public/society does not know them. The purpose behind an act is what I wanted to stress in the article. The result will come, if there's a purpose.

3) Money, power, or knowledge have nothing to do with knowing oneself. It all has to do with choice. A Buddhist monk in Tibet who chooses to meditate all day has neither money, nor power, nor knowledge in the sense the Western world thinks of money, power, and knowledge. But he knows himself. The same with investing. I was a guy with no money to my name two years ago. Before I started investing, I went to therapy for two years. That was my way of learning about myself. Other people do it through meditation, sports, or reading. Then I started investing. I had 46.47% annual return in my first year. As the wise men say: "Be. Do. Have."

Happy investing!
Saga364 - 10 years ago    Report SPAM
Hi Guys,

I dont really agree .. :( things are too eutopian as expressed in the article ...

End of the there is some greed even in people like WEB n Ben ... if he wasnt greedy, why would he keep investing ..?

And this is purely my personal opinion and even I preech .. "we like process more than the proceeds"


Jasonfrey33 premium member - 10 years ago
I believe that the greatest challenge that we have in life is to know and conquer oneself. It is not surprising to find that people who have achieved this lofty goal or even made progress toward it accomplish extraordinary things. Not only do they shine at their chosen profession, in this case investing, but also in every other area of life.

Imagine if you had perfect patience to wait for the right moment to invest. Imagine if you had fortitude to go against the crowd even in the toughest of times for several years on end. Imagine if you had complete honesty with yourself in what you know and don't know. What a difference these traits would make to your investment returns, or even more important, your life.

I believe the greatest investors also possess talent, although where the talent lies varies from investor to investor. I used to believe that talent was no different than long hours of hard work. I now realize that I was wrong. Try as I might there are certainly things that I could never achieve at the level of another person. For example: compose music like Beethoven. I could expend great effort and not even come close. However, there are things that I can do with little practice better than the majority of people and with extensive practice I can do these things better than most anyone. How do you know if investing is your talent? There is a three rule test:

1) It should bring you great joy.

2) You should be effective at it.

3) Others should recognize and confirm that you excel in that area.

Purpose is a powerful trump card. I think it would be an interesting post to see the purpose that led each member to investing. The quality of the purpose may not correlate with returns, but it likely correlates with perseverance during difficult times and the joy that a chosen task brings to a person. Two people can do the exact same job and one will be miserable and another joyful, the only difference being the purpose behind the work. If we work where our talents lie, develop the virtues and have the correct purpose in mind we should all be tap dancing to work.

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