In most cases in our particular search for ” El Dorado ” we stop to read the stories of large investors or speculators to know how they have managed to realize his dream, familiar characters from the world of finance appear: Warren Buffet, George Soros, Jesse Livermore … whose existence and teachings, in one way or another, we strive to replicate.
However, there are stories of lesser – known characters whose advice can bring us a dose of wisdom to our approach to business and life.
In this context I met with Michael Steinhardt , considered one of the brightest managers of hedge funds (Steinhardt Partners LP), which achieved an annualized return of 24.5% annually, nearly triple the profitability of the SP500, in the same the fund was operational period (1967-1995). The six rulesthat Michael Steinhardt considered key, as described in article “Six Rules” , to become a hedge fund success and can be applied to life situations and investment decisions are:
- Committing all the more serious mistakes at the beginning , so the hardest lessons learned in the early years and then avoid them . One of the classic mistakes is to rely on gurus of finance.
- Devote themselves throughout life to do what excites us , because it is the only way to keep the maximum effort and dedication required to succeed long term.
- Being competitive intellectually , it is to be constantly researching and searching among the subjects of our field. The trick is to soak in the information and be sensitive enough to detect opportunities before anyone else.
- Make good decisions even with incomplete information , you never have all the necessary data, the important thing is to perform research work and focus on the facts that influence the decision.
- Always rely on intuition , intuition works as a hidden supercomputer in the mind and we are not aware. With time, experience in investments will help develop intuition so that can save us serious errors.
- Do tiny investment if money risks make sure the reward is enough for the effort and risk assumed.
From this list it is concluded that the successful investor long – term need to learn from their mistakes, spend a lot of time and effort to work, believe in their chances and not lose heart, cultivate their “nose”, take risks and have clear objectives.
These qualities that are easy to describe are much more complex to implement them consistently without becoming discouraged by the results difficult at the beginning. All of them away from the idea of approaching some markets thinking easy money, guided by the hope placed in the system purchased some guru or last heard recommendation.
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