December 17, 2021

These days, legions of investors hang on the every word of celebrity CEOs and business gurus. But no matter how brilliant Elon Musk or some guy on Reddit might be, real investing demands that we think for ourselves.

I happen to be a big fan of Warren Buffet, but that does not mean I try to replicate Buffet’s moves. Those trying to imitate Berkshire Hathaway, are two steps behind — not the recipe for market beating returns.

To beat the market, we need to be a little more original than just following an influencer, and a lot more methodical. Buffet’s ability to form a clear point of view, convert that into analysis, and avoid emotional reasoning, has made him one of the greatest investors of all time. His philosophy is simple, but execution is hard.

Every active investor has to factor in all the details of their own context. Your knowledge base, interests, risk tolerance, existing portfolio assets, and time horizons all make every investment a unique case.

What really sets the best investors apart from the crowd is that they are top notch learners. You get there by engaging in the process of observing, forming a theory, setting up performance benchmarks to measure success, then reflecting and improving the next time.

Anybody who relies too much on outside advice is going to undercut their own skills as an investor. Just as you don’t become a skilled doctor by copying somebody else’s homework, you don’t become a great investor by relying on other people’s investment tips.

Active investing is hard work, and it’s not for everyone. If you want to beat the market over time, there are no shortcuts. Learn to research, think for yourself, and manage your emotions. Anything else is just gambling.

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