temperament
Temperament beats intellect
The rule
Investing success comes from calm, patience and self-control, not from a high IQ. Character beats cleverness.
Where it flips
But calm with no homework is just stubbornness. The fix is a steady temperament joined to a sound method, calmness applied to good choices, not to bad ones held out of pride.
Graham said the investor's biggest problem, and worst enemy, is himself. Being clever does not stop you from panic-selling in a crash or chasing a mania. A steady temperament does. The rare real edge is the plain-sounding ability to stay calm and sensible while everyone around you loses their head.
A worked example
In a crash, the cleverest analyst in the room sells at the bottom out of fear. Meanwhile a calm, ordinary investor sticks to the plan and recovers. The difference was temperament, not brains. [illustrative]
How to spot it
- ·the plan dropped under fear or greed
- ·cleverness without self-control
- ·the real enemy is in the mirror
Benjamin Graham · The Intelligent Investor