In my years of investing experience, I have come to believe the three ingredients necessary to create a successful investor are the ability to take prudent risks, to diligently analyze available information to form a point of view, and to be able to step back and evaluate conclusions in the context of the big picture.
Over the past two years, I’ve made a concerted effort to spend more time reading books. In that endeavor, I’ve come to realize that the non-fiction books I appreciate most are those that synthesize extraordinarily vast amounts of information, draw notable conclusions, and convey them in a very concise form. I believe authors can demonstrate the breadth and depth of their knowledge precisely by the brevity of their works. Some writers possess an extraordinary ability to see the big picture and communicate it beautifully. In the world of investing writers, I would put Warren Buffett and Howard Marks in this category. Both write in concise essay form, focus on the big picture, and teach core investing principles in an approachable and eloquent way. They do so by drawing on a breadth of knowledge across many fields, rather than just a deep understanding of financial markets. I believe a successful investor needs both: a depth of knowledge in finance, economics and markets and a breadth of knowledge across other fields including history, science, and humanities in order to see the big picture.
“Day after day they pour forth speech; night after night they reveal knowledge.” – Psalm 19:2