The Big Win: Learning from the Legends to Become a More Successful Investor

Conclusion: So There You Have It …

Legendary investors, brilliant business people—what do they have in common and what can you learn from them? The first thing to understand is that each of these individuals is an entrepreneur. Merriam-Webster defines entrepreneur as: “one who organizes, manages, and assumes the risks of a business or enterprise.”¹ I know what you may be thinking—the guy who started XYZ Software Company is an entrepreneur. Buying a few stocks and bonds every now and then is hardly comparable to owning a business; it’s just not the same. I maintain that this type of narrow thinking is the problem with the way numerous investors approach the market. Consider the parallels: Entrepreneurs and investors share a common goal which is to generate exponential return on an investment while limiting loss. For the former, it is in terms of a greater value to their enterprise; for investors it is the same exact goal except that their enterprise is their portfolio. And the same decision process should be in control: How much capital has to be put at risk to earn a reasonable return, and does the specific potential for loss make the investment worthwhile?

There are many different types of entrepreneurs, and creating a new website from your college dorm room is only one way to build a business. No one can deny that hedge fund managers are entrepreneurial, as are private wealth managers. In fact, so are individual investors except they have only themselves as clients. The point ...