Think Like the Great Investors: Make Better Decisions and Raise Your Investing to a New Level

Part I

Stretching our mind

Man’s mind stretched to a new idea never goes back to its original dimensions.

Oliver Wendell Holmes

Most of us have learned to make decisions in a haphazard manner based on doing what comes naturally. However, research in the new field of behavioural finance has shown that our natural instincts often do not serve us well. Once we are introduced to the common cognitive biases in the way we make decisions, we will never look at the investing process the same way again.

Chapter 1

Shaping our destiny

It is in your moments of decision that your destiny is shaped.

Anthony Robbins

I am a very keen reader of books and articles about investing. In particular, I love reading about the great investors, those who consistently achieve outstanding returns that make them and their clients very wealthy. After all, if we want to be better investors, our best models are those with a proven outstanding track record.

The more I study the great investors, the more I am struck by the way the quality of their thinking seems to be superior to that of the ordinary investor. I find that the great investors have several key attributes that, in combination, lead to outstanding results and to their classification as outstanding investors:

• Education. This is a must. A very few have been entirely self-taught, but most will have a tertiary qualification, usually at postgraduate ...