The Many Hats of Great Investors

I have a new column out in the Washington Post on what varied skills it takes to become a better investor, titled The many hats of great investors.

Here is an excerpt:

“Contrary to popular belief, investing isn’t a traditional academic discipline. Money management is hardly a typical major. There are, of course, plenty of “Business Administration” undergrads, but their focus tends to be on running companies, rather than investing in them.

We churn out MBAs like made-in-China widgets, yet few ever become outstanding investors. And don’t even ask about economists — the profession that missed the housing boom and bust, the Great Recession, the credit crisis and the market collapse.

Great investors are savvy generalists. I can think of five fields that are hugely helpful to asset management. If you were to study these disciplines, your understanding of how markets work would greatly improve. And you would be a better investor.

How? You will generate better risk-adjusted returns; meaning, you will get the most bang for the bucks you are putting at risk. You will suffer less from volatility — the stomach-churning ups and downs in the markets that are one part risk, one part opportunity. And you will avoid the typical mistakes that most investors make.”

To see the five disciplines I discuss that can help you be a better investor, read at the full column at the Washington Post . . .


The many hats of great investors
Barry Ritholtz
Washington Post, May 22, 2011, Page G6

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