A few years ago, I was fortunate enough to attend a presentation by Jason Zweig where he discussed "The Seven Virtues of Great Investors." It left such a profound impact on me that I knew we needed to share these principles with our investors, as they continue to guide our approach at Cap Six.
Great investors share common traits that allow them to succeed consistently over time. These are not technical skills or secret strategies but rather virtues that can be cultivated through practice and discipline. Here are the seven virtues as outlined by Zweig:
- Curiosity: Great investors possess an insatiable desire to learn. They read voraciously, ask questions constantly, and never assume they have all the answers. This intellectual humility keeps them open to new ideas and perspectives.
- Skepticism: While curious, successful investors are also skeptical. They do not accept information at face value and always seek to verify claims. This healthy doubt protects them from falling for too-good-to-be-true opportunities.
- Independence: The best investors think for themselves. They do not follow the crowd or rely on others to make decisions for them. This independence allows them to see opportunities that others miss and avoid the pitfalls of herd mentality.
- Humility: Acknowledging what you do not know is just as important as leveraging what you do know. Great investors admit their mistakes, learn from them, and move forward without letting ego cloud their judgment.
- Discipline: Successful investing requires sticking to a plan, even when emotions run high. Discipline means following your investment process consistently, regardless of market conditions or short-term noise.
- Patience: Wealth is built over time, not overnight. Great investors understand that compounding works best when given time to work. They resist the urge to chase quick gains and focus on long-term results.
- Courage: Making contrarian bets requires courage. Great investors are willing to go against the grain when their analysis supports it, even when it feels uncomfortable. This courage is what allows them to buy when others are selling and vice versa.
At Cap Six, we have embedded these virtues into our investment PROCESS. Our systematic approach is designed to cultivate curiosity through continuous research, maintain skepticism through rigorous analysis, preserve independence through our proprietary models, practice humility through regular portfolio reviews, enforce discipline through rules-based execution, exercise patience through our long-term focus, and demonstrate courage through our conviction-weighted positions.
These virtues are not just nice-to-haves; they are essential components of successful long-term investing. By building systems that embody these principles, we aim to deliver consistent results for our clients while staying true to the timeless wisdom that has guided great investors throughout history.