Over and over Warren Buffett has emphasized that investing is not an area where a person with a high IQ beats a person with a lower IQ. For example, in an interview in Newsweek he said, "You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. Rationality is essential." (Anne Hughey, Omaha’s Plain Dealer, Newsweek, April 1, 1995)
He has also talked about the importance of temperament as opposed to intellect. “The most important quality for an investor is temperament, not intellect. You don’t need tons of IQ in this business. You don’t have to be able to play three-dimensional chess or duplicate bridge. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd. You know you’re right, not because of the position of others, because your facts and your reasoning are right.” (Adam Smith’s “Money World” show, June 20, 1988)
Buffett also emphasizes the importance of thinking for your self. “You have to think for yourself,” he said. “It amazes me how high-IQ people mindlessly imitate.” (U.S. News & World Report, June 20, 1994)
Summarizing all that I have learned from Warren Buffett and combining it with my own experience, my guidelines would be to understand the criteria in Conscious Investor for finding great companies. Next, when you find these companies, use Conscious Investor to calculate a fair price for them including a margin of safety.
The final step is to take your time until everything meets your requirements. You might only have everything lined up once or twice a year. But when they are, then that is the time to buy a substantial amount of stock in the company.
