Masters in Business

The Four Traits of Successful Investors

Analyst Ned Davis elaborates on the differences between winners and losers.

This week on our Masters in Business podcast, we speak with Ned Davis, one of the most respected technical analysts working today, and co-founder of Ned Davis Research. He is the author of "Being Right or Making Money" as well as "The Triumph of Contrarian Investing: Crowds, Manias, and Beating the Market by Going Against the Grain."

Davis' firm quickly developed a reputation as independent, institutional research company by offering unbiased, in-depth financial analysis. The firm was sold to Euromoney in 2011 for $173 million.

Davis says “We are in the business of making mistakes. The only difference between the winners and the losers is that the winners make small mistakes, while the losers make big mistakes.”

He notes that all successful investors share four basic traits:

  1. They use objective indicators.
  2. They are disciplined.
  3. They are flexible.
  4. They are risk-averse.

A brief historical note: Ned Davis was one of the people who inspired the idea for these deeper dive Masters in Business conversations; he was one of the very first people I interviewed (it was over the phone, it's unedited and it's very rough -- if you can tolerate it, the original interview is here). But the seeds of the idea for this podcast were planted with that interview.

You can stream/download the full conversation, including the podcast extras, on iTunesSoundcloudOvercast and Bloomberg. Our earlier podcasts can all be found on iTunesSoundcloudOvercast and Bloomberg.

Next week, we speak with Anindya Ghose, professor at New York University's Stern School of Business and the director of the Masters of Business Analytics program at NYU; he is the author of "Tap: Unlocking the Mobile Economy."

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Barry Ritholtz at britholtz3@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

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