Do not blindly follow Winners' Common Traits

Recently I've been reading the book "Hard Facts, Dangerous Half-Truths & Total Nonsense". The book has pointed out an very useful but easily overlooked idea.

That is, we tend to look for common traits in Winners and think that we can be winners if we follow these common traits too. But sadly, focusing on the common Winners' traits is insufficient.

One also has to compare these Winners' traits against the Average (group). If a trait can be found in the both Average and Winner, then this trait may not be differentiating factor between Winner and Average.

In addition, even if a trait is only present in the Winners, we have only observed a correlation. For people who know statistics, correlation does not imply causation. Similarly, a trait that is only found in Winners does not necessarily mean that such a trait is important in being a Winner.

How can we apply this idea? In my previous book review on "The Greatest Trade Ever", I have noted a lot of interesting points.

Now, these points are only gathered from the book which only focus on a few winners. We do not know whether these points are found in most winners. Neither do we know whether the average will have these points.

Hence, we should not blindly accept that having these points will definitely lead/help one to become a better investor. Who knows! Some of these points may turn out hindering you from becoming a great investor.

Now, there are many books that only focus on either the winners' traits or the losers' traits. Most of these books did not compare these traits against the average (or a sufficiently large average population). And you know what this means.