In Bill Ackman’s Floating University lecture, entitled “If You’re So Smart, Why Aren’t You Rich?”Ackman argues that to be a successful investor, “you have to be able to avoid some natural human tendencies to follow the herd.” Ackman also stated that you need to be able “to withstand the volatility of the stock markets.”

When the market goes down, Ackman states  “every day your natural tendency is to want to sell. When the stock market is actually going up, every day your natural tendency is to want to buy, so in bubbles you probably should be a seller.  In busts you should probably be a buyer, and you have to have that kind of a discipline.”

Discipline means thinking long-term. According to Bill Ackman (and Benjamin Graham), the stock market is a “voting machine,” which is subject to  “the whims of people in the short term.” In today’s global economy, all sorts of events may occur that scare investors, but as Ackman points out, stock prices are affected by many things “that really have nothing to do with the value of certain companies that you’re investing in.”

Video here-

More tomorrow from Ackman