Warren Buffett On The Similarities Of Underwriting And Investing by Greg Speicher, Ideas for Intelligent Investing
In 1999 Warren Buffett wrote, “In Ajit, we have an underwriter equipped with the intelligence to properly rate most risks; the realism to forget about those he can’t evaluate; the courage to write huge policies when the premium is appropriate; and the discipline to reject even the smallest risk when the premium is inadequate. It is rare to find a person possessing any one of these talents. For one person to have them all is remarkable.”
It is interesting that these qualities parallel those required to be a successful investor.
A successful investor must:
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
- properly assess the future prospects of a business;
- quickly pass on those businesses he cannot understand;
- have the courage to make a large bet when the odds are in his favor;
- not invest if the margin of safety is too small.
You can infer from Buffett’s comments that finding (or becoming) an investor with these traits is difficult.