Success and academics, Innate vs learnt, Inspiration vs perspiration

Just thought I would throw it out there and see what the opinion was on this one.

What percentage of success in your career is due to academically understanding the markets/stocks/industries/strategies that you target, how much of your success is from reading books and how much seems to come from getting lucky or 'just having a feeling'?

Following on from that, there are loads of great books out there, loads of great lists but how many have each of you read? Is it often a case that there are books that would be great to read but normally you are too busy to read and instead focus on the day-to-day of blogs and news articles.

 
Best Response

I've often thought about this question myself -- I will keep my answer short and to the point:

I'm throwing in a 4th point that I believe is often overlooked: Personality

Personality: 60%

Academic understanding: 25%

Reading from books/articles/magazines:10%

Getting lucky/having a feeling: 5%

From my view, most people can do any reasonable amount of accounting, finance, or legal work -- AP/AR, financial models, litigation work...but what it really comes down to in the work place is -- does management want to work with you or not? That's where personality comes into play. Academic understanding is necessary but sometimes trivial since most of what you learn on the job is the foundation or supplemental to your academic foundation of understanding in accounting/finance. Every so often, you'll learn a thing or two from books -- or at least understanding more of the mental fortitude some of the men and women in finance have -- what they've overcome, and how to better understand their personality. I think this is important because your personality is part of what allows you to make long lasting connections and relationships with people in the industry. Getting lucky -- there is always a small element of luck or something that we can't fully comprehend -- so when you see an opportunity -- right place, right time -- jump on it and take advantage of it.

 

90% of the knowledge I've acquired in finance comes from books and experience. Academics can only take you so far as you only develop a theoretical understanding of surface concepts. To further your understanding, lots of outside work and experience needs to be done to understand how companies, subjective to a particular industry, should be analyzed. The most valuable lessons school has taught me are the ins and outs of a Bloomberg Terminal and financial modeling. As far as success goes, luck and networking are equally as valuable as knowledge. Remember, in business its about who you know. If I were to group academics and reading books, I'd say I owe 50% of my success to that and the rest to who I knew and luck. Simply put, each of those independent of each other are not drivers of success.

On the topic of how many books I've read..many. In college, I would read one book in two days and reread it a few more times with a highlighter and a pencil. (I was and still am a huge nerd). I have about two book shelves full of finance/investing books.

Portfolio manager of a boutique value-oriented long/short and event-driven hedge fund Disciple of Graham since the age of 12 Started an investment fiirm and two funds at a young age, all you young-lings interested in hedge funds, pm me.
 

Seems to be as much as I thought. It reminds me of when I was trying to learn to program. I used to read loads of books and never actually make the move into actually developing things. Eventually when I did start, I realised nearly everything I had been reading was largely irrelevant to day-to-day, although the background understanding was still helpful.

It would be great to get a few more comments to see what other peoples thoughts are on this.

 

Personality trumps all. However, if you work smarter and out-work everyone else that compensates as well (oxymoron, I know...)

I'm on the pursuit of happiness and I know everything that shine ain't always gonna be gold. I'll be fine once I get it
 

I totally agree with MLCM and his advice on reading books applies to everyone regardless of strategy employed. Freshman year alone I had read north of 70 markets related books (yes, I tracked them on an excel spreadsheet) which I believe was really beneficial in leading to everything that came after. That being said, most of the stuff you read in trading books are garbage and for the ones that are worthwhile, a substantial portion of concepts are borrowed from other preexisting books so there's a clear decreasing marginal utility in effect. I currently seldom read more than 4 markets books a year.

 

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