Your IQ and ROI
According to Warren Buffett "Investing is not a game where the guy with a 160 IQ beats the guy with a 130 IQ" and what Buffett says about what is necessary for investing successfully:
Temperament is also important. Independent thinking, emotional stability, and a keen understanding of both human and institutional behavior is vital to long-term investment success. I’ve seen a lot of very smart people who have lacked these virtues.
Also, investing is simple, but not easy. It requires independent thinking and emotional intelligence more than IQ. When markets are tumbling and fall like no tomorrow, IQ is not going to help you to stay away from selling and buy even more at most bargaining prices.
Below is one of the best article written about “Intelligence and Investment “ from awealthofcommonsense.com
Here are some of the highlight from the article : “After a few years of being impressed by the sophistication and above average IQ of the various portfolio managers, strategists, analysts, and marketing people I came into contact with, I finally had a realization – intelligence can only take you so far in this world. I didn’t exactly have an epiphany on the topic, but over time the shine began to wear off.
One of the strongest verdict :
IQ may be useful when it comes to analyzing complicated investments. However, patience, discipline and perspective are all more closely-tied to EQ than IQ.
Sometimes it doesn't matter how much complex quantitative analysis you perform on a stock or how good one could predict the cash flow or growth of a company. At the end of the day, share price is determined by the market, not by a number that a supercomputer or complex algorithm.
If high intelligence were the key to successful investing, top business school professors and economists would be the wealthiest guys on the planet.
Obviously, financial markets are made up of millions of people around the world. Understanding how other investors are feeling, identifying why they are buying and selling and anticipating what they will be doing next all involve emotional intelligence. You may find out more about the importance of “ behavioral or psychology “ impact on investment in My Investment Strategy ( here )
But how many investors will dare to buy during crisis ? as what repeatedly emphasized and highlighted by Buffett “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”