What makes you a successful investor over the long term is to be able to focus on just that, the long term. Two things in the news support this thought. One is the violence and threat of chaos in North Africa and the other is Warren Buffet’s yearly letter to investors. On the one hand the US, Great Britain, France, and Italy have had discussions about possible intervention in the internal affairs of Libya. Muammar Qaddafi, the Libyan strongman has responded to peaceful demonstrations with lethal violence. The oil markets are uncertain and the price of crude has risen. The US is talking about enforcing a no fly zone which would mean patrolling the skies over Libya with US or NATO jets at the same time as oil companies are taking steps to remove, potentially, all personnel from the country. Recent demonstrations in Egypt brought down 30 year strongman Hosni Mubarak, leaders in Yemen have asked their head of state to step down and unrest based on religious differences threatens to spread from the Gulf state of Bahrain to the largest oil exporter in the world Saudi Arabia. What makes you a successful investor in such a world is the ability to see clearly beyond the turmoil of the day to the world beyond. What are safe investments in the world of today and what are profitable investments? Someone who has become one of the wealthiest men in the world may be a person to take a cue from in the current situation.
very year the so called Oracle of Omaha writes a letter to his investors. The letters tend to take the long view and, judging from the success Mr. Buffett had has over the years, tend to be good guides for investing. Widely published excerpts of the letter from this year include the opinion that America holds a great deal of opportunity and that smart investors tend to find opportunity. With each national crisis there are been those who have put their money under the mattress, so to speak, and those who have looked forward and invested in the future. If history is, indeed, a guide what makes you a successful investor is to invest in cars instead of the horse and buggy. It is to invest in AT&T as America starts to string phone lines across the continent and put a telephone in every home. It is to look to fiber optic cable, personal computers, and the internet as the old AT&T network ages. What makes you a successful investor is to start investigating the biotechnology that will lengthen lives and change the very fabric of society. No matter what the price of crude oil a stem cell driven cure for diabetes will be a world changer. Investing in the re-emergence of rail travel in America and the rebuilding of the interstate system will likely be profitable for the thoughtful investor. Learning how to invest in things like biotech may take time and homework but fortunes have been made in this industry which is only in its infancy. As always we are not suggesting any specific investment but are suggesting that what makes you a successful investor is to pattern your investments after successful investors, typically those with a long term view and track record of success. If you understand the current chaos in North Africa and the Middle East feel free to invest for short term profits. If you do not then look to investment opportunities that are not strongly affected by changes in oil prices.
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