What are the early signs of an exceptional investor?
Many on this forum have likely run across a couple of individuals who are truly exceptional at investing in private markets. It is immediately apparent when you meet them. I (and you) could list some surface-level characteristics that distinguish these people, nothing new. However, for those of you who are older and have seen some of these people throughout their journey, what were the early signs or characteristics shared by individuals who ultimately become great? Would you have predicted their ascendence? Are their skills learnable or innate for the most part?
Bump
You are only as good as your firm's strategy. It's not like you're at a MM HF and are ripping your own PnL for the pod brah.
You conduct diligence and present the case to IC, if IC likes it you're through. Not sure one can gauge how good of an "investor" one is until you're far more senior.
I guess one thing that does stick out as a younger person is how critical you are of the deal and how the firm can make money from it. What are the operational levers we can pull to hit the exit we need to underwrite to? What is the M&A thesis? How well do you know the market and competitors. It's literally just hours and hours of reading and reps.
Don't necessarily these track to you being a great "investor" but it is important to move up in ranks.
Traits I’ve seen over the years from those that are not only good / great but elite level.
-Compounding learners: Absorb information constantly and build upon what they learn which lets them compound their learnings and mental models.
-Checking your biases: Akin to avoiding the Dunning-Kruger effect. People who have a strong grounding of their circle of competence and more importantly having a feel for what they don’t know.
-Salesmanship skills: Selling and articulating your ideas in effective ways consistently to senior professionals / IC / LPs etc.
-Understanding things at the 101 level: Breaking down layers of complexity to the simple building blocks - I swear so many people no matter how hard they try cannot do this. Bringing things to the 101 level often helps develop insights at the same level or deeper than long-time industry / end market experts.
-Capitalizing on inflection points: This is one I’ve seen rarely but truly separates the God tier investment minds from just good / great. It’s knowing when things are truly misunderstood or at the precipice of an inflection point and understanding why that’s important or worthwhile. Think Buffet and Insurance companies, Soros on UK pound, Bernard Arnault on LVMH and luxury, list goes on.
Hope this helps.
Thanks for the input and excellent breakdown. One that you mentioned that I believe is particularly undervalued amongst younger investors is the salesmanship skills. Which I would further boil down to just being good at communicating succinctly and convincingly. Even though I'm relatively young, I've seen people who had great intuitions, yet could never articulate their ideas to get buy in.
On the inflection points piece -- perfectly put. It is hard to teach that sort of thing, but reminds me of the famous Graham Duncan blog post, detailing level 4 investors.
How are you able to discern if someone is exceptional at private investing during a meeting?
A lot of these traits can be attributable to having high eq, but it doesn't necessarily lend itself to consistently outperforming which is very hard
If private investing traits were discernable than fund of funds would consistently outperform
Vitae maiores omnis minus laboriosam laudantium similique. Est architecto aut aut. Vel repudiandae laudantium labore fugit.
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