Temperament like Pre

Buffett and Steve Prefontaine share a common trait. It's not the runner's physique. It's their even temperament.

Steve Prefontaine (Pre), was a former holder of five American track records (2,000 meters to 10,000 meters), made distance running "cool," and is an example of the even temperament found in many who enjoy running.

Proper temperament is paramount for success in both investing and running. Though Buffett is clearly not a runner, he understands the temperament side. To paraphrase The Oracle of Omaha, intelligent investing requires two traits: Ordinary intelligence and and an even temperament. That sounds like an easy recipe for success; the combination is rare, however, and is often accompanied by man's money-making gene.

Intelligence leads to the creation of a simple investment thesis. Temperament helps you avoid the siren songs of the market. And, the money-making gene, is the obsession (in whatever form) with the investment process.

What is temperament?

According to Wikipedia, "temperament is defined as that part of the personality that is genetically based." Dictionary.com defines it as "the combination of mental, physical, and emotional traits of a person; natural predisposition."

So how would one describe the temperament of a runner and how does this temperament potentially limit errors in the investing process? Distance running, especially under intense pain or stress, requires mental, physical and emotional stamina. It requires independence; it is usually a battle with one's self. Running also forces one to ignore exogenous variables and to focus on the few things that count: breathing, form, and pacing. This focus and avoidance of noise is invaluable when making buy/sell decisions.

There are many habits and hobbies that reflect one's temperament. Running is just a painful one that often manifests even temperament; that's half of Buffett's equation for investment success.



Disclosure: I think Pre was awesome
Image: http://www.thefinalsprint.com