Above a certain level, not very important. IQ is a hygiene factor, not a discriminating factor: it helps to be reasonably smart, but above a certain threshold, further increments help less than in some other fields. The two PhD\u2019s in the book specifically commented on this\u2026<\/p>\n\n\n\n
Sushil, Chapter 5: \u201c\u2026for anyone in the top few percent of the population, IQ points are not the limiting factor in investment \u2013 other qualities such as recognising your ignorance matter more.\u201d <\/em><\/p>\n\n\n\n Vernon, Chapter 7: \u201d Compared to his mathematics degree and his doctoral work in computer science , he thinks investing is not technically difficult, but it does require some mental habits which are possibly unusual, although not difficult\u2026\u201d<\/em><\/p>\n\n\n\n Emanuel Derman<\/a> gives another version of this: “I once said to one of our equity traders that I thought, on average, fixed-income traders seem to be smarter than equity traders. He agreed, adding \u2018That\u2019s because there\u2019s no competitive advantage to being that smart in equity trading\u2019<\/strong>.”<\/em><\/p>\n\n\n\n I think it helps to distinguish between mental strength and mental characteristics.<\/p>\n\n\n\n Mental strength<\/strong> refers to raw processing power, IQ, analytical ability. <\/p>\n\n\n\n Mental characteristics<\/strong> means things like<\/p>\n\n\n\n For intelligence above a certain level, mental characteristics are related only weakly, if at all, to IQ.<\/strong><\/p>\n\n\n\n By the way, the mental characteristics listed above are not universally positive. There are many occupations and endeavours which require the protagonists to maintain habitual biases (eg<\/em> politics), reduce or deny uncertainty (eg<\/em> leadership), and affirm group affiliation (eg<\/em> almost any role in any organisation). The mental characteristics which are helpful for investing may not be much use for anything else. <\/strong><\/p>\n\n\n\n Update (1 Nov 2011):<\/strong> some psychologists characterise the distinction above as intelligence versus rationality<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Above a certain level, not very important. IQ is a hygiene factor, not a discriminating factor: it helps to be reasonably smart, but above a certain threshold, further increments help less than in some other fields. The two PhD\u2019s in the book specifically commented on this\u2026 Sushil, Chapter 5: \u201c\u2026for anyone in the top few … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,5],"tags":[],"class_list":["post-41","post","type-post","status-publish","format-standard","hentry","category-free-capital","category-investment"],"_links":{"self":[{"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/posts\/41","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/comments?post=41"}],"version-history":[{"count":1,"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/posts\/41\/revisions"}],"predecessor-version":[{"id":42,"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/posts\/41\/revisions\/42"}],"wp:attachment":[{"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/media?parent=41"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/categories?post=41"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.guythomas.org.uk\/blog\/wp-json\/wp\/v2\/tags?post=41"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}