Ben Graham said to be a successful investors one needs first, reasonably good intelligence; second, sound principles of operation; and third, and most important, firmness of character. What did he mean by “firmness of character”?
Operating in an intensely competitive domain with limited information and high stakes is psychologically demanding. We have to constantly work against our evolutionary instincts (conformity, attribution bias, loss aversion, narrative fallacy etc) while trying to generate sustainable returns in markets. Hence good investors are often contrarians, have high tolerance for uncertainty and are loners.
Studies have shown that being a contrarian and standing against your social peer group activates anterior cingulated cortex and the insula in your brain which are also activated in case of real physical pain. As a contrarian investor you are buying what everybody else is selling and selling what everybody else is buying and this is to an extent biologically equivalent to breaking your bones in terms of fear and pain response.
Constantly dealing with uncertainty is also challenging. It is more stressful than even knowing something bad is definitely going to happen. Given a choice to get a painful electric shock now or may be sometime in the future people overwhelmingly choose former (equivalent of an investor preferring a certain immediate loss vs. a probable loss of same magnitude in future).
Its imperative for good investors to be fiercely independent and avoid groupthink. This is a lonely endeavour and humans can go to great lengths to avoid loneliness (they would rather be electrically shocked than left alone with their thoughts). In simulated trading games people would rather make losing bets than just sit and be bored. A good investor is also always thinking probabilistically and hence rarely gets the satisfaction of narrative closure leading to anxiety.
I think what Ben Graham meant by “firmness of character” was that you have to improve as a person before you can improve as an investor. You have to make sacrifices that others are not willing to make and train yourself to deal with stressors that are often debilitating for most people.
References
Striatal BOLD Response Reflects the Impact of Herd Information on Financial Decisions
Why we're hardwired to hate uncertainty
People would rather be electrically shocked than left alone with their thoughts
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