It's no big secret that many people who traded in stocks ultimately lose money. What's the difference between truly great investors like Peter Lynch and Warren Buffet, to the average investor?

Invest In Companies not Stocks

This is one of the ultimate differences in mindset between successful investors and investors who fail.

Stock investors who fail tend to relate to stock as pure numbers. Basically, they are waiting for these numbers on their screens to go up. They read morning newspapers and talk to stockbrokers to try and get the low down on which numbers are going to go up in the near future.

In the long run, this type of investing method almost always results in failure.

Successful investors don't relate to stocks as numbers - Instead, they relate to stocks as part ownership in a company.

If Warren Buffett were to owned 100 shares of a company and the company posts and earnings of $5 per share, Buffett would treat that as $500 he earned - Whether or not the company paid dividends.

Why is it so? Because Warren Buffett treats it as a company that he owns a part of making money.

This may seem to you like a small point, but the questions that result from this mindset are huge in difference: It goes from "What stocks will go up?" to "What are the undervalued companies?" The answers will yield completely different results.

Paying to much Attention to the Stock Market Activity

Did you know that Warren Buffett and Lynch don't actually pay that much attention to the stock market? 

In fact, if a Wall Street analyst recommends a stock, that's about the right time to start running in the opposite direction, Lynch says.

People who keep losing money in the stock market often make trades based on the advice of stock brokers. No matter how enthusiastic or convincing a stock broker sounds, you should never invest based on a "hot tip" or advice that someone else is "sure this is going to go up."

Successful investors don't invest based on tips from others. Instead, they do their own research and try to find companies that they think have high potential. They invest in those companies, not latest stock fads.

It has been rightly said that where there is a will there is a way. The willingness to learn with every investment venture will only sharpen your analytical skills thus helping you take decisions that prove lucrative for you. This is the mantra that successful investors follow. 

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