According to a paper titled "Cognitive Reflection and Decision Making" (link opens a PDF file) by Professor Shane Frederick at MIT's Sloan School of Management, Warren Buffett, chairman of Berkshire Hathaway (NYSE:BRK-A), might be a smart woman.

Didn't see that coming, did you?
Professor Frederick performed a study aimed at linking cognitive ability (IQ) with patience and risk tolerance. He found some interesting results when breaking down the data by gender. Here's the sentence that grabbed me:

"Expressed loosely, being smart makes women patient and makes men take more risks."

In the paper, patience referred to delaying small gains today for big gains tomorrow and taking the time to work through problems rather than taking shortcuts via intuition. Risk referred to the willingness to take chances rather than settle for sure things.

Gender bias
OK, OK, the Oracle of Omaha is obviously not a woman. But he sure acts like a smart one, preferring to wait for the right opportunity and then hold patiently to reap all of the rewards.

That's why Buffett waited for the stock prices of Coca-Cola (NYSE:KO) and American Express (NYSE:AXP) to slump before he bought in. These were superior companies that were being offered at bargain prices because of difficult yet surmountable problems -- the New Coke debacle and the neglect of the credit card business, respectively.

Buffett continues to hold these stocks today, realizing total returns greater than 500% on both since their initial and subsequent purchases. It takes time for wealth to compound, but the wait can make us all a lot richer in the long run.

Business bias
The philosophy of smart investing is simple:

1. Buy great businesses at good prices.
2. Be very, very patient.

Philip Durell strives to do exactly that in his Motley Fool Inside Value service. He waits for bad things, such as lowered expectations or a CEO leaving for Boeing (NYSE:BA), to happen to great business such as Dell (NASDAQ:DELL). Then he buys, and he's willing to wait. When the market recognizes that these companies consistently create shareholder value, that patience will pay off.

The Foolish bottom line
Being a smart investor means being patient, regardless of gender. Warren Buffett and Philip Durell may think like smart women, but that tack is helping them both achieve market-beating returns.

If you'd like to join Philip at his Inside Value service, click here to be his guest free for 30 days. Take your time to decide for yourself if you want to be part of the team that beats the market while taking on less risk.

This article was originally published on April 19, 2006.

Coca-Cola, Dell, and Berkshire Hathaway are Inside Value recommendations. Dell also does double duty as a Stock Advisor recommendation.

Retail editor and Inside Value team member David Meier does not own shares in any of the companies mentioned. He is currently ranked 619 out of 20,943 investors in The Motley Fool's CAPS rating service. You can view his TMF profile here. The Fool takes its disclosure policy very seriously.