Before there was John Paulson or Eddie Lampert, there was Michael Steinhardt -- one of the first, and most successful, hedge fund titans. From the late '60s through the mid-'90s, Steinhardt's hedge fund compounded money at 24% annually after fees. He's a legend.

Blogger Barry Ritholtz dug up a list of Steinhardt's six rules of success from an old speech he gave. Here they are, along with a few of my comments:

1. Make all your mistakes early in life: The more tough lessons you learn early on, the fewer (bigger) errors you make later. A common mistake of all young investors is to be too trusting with brokers, analysts, and newsletters who are trying to sell you something.

Let's explain this photographically: You want to be Bill Gates here, not Ken Lay here.

In a recent interview, Steve Forbes asked Warren Buffett what made him so different. According to Buffett:

Well, I was lucky that I got started early. My dad happened to be in the investment business, so I would go down to his office on Saturdays. At age 7 or so I started reading these books that were around the place. I knew what I wanted to do early. That's a huge advantage.

2. Always make your living doing something you enjoy: Devote your full intensity for success over the long-term.

One of the most incredible quotes I've come across is from an interview with Chatroulette's eighteen-year-old founder Andrey Ternovskiy. Asked if he'd ever sell his blossoming company, Ternovskiy said, "I'd sell for the sake of becoming rich, and the first thing I'd do if I were rich, I'd buy something. I'd make an investment ... [and] that investment would be buying Chatroulette."

Hard to go wrong when you're that passionate about your job.

3. Be intellectually competitive: Do constant research on subjects that make you money. Plow through the data so as to be able to sense a major change coming in the macro situation.

Says Peter Lynch: "I've always believed that searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you'll likely find one grub; if you turn over 20 rocks you'll find two. During [some market stretches], I had to turn over thousands of rocks ..."

4. Make good decisions even with incomplete information: Investors never have all the data they need before they put their money at risk. Investing is all about decision-making with imperfect information. You will never have all the info you need. What matters is what you do with the information you have. Do your homework and focus on the facts that matter most in any investing situation.

In 2007, value investor Mohnish Pabrai lost nearly all of his investment in Delta Financial after the company went bankrupt. Asked about the loss, he replied: "Investing is a game of probability. Sometimes when you make favorable bets, you still lose them." Asked if he'd do it the same way if he could do it over again, he said bluntly, "It was a good bet."

The lack of perfect information ensures that you'll never find the perfect investment. Acting when the odds are in your favor is the best you can do -- even if you end up losing.

5. Always trust your intuitionIntuition is more than just a hunch -- it resembles a hidden supercomputer in the mind that you're not even aware is there. It can help you do the right thing at the right time if you give it a chance. Over time, your own trading experience will help develop your intuition, so that major pitfalls can be avoided.

I'm not disagreeing, but it's important to know the limits of your intuition. Here's a strong rebuttal from an unrelated Barry Ritholtz article:

You're a monkey. It all comes down to that. You are a slightly clever, pants-wearing primate. If you forget that you're nothing more than a monkey who has been fashioned by eons on the plains, being chased by tigers, you shouldn't invest. You have to be aware of how your own psychology effects [sic] what you do. This is why we as investors sell at the bottom, get panicked ... Every good financial decision I've made comes from, "Wait a second, monkey boy, step back, don't do that." Once you realize how your own brain chemistry works against you, it gives you a chance to not panic at the bottom.

6. Don't make small investments: You only have so much time and energy when you put your money in play. So, if you're going to put money at risk, make sure the reward is high enough to justify it.

According to Charlie Munger: "If you take the whole history of Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B), and you take out the 20 best transactions, our record is a joke." The capital gains alone from just three of Berkshire's investments -- Coca-Cola (NYSE: KO), Procter & Gamble (NYSE: PG), and American Express (NYSE: AXP) -- come to nearly $20 billion, or 10% of the company's current market cap. And that doesn't include dividends.

Thoughts? Sound off in the comment section below.                                

American Express, Berkshire Hathaway, and Coca-Cola are Motley Fool Inside Value recommendations. Berkshire Hathaway is a Motley Fool Stock Advisor pick. Coca-Cola and Procter & Gamble are Motley Fool Income Investor selections. The Fool owns shares of and has written covered calls on Procter & Gamble. The Fool owns shares of Berkshire Hathaway and Coca-Cola. Try any of our Foolish newsletter services free for 30 days

Fool contributor Morgan Housel owns shares of Berkshire and Procter & Gamble. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.