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Is your fund manager an extrovert or introvert? It could have a major impact on how they approach investing - and ultimately, on returns. When we think about investors there are generally two opposing personality types that come to mind: - The gung-ho trader types that are in your face and flashy. Gordon Gekko being a good example. ?? - The studious investment geeks that sit in a quiet room reading company reports. Warren Buffett is the classic archetype here. ?? So who would you rather have as your fund manager? The truth is as human beings we are programmed to seek out other successful people to follow and we are drawn to charismatic leaders. Yet this might detract from our ability to pick a good fund manager. Warren Buffett was so introverted that he had to take lessons in public speaking. What's more, Buffett lives an infamously frugal lifestyle bereft of the flashiness that convention dictates conveys financial success. How many of us would have been truly convinced enough to invest when Buffett was a relative unknown in the investment world? Yet it is often these understated, 'geeky' individuals that we should be seeking out for the best chance of generating strong investment returns. Extroverts have a tendency towards thrill-seeking behaviour, which can lead them into FOMO and overtrading. Meanwhile, introverts tend to sit behind closed doors away from the hubbub and take calculated risks. But introverts have their own shortcomings. They have a tendency to overanalyse and shy away from risk - even when the upside is substantial. So make sure your introverted fund manager has the courage of their convictions and knows when to take action. It's a delicate balancing act. What's your experience? Editorial image credit: Kent Sievers / Shutterstock.com (+++Opinions are my own. Not investment advice. Do your own research.+++) Enjoyed this post? ?? Like ?? Comment ?? Share ?? Subscribe
I think extroverts also love to compare (themselves) with others, make his position known, socially fx. Kind of having a public investment opinion, to compare with others. Can be risky, because emotions quickly take over. I try my best to not speak to anyone about positioning & economics & analysis, because I do not want to "feel anything" if I am ultimately right or wrong in the end, nothing depends on it. Just stops being hit, positions opened & closed. No one to "impress" or be "ashamed" of. This is why LinkedIn is such a relief sometimes, as it is a kind of one way, way to interact with others about markets. Just opinions being flung left right centre, no one remembers who said what anyways, unlike if being very extrovert and social about, what to me, is a very private enterprise. Another Banger post James Faulkner. Always a relevant topic! ?? ??
Such a key point. Extroverts shine at client relationships and deal-making. But when it's time to crunch the numbers, those quiet, analytical souls are your secret weapon. That's why the best funds often have a mix – it's the brains AND the charm that win the day. #teamwork #investmentmanagement
I'd be curious to check out the Myers-Briggs profiles of fund managers. I have a hunch they share a bunch of common traits.
What about ambiverts, which is said to be the majority of the human population?
I’ve always said the best presenters ≠ best fund managers! Always a tricky one for fund buyers to navigate - as you say it’s a balancing act!
Well said James Faulkner, personally I’ll take a mix between Jim simons & Warren Buffet. I definitely believe being on the extreme of either side might not be a good thing.
Christopher Schelling has written some interesting articles on his research that included psychometric testing of PE Fund managers. Would be interesting to know if there was an introvert / extrovert effect.
Partner – Manager Selection | Multi-Asset Investor | CFA Institute Volunteer & Consultant | Decoding investment complexity into practical wisdom with my daily posts
12 个月During the heydays of the structured credit market in the mid-2000s I carried out a due diligence on a CDO manager in New York who was sporting a very expensive diamond-rimmed timepiece on his wrist. The story he told all sounded convincing. But I just couldn’t get myself to invest with a guy who came across so flashy. Just couldn’t. As it turned out, this guy was one of the first to blow up. He took some aggressive bets, basically he was a reckless risk taker. Intuitively, I had made the right decision!