{"id":5389,"date":"2014-07-08T08:35:54","date_gmt":"2014-07-08T12:35:54","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=5389"},"modified":"2018-09-21T02:03:51","modified_gmt":"2018-09-21T06:03:51","slug":"skills-that-separate-you-as-an-investment-manager-decisiveness","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2014\/07\/08\/skills-that-separate-you-as-an-investment-manager-decisiveness\/","title":{"rendered":"Skills That Separate You as an Investment Manager: Decisiveness"},"content":{"rendered":"

In a recent series of posts, I have sought to complement my\u00a0advice on how to become a research analyst<\/a>\u00a0by dissecting\u00a0the\u00a0skills that can separate you from the crowd once you have landed a coveted research analyst position. Having hired research analyst interns, research analysts, a portfolio manager, and even my own successor when I retired from investment management in 2005, I have gained a fair amount of knowledge about the\u00a0skills that can deliver\u00a0a competitive advantage as you enter the investment\u00a0management arena. My prior posts have examined the importance of\u00a0intuition<\/a>,\u00a0<\/span>creativity<\/a>, and\u00a0introspection<\/a>.<\/span><\/p>\n

Some of the skills that you need to succeed as a research analyst are obvious: a love for\u00a0\u2014 \u00a0and vast knowledge of \u2014 \u00a0economics, business, and finance; a strong\u00a0drive; confidence and persistence; and so forth. You probably already recognize these skills as necessary since\u00a0they permeate the mythology of the investment business. Yet many of the skills needed for a successful investment management career are not taught in business schools. Neither are these skills discussed in the business press. And they are not well understood by most firms doing the hiring.<\/span><\/p>\n

If you would like to separate yourself from the vast crowd of highly motivated and highly intelligent candidates seeking to succeed in the investment business, one of the most important skills you’ll need to hone is decisiveness.<\/span><\/p>\n

Decisiveness<\/b><\/span><\/p>\n

I often say that the difference between a research analyst and a portfolio manager is that an analyst aims a gun, whereas the burden of responsibility for firing the gun falls on the manager. This difference underscores not only the grave stresses that can come with responsibility, but also the need for decisiveness in investment management.<\/span><\/p>\n

I have worked with analysts whose number of years in the investment business were greater\u00a0than mine as a portfolio manager.\u00a0 Yet when I would ask these analysts for their opinion about a business and a prospective investment in that business \u2014\u00a0 \u201cWould you buy at the current price?\u201d \u2014\u00a0they would answer the question with loads more data. While this response was sometimes helpful, it was, I think, an example of that most dreaded of analyst ailments: analysis paralysis. Their lack of decisiveness was shrouded in a cloak of data.<\/span><\/p>\n

Remedy<\/b><\/span><\/p>\n

I think analysis paralysis happens for several reasons. For starters, analysts and portfolio managers typically have\u00a0yet to realize or come to grips with one of the great lessons of investing: there is no such thing as a future fact. By definition, facts are things that have occurred in the past, but investment results unfold in the future. So, again, by definition, investment decisions are always leaps of faith. No fact can make a decision for you. So firstly, you must\u00a0come to grips with this reality.<\/span><\/p>\n

Second, I have found that underneath the carefully constructed veneer of analytical rigor and grace that many analysts wear is a person out of touch with his or her emotional state.\u00a0Meditation can provide valuable insights into one\u2019s emotional state<\/a>, as well as the underlying causes of emotional states.<\/span><\/p>\n

Third, if you catch yourself in analysis paralysis, try making\u00a0decisions of less consequence under uncertainty as practice. Start with very small decisions and work your way up. For example, start by being deliberate and conscious about what apples to buy at the grocery store, then eventually advance to decisions with much higher stakes.<\/span><\/p>\n

Application<\/b><\/span><\/p>\n

When I retired from money management, I had the unique privilege of hiring my successor. He and I shared an office for several months as I got him acquainted with the many choices I had made during\u00a0my tenure, as well as my models. As you might expect, he asked numerous questions about my process, my relationships, and my choices.<\/span><\/p>\n

All of the questions were of the knowledge-seeking sort until one day, in early August 2005, he asked me a very different type of question (paraphrased): \u201cWhy on God\u2019s green earth are you doing that<\/i> when you could be doing this<\/i>?\u201d I flashed a big smile and my successor immediately apologized, \u201cI\u2019m sorry, that was out of line.\u201d I replied: \u201cQuite the contrary, this is the very<\/i> moment I have been waiting for as the fund is now yours.\u201d The transition was sealed when\u00a0my successor was finally willing and able to question my judgment.<\/span><\/p>\n

With that simple act of decisiveness, the responsibility was his and I was able to quietly retire less than three weeks later.<\/span><\/p>\n

Photo credit: \u00a9iStockphoto.com\/CSA-Archive<\/span><\/p>\n

 <\/p>\n

Originally published on CFA Institute\u2019s \u00a0Enterprising Investor<\/a>.<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

In a recent series of posts, I have sought to complement my\u00a0advice on how to become a research analyst\u00a0by dissecting\u00a0the\u00a0skills that can separate you from the crowd once you have landed a coveted research analyst position. Having hired research analyst interns, research analysts, a portfolio manager, and even my own successor when I retired from […]<\/p>\n","protected":false},"author":2,"featured_media":5390,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[12,3,319],"tags":[240,233],"class_list":["post-5389","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-best-of-the-blog","category-the-blog","category-skills-that-separate-you-as-an-investment-manager","tag-decisiveness","tag-skills-that-separate-you-as-an-investment-manager"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5389","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=5389"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5389\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media\/5390"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=5389"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=5389"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=5389"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}