{"id":5398,"date":"2014-09-09T08:43:49","date_gmt":"2014-09-09T12:43:49","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=5398"},"modified":"2018-09-21T02:03:50","modified_gmt":"2018-09-21T06:03:50","slug":"skills-that-separate-you-as-an-investment-manager-forthrightness","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2014\/09\/09\/skills-that-separate-you-as-an-investment-manager-forthrightness\/","title":{"rendered":"Skills That Separate You as an Investment Manager: Forthrightness"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Once you&#8217;ve finally <a title=\"Advice on How to Become a Research Analyst\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2013\/09\/12\/advice-on-how-to-become-a-research-analyst\/\">landed that coveted position as a research analyst<\/a>, how do you stand out from the crowd in this highly competitive field? Many of the skills needed for a successful investment management career are not taught in business schools, and so I&#8217;ve been enumerating <a title=\"Skills That Separate You as an Investment Manager\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/tag\/skills-that-separate-you-as-an-investment-manager\/\">the unconventional skills you will need to build a successful career in finance<\/a>. Thus far I&#8217;ve covered:<\/span><\/p>\n<ul style=\"margin-left: 5%;\">\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><a title=\"Skills That Separate You as an Investment Manager: Introspection\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2014\/04\/08\/skills-that-separate-you-as-an-investment-manager-introspection\/\">Introspection<\/a><\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><a title=\"Skills That Separate You as an Investment Manager: Creativity\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2014\/05\/13\/skills-that-separate-you-as-an-investment-manager-creativity\/\">Creativity<\/a><\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><a title=\"Skills That Separate You as an Investment Manager: Intuition\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2014\/06\/10\/skills-that-separate-you-as-an-investment-manager-intuition\/\">Intuition<\/a><\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><a title=\"Skills That Separate You as an Investment Manager: Decisiveness\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2014\/07\/08\/skills-that-separate-you-as-an-investment-manager-decisiveness\/\">Decisiveness<\/a><\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><a title=\"Skills That Separate You as an Investment Manager: Absolute vs. Relative Decision Making\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2014\/08\/12\/skills-that-separate-you-as-an-investment-manager-absolute-vs-relative-decision-making\/\">Absolute vs. relative decision making<\/a><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">In this installment, we will discuss forthrightness.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><b>Forthrightness<\/b><\/span><\/p>\n<p><span style=\"font-size: 16px;\">You may have mastered all other skills necessary for successful investment management, but knowing, and communicating that you know something, are entirely different skill sets. Translating the insights of the right brain into language \u2014 a more linear form \u2014 takes tremendous skill. Here investment professionals are able to speak the truth of what they think and know in such a way that the often abstruse thought processes of investment analysis are made clear for listeners, such as portfolio managers, chief investment officers, and boards of directors. Forthrightness differs from honesty in that it insists that investment managers speak the truth as they see it and to volunteer their opinions without heavily filtering the message. When you consistently take this approach, decisions become easier to make because people seem to have an innate sense of the truth of your statements.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><strong>A Model for Cultivating Forthrightness<\/strong><\/span><\/p>\n<p><span style=\"font-size: 16px;\">If you want to be more forthright and for your words to ring with truth, try working with the following mental framework. Words are typically perceived as authentic by listeners when the following five states honored evenly: inspiration, imagination, thought, word, and deed.<\/span><\/p>\n<ul style=\"margin-left: 5%;\">\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>Inspiration<\/strong> is the \u201caha!\u201d or \u201ceureka\u201d quality that comes with true discovery.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>Imagination<\/strong> is inspiration combined with knowledge and experiences to discover new ideas; many think of this as creativity.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>Thought<\/strong> is the creation of architecture meant to make the initial inspiration and commensurate imagination a structured reality.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>Word<\/strong> \u2014 as in \u201cI give you my word\u201d \u2014 is a meaningful commitment and responsibility to make real the original inspiration.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\"><strong>Deed<\/strong> is doing the hard work to make an originally intangible idea a tangible reality.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">When each of the five steps are in place and working together seamlessly, then magical things can happen for investment managers. This includes: changing the asset allocation of a portfolio; or creating an ideal set of questions with which to pepper an intransigent business management so that you get to the truth of a situation; or developing a new way of looking at all businesses that leads to new analytical insights; or divining what to write to your shareholders in your semiannual report so that it conveys your true regret at a bad decision \u2014 but in such a way that you get to keep your job and restore trust.<\/span><\/p>\n<p><span style=\"font-size: 16px;\"><b>Application of Forthrightness<\/b><\/span><\/p>\n<p><span style=\"font-size: 16px;\">As a part of the original job candidate materials I submitted to my first employer in finance, I included a copy of my master&#8217;s thesis. I concluded that active managers outperform passive managers \u2014 <a title=\"New Twists to the Active vs. Passive Debate\" href=\"http:\/\/blogs.cfainstitute.org\/investor\/2014\/09\/08\/new-twists-to-the-active-versus-passive-debate\/\">contrary to popular opinion<\/a> \u2014 so long as you use downside measures of risk and not measures of volatility in calculating Sharpe and Treynor ratios. During a subsequent in-person interview for that research analyst job, my interviewer turned to me and said, \u201cYou know I think your thesis is a load of bull!\u201d<\/span><\/p>\n<p><span style=\"font-size: 16px;\">I took a deep breath to dissipate my emotions and to center on some inspiration. Namely, I did not feel that my interviewer read my thesis; this was my inspired insight. Knowing what I knew about the firm \u2014 that they were active managers \u2014 I could not imagine that he had read the thesis. I then remembered that when I entered his office for the interview he was on a conference call with a company and that he was then busy checking e-mails for a while, keeping our interview at bay; this was the \u2018thought\u2019 stage of forthrightness. I also committed myself to challenge him on whether or not he read the thesis (the word phase), and then replied (deed phase), \u201cI don\u2019t think you read it all the way through, because it actually advocates strongly for the power of active management.\u201d<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Normally the advice given to interview candidates is to be a shrinking violet and to not challenge the interviewer. But in this instance, my words resulted in the interviewer blushing and then saying, \u201cWell you are right. Why don\u2019t you tell me what your thesis is about?\u201d I eventually received a job offer, which I accepted. This is the nature of truth when it is spoken: It cuts through abstruse layers of conversational and intellectual confusion.<\/span><\/p>\n<p style=\"font-size: smaller;\"><span style=\"font-size: 16px;\">Photo credit: \u00a9iStockphoto.com\/TK<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-size: 16px;\"><em>Originally published on CFA Institute\u2019s \u00a0<a href=\"https:\/\/blogs.cfainstitute.org\/investor\/\">Enterprising Investor<\/a>.<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Once you&#8217;ve finally landed that coveted position as a research analyst, how do you stand out from the crowd in this highly competitive field? Many of the skills needed for a successful investment management career are not taught in business schools, and so I&#8217;ve been enumerating the unconventional skills you will need to build a [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5399,"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":[241,233],"class_list":["post-5398","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-forthrightness","tag-skills-that-separate-you-as-an-investment-manager"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5398","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=5398"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media\/5399"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=5398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=5398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=5398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}