The Psychology of Money - An Investment Manager\'s Guide to Beating the Market

stretch with the times. They appreciate new paradigms and the need

for new strategies. An example of a “new paradigm” owl is Bill

Miller at Legg Mason. He has an incredible winning streak of nine

years straight beating the S&P 500—beating it by an average of 11

percent each year over the past four years. Though labeled a value

investor, a Wall Street Journal article said that Miller:

taps esoteric sources of inspiration far beyond the confines of

Wall Street, largely through his association with the Santa Fe In-

stitute, a nonprofit think tank that studies “complex adaptive

systems.” Mr. Miller, who is on the institute’s board of trustees,

says buttons and thread, and alluvial geography, as well as ants,

are among the things he has found can be instructive in the realm

of investing [“A Value-Fund’s Chief Redefines the Term—with

Soaring Results,” Wall Street Journal, Dec. 31, 1999].

Owls like Bill Miller are more willing to take on risk. This

attitude, combined with their pragmatic and competitive inclina-

tions, make them formidable opponents in the market. They are

not new players in the market, but they may become more visible

as successful players in a market that is becoming impervious to

traditional methods.

Lions and foxes are two temperaments that have always gravi-

tated toward the market. What about the new players, called foxes

and dolphins?

The Adventurist(SP): The Wily Fox

View of the market: “It’s a fun game to be played with flair.”

Adventurists are wily foxes who love to use their resourceful,

clever minds. They thrive on activity and competition. Like the

rationalist, they integrate both the left and right brain hemispheres,

seeking precision and detail (left brain) but preferring a go-with-

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