Viewed from a different perspective, they were asking for and
receiving help on difficult issues in a truly collaborative way. Am
I saying that investment professionals should run out and share all
their hard-earned information? No. There is a place for coopera-
tion and a place for competition. Choice is the issue. Knowing when
to use each and having a choice is the key. My experience with
investors is that they spend so much time in the competitive mode
that they miss many opportunities to ask for help.
There is another arena in which investors could ask for help.
As discussed in Chapter 5, investors could establish buddy systems
to monitor their emotional reactions, the ones that could damage
performance. (Watch out if a person’s response to this topic is: “I
don’t have emotional reactions.” We all have emotional reactions;
it’s just a matter of how we manage them.) Meir Statman, a pro-
fessor of behavioral finance, suggests that investors recognize their
capacity for (biased) emotional decision making and experiment
with cooling-off periods, like the three-day time period the law
provides for consumers to act on “buyer’s regret.” Statman writes,
“The same argument applies to securities. People understand that
cognitive errors and imperfect self-control interfere with good
decisions” (Behavioral Finance and Decision Theory in Investment
Management, AIMR Publications 1995). We could guard against
these habits and avoid inferior decisions by buddying up with
someone who knows us and our tendencies when emotional reac-
tions are triggered. A case in point is the example from Chapter 5
about the portfolio manager who overreacted in the PharMor situ-
ation. He could have saved his firm hundreds of thousands of dollars
by asking for help.
In what ways could you improve your level of creativity and
investment results by collaborating with others? If top athletes
and performing artists have coaches, doesn’t it seem odd that top
money managers don’t? Again we could draw from the experience
of John Cleese, the comedian, who now collaborates on all
his creative projects. Two heads are better than one. Even if the“A” Is for Ask for Help 19914-25 ware 199 1/19/01, 1:16 PM