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

Strengthening One’s Abilities 37

to have a natural preference for extraversion, as seen in his con-

stant traveling and visits with managements. Lynch is known for

finding his ideas at the malls, by getting to the stores and seeing

them firsthand. Here is an example of his regret at not getting out

in person to see a new company:

In hindsight, I wish I had dragged myself out to the Chestnut Hill

Mall to visit the new NordicTrack retail store. I would have seen

firsthand the array of new products—the NordicFitness chair, the

NordicFlex Gold body building machine, NordicRow TBX, the

recumbent bike exerciser, and the various advancements in sta-

tionary skiing.

If I had watched the customers try out this equipment, per-

haps I would have understood the importance of these retail

outlets, which by 1992 accounted for about 25% of NordicTrack

sales. Perhaps I would have taken Skip Wells’s megatrend projec-

tions more seriously [“When the Peter Lynch Rule Fails,” For-

tune, Oct. 25, 1999].

The “stretch” for extraverts is spending more time alone, con-

centrating on the numbers and data. This is difficult for extraverts

because they feel that they are missing something when they are

off by themselves. Their tendency is to go to a conference, attend

a management lunch, or talk on the phone. Almost any activity

will do as long as it involves other people. (I remember telling my

extraverted mother-in-law how excited I was—as an introvert—

about going to a friend’s farm, 200 acres of just quiet and solitude.

Her response? A horrified “Borrrr-ing!”) Extraverts join investment

clubs and read Barron’s in the café at Borders.

All of this is fine, except that the likelihood of original thinking

is often reduced when one works with others. The behavioral fi-

nance people have shown that it is harder to remain unbiased than

you might think. We are subtly influenced by the attitudes and

opinions of others. One experiment that shows the power of these

subtle influences asked people to guess the year of the Magna Carta

signing: A.D. 1215. The participants were divided into two groups

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