Likely roles in an investment firm: technician or fundamental
analyst using traditional methods; institutional traders, leaders, and
administrators.
These investors will gravitate toward anything that says, “I’m
steady.” They love order and consistency. Their first instinct with
money is to conserve it. They are great savers. They are persuaded
by data and logic. These investors tend to be the least risk tolerant.
They like safety.
Do they have weaknesses? In their own eyes, not many and not
much. Because our culture reinforces their values—precision, clar-
ity, bottom-line attention—they tend to see their own behavior as
ideal. Hence, their weaknesses are often inflexibility, lack of vi-
sion, or being stuck in the past. As the pace of change in the world
increases daily, lions must be careful to keep a few visionaries on
hand, intuitive people who naturally enjoy predicting the future.
What kind of stocks will lions buy? How will they affect the
market?
Lions will continue to play by the traditional rules, the ones
that have worked in the past. They will focus on P/E ratios, divi-
dend discount models, technical rules, earnings growth, and so forth.
They will resist the dot.com stocks and their valuations, which
appear crazy to tradition-based lions. A recent Wall Street Journal
article (“A Fund Manager Stick to His Values, Loses Customers,”
Jan. 3, 2000) quoted a value-oriented investor, probably a lion,
and his reaction to the technology stocks:Yet the portfolio manager continues to shun nearly all technol-
ogy stocks because they violate his “value” approach to invest-
ing, buying shares that he deems undervalued on the basis of such
measures as price-to-earnings ratios. “The thought of buying such
overpriced shares is something I’ll never do,” the bargain-hunter
declares.In the meantime, investors have pulled nearly half of their money
out of this investor’s fund.Temperaments and Teams 10108-13 ware 101 1/19/01, 1:11 PM