104 THE INVESTMENT TEAM
the-flow approach to life (right brain). Of all the temperaments,
they are the most comfortable with risk. They are great salespeople
and storytellers. Their investment strengths are finding facts, dig-
ging for the data, taking action and risks. Their investment style
leans toward momentum or growth stocks: day trading, arbitrage,
venture capital, hedge funds... anything with a kick. They love
action. They love to be in the game. They love riding the wave.
They like to make an impact. High turnover is common in their
portfolios.
Though we’ve already noted that Peter Lynch has all the eight
traits of great investors, his basic temperament may be that of the
fox. Lynch is famous for his dictum: “Know the company’s story.”
In fact, he says all investors should be able to pass the “two-minute
drill” on every stock they own. What is the two-minute drill? You
should be able to give the guts of the stock’s story in two minutes.
Foxes love to tell stories.
Furthermore, Lynch is famous for getting to the mall to kick
the tires and see the merchandise. Foxes like action. They are good
at collecting data. Another piece of evidence that suggests Lynch is
a fox is the condition of his office, piled high with paper and re-
ports. Foxes prefer to go with the flow and are overly concerned
with organization.
Foxes make good deal makers, brokers, and hedge-fund man-
agers. They love making things happen. They love the attention
that they receive when they are successful. Inside every fox is an
ego crying out, “Look, I’m special!”
This last characteristic indicates a possible weakness of foxes:
They can be reckless and impatient in their quest to make an impact
and be noticed. Their comfort with risk can make them danger-
ously impulsive. The odds are that many of the rogue traders, like
Nick Leeson at Baring Bank, were foxes. He was caught up in the
thrill of the game, of winning, of adulation. Foxes earn and spend
money to be admired.
As more foxes trade in the markets, valuations may get more08-13 ware 104 1/19/01, 1:11 PM