Personality Types

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efficiency

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Post Number: 33
Registered: 12-2002

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Wednesday, March 01, 2006 - 06:02 pm:

In the interest of self-awareness, the predator/prey scenario, the Pareto principle, and provide a little levity, forthwith is a list of investor and trader "classifications". We ALL fall into at least one category.

1. ETERNAL OPTIMISTS: Can't lose and IF losing, doesn't cut their losses. Pride in the buy and hold and long term investor concepts.

2. HYPERACTIVE: In and out with no NET progress. Addicted to random returns. Cultivated by discount brokerages.

3. PLUNGERS: Everything into ONE position. Eh...... less than a smooth equity curve.

4. GROUPIE: Buys WHAT well-known people are supposedly buying. In the US, Warren Buffett comes to mind.

5. PRUDENT: Execution governed EVERY step of the way. Trigger often isn't pulled. Late entries. Selling too soon. Not enough position size to capitalize when one is correct.

6. EDUCATED FOOL: Bound to THEORY but limited in practice. This may include redundant indicators. Using (5) different oscillators which basically portray the "same" thing.

7. HEDGER: Not to make money to preserve capital OR avoid paying tax.

8. TAG-A-LONG: "I'll buy WHATEVER you're buying". This would include getting "advice" from message boards television shills, and even friends/neighbors/relatives/co-workers. A less selective variation of #4 the Groupie.

9. MARKET MASOCHIST: Someone to BLAME, such as the evil short sellers or the government.

10. CONTRARIAN: And contrary for JUST the sake of being contrary. Not necessarily wrong, but often very early. A stock's too high, it must go down.

11. SERENDIPITY: Bought the bank stock BECAUSE the tellers are nice. Yesssssssss, there are people like this.

12. GREATER FOOLS: AFTER the fact. The proverbial bagholders. Each share is always owned by someone. They provide a necessary function in the distribution of paper. Weinstein's stage 4.

13. TRENDY: Owns/buys what is in FASHION. Microsoft comes to mind.

14. INSIDERS: Has the proverbial brother-in-law that KNOWS something, but not enough.

15. EGOTIST: Takes more satisfaction from being RIGHT than from adding to their equity.

16. SCALPER: Takes advantage of MOB psychology and doesn't over-stay the party. Repetition and familiarity. Helps to have a floor seat to minimize transaction costs.

17. KAMIKAZEE: EXTREME version of #3, the plunger. Can you say fully margined?

18. OPINION HUNTER: The MAJORITY knows best and their is safety in numbers. Basic herd instinct. This may include the opening hour and feeling left out. Opposite of #10, the Contrarian.

No doubt, you the reader can think of some more (which is another reason why I typed this). I'd like to be aware of those I haven't pondered.

(Message edited by efficiency on March 01, 2006)

samnewman

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Tuesday, March 07, 2006 - 01:11 am:

lol hope u had fun writing that post because most of it was repeating itself just to make a point..even though i stopped reading at about the second "personality type" u have obviously researched thoroughly.

and since when is warren buffet a groupie?? oh yeh i forgot, you are a much superior trader or investor to what he is with your massive $3 billion portfolio that u manage.

ps. trendy, tag a long, groupie, opinion hunter are all exactly the same

pps. I have a new one: GUY ON COMPUTER FORUM WITH TOO MUCH TIME UP HIS SLEAVES TO BE DOING ANYTHING USEFUL. i know at least one guy fitting this category

efficiency

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Post Number: 34
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Tuesday, March 07, 2006 - 02:34 am:

Thanks for the warm reception. I was hoping for something constructive, I guess I'll have to settle for your response.

My first paragraph speaks for itself.

Buffett isn't the groupie. He HAS groupies. Perhaps you're one. Let's get him out to the way, shall we? Not only do I reside in the US, I live precisely 3.5 miles (sorry we don't use km) from the house he's resided in since 1956. I have a relative whose an accounting manager for one of his local retail outlets. Point being his grandfatherly persona is just that.

To quantify things. Berkshire Class A traded at $80,000 in 1998. Here we are in 2006 and it's at $87,000. That's 8.75% over roughly 8 years. Or..........1.09% per annum in nominal terms for NET progress. Given it's price level, liquidity and volatility, it's not really a trading vehicle. Stated another way, the majority of shareholders are of the buy and hold variety. Many bought for the sake of Buffett. To reiterate, their annual return over the span of the last 8 years, .....NET,........ would have been bettered by a money market account, in other words, CASH.

Contrary to your remark; "trendy", "tag-a-long", "groupie", and "opinion hunter" may have common elements, but are indeed distinct (as described).

SIMPLY PUT.................WHICH TYPE(S) ARE YOU?

Care to answer that?

Or would you rather explore the virtues of holding Disney, McDonald's, and Coca-Cola perpetually?

P.S. With all this time up my sleeves, I can post script too.

IF you're going to be a groupie, you might want to know how to spell your respective idol's name.

(Message edited by efficiency on March 07, 2006)

greatdane

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Post Number: 222
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Tuesday, March 07, 2006 - 08:11 am:

Having read the past two posts on this ‘Personality Types’ thread I thought for as moment I was among Yahooligans or mistakenly got off the lift (elevator) at the lower basement where Hot Copper resides.

Keep it civil on IC please. Thank you.

BTW - 'efficiency', I did enjoy reading your initial post dated Wednesday, March 01, 2006 - 07:02 pm

Also this, “Berkshire Class A traded at $80,000 in 1998”
Yes, and during the 'new economy…..com' period ~six years ago you could have bought BRK.a for ~$40k. That is ~50% of today’s price.

……and imagine if I had asked Grandfather Warren to mind the 10k tax free US dollars I earned working near the North Pole in 1965.

Considering that Berkshire's book value is up more than 300K% over that period what would that $10K be worth today?

All the best.
Got Ag & Ux?

Regards, GreatDane

efficiency

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Tuesday, March 07, 2006 - 09:24 am:

Let's call a spade a spade and save the folklore for Crocodile Dundee or Paul Revere.

Foremost, Buffett's partnership between 1956 and 1969 returned an impressive 24% per annum. At that juncture he wound it down.

No denying BRK could have been bought in the spring of 2000 for $42,000. Aren't you missing a point? Those holding 1 share at $80m in 1998 would have eroded HALF of it in just two years. We'll call it a drawdown. That same bunch, once again, presently have $7,000 more per share after 8 years.

Everything in the US rose from March 2003 (having bottomed October 2002). Nothing special there. Particularly IF you made a relative strength computation with the S&P.

I believe ol' Warren lost about $900 million on his $41 billion foreign currency exposure (which incidently involved options more so than crosses). And "they" say he's not a trader.

What's truly missed are the cash cows. Geico and General Re in particular. Not only do I live near Warren, I'm also 4 miles north of the largest furniture store in the US.

My post wasn't about Buffett, nor is it getting the response I hoped for (proving hope is a four letter word). You may not like the titles, but each indeed reflects the personaliites in the arena (excluding insiders and marketmakers).

greatdane

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Tuesday, March 07, 2006 - 10:20 am:

“Those holding 1 share at $80m in 1998”
Let correct that to 1 share at $80K, shall we?

The difference between the ‘m’ and the ‘K’ is probably more significant than someone spelling Buffett with one or two t’s.

No I don’t think I am missing the point in your post.
I believe I fully understand what you are saying and I don’t necessary disagree.
I also remember that Grandfather Warren at the time in his annual letter warned shareholders that going forward Berkshire was unlikely to maintain its past rate of growth. Anyone uncomfortable with that statement could have bailed at the time.

Could be the very reason I sold my significant holding of BRK.b some years ago.
The steak was bought at just over $1350 during “the new economy” nonsense in 2000 and sold two years later @ ~$2500. Dividend or no dividend the capital gain was good.

Those who listened to WB and acted would have been well served investing in a stock like ANZ ADR’s. Just have a look at the chart for this well managed bank.
While you are at it why not overlay the ANZ chart on the BRK chart - say 5 years. Easy done in Yahoo.

Also, unlike BRK the ANZ bank pays a generous dividend. In fact those who bought the stock in 1995 would have seen the annual dividend more than pay for the initial capital outlay.

Anyhow, your original post was under the heading “Trading Psychology”, so I’ll let others have an opportunity to reply to that while I get on with making some money on the ASX.

Guess you will have to head out of town when the believers arrive in Omaha for the annual Buffett Festival in the first week-end in May.

All the best.
GD

Regards, GreatDane

efficiency

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Post Number: 36
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Tuesday, March 07, 2006 - 03:36 pm:

"All the best" must be tongue-in-cheek. All I'm reading from you is off topic and selected excerpts.

"m" and mm" are common in the US to distinguish between thousands and millions. A spelling, particularly in the vein offered, is a "fundamental" detail.

The line on the chart was to quickly highlight the lack of net progress. It should have succeeded. It didn't. Selective perception? Bookvalue stems from cash cows as much if not more than KO/DIS/MCD. Should the "believers" holding the stock prior to 1998 AND continuing as I write be admired? Or do they fall in category #1? Given their trek to the mecca here one weekend a year relative to net gains, I'd have to conclude so. With Warren being 76, makes me ponder how they'll deal with his eventual absence.

Not being a Buffett thread, the topic at hand pertains to categories of participants (excluding insiders and marketmakers) in an arena (regardless of locale). It has nothing to do with banks that pay a generous dividend, but might have something to do with the confusion between brains and a bull market.

Obviously my post is going "nowhere" in terms of expansion, ancedotes, other anything else constructive. That itself, probably has psychological implications. But.........it doesn't specifically explain why you replied (the first time yet alone the second time off topic). I guess the forum is better suited to dream interpretation, osmosis, brain scans, dealing with massive losses after the fact, paper trading, and other such relevant issues.