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"Behold the turtle. He makes progress
only when he sticks his neck out."
- James Bryant
Conant
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Successful investing, I believe,
involves a number of key factors such as serious investigation,
unemotional steadfast discipline, consistency and courage of one's
convictions. Put together, profitable investment management encompasses
all these important qualities plus one other: sticking one's neck out.
The truth of the matter is that one
can be the greatest investment analyst, however, if one doesn't actually
make the investment there is no net benefit for all the effort. In
effect, the whole analytical experience becomes theoretical and,
metaphorically speaking, a hotshot stock picker is reduced to a
toothless tiger.
In my opinion, sticking one's neck
out is a natural follow-through to a strongly held investment opinion.
Admittedly, it is a tough decision with certain consequences. For
instance, a portfolio manager will often find his feet put to the fire
as the strength of his conviction will be tested and challenged by
doubting clients. However, when the investment eventually prospers, the
manager not only achieves financial success for his clients but he also
reaps significant spiritual rewards for himself.
On the other hand, the investment
highway is, unfortunately, littered by many unsuccessful managers who
couldn't carry through a well-thought-out financial plan. Simply put,
sticking one's neck out separates the men from the boys. Unfortunately,
this quality can neither be bought nor taught. It cannot be acquired
from a top-notch MBA program, PHD study or by reading a "how to
book". Quite frankly, a portfolio manager either has it or he does
not. While he might hone this trait through battle-hardened work
experience, sticking one's neck out is quite stressful, challenging and
mentally exhausting. But at the end of the day, it remains a vital
ingredient toward successful investment performance.
Irwin A. Michael, CFA
