An Investing Frankenstein

Patrick O’Shaughnessy attempts to combine all the key attributes in order to create a “Perfect Investor” in a new post at his site, Millennial Invest.

I’ll go the other way around and build the absolute worst investor, taking the worst qualities that we can possess to create an absolute Frankenstein monster…

1. Obsesses over each day’s activity

2. Relentlessly judges self against benchmarks, picking and choosing which one “matters” on any given day

3. Is preoccupied with other people’s trades and quick to hurl insults at people who get things wrong

4. Cannot tolerate the disagreement of other investors, takes personal offense and lashes out in the presence of dissent over an investment idea

5. Attempts to assign meaning to every random fluctuation in the markets

6. Constantly incorporating new data into a “master” thesis or theme, rejecting whatever doesn’t fit

7. Keeps a running score over who else was wrong or right over years and years

8. Emphasizes winning trades in conversation as though they exist in isolation

9. Plays for batting average (W’s and L’s) as opposed to the overall result, ignores trading costs, taxes and other tangible portfolio friction

10. Frequently abandons an underperforming strategy when something else appears to be working better

11. Blames larger forces for unsatisfactory results, ie: The Fed, Central Banking, Politicians, etc

12. Adopts really strong opinions and defends them to the death

13. Allows religious, political or social views to color (dominate?) their investment portfolio / strategy

14. Uses tips from experts in lieu of research, misunderstands the difference between TV and real life

15. Forgets that a stock or a fund doesn’t know or care who its owners are, or what price they acquired it at; trades for revenge

We’ve all exhibited a few of these traits. If you come into contact with someone who exhibits many or most of them, know that you’re dealing with a schmuck and run the other way.