Adam Smith

Adam Smith. Can the ink blots to tell you whether you are a man who made a lot of money in the market?

Adam Smith or George JW Goodman, as named by his mother, made a great impression on Wall Street, his 1968 bestseller "The Game of Money" (The Money Game), ruthlessly, but fun describing the behavior of the emotional and irrational investor crowd. Here is one of them of known truths: "Even the people on Wall Street play a game. They are concerned about how much money they make, how many othersdo, but money as money for them means nothing." Hence the name "The Game of Money." Ero nickname is the result of his own game. Once he signed the name "Procrustes" under an article about a securities analyst. Unknown editor changed this nodpis to Adam Smith. Thus was born this way. Within two years, his true name was hidden, and then another of the same reporter pulled out the truth to light. Whatever it was, Goodman continued to use that name in 20 years as a program host of public television, "Money World of Adam Smith."

After graduating from Harvard University in 1952 and studying for several years at Oxford University on a scholarship Rhodes, Goodman in 1956, began his writing career as a reporter, "Kolliers." The following year he spent on "Berronz", then "Time" and "Fortune." In the early years of TV, he wrote three novels, deriding the bourgeoisie. They are all well taken in 1960, he turned his attention and became a portfolio manager in "Lincoln Fand,". "I think - he said - I'm the person who loves to learn new things ... The only reason I know something about Wall Street, that I was interested to learn why some people are making money, while others no. " Over the years, Goodman learned that, of all people who want to make money on Wall Street, few want to make this effort. But for those who have spared no effort, the reward is more than just money. "It is a daily theater, and a way to see and understand the Map",

On the question of what it takes to become a great investor, he believes that former athletes have an advantage. Sports have made them more accustomed to competition. Knowledge economy, economic cycles, and analysis of securities do not guarantee success, because there is a source of trouble, known as mass psychology. In his essay "Can the ink blots to tell you ..." it offers a fun, yet deep psychological test for future investors.



Sociologists must be too busy with the restoration of Vietnamese society and their own affairs, to try to find the elusive Australopithecus animal market. But a psychologist friend of mine at least started to ask some questions and build the first hypothesis. Hypotheses are not on mass psychology, individual psychology and on, so we have to go back to brokers ... Some of my friends Boston - fund managers - have brought me to Dr. Charles MacArthur from Harvard. These funds are used him as a consultant for the selection of promising securities analysts. Typically, Dr. McArthur is sitting in a luxurious Jose Maria Cepga by testing students at Harvard. But then a pair of Bostonians decided that if he can help with multiple choice and ink blots to determine who will be expelled from college, perhaps the same technique will work for financiers. Word for word, and now Dr. MacArthur spends most of his time, landing the ink blots on the guys who think that they can manage hundreds of millions of dollars.

So I found myself at the dinner table in the faculty of Harvard Club, cutting horse steak. If a president ever to appoint you as the representative for relations with the intelligentsia, or you're in the faculty club at Harvard for any other reason, you do not forget to order good horse steak. This shows that you're just like them. Steak of horse appeared on the menu during the Second World War, when not enough meat. Harvard Epicureans, always sensitive to new taste sensations with a sharp, spicy, and have found it more interesting than plain old beef steak, especially if you drink it easy entertaining Australian Pinot Chardonnay. So he stayed on the menu forever. Steak of horse - the symbol of an open, seeking mind that Harvard is so fond of his attribute.

Anyway, Dr. MacArthur cuts through through your own horse steak, modestly pointing out that his study is too limited to say for sure. It means if he will publish his results as a scientific work with a colon in the middle of the title, the researchers - psychologists and sociologists - pounce on him from all sides. They are likely to pounce at the very idea of ??trying to find something so vile as the type of person that makes money. Money-anathema in the groves of the Academy, if they do not come from foundations or government, especially from the government.

Research of Dr. MacArthur's stress on at least one - there are differences between the personalities of people that are good for stocks and find people making decisions about the timing and portfolio managers as a whole. Securities analysts dig the information and offer ideas that you should buy or sell, but they are not necessarily good for the whole orchestra conductors. If they do from the outset played a wind instrument, they want to hear the entire orchestra, as if it consisted of wind instruments, but requires a different type of personality to keep the balance between wind, brass and string instruments.

How to find a good analyst of securities? The first thing that gives you the Examiner - and your potential boss - this is a test Strong, named in honor of his invented a psychologist at Stanford University. Somewhere in your life you have been tested for vocational preference, so this will be familiar to you. It is intended to show that you love, just in case you're cheating yourself. The issues proposed for several responses, such as:

Tomorrow - a day off, and you can do anything you want. Do you prefer

a) to fly on an airplane;
B) read a book;
c) sleep;
d) to go to the nearest pubs and chat with the guys;
e) work in your garden, cutting flowers.

These are the questions. The more you delve into the test, the more interesting.

Announcing the preparation of the expedition to study the ducts of dangerous Amazon piranhas where water and on land - angry headhunters. Do you prefer

a) to lead an expedition;
B) To collect money for the scientific enterprise, c) go to its composition and write kiigu upon return;
d) just do not go.

Do you see yourself at the head of the expedition to Amazoiku? This may seem quite attractive. But perhaps you have a dangerous fantasy, and almost certainly you will sverbet in the ass when you sit at a desk reading reports about the stock market. If you choose to, we may ask you to write to our weekly newsletter stock market, but you better be able to do some other things.

You return home from a party and swearing to his wife. The quarrel is going on around
a) time when you finally managed to get her to leave;
B) how much she (you) should have to drink;
c) that she (you) have done so Khmyrov (washcloth) on the couch;
d) money;
e) children.

In this quarrel is best

a) say nothing and let her speak out;
b) to ensure that she understood your point of view for its own sake;
c) to show who was master of the situation, quickly and firmly;
d) try to keep the peace in any way.

If you wanted to leave before your wife, if she drank more than they should, if there was a quarrel over money and children, you are among the 81.1 per cent of our subjects and are suited to our organization. You are smarter than your wife, you want it to understand it. We like that attitude.

Tests were given preference over the years to date they have identified the stereotypes in the form of punched cards, grouping together the various professions. Analysts are in groups V and IX Test Strong. Group V combines social services - which means telling people what is best for their own good. Group IX combines the sales and means extroverts with good sense and focused on people practicing. "For you will not be any good from a good idea if you can not sell it.

Portfolio Manager - an animal of another species, is currently in process of retiring from the Group VIII, where office workers. Once portfolio managers were people of the same type as a certified public accountant. Portfolio managers are usually employees of the trust departments of banks, reliable, solid sensible people. They wore green visors on the forehead, sleeves and said, "My good man." But the truly productive managers, giving the portfolio of identity and overtaking superagressivnye funds have characters that are closer to the entrepreneurs who prefer to understand what was going on, people to organize and run a business or project. Portfolio Manager type of worker trust department delves into the details; aggressive fund manager can barely make them. All portfolio managers, as expected, people are physically strenuous. But the aggressive portfolio managers play squash, tennis and rowing are engaged, but so as not to be part of someone else's team. Accounting Manager type supposedly best manifests itself in a relay race or football, or some other sport where the outcome depends on the efforts of the team. (New restless aggressive manager - the breed, which appeared only recently. While we do not have the complete file on him ...)

Other written tests disrupt other covers. John has four apples, three oranges, Mary, both of them sit on the train from the station at 2:10 at forty miles an hour. When the train comes, John is two apples and Mary has six oranges. What time is it?

The analyst is inductive. He will break the problem into its component parts and will work on each one to find the answer to old portfolio manager with joy will sink into the problem, and he loves them. Aggressive portfolio manager says: "What the hell is this stupid question, and how it can make money?" - And will go into the same angry state, which he had when his wife did not want to leave the party. He must understand the concept of a stroke, or feels ill at ease.

While analysts can solve the problem, they do a lot of arithmetic errors. This is different from accountants that make up all the decimal point. But good intelligence and get on with words and numbers. Dictionary for their native element. But when the action becomes abstract and digitally, and in verbal form, they begin to fade.

Everything in this area are very clever. The minimum IQ 130, so if you are blunt, better stop right here - all the other people are too smart. Range - from outstanding to almost genius. Are you ready to sputter? An example of such a blot is shown below.



What you see in an inkblot? How many objects did you see? Is the whole object or only part of the blot blots? As soon as you saw him?

If you become from this easier, many people have seen these insects, animal skins and outstretched hands. But you have to do better, because you only see what others see. You better during the first twenty seconds to find something your own.

The essence of klyaksovogo test is not whether what you see in an inkblot, but how you react to them. How high your claim to the evidence? In other words, what you should see before you make a choice?

Once again, the analyst moves to address the problem of induction, while the real killer portfolio manager can not afford to hesitate. He jumps on impulse, he is enthusiastic, almost too sharp reaction. Analyst really wants to be right, his ego needs to be pleasures of self-righteousness. For him, probably more important to be right than make money. Aggressive portfolio manager does not hurt, then care about the correctness of each proposition as long as he wins when you move up. Of course, it should be more right than wrong, but he prefers to perform lightning-fast action and hope that, among its decisions will be more correct - and in weight than wrong. In fact, he checks all the time - quickly and unconsciously - every incentive to "Apperception mass" of their own intuition, and intuition it includes all the "cognitive perception," which he used for many years.

This portrait of an aggressive portfolio manager is not one that would allow the ancient guardians of veneered panels boardrooms feel safe. But, as we have said, such a little bit. This portrait is really suited only to a handful of managers of hedge funds and mutual funds, not to staff the trust departments of banks or managers of large organizations.

These results-oriented managers are relatively new to their game is still seen as something the trial, but they've gone through some turmoil. What distinguishes this form of investing - fast response to information - from the behavior of small investors, who hears the council and in a hurry to buy? The reaction of the small investor is not based on knowledge. 3a his response should not be "inertial mass", a portfolio manager can easily yield to remember a hundred companies, as stocks react to different situations and where his place among the other managers. If he knows these things, it can be far from the market and still know where it crossed the rhythm and the rhythm of the market. In short, if you really know what's going on, you do not need to know what's going to know what's going on. All you need is a lot of "inertial mass" IQ of 150 and silver-plated spoon, and you can ignore the headlines, because you anticipate them many months ago.

There is one requirement that is absolutely necessary when managing capital. You already know it by the first error rule. "If you do not know who you are, find it here would be very expensive." This requirement is - emotional maturity.

"You have to benefit from the emotions, - said Dr. McArthur. - Your emotions should support the goal to which you aspire. You should not be any conflict as to what you want. Your emotional needs should be met success in what you do. In short, you should be able to cope with any situation without losing the peace, not letting emotions get the better you have to work without fear. "

Psychological tests can not truly say if you can become an ace of making money, this is only the description of the existing groups. Some of them later were subjected to new tests for the duration (how long will last at this point), satisfaction and success. You can not fit any of the stereotypes and still succeed, or the world can be changed to such an extent that these stereotypes are no longer lead to success. But if you accept the world as it is, according to these rules and is game. Some analysts do not have to manage their own money, some portfolio managers to manage funds with different characteristics, and some investors have cut flowers in his sadochke and allow smart people to manage money.

You can even brilliant pass all tests, but the real test - this is how you behave when the entire crowd rushes the other way. We know something about certain types of personality, but the crowd, this elusive Australopithecus, still remains largely unknown quantity, the phenomenon of mass psychology, which is still to be explored.