Why successful manager usually not a good investor?


I published on my blog a few days ago “Why the successful skills needed for stock investment is opposite of successful workplace skills?” The article arouses readers’ recollection. Based on this, I would like to discuss another more thought-provoking phenomenon. That is, why professional managers who are successful in their careers, and company executives who are important in the company, usually not very good in investment.

The reasons

The reasons can be summarized as the following:

  • They are usually reused and promoted all the way in their careers, enjoying great glory and taking on more and more responsibilities. Of course it will be sought after by the company, because there are a lot of people waiting for their decision; but because of this, it is easy to lead to arrogance. They think the world is running around him, are smarter than others, and usually accustomed to command others, it is impossible to listen to other people’s different opinions; this is the root cause of their poor investment performance.
  • Like all office workers, successful managers are more adaptable to being an office worker. They have higher than average career survival skills to make them successful, but they must also pay for it. You can read my blog article published “Why the successful skills needed for stock investment is opposite of successful workplace skills?” Moreover, most people can be promoted to high-level managers of enterprises relying on the skills of political struggle and the management of rich workplace contacts, which are all useless in investment.
  • Senior managers usually have richer fixed salaries and can withstand larger investment losses. But because of this, they don’t take profit and loss as a matter of importance, so they don’t carefully review investment performance and improve their investment methods.
  • Really successful senior managers actually have endless meetings and travel every day, and they are much busier than ordinary people. Even if there is a rare holiday, almost all of them are emptying themselves. There is no time to absorb any information outside of my company’s business, let alone conduct basic investment research. This is indeed a fact. On the road of investment, it is of course impossible to achieve success without enthusiastic dedication.

Halo effect

These views will subvert the views of many people, because they are very different from the perceptions of most people. Sure enough, after I published this article, I received many replies; most of them did not agree with me (this is the original intention of writing this article). To be honest, I wouldn’t be surprised. Most people think that they are successful managers (especially the managers of their own companies, the so-called successful people around them, or well-known professionals on the screen), it should be very successful in all aspects.

Psychology calls this phenomenon the “Halo effect“: if a person is marked as good, he will be enveloped by a positive aura and be given to him everything will be a good established impression. I have observed that most people have this myth before publishing this article. If my opinion is the same as everyone’s, then there is no need to spend time writing my opinion.

I will not try to think about changing the views of most people. I know many so-called successful people based on my own life experience. Few people should believe that many of them lives paycheck to paycheck; most of them have terrible investment performance.

It’s hard to get rich if have the same opinions as the mass

Investment is a profession and has nothing to do with IQ (otherwise the world’s richest man should be Nobel Prize winners), and it has nothing to do with your educational and economic status. If your opinion is the same as that of most people, it is difficult to get rich by investing. We are investing, not voting. If your opinions are the same as most people, in the end, you will surely buy the same stocks as most people. Of course, the best result is just the market average (usually only worse than the market). This is the eternal truth of stock market investment.

credit: mohamed_hassan

Business owners versus stock investors

In order to prevent readers from misunderstanding my point of view (thanks to reader Ge Ba for giving me the opportunity to explain my point of view in depth), I would like to emphasize once again that this article refers to successful managers and refers to generally salaried managers. The manager is not the owner or major shareholder of the company, and even excludes the management team of a large or listed company (usually these people have a large number of shares). why? Please refer to my other blog article “Differences between business Owners and stock Investors” for the detail.

Not the stock that the company grant to you

Let me stress one last time, this article is not talking about the stock that the company distributes to the successful people who get rich; Allotment of stocks by the company will of course make successful managers rich. We exclude a very small number of extreme cases of super listed companies, but most of the stocks allotted by their own companies cannot become very rich (please pay attention to my terminology, there is a huge difference between rich and very rich). In short, what we are talking about is not the passive distribution of stocks by companies to successful people, but the active buying of stocks that are not their own companies.

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