10 Sep What Is Your Investment Archetype?
The Greeks have recorded archetypes through the mythological figures in their stories such as the Iliad and the Odyssey. These Greek Gods have personalities like humans, with only the special powers that separated them from men.
The psychologist Carl Jung purported the collective unconscious of mankind. It was a radical idea even today. I am no expert in this area but I will attempt to explain it as simple as I understand it to be.
Stories have been used to communicate since our ancestors were cavemen. Stories are also passed down through generations, albeit with lots of modifications. These stories often have characters or personified animals, and overtime, these archetypes are formed in our minds. They are so ingrained in us that we would immediately form an impression; for example when we say someone is a “motherly” figure, an image of a caring, protective, and sacrificial woman would appear in our heads. Jung said that the society has formed such collective views of these figures or archetypes unconsciously. A newborn would have began downloading and installing this societal views from day one. Unconsciously of course.
To make it a little interesting, let’s see if we can adapt the common archetypes to the world of investment. I am not sure if anyone has done this before. If not, I will blaze the trail.
Let me guess… Your first investor who came to your mind is the Sage of Omaha. Right?! A sage is wise and deliberate in his thinking. He doesn’t act rashly and he has great patience. He sees through the surface of things with his deep knowledge and experience. He continues to acquire knowledge even though he already knew much more than most people. He attracts many disciples as he preaches wise words to them.
Representative: Warren Buffett
Greek Mythology Representative: Athena
The magician is mystical and have powers beyond the understanding of science. He is elusive in character. He often practises the fields of astrology, feng shui, fortune telling and alike. With these powers, they can tell you secrets of the universe, and you can take actions to get what you want with the information. The magician can be the most bizarre friend you have. He will tell you something along this line, “I made money every time I buy stocks at 4pm wearing red underwear.”
I would also label gurus as magicians. Humans hate uncertainties and seek answers for tomorrow. The media loves to interview gurus and they are more than willing to impose their views on others. They are highly confident about their views and they always think they are right. They often give market predictions and sell their confidence to the audience. The audience would easily be convinced of the accuracies in these predictions.
Representative: Professor George Kester. He believes that whenever an original NFL team wins the Super Bowl, the stock market will be up on the year; whenever an original AFL wins, the market will be down. Hu Li Yang as a predictor of the financial markets.
Greek Mythology Representative: Hecate
The hero is someone who had succeeded against all odds. He met a major setback but was able to recover from it and had the courage to fight when the going gets tough. He eventually succeeded and gained admiration from the masses. He is an inspiration for people who met obstacles in their own lives.
He is likely your rags to riches man. The most improbable person to succeed but he did. As an investor, he may have lost all his money through wrongful investments. He learned from the experience and he eventually made back his money and even more.
Representative: Jesse Livermore
Greek Mythology Representative: Perseus
He is the corporate raider. He is a ruthless capitalist who effect hostile takeover of companies to gain control. Thereafter, he can strip the assets of the company and free up money for himself. Or he can change the management to his preference. He can also cut expenses and raise prices of the products and services.
Or he can be an activist. Taking short positions of a company and announce to the world that the financial numbers are rosier than they should.
Representative: Carl Icahn, the corporate raider. Henry Kravis in the infamous RJR Nabisco leveraged buyout. Bill Ackman against Herbal Life.
Greek Mythology Representative: Ares
The King rules them all. Power and control is what the Ruler seeks. He believes many things are under his control and he would want to control them. He hates uncertainties and wants things to go his way. He doesn’t like to be told to do things as he likes to do things his way. His way or the highway. A control freak who loves to dominate.
There are several levels of Ruler. The most obvious level is at the retail investors. I believe most BigFatPurse readers are Rulers. We prefer to invest our own money than to leave it to someone else. We desire that control. We must be careful of this control. We need to know if we are doing it right and there is no better way than to track our investment performance against the relevant benchmark. Otherwise, less control (invest in index funds) is better than more control (picking stocks or timing the market).
Another level of Ruler is the stock market syndicates. They make money by manipulating stock prices. They want to control the prices. They want to control the buying and selling of shares. And it is often easier to control a small cap stocks than a big cap. It is better to be a big fish in a small pond than a small fish in a big pond.
Representative: The Hunt Brothers who tried to corner the silver market in the 1970s.
Greek Mythology Representative: Zeus
The Everyman is a law abiding citizen. He is the man on the street. Down to earth. Your girl or guy next door. He is considerate to others and a socialist at heart. He is optimistic and believes the good in other people. He is willing to lend a helping hand in times of need. He does his best in his job. He doesn’t crave for riches and doesn’t try to keep up with the Joneses. He is happy with what he has.
Representative Investor: Thrifty investor. Most financial bloggers in Singapore :) Hit any blog and you have a high chance to meet the Everyman.
Greek Mythology Representative: Hestia
This archetype believes he only lives his life once so he should make full use of it. If he can enjoy life today why wait until tomorrow? He loves fun, enjoys parties, and splurges for pleasure. Life is too precious to be wasted on boring and mundane matters.
He is unlikely to save money as he values most things higher than money. He is also unlikely making prudent investments. Hence, this is not an investor archetype but I included it because we all have people around us who adopt such attitude towards money. It isn’t wrong but just different priorities in life.
Representative: Michael Jackson
Greek Mythology Representative: Dionysus
I hope you found this archetypal application to investors interesting. The Everyman who wises up, the Hero who perseveres, the Ruler who watches his overconfidence, and the Sage who takes action at the right time, are likely to be the better investing archetypes. Which investing archetypes do you belong to? Are there other archetypes that are relevant which I have missed out?