Practical analysis for investment professionals
17 February 2015

Skills That Separate You as an Investment Manager: Curiosity

Over the last year I shared many of the skills that separate you as an investment manager that are not covered in formal contexts, such as business school, firm-level training, or even as a part of the CFA Program. In this installment I discuss the benefits of curiosity for investment management success. Tangent to this discussion are my articles on the importance of discernment and context creation.

Curiosity Helps You Expand Past Your Boundaries

To me the most important investment skill is understanding information. All other things equal, the analyst or investment manager who understands information the best wins the day. However, asymptotic to understand information is the analyst or investment manager who understands the most information. What is the fuel that drives someone to constantly search out new experiences, new perspectives, and new ways of doing things, to constantly expand past her personal boundaries to understand more information? It is curiosity.

Curiosity Is in Alignment with the News Flow

To be curious also implies eagerness to learn and to change. News flow is constantly changing and there are constantly new stories to understand. Thus, an investment manager or analyst possessed of curiosity is naturally in alignment with the informational flow, and discounting information is paramount to investment management.

Curiosity Is Efficient

Curious investment professionals do not need to be forced to understand the world around them. Instead, there is ample energy and instinctual effort in digesting the vagaries of the news whipsaw. By contrast, analysts and investment managers not possessed of curiosity must force themselves through sheer discipline to change and to learn new things.

The forces needed to overcome such intellectual inertia are considerable and require more effort on the part of the investment manager personally, through force of will, or on supervisors who must enforce a willingness to adjust and adapt to the ever-changing world. This is extra effort that could be spent doing any number of other things necessary for making investment clients more money. So the curious are also efficient effort-wise.

Curiosity Is Not Easily Satisfied

Analysts possessed of curiosity are not easily satisfied. Instead, they constantly seek out more information and new capabilities. Furthermore, they are not satisfied to take the word of others. Curiosity is hardly ever sated by the easy answers offered by another person. In part, this is because curiosity is about experiencing something firsthand . . . about experiencing something that is direct and personal, as opposed to abstract or described by others.

Investment pros without curiosity do not have the inclination to travel to see the businesses that compose their stock portfolios, or to meet and talk with the management teams that steer corporations. But the curious are so inclined. In fact, the most curious analysts I know insist on experiencing things directly and do not accept surface explanations and answers. This trait, in turn, results in deeper, more thorough, and personally accountable analysis.

How to Be More Curious

If you find yourself in the category of analysts and investment managers I described above — those executing their job tasks through sheer discipline — then some tips about cultivating curiosity are in order.

  1. Curiosity is about a willingness to explore what lies on the other side of your personal boundaries. Do you know what your personal boundaries are? For example, do you stop short of reading anything that contains mathematical symbols and nomenclature? If so, begin letting your ignorance dictate your research interests. That is, if you come across something that makes you feel ignorant, there is a ready-made solution to these uncomfortable sensations: get more information. In other words, it may be that standing in the way of your curiosity is a fear of feeling ignorant. In the modern digital world, illumination about nearly any topic is a search engine away. So if you are anxious about Laffer curves or what an inverted yield curve means for the economy, then investigate the topic further.
  2. Take a personal knowledge inventory. Begin by writing down those things or skills that you know a lot about. After that, list the things you know something about, but not necessarily a lot. Next, list things for which you have only a passing amount of knowledge. Commit to becoming more knowledgeable about one of the topics listed in your personal knowledge inventory. If you are not naturally curious, then force yourself to explore one of the issues listed in the second category of your personal knowledge inventory. If you do not quite know how to bootstrap a yield curve, then commit to learning this skill. If understanding an options strategy, such as a straddle, eludes you, then endeavor to learn about its peculiarities.
  3. Honor your curiosity. That is, perhaps you are curious but rarely sate your curiosity by following its drum beat. If there are topics that pique your curiosity but that you have not followed up on, then make time to indulge your curiosity. Want to better understand differential equations? Then follow up on that curiosity. Want to better understand the politics of India circa 1948 and how they shape its current politics? Then read a good book.

In short, curiosity is a secret weapon for being a better analyst or investment manager. It is about learning, understanding, assessing, efficiency, and thoroughness — all skills needed for investment management success.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©iStockPhoto.com/CSA-Archive

About the Author(s)
Jason Voss, CFA

Jason Voss, CFA, tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor. Previously, Jason was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. He holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: jason@jasonapollovoss.com

15 thoughts on “Skills That Separate You as an Investment Manager: Curiosity”

  1. Great article! Other ways to support curiosity to learn and understand self and others is to be present to listen, actively listen, and ask curious open questions – skills needed today to succeed at anything we do. We all believe we are great listeners – spoiler alert! We aren’t. When we aren’t curious in conversations we don’t listen or learn and we narrow opportunities and possibilities. Not great ways of understanding the needs of clients or building relationships.

    1. Hello Kirsten,

      I really like you tying curiosity and listening to one another. I agree that listening is massively underrated in its importance. I also agree that most people are not particularly good listeners. In my experience, most listen only for the opportunity to share their own opinions and insights.

      Yours, in service,

      Jason

  2. Hi Jason: I really enjoyed your article. I would suggest that everyone has the opportunity to be open and curious in all aspects of their lives. When we really listen to others and seek to understand them by asking them open and curious questions we find we begin to approach all aspects of our lives in a more open and curious way, wanting to explore and discover, being open to ideas and perspectives so we can understand and learn. In addition, when we are curious is situations that could be conflictual, we are able to stay in the conversation, gain clarity and better understand which leads to a more constructive outcome.

    1. Hello Kathy,

      Thank you very much for your feedback and for your insights.

      Yours, in service,

      Jason

      1. Hi Jason – thank you.

  3. Jason: I am co-founder of the Institute of Curiosity and co-author of ‘The Power of Curiosity: How to Have Real Conversations that Create Collaboration, Innovation and Understanding’ and would be pleased to send you a copy of our book if you are interested. Just let me know.
    Thanks.

    1. Hi Kathy,

      Thank you for the offer of sending your book. Better for me ethically is if you can provide a link with a book description and the best place to possibly purchase the book.

      Yours, in service,

      Jason

  4. Steve Delano says:

    Ultimately curiosity becomes investment strategy and strategy is validated with a credible record that leads to assets or jobs, which is why myinvestmentrecord.com is growing.

    Steve Delano

    1. Hi Steve,

      Thank you for sharing your perspective about the importance of curiosity; much appreciated.

      Yours, in service,

      Jason

  5. Dirk Mueller says:

    Nice article, Jason!

    What I´d like to add is the advantage of developing multidisciplinary and translational skills, before the need emerges. As a scientist working in say, medical device business, for a period of time, and then acquiring analyst´s skills to enter the investment universe as a second career could potentially contribute to the quality enhancement of an existing analyst team. It offers other perspectives, methods and deep insights into a particular business segment or similar segments.

    Dirk

    1. Hello Dirk,

      Thank you for adding your thoughts to the conversation. I agree with you about curiosity’s ability to help people bridge separated disciplines.

      Yours, in service,

      Jason

  6. Thanks for sharing your knowledge and tips. I specifically like how you commented on knowing and understanding the information. I think that skill definitely helps you in any career path that you plan on taking. I have no experience with investment, but I do appreciate those who take the time and energy to help me with my financial planning.

    1. Hello Charlotte,

      Thank you for taking the time to share your thoughts.

      With smiles,

      Jason

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