Thinker – Common behaviours and recommended investment styles
A thinker typically uses logic, analysis, and facts to make decisions and take action. They place a strong emphasis on ideas, systematic inquiry, and problem-solving. Thinkers find satisfaction in identifying issues, developing solutions, and carefully evaluating them. They possess the ability to develop systematic methods and are effective in organizing themselves and others for research and planning.
Thinkers tend to consider time from all perspectives – past, present, and future – due to their thorough analysis approach. They enjoy continuing to learn and expanding their thinking framework. However, when under stress or at their extreme, a thinker may become overly cautious, conservative, and overly focused on details, potentially becoming overly involved in research and analysis.
Investment style of thinkers
Thinkers tend to have a systematic and analytical approach to investment decisions. They value data and statistics over personal opinions and tend to be less influenced by emotions. This personality style is characterized by a strong focus on research and analysis, making them more likely to conduct thorough due diligence before investing.
Thinkers may prefer a value-oriented investment strategy, where they seek out undervalued companies or assets that have strong fundamentals and have the potential for long-term growth. They may also prefer to invest in companies that have a strong track record of performance, financial stability, and a solid management team.
Thinkers may also be attracted to quantitative investment strategies, such as algorithmic trading or statistical arbitrage, which rely on mathematical models and data analysis to make investment decisions. They may also prefer to use financial metrics and ratio analysis to evaluate companies and make investment decisions.
Thinkers tend to be more cautious and risk-averse investors, as they tend to focus on the numbers and facts rather than emotions. They are more likely to be patient investors, who are willing to wait for the right opportunity to invest and are not swayed by market fluctuations.
In summary, thinkers tend to have a disciplined and data-driven investment style, preferring to conduct thorough research and analysis before making investment decisions. They are also more likely to be value investors, who seek undervalued companies with strong fundamentals, and are attracted to quantitative investment strategies.
Recommendations to refine thinkers’ investment style
Thinkers tend to have a logical and analytical approach to investment decisions, valuing data and statistics over emotions. They tend to be more focused on the numbers and less swayed by personal values or beliefs. To refine a Thinker’s investment style, there are a few steps they can take:
- Take emotions out of the equation: Thinkers may tend to rely heavily on data and statistics, but it’s also important to be aware of the emotional side of investment decisions. By taking emotions out of the equation, they can make more objective and logical investment decisions.
- Broaden research horizons: Thinkers tend to be more focused on using data and statistics, but broadening their research horizons to include other methods such as technical analysis, which uses charts and past market data to predict future price movements, or trend analysis, which can help identify long-term market trends, can help them have a more comprehensive view of the market.
- Consider different investment strategies: Thinkers may tend to prefer a quantitative investment strategy, where they use data and statistics to make investment decisions. However, considering different investment strategies, such as value investing, where they seek out companies that are undervalued by the market, or growth investing, where they seek out companies with high growth potential, can help them diversify their portfolio and achieve greater returns.
- Take a long-term view: Thinkers tend to be more focused on short-term performance, but taking a long-term view can help them achieve greater returns over time. Thorough analysis is a strength of thinkers. Given that thinkers may require more time to conduct in-depth study, it may be more suitable for thinkers to avoid short-term trading and instead focus on value investing or momentum investing. These strategies align with thinkers’ analytical approach and will allow thinkers to make informed, well-considered decisions.
- Reduce thorough studies in macroeconomic in making investment decisions: It is important to stay informed about global events, but for the purpose of decision making, it may be best to limit the consideration of macroeconomics. Macroeconomic topics can be very broad and complex and thinkers may be inclined to extensively study them, which can slow down decision making and lead to overthinking. Instead, focus on the information that is most relevant to investment decisions and avoid getting bogged down in unnecessary details.
- Apply relevant metrics only
- An excessive number of metrics and charts can be overwhelming and may not provide a comprehensive understanding of a situation. Furthermore, they may even present contradictory information, causing confusion for a thinker. Therefore, it is important to carefully select relevant data and use a limited number of metrics and charts for analysis, to avoid confusion and simplify the decision-making process.
- Thinkers may tend to over-analyze and seek out excessive information, which can lead to a phenomenon known as “analysis paralysis”. This is when an individual becomes overwhelmed by the amount of information and options available, making it difficult for them to decide. To avoid this, it is important to set clear criteria for decision-making, prioritize the most relevant information, and to not be afraid to decide even if it is not based on complete information. Additionally, it can be helpful to set a deadline for deciding to avoid getting stuck in a state of indecision.
- When analyzing companies, it is important to focus on the metrics and charts that are relevant to the specific company and industry. This will provide a more accurate and meaningful understanding of the company’s performance and potential for growth. Avoid using metrics or charts that are not related to the company, as they may be misleading or not provide useful information. By focusing on relevant metrics and charts, thinkers can make more informed investment decisions.
- Focus on few industries:
- Thinkers often enjoy conducting extensive analysis, but it is important to remember that time is limited, and one cannot study everything. Instead, focus on a few specific industries or companies that align with your investment strategy, this way you can spend more time analyzing these companies in-depth and make more informed investment decisions. By limiting the scope of your analysis, you can ensure that the time you spend studying is being used effectively and efficiently.
- Be open to new investment opportunities: Thinkers tend to be more focused on data and statistics, but being open to new investment opportunities, such as emerging technologies or industries with high growth potential, can help them take advantage of new growth opportunities.
- Cut down news subscriptions: As a thinker, it’s important to stay informed about global events and market trends, but receiving too much information from various sources can lead to information overload. To avoid this, it’s good to limit the number of news subscriptions you have and carefully select the sources that provide the most relevant information for your investment decisions. This can help you focus on the most important information and make better use of your time. Additionally, it’s also a good idea to set aside specific times of the day to read news and update yourself on market conditions, this way you can stay informed without getting overwhelmed.
- Use quarterly results as decision making point: Thinkers may be inclined to be overly cautious and conservative in their investment decisions, particularly when considering long-term trends. To avoid this, it’s important to maintain a long-term perspective while also keeping an eye on short-term performance. One way to do this is by using quarterly results as a decision-making point to accumulate or sell a stock. This allows thinkers to consider both long-term trends and short-term performance when making investment decisions, and can help thinkers make more informed and balanced decisions.
By following these steps, Thinkers can refine their investment style and potentially achieve greater returns while still maintaining their logical and analytical approach to investment decisions.
How the primary thinker typically functions
- Relies on his observations and rational principles while avoiding emotionalism and speculation
- Sceptical of his own initial reactions and formulations as well as those of others
- Good ability to develop systematic methods which enable others to test alternatives and to select logically among them.
The primary thinker at his best
- A consistent force for progress – Topflight thinker and doer
- Highly effective in organising himself and others to research and plan
- A great asset in executing a logical, pains-taking, and profitable project.
The primary thinker at his worst
- Overly cautious, conservative, overly methodical, overly logical
- So involved in weighing, testing, researching, and checking
- People may perceive him as indecisive
- Sometimes be viewed as rigid and dogmatic.
How the primary thinker functions under stress?
- Rigid, overly cautious, and insecure
- May be anxious to proceed, but not at the expense of much risk
- Disinterested in human feelings of those around him.
- Tends to look at time from all dimensions – past, present, and future
- Progression of experience – continuing to learn and extend the framework of his thinking.
The thinker mind
- Formal, analyses
- Agenda, careful
- Classifies, goes into details
- Explains, likes grammar
- Thinks of how, informative
- Justifies, logical
- Correct, organised
- Plans, wants to be perfect
- Follows rules,
- Verifies and is watchful
- Prefers structures