Is there any absolute measure can help me to figure out if an investor is a methodical or individualist? They both make decision on thinking, both do a lot of homework. In my eyes, they are pretty similiar. There was some discussion here, http://www.analystforum.com/phorums/read.php?13,694735,759426#msg-759426 Methodical is more Risk Averse (Less Risk) and bases their decisions on facts so they rely on history and databases to make decisions and tend to be disciplined and conservative in their investments. Individualist is Less Risk Averse (More Risk) and they are self-confident and use a wide variety of sources to base their decisions, confident they will be successful in the long run. Can I say: methodical study on formal historical market data; individualist collect information from every sources: experience, news, rumors, even predictions from Voodoo.
The prof in the weekly Schweser class said the only difference was Individualist is less risk adverse and that the two were so close that they definitely wouldn’t have both of those as answer choices on the actual exam b/c they’re too similar. Hope he’s right about that.
Thank you very much. Hope they won’t appear in the same question.
think of the difference in that Richard Branson is an individualist and is unlike a methodical accountant
My take on it: Think of the difference between relying on “facts” and relying on “sources” and how it relates to risk. When I think of a methodical investor, I picture someone who needs very quantitative data. This person finds comfort in the validity of numbers, they feel like there is no arguing with these facts. The individualist, on the other hand, gathers data from whatever they can get, and is more willing to take a risk and gamble based on someone’s gut feeling or other more subjective observations. So if you have some young, bright entrepreneurs in a relatively new field, the methodical investor will not invest because they have no track record, he has nothing that will prove to him the risk is worth it. But the individualist will talk to them, listen to their ideas, talk to experts in similar fields and make a riskier decision based on all of that. Hope this helps. And someone please tell me if I’m way off base here.
Sounds like a good explanation to me springwater. Thanks.
…way on base, Springwater…
Ive seen methodical and individualistic in the same answer key. I think of a methodical investor as a robot (like a hedge fund quant computer, calculating historical betas and covariances), one who has no emotions and forms no emotional attachments to companies Whereas I would agree with the above post on individualistic
Thank you, springwater! You make me recognize myself. I am definitely a methodical investor. When faced with similiar questions, I will compare the investor to myself to see If we two are similiar. If yes, he/she is a methodical investor; otherwise, an individualistic investor.
The idea that they would not ask you to distinguish between a methodical and individualistic investor on the exam because the difference is “so slight” is patently untrue… these are exactly the situations they will ask about. distinguishing between spontaneous and methodical or cautious and spontaneous is childs play and is unlikely to be asked in my opinion but - cautious vs. methodical - individualistic vs. methodical are very much the more likely questions given my experience with these rascals!