Never be the Smartest Person in the Room

[ohai]

Just out of curiosity, does anyone here NOT think that they are above average in their work place in terms of IQ or EQ?

[numi]

@ohai

Just out of curiosity, does anyone here NOT think that they are above average in their work place in terms of IQ or EQ?

Well, my firm is pretty small (in terms of headcount) and we can’t all be above average, so I guess anything is possible. Depressing thought on a Monday morning…

[Turd_Fergeson]

@numi

@Turd_Fergeson

Any buy siders out there - how do you handle things when you and your boss don’t see eye to eye on an investment? especially when it’s obvious that there’s not much to like about a deal???

The easiest way to resolve this is to build credibility, and you build credibility by making millions for your fund

But at the risk of stating the obvious, this happens all the time. Even if you follow the same investment process and style, people naturally have different investment sensibilities. It really comes down to whether there is a truly fundamental difference, or if there is a misunderstood thesis. For example, there are certain types of companies that I like to invest in that my PM won’t touch. I like patent licensing companies because I think I have some pretty strong connections in the channel that can help me understand what’s going on. My portfolio manager doesn’t want to touch them because they’re too opaque. In this case, it doesn’t make sense for me to pitch them because he’ll just never come around. These situations aren’t things he’s interested in investing in, so I’m barking up the wrong tree if I’m trying to pitch him these ideas.

In other cases, we may not see eye to eye on a potential opportunity. If I’m strongly convicted in my idea, I’ll ask him to explain to me what gives him reservations about the investment. If he can’t articulate the bear thesis clearly, then at least he’ll hear himself talk and perhaps come to the realization that some of his concerns may be unfounded. If he does have a strong handle of the bear thesis, I’ll go item by item to present a fact-based argument why his concerns may be unfounded. I’ll then wrap things up with my interpretation of those facts, but I always prefer to lead by facts rather than evidence. That way, we’re both looking at the same set of issues and nobody has concerns that I’m trying to data-mine or whatever.

But yeah, at the end of the day, the buy-side really IS about making it rain. If the fund makes money, nobody’s feelings get hurt and everyone is happy.

i have plenty of credibility. my boss has told me several times i’m ahead of his development at the same point in his career. and i’ve done deals that have made millions for my fund and haven’t recommended any dogs…yet.

i think you’re right numi, you need credibility to be able to voice an oposing view. beforehand, i think you can bring up oposing views as concnerns (with factual backup) but not push it too hard i.e. know your place. nothing more annoying than an overly opinionated inexperienced d-bag (i.e. an MBA…i kid i joke). getting over the hump of the first disagreement when you’re ready is scary…

[numi]

Well, if you have credibility and you haven’t had many money-losers for the fund, then you probably should be able to see eye to eye a bit more. What type of “fund” are you running? Hard for me to give any useful advice without knowing what type of place you work at. I’ve worked in private equity/LBO’s, long only and long/short hedge fund so can talk about those but not too sure about other stuff like FoF, other than that they still seem overpaid to me based on the amount of value actually added.

[S2000magician]

@ohai

Just out of curiosity, does anyone here NOT think that they are above average in their work place in terms of IQ or EQ?

At the moment, my workplace comprises me, the dog, and the two cats.

I’m clearly at the bottom of the roster.

[Greenman72]

@ohai

Just out of curiosity, does anyone here NOT think that they are above average in their work place in terms of IQ or EQ?

I’m not sure this is a good question. Probably needs to be clarified.

EG - I may be the smartest person in my workplace with an IQ of 290. Everybody else is mildly retarded. However, today’s the first day on the job, and I’ve never worked in this business before. Everybody else has 20+ years of experience. So in some strange way, I’m the “dumbest” person in the room.

And I’ll admit freely that my EQ probably needs some improvement, if that’s even possible.

[hpracing007]

@numi

I think the “dumb finance guy” is tongue and cheek. This would be unambiguous if you heard that in normal dialogue with me.

Separately, good suggestion on the Dale Carnegie Book --> http://www.therapysites.com/userfiles/2188465/file/Dale%20Carnegie%20PDF%20Book.pdf

There is also an excellent book called “Influence” by Robert Cialdini which I have read and would also strongly recommend. There’s some overlap with the Carnegie book but this is much more grounded in empirical data, which I like.

Putting that one on the list, always looking for good books like that to learn from.

[ohai]

Most people probably consider themselves to have above average skill or intelligence, even if this is not actually the case. So, if someone says “I am one of the smarter people in my group and should be promoted”, chances are, most people in that group have the same opinion about themselves.

[brain_wash_your_face]

@ohai

So, if someone says “I am one of the smarter people in my group and should be promoted”, chances are, most people in that group have the same opinion about themselves.

Also, chances are that they don’t understand life. Leadership and results get people promoted, not being smart. Some of the smartest people I know are completely content to smoke the devil’s lettuce and hold down an easy (for them) programming job with good comp.

[dudesama]

http://en.wikipedia.org/wiki/Illusory_superiority

"In a similar survey, 87% of MBA students at Stanford University rated their academic performance as above the median.

Svenson (1981) surveyed 161 students in Sweden and the United States, asking them to compare their driving safety and skill to the other people in the experiment. For driving skill, 93% of the US sample and 69% of the Swedish sample put themselves in the top 50% (above the median)."

[comp_sci_kid]

.

[NANA_Hachiko]

my friend has this theory, he always act as if he is a goof (which he kind of is), so he appears less of a threat, in fact that works to his favour because he finds people are more willing to help others who seem weaker than them.

like in university if someone asks you for help, you are more willing to help someone who scores a lot lower than you than someone who is potentially your competitor?

i kind of agree, some people go through life easier as a non-competitor, i think i am in that category too although i did not intentionally do that.

[hpracing007]

^That’s like in Sun Tzu in Art of War… when you’re weak appear strong, when you’re strong appear weak. That kind of thing.

[ohai]

One of the best pieces of advice I received is that you can always learn something from someone, even if that person is an idiot.

[NANA_Hachiko]

@ohai

One of the best pieces of advice I received is that you can always learn something from someone, even if that person is an idiot.

the happiest people i know around me are not the most intelligent, smartest, most established or wealthiest.

[numi]

One of my great career coaches, Notorious B.I.G. , uttered these profound words: “Mo’ money mo’ problems”…

Observe figure 1 (below)

[Greenman72]

@NANA_Hachiko

my friend has this theory, he always act as if he is a goof (which he kind of is), so he appears less of a threat, in fact that works to his favour because he finds people are more willing to help others who seem weaker than them.

This worked well in the military. Perceived incompetence will take you very far, because nobody will ever ask you to do anything.

I don’t know if it works in the real world, because if you’re perceived as incompetent, you won’t get raises or promotions.

[brain_wash_your_face]

@numi

One of my great career coaches, Notorious B.I.G. , uttered these profound words: “Mo’ money mo’ problems”…

Observe figure 1 (below)

Indeed. I have heard similar things about women. Observe the below direct relationship:

[Greenman72]

Why is it that 3 women is “threesome”? I thought that it would be a 2 women.

[numi]

Haha, that’s really funny…all makes sense, though I’m surprised that the graphs are linear instead of parabolic…