What investors can learn from Googlers
I was interested to read recently about the things Google looks for in new hires.
Google is a company that thinks carefully about its hiring practices, and it tracks over time the results of hiring decisions, to make sure it understands what works and what doesn’t.
One of the things Google believes important in new recruits is the ability to have a confident opinion on something, but also to be willing to relinquish that view when presented with new facts.
It struck me that this is also a very desirable attribute in an investor. You need the confidence to hold onto a good investment when others are losing their heads and the price is dropping, but you also need to be able to change your opinion in the face of new facts that contradict your investment thesis.
On a related note, you may be interested to know that early in his investing career, Warren Buffett was an enthusiastic follower of charting and tape reading. He later changed his view and became the world’s best-known value investor. The new information that prompted the change? Reading Benjamin Graham’s book, The Intelligent Investor.
Tim joined Montgomery in July 2012 and is a senior member of the investment team. Prior to this, Tim was an Executive Director in the corporate advisory division of Gresham Partners, where he worked for 17 years. Tim focuses on quant investing and market-neutral strategies.
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Kshitij Gupta
:
I believe in one of his letters (1959??), he compared his performance with few other funds and admitted that some of them had totally outperformed him over years and that he, infact, did not have those skill-sets.
Andrew Legget
:
Google is one of those companies not afraid to re-write rule books and coninually innovate to ensure they stay the company they are. This is what all companies should try for but especially important for companies like google and the social networks.
Confidence in ones own investment philosophy is a very important aspect (which i think gets overlooked by those starting out). It took me a while, it is arguably still even a work in progress, for myself to have the confidence to put my views to paper and post it for others to critique. Although i have considerably improved in this regard, i still sometimes find myself babbling and being almost apologetic for sharing them.
However, i know i am heading in the right direction. The more i test, study and refine my own philosophy (which like google is something you should always do) i find the results improving and the overall quality of my decisions getting better.
As always, like Tim says, you do need to be willing to let beliefs go if it is proven they are no valid or new facts emerge. There is no point rallying against reality regardless of the elegance of the belief or model if it continually is proven to be false.
Finally, perhaps we also take Warren Buffets advice in his latest letter and we make sure we call Charlie more.