Connoisseurs MichelPireu     | Business Day Thursday, October 25, 2018
In his book, The Art of Execution, money manager Lee Freeman-Shor divides investors into rabbits, assassins, hunters, raiders and, the most successful group, Connoisseurs.

The key to their success came down to how they responded when investments rose and when they fell. Winning big on just a few successes and minimising losses means a manager can still do seriously well, even when less than half of his or her bets come off.

Assassins deal promptly and unemotionally with their failures. Hunters tend to watch, analyse and then attempt to average down to salvage their investments. Rabbits watched their investment continue to fall, neither cutting nor adding. Raiders snatched at any profit they made; 10-30% was enough. The connoisseurs let their winners run.

Here is what Freeman-Shor has to say about the attributes of Connoisseurs: “One of the key requirements of staying invested in a big winner is to have (or cultivate) a high boredom threshold. Meeting some of my Connoisseurs could be very, very boring. They would talk about the same stocks they had been invested in for the past five years or more. The fact is, most of us will find it difficult to emulate the Connoisseurs because we feel the need to do something every day. We look at stock price charts, listen to the latest market news and fool ourselves into believing we could add value from making a few small trades here and there. It is very hard to do nothing but focus on the same handful of companies every year; only researching new ideas on the side. Many of us, seeing we have made a profit of 40% in one of our stocks, start actively looking for another company to invest the money into – instead of leaving it invested. This is precisely why lots of investors never become very successful.”
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