Investor's DNA

The ABCs of Investors’ DNA

"In a speech at Babson College in 2010, the renowned value investor Seth Klarman remarked that research on fruit flies showed that most of them will swarm toward a light—but that a small minority appear to be genetically programmed to stay away from it.

Mr. Klarman, president of the Boston-based Baupost Group, which manages $26 billion in hedge-fund assets, jokingly called these flies “tiny contrarians,” the insect equivalents of “deep value investors.”

He went on to speculate that most people might possess “a dominant gene” for chasing hot performance and overhyped assets, while only a minority have “the recessive value gene” that confers a patient preference for whatever is battered and unpopular.

Mr. Klarman told me this past week that he still holds the same view."

Painting By Numbers - An Ode To Quant
The superiority of models over human judgement.