What makes a good investment manager? One trait not often talked about is curiosity. You cannot find new or unique opportunities if you are not curious; however, the concept or meaning of curiosity for investment management may be hard to define.
A recent book, Why? What Makes Us Curious, is not related to money management but tackles the issue of what it means to be curious. The author describes four different types of curiosity which can easily be applied to investment decision-making.
A high functioning money manager needs all forms of curiosity to be successful. For example, he needs to be able to notice things and have a sense for when markets are out of alignment or there is an anomaly. He needs to have a desire for continual learning or just the expansion of his knowledge of markets and new research. He needs to also be able to drill deep into a specific problem and not just have superficial knowledge. Finally, there has to be a sense of exploration to try new ideas.
My guess is that most managers have not developed all four types and may follow different curiosities with different level of intensity across their careers. It is truly rare to find the curious manager who can stay that way across long periods of time. So, next time you interview a manager, ask him about his market curiosity.