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Covering human psychology in investing, consumer, and tech sectors. It is also about managing a portfolio based on your "personality tech" without copying others. Author is a seasoned investor, ex-ibanker, and grad student in clinical mental health.

Enneagram x Stock Picking (Part IV): Type Four Investors and their Emotions

Are emotions - embodied by Type Fours - necessarily bad when it comes to personal investing? By Benjamin Tan

Mar 7, 2023

Let’s say a friend confides in you about her romantic life with the following:

“I always wake up screaming from dreaming that one day he will leave me because he gets tired of my scheming. One day, I'll watch as he leaves and life will lose all its meaning. I know I am the problem between us. It is me and everybody agrees. Must be exhausting having to root for me”

You might think of her as a self-referential drama queen and wonder how much time she devotes to having a pity party.

Except that the above is lifted almost verbatim from the song Anti-Hero written by Taylor Swift, one of the most successful musicians of all time and famed for her autobiographical lyrics.

And she is most definitely an Enneagram Type Four.

Taylor Swift: Her lyrics are emotionally charged, and she is one of the most powerful musicians of our generation

How is Taylor Swift Dramatic and Prolific at the same time?

Being able to experience the full range of human emotions and develop self-awareness are essential to personal development. Type Fours are especially good at digging deep into themselves when mining for meaning and reflections. But that inwardness must not replace definitive actions to move forward in life and reach new goals.

Swift has transformed her melodrama into music that is not only authentic, but relatable to millions. Discipline in actions moved her to connect with people via her abundant outputs. She is a model Type Four individual who is not only unique but has harnessed acute awareness of her inner struggles into creative works.

What does Taylor Swift have to do with Personal Investing?

For a start, we can observe how feelings can be separate from actions and identity. If all Taylor Swift does is wallow in negative self-image, she would just be a sad individual, not the prolific singer-songwriter that she is today. Type Fours need to recognize that their feelings are not their identities, and they need to be worked through. Renewal of self is rooted in a combination of introspection and actions - emotions must not be the sole driver in life. There needs to be a balance between staying connected with feelings to inform self-awareness and an active life that connects with the outside world.

When it comes to personal investing, it is important for Type Four investors to keep moving forward, regardless of successes, failures, stumbles, or downright disasters. Feelings can magnify by orders of magnitude when money is involved, so Type Four investors must lean harder into the discipline of a Type One (Perfectionist) to act more on rational rules and principles of personal finances. By freeing themselves from the traps of their relentless moods, Type Four investors can draw inspiration from the ever-resolute Type Ones to act with grit and firm convictions.

Type Fours: Creative Individualists

If you respond “Yes” to most of the statements below, you may be a Type Four:

In your choice of profession, you believe in finding the ideal job that fits your identity and creativity, more so than what is the most coveted or in-demand career path out there
Between “being practical” and “being authentic”, the latter resonates more with you
Compared to your peers, you feel you are more introspective than them
You can be vulnerable and feel hurt for extended periods of time, even by casual teases or jokes on you
You would rather be unique and unpopular, than popular but be like everyone else
You are comfortable experiencing full and intense emotions across the entire spectrum, from profound sadness to pure joy
Rather than pure quantitative analysis and exploration of multiple scenarios, you rely on feelings and intuition just as much (if not more) in your approach to problem-solving

Type Four Investors: Picking Stocks that Resonate

Type Fours are far more attuned to their emotions than either of the other two heart types - Threes (Performers) and Twos (Givers). This can be a competitive edge when Type Fours are investing in stocks.

For example, Type Four investors may spot early trends in consumer markets quicker than any other types, due to their ability to read emotions in people. A connoisseur of high fashion might have noticed how Gucci was connecting with a whole new generation of younger consumers when Alessandro Michele was appointed creative director in 2015, and proceed to make a prescient investment in Kering S.A., the parent company of Gucci.

Gucci store facade — Shareholders of Kering have seen their fortunes soar alongside Gucci’s resurgence

Healthy Type Four investors are also excellent judges of individuals, as insightful of the outside world as they are into theirs. Harnessing their skills honed from natural self-awareness, they can observe people with inexplicable but accurate intuition. Like a sixth sense guiding their inner voices, it is a much-needed skill in investing to separate the Steve Jobs of the world from well-presented frauds like Elizabeth Holmes of Theranos, Kenneth Lay of Enron, and Trevor Milton of Nikola.

Potential Pitfalls when Emotions become Pronounced

Because Type Four investors naturally yearn to be different, they may choose to snub plain vanilla investment options - like index funds, home purchases, fixed income instruments, large capitalization stocks, and cash savings - in favor of the exotic, making idiosyncratic bets based more on emotions, rather than defensible rationale. Sometimes, daring bets may work out, like investing in Netflix (NFLX 0.00%↑) when it was just a quirky DVD-by-mail subscription provider back in early 2000s, or it can bomb, if invested in Webvan and Pets.com.

Type Four investors also have innate tendencies to detach from reality into their own inner worlds. A combination of “could have, should have, would have” and “if only” type of ruminations can suck them into a vortex of inaction. All the energy spent in anger, regret, and fantasies detracts Type Four investors from carrying out actual investment plans to move forward. Accordingly, they must get out of themselves and their feelings to start moving, despite how good melancholy may taste. In other words, borrowing from Cher’s iconic line in the 1987 film Moonstruck, Type Four investors sometimes need to “snap out of it”.

Why Learning about Our Motivations for Stock Picking Matters

This is Part Four of a series of post that I will be writing on Enneagram x Stock Picking. Below are the links to Part One (Type One Perfectionist), Part Two (Type Two Giver), and Part Three (Type Three Achiever)

Our best traits and core motivations are often accompanied by closely related blind spots and unhealthy biases. It is therefore important to clarify our primary underpinnings for investing in singular names, because they can reveal the specific personality pitfalls we face as investors.

To find out more about your typology, try the free test on my website.

I shall be writing more about Enneagram types and personal investing in the weeks to come. Stay tuned and subscribe. Meantime, visit my website “Enneagram Investing”

Follow me on Twitter @ConsumeOwnTech and Commonstock @ConsumeOwnTech

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