Lee Freeman-Shor of Old Mutual Global Investors authored a piece for the AAII Journal that identifies differences in the strategies of investors who win or lose over time. After analyzing over 30,000 trades by 45 investors over seven years, he concluded that the difference is not in whether their ideas are right (“the chance of a great idea making money was a lousy 49%”) but in their execution style. He defines two winning approaches and one losing approach for when an investment idea proves wrong (i.e., loses money initially) as well as a winning and losing style for when an idea proves right. The five “tribes” of investors outlined by Freeman-Shor are:

For initial losses:

• Assassins: a successful strategy in which the investors “sold losing investments that fell by a certain percentage or that declined by any amount and showed no signs of recovery after a certain period of time.”
• Hunters: a successful strategy of “invest[ing] a lesser amount at the outset and with a plan of buying significantly more shares if the price fell” and of being “unafraid to sell” if it becomes clear the initial investment was a mistake.
• Rabbits: an unsuccessful approach that results from “not having a plan, or doing nothing,” which “opens up the possibility of losing big.”

For initial gains:

• Connoisseurs: a successful strategy that “make[s] high-conviction investments, hold[s] onto them for a long time and take[s] small profits along the way,” because it enables the approach expressed by Stanely Druckenmiller as follows: “[the] way to build long-term returns is through preservation of capital and home runs.”
• Raiders: an unsuccessful style of “tak[ing] profits as soon as practical,” which fails because “if your approach is to keep taking small profits, you will never have a big winner.”