Discerene’s Approach to Hiring
Fundamentally, we believe that it takes a certain personality — a certain chutzpah — for an analyst to believe that he/she can consistently make money by being right analyzing businesses when others are wrong. Analysts with the most potential are not likely to be the most consensus-driven, intellectually easygoing people we will meet. When we recruit, we actively seek out a preternatural spark, that "off-center" quality that many people with high capacity for independent-minded blue-sky thinking have. However, intellectual creativity does not always go hand-in-hand with analytical discipline. We also look for folks who show the ability to follow through on independent ideas with rigorous, methodical empirical work, especially in seeking out and evaluating disconfirming evidence, guided by clear, knife-through-butter logic.
We find that sometimes, folks with high IQs have never had to push past thinking mostly at an intuitive level, because (unfortunately, for analytical muscle-training purposes), their initial intuitions have often been right, or at least persuasive, such that these intuitions do not often get questioned or subjected to empirical investigation. In particular, a phenomenon we have observed is that some folks with high IQs have also learned (consciously or subconsciously), along the way, how to better blend in and thrive socially. Truth for them becomes a social construct to be figured out within a particular institutional context (e.g., an academic “school” or professional peer group) instead of a reality to be discovered from first principles. We believe we have created an environment within which original thinking is encouraged and can flourish, but we know that many patterns of behavior are already well formed before potential hires get to us.
Our research process embraces calibrated, nuanced, counterintuitive, probabilistic thinking. Consequently, we look for folks whose raw analytical horsepower is embedded in important mental dispositions, including the tendency to collect information before making up one’s mind, the tendency to seek various points of view before coming to a conclusion, the disposition to think extensively about a problem before responding, the tendency to calibrate the degree of strength of one’s opinion to the degree of evidence available, the tendency to think about future consequences before taking action, the tendency to explicitly weigh pluses and minuses of a situation before making a decision, and the tendency to seek nuance and avoid absolutism.
We also need intellectual humility. Here, we do not mean the "modesty" that well-socialized analysts with pedigreed backgrounds learn to project. We look for a radical intellectual humility — grounded in a thoroughgoing appreciation of just how little we can actually know, and just how contingent, probabilistic, and slippery knowledge really is. If this humility is combined with a deeply rooted commitment to intellectual honesty — i.e., a commitment to finding Truth — the combination can be powerful. The commitment to Truth also requires a certain intellectual flexibility and malleability, including a willingness to use contingently held beliefs about the world as placeholders (so as not to be paralyzed) while simultaneously putting those beliefs under continued scrutiny. There is also a fine line between healthy skepticism, and outright nihilism or cynicism. When pursuit of Truth ceases to motivate, concern for the perception/regard of others often becomes a preoccupation — and that is incredibly dangerous for what we do.
Given our epistemology, our house view is that analytical rigor is often inversely correlated with rhetorical pugilism. Without intellectual humility, we are aware that the personality traits that encourage unconventional thinking can ossify into stubbornness over time. Our culture works best with (and, we think, attracts) natural givers who find joy in discovering, accumulating, sharing, and imparting knowledge. In people we encounter, we find intelligence most compelling when it is coupled with an instinctive generosity, honesty, earnestness, and fair-mindedness.
Sound thinking does not translate to successful investing without a goal orientation. A trait we have come to value in people we work with is a sense of ownership. We have observed that some people care — deeply and passionately — about what they do. The quality and integrity of their work matter to them. This sense of ownership is often innate — they care just as much even when no one is watching, and when there is no economic interest involved. It also inspires courageous (and occasionally heroic) action; for example, it compels someone to speak up even when this is against his/her interests. Wherever we encounter this trait, we have found it absolutely winning. It is also uncommon.
Closely intertwined with this sense of ownership — but not identical to it — is internal drive. This drive is also often a source of grit; it allows folks to find an extra gear when the going gets tough. However — unfortunately for us when hiring — we have found that drive often comes with impatience and an overeagerness for action, both of which are sometimes counterproductive. It is a rare person who is willing to run hard at a research project, knowing that we might only harvest the fruit of his/her work five to ten years from now. Rarer still is the person who is willing to go the extra mile on a project, only to ultimately make the case for not making an investment when the facts do not support it. We look for folks who are “long-term greedy,” which is a distinctly uncommon combination of commercialism (an intense appetite for unearthing, chasing down, and snapping up a bargain) and uncompromising intellectual honesty and rigor.
The traits above are unlikely to be present in a person without a healthy self-esteem and ego drive. Folks we look to hire are often very ambitious, in the best sense of the word. They want to make a difference in their chosen vocations. Consequently, we also look out for an intangible “Vision Thing”: Do they want to realize their ambitions as part of something bigger than themselves? Does the Discerene vision (philosophy, values, goals) resonate with them? Can they make this vision their own?
At the foundation, we look for integrity and character. Political analysts can quickly destroy the culture we have built. Fragile egos — resulting in an overly reflexive agreeableness, or alternatively, a territoriality or defensiveness emanating from an overattachment to seeming to be right — can seriously detract from the effectiveness of the team. We want folks who have strong drives to succeed, but are not driven by success; the difference is reflected in what one is willing to do (or not do) to achieve that success, and how one behaves if/when one achieves it. We find that people with the strongest sense of self are also those who are the least mindful of the self, and hence possess the highest potential to be effective at the Firm.
Consequently, apparent paradoxes emerge in what we look for. We want team players, but not overly eager consensus builders. We seek out intellectual iconoclasts, but not those who set out to be perceived as iconoclastic. We value detail-oriented quantitative analysts, but not those who will miss the forest for the trees. We have a culture where each person knows that we all want him/her to succeed, and will be there to back him/her, especially when the chips are down — which then frees us up to be honest, even tough, when holding each other to high standards of professional output and personal conduct.
Our commitment to each hire is that we will work hard to create the conditions, team environment, and runway for each person to learn, grow, and flourish. This includes giving space for each person to be vulnerable, make and admit to mistakes and learn from them, ask “why” more times than is generally expected in a workplace, have the autonomy and rope to work out solutions to problems, have the ability to turn to others for coaching and mentoring, and have the opportunity to try to develop true mastery of a professional craft — all while being held to ever higher standards of productivity, performance, and accountability.