Francois Rochon: The “Missing Gene” That Sets 5% Of Investors Apart From The Rest

In this interview with The Investor’s Podcast, Francois Rochon discusses his theory about a “missing gene,” suggesting that most people possess a “tribal gene” hardwired from prehistoric times, when immediate conformity—like fleeing from a predator—was vital for survival.

This gene prompts most individuals to follow group behaviors instinctively, particularly under stress or during collective movements, such as market trends. However, about 5% of the population lacks this gene, enabling them to act independently from the group.

This independence, according to his theory, positions them uniquely to excel in areas like investing, where they can resist popular trends and make contrarian decisions, potentially leading to superior outcomes. This capacity to diverge from the norm is seen as crucial for achieving greater than average returns in the market.

Here’s an excerpt from the interview:

I don’t exactly remember what I wrote, but I think it was in that letter I talked about the importance of what I call the missing gene. My theory, because I have not proven it scientifically, but my theory is that most humans are born with a tribal gene in their DNA.

Just how our species works. That gene has been transmitted for generations because, 10,000 years ago when we lived in huts and small villages and there was a tiger that would come to the villages and people would start running.

The intelligent thing was not to ask too many questions and start running yourself because you don’t want to be the lunch of the tiger.

The urge to follow the tribe has been genetically embedded in our DNA. Just for a probably useful reason, at least 10,000 years ago. And most humans, most normal humans have that gene.

My theory is that probably some 5 percent of human beings don’t have that gene. Whatever the reason, their DNA is not totally as accurate as others. We could say that.

I don’t know if it’s a handicap or let’s say that they just don’t have that gene. So I call it the missing gene and those people are able to not follow the tribe whenever it was running, when everyone’s going right they are able to go on the left.

So the problem is not that people are doing the wrong thing, it’s just that most people are doing the same thing. They’re just following the tribe.

It’s most of them on an unconscious level probably. And so when the market is going down, a lot of people will be selling and it’s just because they have the tribal gene that cannot help themselves.

And when a stock is very popular and they wanna buy it, but you have that 5% of the population that probably they can become artists, writers, scientists, and have novel ideas.

They are able to go into a new path of discovery, whatever field they are. So in the investment world, those 5 percent are able to buy something that everyone is selling.

They are able to invest in the stock market when everyone is depressed and panicking. And they’re able to not succumb to the latest fab, whatever it may be.

So when everyone wants to invest in intelligence, artificial intelligence or the internet or whatever fashion there is, they are immune to this idea of following the tribe.

So I think those 5% are able to generate superior returns because they are able to do things differently than the others. And we’re talking about John Templeton and they said that the first ingredient if you want to do better than the others, you have to do something different from the others. So following the tribe isn’t the way to do it if you want to have superior returns.

So that was my theory. And I still think that’s the right approach. Like I said, at the beginning, it’s not a question of intelligence and hard work and resources. First thing you have to be able to do something different.

So you have to have that missing gene or you need not to have the tribal gene, that’s probably the first ingredient to have some odds of doing better than the index.

You can listen to the entire interview here: