A keynote I gave to the Golden Key National Honor Society UF Chapter in 2007.
I was asked here this evening to offer some advice about success. The thing of it is, planning for the success itself is easy. It’s pleasant to look forward to prosperity, respect, advancement. What’s hard is accepting, and even planning for, the setbacks and failures that are inevitably part of any well-lived life. If success is the opposite of failure, then is the key to success avoiding failure? How do you avoid failure? The answer: set very low expectations for yourself. Then you’ll find it easy to succeed and never fail. For example, I’ve set myself the goal of going home this evening and watching a rerun of The Simpsons. But, you may well point out, the Simpsons is on at 7:30 and this banquet may not end in time. But my friends, I TIVO’ed it. I’m going to watch it. Then I’m going to check it off my to-do list and sleep the sleep of the easily satisfied.
If I fill my weekly schedule with similar items, by Friday I’ll have checked off a long list of mundane and pointless tasks and feel ever-so accomplished and successful. I might similarly design a whole life in which my ladder to success is more of a gentle slope dotted with modest, easily reached milestones: have job most of the time, live in enclosed structure with indoor plumbing, enjoy relationship with not entirely repulsive significant other who is firmly resigned to the fact that I’m the best she can get.
Not the stuff of great novels, but entirely within my grasp. Not so bad, could certainly be worse. If this vision of a modest, easily-achieved, not entirely objectionable life doesn’t fire your imagination, ask yourself why. Why do we seek a life of challenge? Why flirt with risk? Why do we get inspired by quotes like the one from Helen Keller, who said, “Life is either a daring adventure or nothing.”? Is it ego? Do we all have an inner Napoleon or perhaps an inner Madonna who craves conquest and fame? Or is it something we needn’t judge so harshly? Is our ambition to succeed something that is good, not only for ourselves but for the world?
I think of the stories we tell ourselves and each other for inspiration. Rarely are they stories of prudence, modesty, and settling for what is practical. The great stories are always of heroes daring the impossible, or possibly impossible, enduring hardship and humiliation, growing and adapting with creativity and humor, but never, never giving up. Those are the stories we cherish. My friends, each of us is living a story, and I urge you to think about what sort of story you are living. Above all, ask yourself, am I the hero of my own life story?
I believe we all have a right to see ourselves as the heroes of our own life stories. Not the victim of circumstance, not a comic side character, not a villain waiting to be exposed, but the hero. When you think that way, you can remember that in every hero story, there are parts where the hero struggles: Cinderella sitting among the ashes, humiliated, alone, her true worth unrecognized. And you need that part of the story to be there. If the story went: Cinderella was popular, rich, and never had any problems, and then she met a prince and lived happily ever after—well, nobody wants to watch that movie! You might want to live it. But then again, deep down, no you wouldn’t. It’s the struggle that makes the success mean something. It’s the essential part of the story.
When a friend of mine was going through a severe illness, I shared this idea with her, and asked her to write the story of her life, but with her as the hero, not the victim. I wanted her to see that if you only look at the chapter in which the awful stuff is happening, you might see it as just an ugly, sad story of a victim suffering. She was living that chapter then, and you can imagine she felt like a victim. She felt like a failure. She asked “Why me?” as anyone would. But writing is wonderful therapy, and this time she rewrote her story, so that the horrible chapter she was going through—her body failing her, her husband leaving her, etc.—was part of a larger whole—a story of which she was the hero and, indeed, the author, or perhaps co-author.
I knew something interesting was happening when she asked if she could make the story an allegory, like a fable. I said sure. Then she said, and I quote, “Can I be a fairy princess?” Now, this is a high-powered executive, who lives in suits and leads a large organization. I knew something interesting was happening. When I read her story, it was funny and touching, but nearly half of it was very detailed descriptions of what she, as a fairy princess, would be wearing. I said, “This is mostly costume changes! What about the important stuff?”
To which she replied, “What I’m wearing is the important stuff!”
But there was also a plot, and though the events were the same, it had gone from the story of a victim suffering, to that of a hero struggling. That is the key difference. As I said, every great story has setbacks, heartaches, periods of great suffering. We put up with them because we know that at the end of the tale, those dark chapters lead to the eventual successes and without them, the hero’s successes wouldn’t mean anything.
When you are facing one of the dark chapters of your own life–and unless you set consistently low expectations for yourself, you will have dark chapters–remember that you have the choice, to see that episode as one of a victim suffering meaninglessly, or a hero struggling meaningfully and creatively in the midst of a noble quest. Have the courage to look at your so-called failures and setbacks and decide for yourself what they mean in the context of the larger story, a story of which you are the hero and the co-author. Then you can deal with those dark chapters in a way that respects your deepest values and your inner nobility.
I realize that what I’ve given you is advice on how to look at failure, when I was asked here to give you advice on success. So let me conclude with some advice on how to handle success, which I learned from my friend who said, “What I’m wearing is the important stuff.” My advice to you is, when success comes, as it will for all of you, people will want to take your picture, so make sure you look good. Iron your clothes, get your hair done, maybe get some of those tooth-whitening strips. Because people will look at the person in that picture, and they’ll think about your story, and then they’ll think about their own stories. Your story can inspire others to make their own stories great, even people you never meet. So that’s my advice on success: don’t just achieve it; achieve it with style. The hero of your story deserves nothing less.
One of my teaching mentors, Dr. Dennis Huston of Rice, taught me Shakespeare and encouraged me to become an actor. Above all, he inspired me to want to teach and to enjoy it as much as he did. He was named Professor of the Year by the Carnegie Foundation, but more than his excellence, it was his enthusiasm I admired. He described the classroom as a “magical space,” where people could better understand each other and themselves and gain insights which you cannot gain elsewhere. After 17 years of teaching, I have learned how right he was.
Dr. Huston once mentioned, casually, that there were “only four things a teacher really needs to do” and the rest came from practice and experience. I asked him to teach me the four things. It took an hour, after dinner on a Tuesday, and a few of my friends joined us.
The four things:
The trust they place in you often translates into dedication to your class. I had several—too many—students say their only reason for not trying suicide on a Tuesday was because they had my class on Wednesday. And they knew I would miss them. No training can prepare you to be the only reason a student gets out of bed all semester. You just thank God and keep teaching.
Dr. Huston was right about the rest being practice and experience. You find beauty in the basics which you didn’t see at the start of your career.
80% of my writing classes is still rules 16 and 17 of Strunk & White’s The Elements of Style: “Use definite, specific, concrete language” and “Omit needless words.” Not only do these basic truths of good writing cultivate and strengthen style, they reflect larger truths of character.
To be specific is to give, as Marge Piercy puts it in “The Art of Blessing the Day”:
attention to each little and big blossom of the tree
of life, to let the tongue sing each fruit,
its savor, its aroma and its use.
How lovely a way to treat the world! Adam’s first job, after all, was to give names to each creation in the Garden.
To omit needless words we must make hard and clear decisions about what words we need. I called my first and best-loved course “Writing & Love” because, I said in the description, “Writing and loving are similar disciplines requiring similar decisions.”
To decide what needs to be said can only be done through compassion. To see each other well, to decide what is important to notice and what just gets in the way, requires a sure and well-guided eye and hand.
In the end, good writing is a promise to tell the truth as well as you can and with compassion, and the keeping of that promise. The promise leads to the beauty and power inherent in the language, which only attention can reveal.
Good English prose consists of sentences of varying length, with pleasing rhythm and melody, using short words drawn mostly from the Anglo-Saxon, with Latinate and French words for seasoning. The Gettysburg Address is a model, beautiful and powerful. It shows Lincoln’s compassion for his people, and love for the act of writing to them. It shows his attention to detail in choosing those 272 words and omitting any others.
Other subjects have their power and beauty. Chemistry is a dance between positive and negative charges. Even the language of chemistry is love poetry. Molecules are water-loving (hydrophilic) or water-avoiding (hydrophobic). A galvanic cell is a tale of unrequited love. (Really, it is.)
Architects don’t design structures, they design spaces of potential, waiting to be filled with life. So do all teachers who believe in Dr. Huston’s “magical space” of the classroom.
In all of these is the magic of attention, from the French attendre, to wait. To wait for something is an act of faith: you believe something is going to come. What that is depends on what you ask for. Bad teachers, teachers who have given up, expect only disappointment and drudgery. And so they find it.
A good teacher expects, even demands, something else. She attends, waiting for the burnt-out and unconfident student to show the merest kindling of genius. She feeds that ember into flame enough to shed light. She holds it up before the student’s glowing, half-believing eyes and says, “See? That’s you.” As Marge Piercy wrote and my mentors taught me, “Attention is love.”
It’s great to know you can count on yourself to do what you say you’ll do. Drive to the parking lot of any gym or fitness center the next few days and you’ll see a lot of hopeful people parked. Most of them, sadly, will let themselves down by February, when the habit of not exercising comes back from winter vacation.
So how do you make a new habit out of a goal or a wish or a hope? There isn’t one answer, but the process does have some common features.
But you don’t have to physically repeat the act for it to work. A study using college basketball players showed the power of visualization .
They were divided into three groups. One group practiced free throws as usual. The second got to skip that portion of practice. The third group was asked to suit up, sit on the bench, and visualize themselves shooting free throws. After a few weeks, the group that didn’t practice had gotten worse. But the visualization group scored 97% as well as those who practiced.
So even when you aren’t actively doing your new resolution, visualize yourself doing it successfully. Your brain doesn’t know the difference.
Visualize it down to the last detail. Picking out your workout clothes, your socks, which aren’t still in the washer but are waiting for you, fresh and dry. Pulling out your membership card, which is in your wallet because it’s always in your wallet. And so on. Don’t just have a general plan. Plan every little step and walk through those steps again and again.
My friend Chapman Ducote is a top LeMans race car driver. The night before a race, he walks every foot of every mile of the course, visualizing the race. The next day, he knows the route intimately.
That’s how well you should know your plan, whether it’s how you’ll get out at your stop loss or profit target, or how you’ll pull the trigger and enter a trade.
We often say things like, “I’m trying to work out Monday, Wednesday, and Fridays before work,” or “This year I’m going to” or “My goal/resolution is to.” To make it worse, we might even add a shrug or eye-roll or a “We’ll see how it goes.” Wrong!
You don’t say “I’m trying to brush my teeth every day” or “My goal is to shower every day.” Those are habits. You talk about them as habits, in the present tense: “I brush my teeth daily,” and “I shower every day.”
Talk about the new resolution the same way. “I eat vegetables and fruits with every meal,” “I work out Monday, Wednesday, and Friday before work.”
Sure, someone will ask how long you’ve been doing it or point out that it’s January 1st. Ignore him. Change the subject. Pretend you didn’t hear. Go to the restroom.
Your subconscious mind doesn’t ask such questions. It simply accepts what it hears over and over. If it hears, “I’m a professional trader who always uses stops,” it won’t pull out last week’s trading record and cross-examine you. Ignore the part of your mind that does that. You’re not in court. You’re creating a reality in your mind.
Fake it till you make it.
Almost everything we do automatically has a cue, a trigger. You see the Starbucks on your route home and you immediately change lanes. You hear a certain voice and you immediately tense up or get excited.
You hear “Have a Coke and a–” and you think “smile” even though that ad ended decades ago.
Action triggers like these can be surprisingly effective in motivating action. The psychologists Sheina Orbell and Paschal Sheeran studied a group of patients in England with an average age of 68, who were recovering from hip or knee replacement surgery. Some of them were asked to set action triggers for their recovery exercises—something like, “I’ll do my range-of-motion extensions every morning after I finish my first cup of coffee.” The other group did not receive any coaching on action triggers. The results were dramatic: Those patients who used action triggers recovered more than twice as fast, standing up on their own in 3.5 weeks, versus 7.7 weeks for the others.
Find a simple trigger–something that is already part of your routine, and attach the new habit to the old one. The trigger can even be silly. A little phrase you say out loud in a funny voice. A little song you sing.
I sing a line from a song by Mr. Rogers to remind me to use stop-losses: “I can stop when I want to/stop when I wish/can stop, stop, stop any time/And what a good feeling/to feel like this/and know that the feeling/is really mine.” Shut up. It works.
Sure the stick works faster than the carrot sometimes, but in the long run, our most powerful motivation is love, not fear. Successful people motivate themselves by focusing on what they want to be, not what they want to avoid.
Don’t think of a purple elephant.
What did you just think of? Of course. It’s because your brain only hears the interesting, new part of the sentence, “purple elephant,” and not the “don’t.”
This is why telling children not to do something doesn’t work. Tell them what they can do instead and make them feel happy about doing the alternative.
The resolution-keeping, habit-making part of us is like al child. Sure, we might fancy it up with psychology and big words, but in the end it still comes down to: See cookie; think “Cookie!”; Eat cookie.
And then of course, blame parents for wrecking self-esteem and the media for promoting unhealthy body images. But still, cookie.
You’re thinking about cookies right now, aren’t you?
Eating a cookie has its rewards. They are immediate and familiar. Eating healthy vegetables will only become habit if you feel the reward of it, if it makes you happy, not just weeks later, but as you’re eating them.
That’s why it’s important to make the habit its own reward. If your diet (horrible word, never use it) involves you thinking, “If I eat all my salad, then I can have pie for dessert. 100 grams of pie.” That is just sad.
Seriously, you want to spoil the eating of pie by introducing math? And Americans don’t like the metric system to begin with. No wonder we’re so fat.
What if instead, you celebrated every bite of a delicious salad, then had a tasty balance of protein, monounsaturated fat, and finally, something sweet that you took time to savor instead of scarfing it down while driving? What if you enjoyed feeling like one of those people, the healthy ones who aren’t hungry all the time?
The technical term for an activity that is its own reward is teleological intrinsic finality. It means that you don’t do something for a later, separate outcome or reward. You do it because it is inherently worth doing.
Think of billionaires who keep working. If more people had jobs they would do for free because they enjoy them so much, the economy would boom.
The simplest way to make your new resolution teleologically intrinsic is to do what Chip and Dan call “looking for the bright spots.” Find one little part of it that you enjoy and make sure that part always happens. You may not like everything about your workout, but you like the always-happy aerobics teacher, so you go. You like doing curls in front of the mirror. You like lacing your shoes and listening to the theme from Rocky (or “Firework” by Katy Perry, we’re not judging).
It doesn’t matter what the bright spot is, just find it and make sure it’s always in there.
Your brain can only handle so much change at once. So even though you might have a whole list of self-improvement goals, don’t try to do them all on January 2nd. That’s a sure way to make yourself sad by January 10th.
The flow experience is what makes any activity self-rewarding. It’s that feeling you get during a great conversation or doing something with total absorption. You lose track of time, there’s a perfect balance between the level of challenge and your ability. I’m sure you’ve felt it.
The key is to make the start as easy and frictionless as possible. My resolution (and I’m only focusing on one for January) is to wake up at 4 am, get out of bed, and do a Surya Namaskara, the sun salute exercise that every yoga student learns. It’s a simple act of waking up, getting into my body and mind. Most importantly, it’s an act of doing what I promised myself I would do.
This morning it is well below freezing outside in Chicago and I went to sleep a little after midnight. But I wanted to make myself trust myself.
Simple as that. I wanted to know I could trust myself at least in this small thing. I got up, stretched and moved, and got back under the warm covers.
Funny thing, though. Instead of going back to sleep, I started doing other parts of my morning routine. I proofread Kathy Garber’s excellent technical analysis of the S&P’s direction as we go into 2014; it didn’t need much editing, so I just ended up admiring it. You should read it.
It’s about how she (like all good traders) doesn’t make predictions, but offers If-Then statements. If price holds below level X, then we’ll see more downside, and so on.
In the same way, can I predict at 5:45 AM how my day will go? No. But IF I was able to trust myself to do one small good thing at 4 AM, THEN maybe I can have more confidence in myself to handle the rest of the day well.
You may have heard of Jerry Seinfeld’s great “Don’t Break The Chain” advice on habit formation. It is now quite famous among coaches. You simply do the new habit, then mark that day on a calendar with a big red X. Next day, same thing.
Soon you have a growing chain of Xs, which you’ll enjoy seeing. Your job is just to not break the chain. Do you see the pattern? Inherently rewarding, easy to start, has a trigger.
Go to dontbreakthechain.com for a free, simple app (and Chrome extension) to start and keep your own chains. As I said, start with just one. Keep it small and easy. Like, “put the cap back on the toothpaste” easy. Studies show if you do it for 21 days in a row, it’ll be habit.
Happy New Year, everyone! I hope you have fun. And I hope having fun becomes an unbreakable habit for all of us.
You’ve heard the expression, “Scared money runs away from you.” The more you worry about losing money, the more likely you are to lose it. The low volumes, high volatility, and unclear direction of the stock market over the past five days says there’s a lot of scared money out there.
Danny Riley wrote about it yesterday and we saw it all day in the MrTopStep Trading Room, where the collective intelligence helped a lot of us stay focused and make money. But outside our room, we knew many traders were getting chopped up.
When you learn advanced driving skills and find yourself heading straight for a wall, the instructor always tells you to look at where you want the car to go, not what you want to avoid. If you look at the wall, you’ll hit the wall. If you look at the spot you want to get to, sure enough, you’ll turn and avoid the wall.
Don’t think of a pink elephant. What did you just think of? Your brain tuned out the other words and went straight to something it could see.
A row of pink elephants, up on their hind legs, dancing in a conga line. See how easy it is?
So if you’re trading and you don’t want to think about losing money, the worst thing you can do is tell yourself, “Don’t think about losing money.” Your brain will only register “losing money,” because that’s what it can see and feel.
You need to give your mind something else to focus on. Something vivid, something real, something it can hold onto.
In India, the mahouts, elephant trainers, have an old trick for keeping an elephant from grabbing fruits and swatting people with their trunks when they take them on parades. They give the elephant a stick to hold in its trunk, directly in front of its face. The elephant will simply keep holding the stick no matter how many banana and mango carts it passes.
Your mind needs the equivalent of that stick. It’s the trading plan and checklist I wrote about yesterday. Here are a few things you can add to that checklist to make sure you aren’t trading scared.
When you do lose money—notice I said when, not if—do you have a plan to absorb it in a creative and positive way? Start with the words you use. Don’t say, “I f$#^&d up.” Be specific.[pullquote]Michael Jordan winked at me, then dribbled, paused, then swoosh. That was his free throw checklist.[/pullquote]
There are specific steps that lead to a losing trade just as there are to a profitable trade. What were the specific steps you took that led to that outcome?
Don’t say you were unlucky. Luck has very little to do with good, consistent trading. When you’re in the zone, in what psychologists call a flow state, it can feel like luck. Time slows down, you have no fear, you’re focused and calm. But that’s a mental state anyone can enter at any time. Most of us just don’t train ourselves to do it.
The best athletes know how to overcome fear by entering a flow state. In college, I once found myself alone in a gym with a young Michael Jordan, who was practicing free throws. Over and over, he dribbled the same way, paused the same way, and swoosh. Nothin’ but net. It was like being with a Zen master.
When he finally missed one, he didn’t react at all. He got the ball the same way, got back in position the same way. He finally saw me watching him. Michael Jordan winked at me, then dribbled, paused, then swoosh. That was his free throw checklist.
(He famously showed in one game that keeping his eyes open was not on that list. He closed his eyes, sank the shot, then turned to a rookie and said, “Welcome to the NBA.”)
In much the same way, the best, most consistent traders have a checklist that becomes second nature to them. They enter into a flow state (which I can tell you from experience is immensely pleasurable), then they walk into the market and pull money from the markets virtually at will, like the market is their personal ATM.
If they lose, the trade lost; it doesn’t mean they are losers. They see the loss as part of a larger story of success. It’s tuition paid for their ongoing education towards mastery. If you learn from each mistake, the money becomes an investment in your education. Think of it that way.
If you can train yourself and internalize the checklist you want to focus on, you’ll spend the trading hours in a happy flow state. Fear and worry will just blow past you like a light breeze and you won’t get tempted to let them control you. You’ll be a happy warrior.
If you ever need a way to remind yourself to focus on your checklist and trade in flow, just think of an elephant.
One of the best ways to avoid needless mistakes is to have a checklist. Atul Gawande’s bestseller, The Checklist Manifesto: How to Get Things Right, talks about how air forces and airlines implemented checklists and drastically reduced pilot error; how surgeons who follow checklists make fewer life-threatening errors; and how a cleanliness checklist in intensive care units virtually eliminated a type of deadly hospital infection.
I had lunch this week with an old student, who manages a private fund and is a friend and investor in Mohnish Pabrai‘s well known long-only equity fund that has returned 517% net since 2000. He adopted Mohnish’s use of checklists for his investment research, which was inspired by The Checklist Manifesto. When you are dealing with a number of complex variables, especially doing something you routinely do over and over, it’s easy to skip a step. Sometimes that step is the most important one, and you forgot it. A checklist helps you avoid those fatal mistakes.
Have you ever tried changing the routine for something ordinary that you do every day? Like shaving and showering or which teeth you brush in what order and up and down or side to side: just do a different thing first and sometimes you get totally messed up. You can’t remember which thing comes next. Now imagine doing the same when analyzing a market.
A well-planned and tested checklist makes it easier to pull the trigger in a timely and emotionally detached way.
I gave my checklist the acronym STIFF:
I don’t try to pick tops and bottoms. I like to trade what I call the “fat middle,” where the trend is clear and moving with momentum.
What about intuition and feeling? They do have a place. But if you’ve done the work, your feeling comes from a different place.
You aren’t wishing for something to happen. You’re just watching it unfold and getting the sense that what you hoped for is manifesting before your eyes. It’s the difference between desire for something that isn’t there and gratitude for something that is coming into view like a sunrise.
For me, the best trades are a combination of the checklist and the feeling of gratitude. Yes, the trade could still fail. “Time and chance happeneth” to us all.
Although we can’t control the markets or tell them what to do (though many of us keep trying, day after frustrating day), what we can control we must try to control. We can control what we focus our minds on. We can control what we allow to influence our decisions. And we, only we, can decide to act.
Use your checklist to get ready and aim. Then trust your feelings if they come from gratitude and not greed. Then just pull the trigger. You’ve done the work. You’ve controlled what you can control and detached from what you can’t.
That’s it. Bang.