You've Got the Power with Denise Shull, Steve Goldstein and Gio Valiante

30:41Like, you know, okay, we can tweet about it and we can maybe go to a protest for whichever side of the situation we believe in, but we're essentially powerless, which makes us feel like more nervous and more anxious. So there's the first to just admit, like, like, I will take the Middle East for myself. I mean, I wish I could do something. I can't do anything. You know, I could voice my opinion on Twitter, but that's sort of useless. Like I can't actually do anything. And, but many of us have this feeling like we should do something about a problem. And there's some value to just realizing, like I have the same in relationship to the presidential election.

31:24I wish I could, but I can't really cause anything to happen. So I can just like influence what I can do in my life, in my life about the things that I do have some agency over. Being able to admit how you feel about those things is actually a source of strength. And then if there is something that any individual can do, it becomes more apparent to that person once you realize how you actually feel about it and even what you really think. I'm going to actually take it back to the markets for a second. I agree with Steve. There are essentially infinite number of ways to make money in the market.

32:10Like, I mean, if you could catch every little price, you know, every little move of every little thing, think how much money is there. You just have to figure out like how you see it and what makes sense to you. What is your version of understanding what makes prices move and then stick with it. Like, and then stick with it. And it can be, you know, some people are scalpers and some people are trading for weeks and months at a time. You know, I found myself to be a momentum trader. And this is back when I traded equities. Like, that's how it made sense to me. The drug stocks move together. Like, you have to figure out your version.

32:50You learned from somebody. And unless you're really sure that the person you learned from makes money and their viewpoint, their lens in the market makes sense, You've got to go back to like, where am I in this system? How does it make sense to me? And what can I do about that? Which, believe it or not, your feelings are going to give you all sorts of information about that if you learn to think of them as data. That's a whole project, but it's true. I want to say one more thing. The brain science says that the best traders understand the market as a social game. The closest analogy, not perfect, but is poker.

33:38So, you know, you're not really playing the cards. You need to play how you think other people are playing their cards. That's called theory of mind. Like my hedge fund clients always talk about positioning. It's not like this perfect mathematical game. Some of those big funds force their traders to be factor neutral, market neutral. They have all this data, but they have so many constraints on what they can do that as an individual trader, you don't have. So that's actually an advantage. Like when you don't have the big corporations rules and way they think you should do it. Anyway, this comes back to like, what do you really think?

34:25I will ask my clients to answer, what do I really think? Well, yeah. What do I want? By the way, using desire is a good thing. What do you want? Like, what do you want for the trade? What do you want for your life? What do I want? What do I really think? And what am I afraid of? That happens to be WTF, if you really think about it. That's the way to remember it. But it's true, like, for you and your life and your family in this chaotic world. And it's true for like the trade you're going to do this afternoon. I've talked about that. That's fascinating. I'm going to pivot a little bit and we don't have to go down this road, but for some reason, and I don't know if it's my, in my own leaning, because I just finished, uh, Walter Isaacson's biography about Elon Musk.

35:16Um, and, and people have a lot of strong feelings about Elon Musk, um, from a psychological perspective depending on your you know what the school of psychology you're looking at there's a once in a once in a several hundred year kind of mind um you know where who are you going to comp him to maybe Isaac Newton right um Henry Ford Charles Darwin who knows um and not only to watch or to listen to how he's doing what he's doing as a futurist but then the behavior he's taken to sort of craft reality. He's literally inventing reality based on a vision, visions that he's had about what he thinks the future should look like.

36:00But then you watch sort of the response from the U.S. government, right? And I don't know if the word weaponization of the federal government, I think that's the term he uses. But certainly nine different federal agencies harassing or pushing back or over-regulating what Elon Musk is trying to do. And his debate is everything I'm doing is pro-human. I'm pro-humanity. So why are you harassing me? And I say that because every once in a while, you have a client come across your desk who's just maybe superhuman or such a dreamer, but also it maybe has the smarts and the moxie to back it up. Does anyone have a view or opinion of Elon Musk?

36:45And if not him specifically, have you seen a figure? Because this is the thing that's always interesting to me, are these people that live at the very tail end of the curve, just the all-timers, the Steve Cohen, maybe Steve Cohen type guys, or Warren Buffett in his own space, that just, they come along and they change everything. And so the world has to pivot to deal with their, Ken Griffins may be another good example of that, has to pivot to deal with their excellence. Any thoughts there?

37:20No? I have thoughts, but I'm... I have thoughts too, but I don't think they're well-formed enough for me to really... Hold on, hold on. I'm going to hold up a mirror, Denise. What are you thinking and how do you feel?

37:39Well... I have, this is going to be your political. So to anyone that that offends, I apologize. But through COVID, through a friend of mine who just testified in front of the Senate a few weeks ago, and I happened to have dinner with her last night, she's from California. She has a microbiome research company. And she's been doing research on the, basically our immune system being in the microbiome. And so she had showed early in COVID that vitamin D, vitamin C, ivermectin and hydroxychloroquine to scare a few of you, like, cured COVID. And she had research and she was shut down. She was shut down this week.

38:32When she testified in front of the Senate three weeks ago, she was shut down. So, and people don't know this, but like the reason ivermectin and hydroxychloroquine were demonized is because if there were an available cure, you couldn't create an emergency use authorization to create a vaccine. So they had to make sure that those things that did actually work were said not to work. Otherwise, you couldn't get the vaccine. I had a naive viewpoint of the world prior to that. I mean, also prior to my suing billions. Like I had a naive viewpoint that like the truth wins out. Maybe the truth does eventually win out, but there's a lot of stuff that goes on in the middle.

39:11Like, so when Elon Musk took over Twitter and said he was going to be for free speech, I was a fan just on that. Because my personal thing is you don't take away someone's health. Like without our health, we don't have agents. I mean, if you don't feel well, you can't tackle the markets, right? You can't feel like that you can go out there and work on that thing you desire if you don't feel well. So I feel like our moral obligation to the world is the truth about what makes you the healthiest. And so I was happy, but I don't know that Elon Musk took over Twitter for the idea that more accurate information.

39:51But I don't know that it's worked out that way. I don't know that it's worked out that way. But I do think we need the visionary people like my friend Sabine Hazan, who has fought for four years now to tell the truth about what cures COVID or at least, you know, because why? Because less people would suffer with less disease if like her information were out there, which is my thing. again, because I want people to be healthy enough to be able to tackle their desire, to learn to trade better, to start that small business, to take age, and this is, you know, unfuck your future, to feel like you can get out of your life what you want.

40:32Which, by the way, as an aside, Reid, you know, Gio just mentioned Warren Buffett, you know, Reid, like he didn't really start making money in the markets till what? It's 50 some years old? you know we were talking about a friend of mine last night who was a hairdresser out of high school went back to college at 32 she had five kids went back to college at 32 became a doctor like figure out what you really want about life and don't give up on it happening like I I wanted to live in a ski town for 35 years I never thought it was going to happen and then the New York shut down in the pandemic and I was like wait what I could go you don't know so hold on to what you want and just try to think, could I do this or do that?

41:17Or could I get a little better at trading over time so that eventually I can quit this job that I hate in a realistic way? That's a long winding answer. But I mean, that's what Elon Musk has these viewpoints, these visions, and goes after them. You have to, however, whether it's Musk or my friend Sabine or even me, who 20 years ago started saying you had to use emotions as information. The very first time I said that at the Chicago Mercantile Exchange, a professor from Northwestern University emailed me and said, I cannot believe you got up and told 250 men to use their emotions. I was like, well, they do need to do it, so why not?

41:58But it's scary sometimes to say what you really think or to go after what you really want, but it's the only way anything ever happens. Wonderful said. I think that was wonderfully said. Stephen any thoughts or shall we move on what do you think about that I don't have it really now the one thing I will say is you know Denise used the phrase a few times I don't know I don't know I just embrace the idea that not knowing is so powerful you know Twitter is full of opinions of people who think they know many of the best traders I've ever with they kind of embrace i don't know and then they start thinking what's the probability not what's the definite outcome and then they find better better trades and they trust themselves with it better you know we talked about poker as being the best analogy for trading you know i just send more or less everyone that i work with to thinking in bets by any duke you know i just think that is such a powerful way to look at everything to accept you don't know and then start from there of trying to find, well, what's the probability?

43:13What's the likelihood? So I do love you bringing it up. Sorry to interrupt you. Like, what do I know? What do I sort of think is going to happen? And what don't I know? And where does that leave me? Yeah. Okay, so we're going to pivot here. The theme of Real Vision's two-week mission to help investors is how to un your future. I have children now, so I'm a little more careful with my expletives. And so going with that theme, what is the, again, we all know that different individuals bring different problems to the table. And so So you want to sort of be problem centered and not have one way to lay out to everyone.

44:07But if I were to ask, what is the best piece of advice that you give or the most common piece of advice or the most impactful piece of advice, something that people can take with them and that will have staying power in their psyche? I'm reminded of Italo Calvino. He wrote an essay called Why Read the Classics. And in it, he says that the hallmark of the defining feature of a classic is that you can read it when you're 10 years old and you see one story like The Education of Little Tree is an example. And you read it when you're 20 and it's still wonderful, but for different reasons. And you read it when you're 50 and it's incredible, but for different reasons.

44:51It's the same story through a different lens and it keeps reinventing itself. What kind of advice or truth or insight or teaching have you given or do you give your clients that has legs and staying power that will help the Real Vision audience to build, to have a really wonderful future for themselves? Stephen, we'll start with you. Okay, so it's two words that sound very cliched, okay, but it kind of gets to the root of everything I try and get people to do. And that's letting go. Okay, to me, it is the superpower of every great client that I've worked with, I notice. At some point, we get to somewhere where they have done some incredible work or do do incredible work, unconsciously, sometimes consciously, on letting go.

45:49Letting go of beliefs, letting go of their ego attachments, letting go of knowing. for example, letting go of an opinion, letting go of a trade, letting go of a view. Somewhere it's always letting go of an ego connection.

46:12And the reason I say that it's so powerful is because actually very few people can do it. Very few people can do it well. It owns them. The ego owns them, their beliefs, which is all connected to that, own them. They're viewing their own superiority, usually owns them. Their concerns own them, that their fear that everything's going to go to hell in a handbasket owns them. You know, that the next trade is going to go wrong. Just let go of that. And I'll tell you a little story about someone that I coached last week for the first time, who I think this guy's going to be an incredible trader. He's only near the start of his journey still.

46:57but he told me that he got ill a couple of weeks ago and he wasn't able to check his trade for a few days and it went the full way to his target it went really well and it was like he said if i'd have been at the screens watching it i'd have got i'd have taken my profit too quickly i'd have got nervous when it moved against me i'd have anticipated it stopping out i'd have probably lost money on a trade that he called that went really well. And he was, you know, because of his illness, he was forced to let go. To me, that is just the most powerful thing. But it is incredibly hard, which is why it's the super skill of great trading.

47:42It is so hard to do. Letting go, letting go. Denise, what about you? What is the, and forgive me for narrowing you, I'm not going to hold you to one because your euphemisms and metaphors and the lessons you teach are so ubiquitous and abundant. So feel free to go more than one. But if you want to sort of maybe tee up, you know, a really good one for the viewers, what would it be? Well, I was thinking, you know, when you first started asking the question, I was thinking one thing and then I did think of another and then I thought of another. But I think it does boil down to this. Grapple with the strategy of answering what am I feeling and why and answering it accurately.

48:29So that's a very easy thing for me to say and probably an easy thing to think about doing. As Susan David of Harvard recently said, you usually get it wrong. um so there's what like even what am i feeling getting better at putting that into words with no judgment no judgment you feel what you feel like you don't have to be positive you don't even have to be grateful like you just have to know what but there's all kinds of research that says that traders who can better differentiate amongst their negative emotions make more money like why when you say negative emotions which which emotions are you talking about i mean the world thinks negative is anything that's unpleasant you know fear frustration disappointment sadness they can be your superpower i have a trader of one of those big funds who recently told one of those owners of the funds that knowing his emotions was a superpower the owner said the same thing.

49:33You wouldn't have expected it from that person. But like your actual feel, like your true feelings about something really have information and knowing them, you can separate them into these two broad buckets of, is this feeling about what's going to happen to me? Or is it about the problem at hand, whether the problem at hand is, is the trade or, you know, your president and the problem at hand is the middle east like the human the design of the human is such that expertise turns into a feeling like when you first learn something it's very you know explicit linear step by step the more you know you saw this with golfers all the time like the more they know they just know what to do right they look at the shot they know what to do they don't have to stand there and think about it like i do so expertise becomes a feeling the trick is the trick is which feelings do you have about the problem and then what's the thing to do that gets you that thing but you have to start with what am i feeling and not now the other thing i want to say is for the most part the human condition is to be self-critical like you basically have like 80 of the world that's secretly self-critical and 20 of the world that is like never self-critical and egotistical but that's just a defense mechanism against being self-critical So everybody is like worried and nervous and insecure on some level or in some situation.

51:01You know, maybe they're not most of the time they are in this trade or they are in front of this person. It's normal to feel like, am I good enough? And I can tell you all the clients I have from individual traders to hedge fund, like everybody has some version of am I good enough? Why? Why? Because actually to survive safely, we need people, we need other people. You can't. So it's like, am I part of a group accepted in a group that I do have help if people, if I need it? so we constantly sort of worry about like do I fit into this group is we can't stop it so don't criticize yourself about it just kind of understand what your version of that is know that's that the negative is exaggerated like everybody has the older brother who was smarter or the teacher who told them you know they'll never amount to everything anything everybody's got a version of that.

52:00I was the tall, redheaded, Protestant kid in a neighborhood of short, blonde Catholics. Like I didn't fit and I was adopted to make it worse. Like, you know, everybody's got their version of it. Like don't secretly go, oh my gosh, just realize that you feel insecure about certain things. Some of it's exaggerated. Some of it's just the human condition and try to find your feeling of expertise. and go with it beautifully articulated reminds me of freud's observation that we you know we we spend our adult lives undoing the debris of childhood and that for almost all of us our adult life is a reaction or response to what happens in the you know in the formative steven i see it's the way the brain's built the brain's built to take past experience and predict so it's like now been shown like you can't help you can't stop that anyway yeah it was a great questions here i'd really love to hear yours well well we don't have i think maggie i think we're

53:09i'm happy to share but i want to be sensitive to time and i think thank you thank you so much yeah i've been listening listen every time we have one of these i just want them to go on forever and i'm sure everyone who's listening agrees um but it is comforting to know that we're all swinging at the same demons. And I laugh every time we have this conversation because even last week, every single day I have people come on and say, well, you just need to take the emotion out of it. You just need to be rational about this. So we struggle all the time with all of these issues. So this has just been wonderful.

53:42We do have a question from Paul and then Gio will let you end with your advice. But Paul's asking, would you agree with this? If we are feeling stress and anxiety from investing or trading, you have not found the style that aligns with your personality. Do you guys agree with that? Or is that oversimplifying it? It could be true. But like I, I mean, I have a client who's always stressed. You know, he definitely knows style. I think your degree of stress and anxiety is more personality driven. I mean, the market is the hardest mental game on the planet. Like, never forget that. It's the hardest because the uncertainty and the ambiguity.

54:30And so it's going to be more stressful. But the value of finding your style is almost indescribable. I agree with Denise. You know, it's great. You know, if you could find that personal alignment, right, it's going to get easier, but it's also going to get harder because you're probably going to take more risk. You're going to put more on. And this is a job where stress is just part of it. And I'm sure it's the same for golfers. You know, you need a high degree of stress to be at your best. You don't want extreme stress, which undermines you. You know, I don't think there's an actor or musician or a sports person that doesn't feel that stress in the pit of their stomach before they engage in that big, you know, walking out on stage or that big tournament.

55:21I think you need some to be at your best. Yeah. I always think when I listen to this, by the way, I know all of you, a lot of your clients are athletes and performers and traders, but listen, just getting through as a human in parenting. There is not a more uncertain, mentally tough game than that. So I take a lot away just as a human trying to make my way through and raise some good people. So this is applicable across everything, I think, which is why these conversations are so fascinating. Gio, why don't you close this out with your advice and thoughts, the question that Stephen asked you? Sure.

55:58Before I go there, Maggie, I'm going to let you know that I just signed an agreement with a parenting coach. I found a woman who's arguably the best parent I've ever seen. I've been watching her parent and she's like the Kobe of parenting. And I asked her what her plans were when her kids got out of the house. And she doesn't do it through intuition. She's really well studied, well trained. I think what you said about parenting is right. And so we're moving in that direction in my practice. You know, when it comes to the advice. I'll start with the two psychological variables that I think are the most under attack in this job, and that's confidence and motivation.

56:37Those are the two of all the variables that psychology measures, the hundreds and hundreds of constructs and various things that are measured. The two that matter the most, I think, are confidence and motivation. And here's why. For confidence, the inverse of confidence, the way that sort of confidence, you know, called self-efficacy. It's inversely related to fear and anxiety. So it's confidence goes up, anxiety goes down, and vice versa. But what happens is when anxiety gets disproportionately high, it distorts. Fear is a distortive mechanism. And so what happens is when you're approaching the market from a place of fear or anxiety or, God forbid, desperation.

57:17We've been talking about desperation being a repulsive trait. We were all in high school and college, and so we've seen when people are desperate in social situations, no one's attracted to desperation socially. Desperation repels success in sports. When an athlete becomes desperate, it doesn't matter how many skills they have. It just kills their ability to execute the various skills they have. And it's true in the markets, right? When you're desperate to make money, the way the dominoes fall psychologically and then behaviorally, it's almost impossible to make money. And so we bucket at desperation and fear and anxiety altogether.

57:52So what's the best mechanism to sort of manage that? It's confidence. And so the way the dominoes fall is if you lose your confidence, all of a sudden our interpretation of threat grows. In other words, everything we see out there is danger and threat and all we see are ways to lose money. So you come in off the risk curve. So even a good idea seems like a bad idea and on and on and on. And so the way we look at it is that this is your skill level, and this is true in any arena, if I can measure your skills as a trader, if I can measure your skills as a golfer, I can measure your skills in really any endeavor, what a little bit of overconfidence does is it elevates skill, right?

58:35So belief is an advance of behavior. So sometimes people play beyond their skill set. And then they develop those skills because confidence allows it. A little much underconfidence diminishes skill. Now, You don't want your confidence to be so high that you don't work hard or you take crazy risks. So we say a little bit of overconfidence is a good thing. And so you've got to protect your confidence in this game. And then the other one is motivation. And motivation gets attacked in two ways. One is you're working so hard because you have to stay on top of the market. I always go back to Steve Cohen.

59:08Over the course of 40 years and 10 ,000 trading days, he only took four days off. He was in the hospital. um and so the everydayness of the work wears on people and so at a certain point everyone asks the question like what the hell am I doing this for like I'm giving my life way to grapple to use the needs to grapple with this monolith of the market and it's just you know someone said to me once that the market does to us emotionally what boxing does to the body right and so boxing beats up the body and the markets beat us up emotionally and so motivation gets hurt on that side of the equation, but then there's the other side of the equation.

59:43If you've made a lot of money and it's the same questions, what am I going to keep showing up to grapple with the markets day after day after? I don't need the money. And so if you can protect confidence and motivation over the course of a 20, 30 year career, you've got a pretty good chance of developing the rest of the skills that I think can lead to overall a successful career. I love that. I love that. A great way to end the show. What a fantastic conversation and a perfect way to kick off the week. So thank you so much. We've got a lot more coming at you. We're leaning into the positive here, people.

1:00:17We're going to talk about the opportunities in tech, digital assets, the business of longevity, and we're going to wrap it all up with Raoul and some interactive workshops on Friday, which we'll tell you a lot more about later today. So thanks for joining us for this. Look forward to the rest and we'll see you for all of it. Thanks, everybody. We hope you enjoyed this episode At Real Vision, we arm you with the expert knowledge, time-efficient tools, and a powerful network to help you succeed on your financial journey. Get a taste of financial freedom with our free offer at realvision.com forward slash free.

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