When I mentioned to a friend that I would be writing about my new year’s resolution, he referred to it as a “lifestyle” piece. In a way, he’s right, but what he was implying is that it isn’t what an investor might think of as actionable intelligence. That’s where he’s wrong, but he’s not alone.
What we do as human beings is make decisions. Whether we are investment managers, athletes, moms or students, the one true commonality we share is the decision itself. Regardless of the implications, who is making the decision or the field in which it is being made, the decision making process always has the same basic components and should always follow the same path. It is a science, not an art. Step 1: Outcome Step 2: States Step 3: Acts
Decision making is a skill. In fact, I would argue it is the skill that we humans possess. However, it is rarely understood to be the underlying source of all other more readily identifiable skills. Instead, we look at a tennis player and think, he is skilled at swinging a racquet or chasing down balls. We look at a politician and think, she is particularly adept at negotiating or salesmanship. We think of a successful fund manager and attribute that success to their ability to identify patterns or steel their nerves under pressure. In reality, steeling your nerves is a decision, a skill that can be taught and learned. Swinging a racquet properly and influencing others are decisions as well. They can be taught and learned. They can be practiced and improved, via the decision making process.
When you truly grasp this concept, and are able to properly frame everything via the decision, to view the world through the lens of the decision making process, you come to realize that in order to truly excel at anything in life, both personally and professionally, you must focus on the decision as a problem to be solved. A professional athlete cannot simply turn off the decision making process when they aren’t on the playing field. To make optimal decisions at the baseline, they must make the right nutritional decisions, practice decisions, footwork decisions, rest decisions, investment decisions, coaching decisions, etc, when they are nowhere near the court. To be a world class tennis star, they must analyze their decisions, refine them, gather data on them and approach them deliberately. It is a 24/7 job to reach and maintain their position as one of the greatest of all time. Same goes for surgeons, actors, and yes, investors. Becoming a world class decision maker isn’t a 9 to 5 job, it is a lifestyle. It requires not just practice, but deliberate practice. The kind that requires the employment of cognitive strain. It is challenging. It requires sacrifice and a significant investment of time and effort. So, yes, this and every other edition of Seeds of Thought, Macro Radar and even Trade Write-Ups are lifestyle pieces. It is actionable intelligence for those committed to being world class decision makers, no matter where they apply the skill.
This year’s resolution, like many before it, has many people scratching their head. The goal is to replicate what the actor Bradley Cooper did in preparation for his role as real life Navy soldier, Chris Kyle in the movie, American Sniper. That’s it. Before I get into the “Why”, let me provide some details as to what his journey actually entailed.
Cooper’s natural physical build is very similar to mine. 182 pounds and just a hair over six feet tall. You wouldn’t describe either of us as particularly muscular. Instead, we have what you might call a “lean” appearance. However, that is not at all how you would describe Bradley’s appearance in American Sniper. The physical transformation is simply astonishing.
For the role, he gained 40 pounds without increasing his proportional body fat. To do so, his routine required nine workouts per week with mostly free weights and the consumption of six thousand clean calories per day, including protein powders and assorted supplements. Note the word “clean”, because it makes a world of difference. Truth is, anyone could knock out 6,000 calories with just three visits to McDonald’s, a box of chocolates, donuts and a bottle of wine. While that diet would quickly result in the addition of 40 extra pounds, it’s very unlikely to contain your proportional body fat.
Allow me to give you a sense for what it takes to consume 6,000 clean calories in a day by providing the caloric content for a few standard menu items.
3 Large Eggs Scrambled with Spinach = 225 calories
Dover Sole Fillet = 90 calories
Can of Peas = 100 calories
Oven Roasted Chicken Breast = 120 calories
In order to achieve the desired result in the same time frame as Cooper, not only do I have to work out twice a day, four times a week and once on another day, but I have to eat roughly every 55 minutes and drink an awful lot of calories. As of this moment, I have gained 20.6 pounds while losing 1.4% body fat, so just under halfway there. Now for the question so many have been asking, from friends to doctors and trainers. “Why?” There are, in fact, numerous reasons.
First, I have been amazed by the radical transformations actors have been achieving for quite some time. Consider the extreme lengths to which Christian Bale, the master of metamorphosis, has gone in order to get into character. Then there is Matthew McConaughey’s transformation for Dallas Buyer’s Club and back for Mud, not to mention Hugh Jackman for Wolverine and so on. I’ve marveled at the results for years, and so I wanted to know what it actually takes to achieve them. In other words, I wanted to understand, and experience, the process.
Second, I turn fifty this summer. While that moment doesn’t actually hold any true significance, it does serve as a reminder that I am of that age when muscle atrophy tends to become a concern. While there may be better, healthier ways to build muscle, this program allows me to kick it off with a bang.
Third, one of the common threads across all of my resolutions is the desire to expand my perspective, to use these as an opportunity to see the world through fresh eyes. The last time I was in the gym was about 30 years ago. I, like so many others, have developed a set of beliefs and impressions about guys who work out regularly at a place like Gold’s Gym, but for most of us, they are unfounded. They are narratives we have developed based on very little evidence. This would give me an opportunity to see this world through my own eyes. In so doing, I improve my ability to understand things from multiple perspectives. As I’ve argued in the past, it isn’t possible to think outside your own box. You can only expand it. This endeavor is yet another attempt to expand mine. Fourth, this is a radical departure from my typical behavior. I became a vegan in 2012, then vegetarian in 2015, but in order to achieve this objective, I’ve returned to being a meat eater (still no red meat though). One person’s response was, “You mean this is a thing? I can set a goal to gain weight? That’s easy!” Although it may sound easy, the reality is, any kind of departure from what comes naturally for us, any break from the patterns we’ve developed, and thus the inertia that guides us, is difficult. Gaining weight, losing weight, working out, hiking, practicing the guitar, racing cars, flying airplanes, even thinking critically and employing cognitive strain are actually quite easy, once they’ve become habitual. It’s the breaking of old habits while developing new ones that is difficult.
"An hour with Steve doesn't just help you find the next great trade. It can change how you think."
Global Macro Portfolio Manager New York, NY Hedge Fund AuM $10 Billion
About the Author For nearly thirty years, Stephen Duneier has applied cognitive science to investment and business management. The result has been the turnaround of numerous institutional trading businesses, career best returns for experienced portfolio managers who have adopted his methods, the development of a $1.25 billion dollar hedge fund and 20.3% average annualized returns as a global macro portfolio manager.
Mr. Duneier teaches graduate courses on Decision Analysis in the College of Engineering, as well as Behavioral Investing, at the University of California.
Through Bija Advisors' coaching, workshops and publications, he helps the world's most successful and experienced investment managers improve performance by applying proven, proprietary decision-making methods to their own processes.
Stephen Duneier was formerly Global Head of Currency Option Trading at Bank of America, Managing Director in charge of Emerging Markets at AIG International and founding partner of award winning hedge funds, Grant Capital Partners and Bija Capital Management. As a speaker, Stephen has delivered informative and inspirational talks to audiences around the world for more than 20 years on topics including global macro economic themes, how cognitive science can improve performance and the keys to living a more deliberate life. Each is delivered via highly entertaining stories that inevitably lead to further conversation, and ultimately, better results.
His artwork has been featured in international publications and on television programs around the world, is represented by the renowned gallery, Sullivan Goss and earned him more than 60,000 followers across social media. As Commissioner of the League of Professional Educators, Duneier is using cognitive science to alter the landscape of American K-12 education. He received his master's degree in finance and economics from New York University's Stern School of Business.
Bija Advisors LLC In publishing research, Bija Advisors LLC is not soliciting any action based upon it. Bija Advisors LLC’s publications contain material based upon publicly available information, obtained from sources that we consider reliable. However, Bija Advisors LLC does not represent that it is accurate and it should not be relied on as such. Opinions expressed are current opinions as of the date appearing on Bija Advisors LLC’s publications only. All forecasts and statements about the future, even if presented as fact, should be treated as judgments, and neither Bija Advisors LLC nor its partners can be held responsible for any failure of those judgments to prove accurate. It should be assumed that, from time to time, Bija Advisors LLC and its partners will hold investments in securities and other positions, in equity, bond, currency and commodities markets, from which they will benefit if the forecasts and judgments about the future presented in this document do prove to be accurate. Bija Advisors LLC is not liable for any loss or damage resulting from the use of its product.
"Duneier takes your mind on a journey. You'll end up feeling you've done a lot of analysis in a short space of time."
Emerging Markets Portfolio Manager London, England $2.3 Billion AuM