Home Investing & Trading How do the Best Investors Navigate Uncertainty? Performance Coach Denise Shull on Decision Making

How do the Best Investors Navigate Uncertainty? Performance Coach Denise Shull on Decision Making

by icosuccess

Anthony Pompliano 0:00
And then how do in times of uncertainty like we have right now, right earlier you talked about unknowns and the future being the biggest unknown, but right now it’s less about the future. I know, I think there’s just a lot of uncertainty, which seems tangentially related, but but but almost worse. How do you talk to people about processing information, making sure that they have the sound decision making and then really operating in a time where every decision, every action feels like it just has more weight on it. And there’s a lot of uncertainty in the air.

Denise Shull 0:40
So the first skill is just to be able to sit with it is literally just to be able to tolerate the uncertainty and go You know what? I can’t make what I think is a good prediction or a good bet. That’s a skill like a lot of people can’t do that. I think we’re seeing, like a lot of decisions being made that are about a swaging.

The fact that that’s an uncomfortable place to be, because when you make a decision that feels a little bit more certain, just because you decided even though, you know, the California schools are my example of that, like, a week or so ago, they said, you know, now classes in the fall, like, on May whatever it was 15 they didn’t need to make that decision, but it made them feel like more certain. So there’s a skill of just being tolerated. Then there’s like, making lists.

Okay, what what do we know? What’s not memorable? What can we maybe find out a little bit more about? And when did we really have to make this decision? Like, if someone you know, startup company, New York, thinks that they’ve heard me talk about like, Do I really have to make the decision and for what period of time their lease is coming up. I don’t know when I think it’s in the fall. And the staff has all been like, are we going back? Or do you sign the lease? The CEO has been like, I don’t know, not making that decision today.

We don’t have to make that decision today. But again, like, how do you do that? You’re just you’d have to be able to tolerate the fact that you don’t know. So there tends to be a bias for action. And I think that bias for action is somewhat misguided. So there’s this idea that people default to inaction. I think it’s generally the other way around. People want to do something to make the feelings go away. Just live with the feelings, you’ll figure out a better thing to do as time unfolds.

Anthony Pompliano 2:45
I’ve always thought of it as whether it’s right or not, as people want to feel in control, right. And the way you feel in control is that you can do something I can impact the situation whether it ends up being good impact or not. And one of my favorite studies came over was Vanguard or fidelity, you know, somebody did a analysis on the best performing accounts they had. And in the retail sector, it was people who had forgotten their passwords or died. Right? Because it’s just they didn’t do anything. Right. Right.

Denise Shull 3:18
Yeah. My father, my father is one of those just because he literally started buying stock. And he never sold any. I don’t he didn’t know how to sell and he put stock in dividend reinvestment programs and just he wouldn’t know how to sell.

Anthony Pompliano 3:36
Yeah, they look is probably wasn’t a bad strategy. I guess. The other aspect of kind of uncertainty and especially right now, I think is a time where people are thinking about this is fear, right? So uncertainty to me feels like gave you plot a scale. It’s not on the easy end, but it’s not on the most extreme of the hard decision making. It’s just uncomfortable aspects.

I feel fear is like the extreme end of I am literally scared, I’m going to lose money, make a bad decision, you know, whatever it ends up being. How do you talk to, especially large asset managers, right where that fear if it ends up becoming reality, they don’t just lose 20 bucks, right? We’re talking, you know, millions or 10s of millions of dollars other people’s money. How do you talk to them about fear and kind of walk them through when they are fearful?

Denise Shull 4:30
Yeah, so a superpower question to be able to answer is, what am I feeling? And why am I feel so I try to get them to put that fear into words. And I oftentimes try to get them to really get to why. So I, I’ve asked for more in the past two months than I asked me one time, what’s the worst that can happen? So again, this is something I think is a little bit different about Are method like we’re going right at the fear. And almost universally the worst that can happen. Actually, if the person really tries to answer that question is some version of catastrophe.

You know, they go through losing money, losing investors, losing employees, losing their fun losing their spouse, their life is disaster. I mean this a long time ago, but I went to someone tell me and my kids are drug dealers and prostitutes. Like it’s sort of a natural human tendency to get down deeper there you have this catastrophe scenario and you don’t realize it because you’re not going down the rabbit hole because you don’t actually By the way, but it’s that catastrophe prediction. That’s like disparate that’s influencing you. And what happens is when you look at a throw away, well, that’s fine.

Not likely to happen. But even if it is gonna happen, there’s like 100 steps between here and there that I can, you know, avert that reality. So I, that’s a long winded way of saying I get all the fears out in the open, and then we look at them which ones are real and which ones are exaggerated, which ones are relevant to whatever decisions you got to make right now, and which ones are irrelevant, you know, meaning they are about something else or they can be put off or so it’s like sorting through this spaghetti bowl full of beer.

When it’s using this research that says, emotion differentiation, emotion granularity, meaning like fear, panic, nervousness, nervousness, worry doubt like all the different intensities. Being able to sort through that shows you act on it less ironic. Being able to sort through it gives you a wider range of choices and stops you from impulsively acting on it just to feel better or to feel in control.

Anthony Pompliano 7:16
Yeah, it’s really interesting. Again, it’s around awareness right kind of having an understanding of what’s happening makes it less powerful to some degree like the forces being acted on you. The the age old question I know somebody listening to this will ask is, are the absolute best in the world ever scared? Or are they emotional control to to avoid fear and maybe just sit with the uncertainty or does it ever get to that point?

Denise Shull 7:48
Well, I haven’t talked to every last single one of them. So maybe there’s somebody out there that’s, you know, less human than the next one. But, um, it’s actually I mean, it’s a strength to be in to admit fear, like and also in its pure form, it’s a source of information. So I think the very best in the world understand it that way that you know, some fears are are warning you of something you should be afraid of. Some are irrelevant. The skill is to know the difference.

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