YouSaid · the spoken record

Brett Steenbarger

lines on the record: 78
first: 2017-01-13
most recent: 2017-01-13
sittings or episodes: 1
sources: podcast

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“Probably the greatest lesson that I've learned is that performance is every bit as much a function of maximizing your strengths as addressing your weaknesses. And there certainly is a role for correcting our weaknesses, for identifying what we do wrong and learning from that. But at the end of the day, what makes people distinctive are their strengths, what they do superlatively well. And it's surprising how people are often unaware of their greatest strengths. And they don't tap those regularly in their personal lives or in their decision making in financial markets. And so by focusing on who this person is and what they're really good at, it allows me to help them leverage those talents in their financial decision making.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, if they were interested in working as a performance coach, whether it's with traders or other performance professionals, I would encourage them to get the best grounding in psychology possible and start with that and then apply to the populations of interest. And I would encourage them in particular to develop a grounding in that positive psychology that I referenced earlier and the research therein, as well as traditional approaches to psychology.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That was fascinating. And the meditation. It's a tool for mindfulness to be more self-aware. And so it can be very helpful for traders in that respect.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. You do. Yes Yeah, I've seen it be very helpful to traders. And the way in which it's helpful is that it induces a state of calm focus. So, it's a way of gaining self-control. And in a meditative state, people are able, for instance, to mentally rehearse different what if scenarios. To prepare for the day ahead. When you've meditated day after day, week after week, you become very good at those skills. And so during the trading day, you can take some deep breaths, get yourself very centered, very focused, and it helps with making more dispassionate decisions.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Happiness, satisfaction, energy, and affection. And those are the four big drivers of positive emotional experience. And so I want to be firing on all those cylinders every week out of the year. And I want the traders I work with to be firing on those cylinders, to be doing some activities that bring them happiness, to be doing some activities that bring them fulfillment, to do some energizing activities, to do some activities that bring them closer to people that they want to be close to. And that keeps people fresh, it keeps them alive and energized even when the prophets aren't coming”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, and to get back to what I was mentioning earlier in terms of the psychological research on positive emotional experience, those four areas of positive experience, happiness doing things that you have fun with. Satisfaction doing things that are deeply meaningful to you, energy, doing things that are stimulating, maybe intellectually, maybe physically, and affection, doing things that bring you closer to the people that matter.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. What I'm finding is that many of the most successful discretionary portfolio managers are ones that have quantitative aspects to what they do. So it's not all machine and it's not all subjective judgment. It's using the machine for enhanced information and then making better decisions based on the information provided by the machine. My analogy for that would be a fighter pilot who has all sorts of computerized equipment on board and is able to gauge very quickly weather conditions and where the enemy is located. But at the end of the day it's the pilot who ends up making a decision about attacking not attacking.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there is a role for human judgment in determining when a unique future is occurring. But I do believe that's becoming a more specialized world.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, and I think already we've seen, particularly with respect to market making, that the lion's share of that business has gone to the machines. They're simply able to process more information. More quickly than human participants. Now, as we widen the timeframe and we go from higher frequency trading to investment, then I believe there will continue to be a role for human judgment. Algorithmic trading at the root of it is science. It is studying the historical patterns in financial markets that recur and profiting when those occur in the present. Certain junctures, the future becomes unlike what it's been in the past. And the algorithms by definition only know the past and the patterns from the past.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's difficult to justify the fees when the performance is not exceeding the average performance of the more passive asset management approaches.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Asset management as opposed to the active trading. I think there will always be a niche for active traders and for people who are talented at active trading. But as you alluded earlier,”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right I think the next shifts are going to be a continuation of what we've seen recently in longer-term investing. Investing through maximizing returns from different factors. As opposed to active timing of markets.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“much decreased risk tolerance. If you read the Market Wizards books, it was not unusual for people to have double-digit losses and then they would have double digit and triple digit returns. No one no one no one talks in those terms anymore. The focus is much more on risk adjusted returns than absolute returns. And if someone is risking only a few percent and can make 5 to 10%. They're happy with that, particularly in the zero interest rate world. So the demands of investors have changed, and that has altered the risk mandates for traders, and that has affected coaching because it's no longer about making as much as you can. It's as much as you were saying before, it's as much about the defense as the offense.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the biggest changes, particularly in the hedge fund world, has been altered risk tolerance among investors in the post-2008 world.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say there is probably the most accessible is there's a website on positive psychology. And if you Google positive psychology, you'll find it. And it summarizes his works. In addition to the works of other psychology researchers, And that's a great way of finding an introduction to the field.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Key researcher in that area who has looked at strengths and how those impact physical health, how those impact emotional well-being. So, those are some of the directions that I've found from recent reading.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, sure. Studied what he called self actualization. But in recent, I'd say in the last 10, 15 years particularly, there's been an emphasis on studying mental health, on studying the positive aspects of human behavior and performance, understanding strengths. There have been some very thought-provoking pieces of research that have been conducted under this rubric of positive psychology. Martin Seligman is a key researcher. Know the name.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I Yeah, love it. Love it. And what it really cemented for me was that there was no one formula for success. That many of these very successful traders were successful because they had unique, distinctive skills and they found a way to implement those skills in financial markets. And so that led me to a strengths-based approach where I tried to figure out what are the traders' greatest strengths and how could they make the greatest use of those strengths in the trading they're doing.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, but they never get down to the specifics of implementing it on a day-to-day basis. And so that was a piece of advice and a perspective that I found very helpful in working with traders”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, that our processes, when they're developed to the fullest, really are positive habit patterns. There are things we do repeatedly in the same way with fidelity. And so by putting something in a calendar, you're cementing it as part of your process. And that resonated with me because many times people have good intentions. They set a goal. They write in their journal.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Meaning that if something truly is part of your process and what you do, then it has a place in your calendar, in your life.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he certainly has evolved over that time period, but has been an inspiration for many traders. But one of the things he said to me early on during my time at Tutor that really resonated was if it's not in your calendar, it's not part of your process.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a huge book, and one of the takeaways, the positive takeaways for me about that book is outlining the philosophy in terms of the importance of respecting objective reality.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Help normal people, people like you like me, who may not have diagnosable mental disorders, but who are capable of becoming much more than they are. And so that was a major influence on me.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The fountain head was the first book of hers I read it. I did read Atlas Shrugged and others. But what really inspired me was the portrayal of an ideal. And I sometimes refer to my work now as therapy for the mentally well. That I'm trying to help.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably the greatest impact on my practice has not been from an investor. It's been from philosophy. Early in my college career, I read the novel The Fountain Head by Ayn Rand And what struck me about the novel was the portrayal of a character as an ideal Who was doing something unique and special with integrity and making the most of who he was? And my immediate thought when I read that novel was what if psychology could help people not just deal with mental illnesses and problems, but what if psychology could help people become what they're capable of becoming? And that influence ended up steering my work with medical students and residents when I did counseling with them and then subsequently with traders and portfolio managers.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I was just going to mention that one of the things I learned from him was that you can learn a lot about markets by studying areas that have nothing to do with markets. Absolutely. So he would look at ecology. He would look at the world politically. And he would be able to derive patterns of human behavior that he could apply to markets. And so it broadens my thinking in many ways.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There you go. Yes. And he really introduced me to a more quantitative and scientific approach to markets. And it was as a result of interacting with him that I began conducting my own studies and supplementing the discretionary decision making that I had done with more quantitative information.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Helping relationship. The helping relationship is as a psychologist your relationship with the client and how you engage them, how you interact with them and whether you're using a behavioral approach or a cognitive approach or a psychoanalytic approach. The quality of that relationship ends up being the best predictor of outcome. And so by focusing on those common ingredients, we can become more effective, whether we're using approach A, approach B, approach C. So that was a big influence on me in graduate school psychology in terms of markets and trading, a big influence on me was around the year 2000 when I began Interacting with the fund manager Victor Niederhofer.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. So, for instance, a common effective ingredient across different approaches to therapy would be the quality of the helping relationship.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“How the different approaches to psychology and psychotherapy are doing things in common rather than being different from each other. On the surface, what a Freudian does or what a behaviorist does quite different. But in fact, he was looking at the common elements and helping”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, definitely on the psychology side in graduate school. Give us some names. One of the clinical supervisors I worked with, who has since passed on, was Dr. Thomas Riley. And he taught an approach that was not common at the time, but has become more so recently that looks at”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's true. And as you know, in the professional world of finance, we look at risk-adjusted returns. How much are you making per unit of risk that you're taking? And it says something about professionalism when someone can't. Can't answer that question. Can't answer the question.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I haven't done much of that and many times with the non-professional, the ratio of what's a trading problem and what's a psychological problem becomes skewed and they make many more trading problems precisely because they're not professionals. And so what they really need in my view typically is mentoring. They need someone to teach them the ropes about financial markets and decision making rather than a psychological coach.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It really is astonishing, and it's astonishing how much can be learned by keeping score and tracking the various elements of your trades and your decision making. But one of the patterns I think you're referencing is that many times people will be profitable on a majority of their trades, but the losers go too far. And so the average size of their losing trades becomes much larger than the average size of the winners, and that drags them down. So it seems like they're winning. They have more winning trades than losing trades, but in fact the P&L is not winning.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I would applaud the staying power. That's for sure. But the question I would ask that trader is, okay, you're up 90%. How much of that 90% do you want to put at risk right here, right now to make how much more? What is the risk reward right here, right now? And how much do you want to make sure you go home with at the end of the year? So I would encourage them to think of risk taking fresh, not keeping it all on, not taking it all off, but recalibrating.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there are definitely random and lucky influences in any of these endeavors. So, for instance, with trading, one trader may hit their best ideas relatively early in the year during January. Another trader will go through a drawdown during the first weeks of the year. The first trader now has banked some profits, has some cushion, feels more confident in taking risk later on. The second one is afraid of digging too deep a hole because they don't want to be fired, so they restrain their risk taking. So that random period of January performance ends up potentially shaping a year's worth of performance.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right Cash You are so right, Barry. And once in a while I'll write blog posts or tweet something. And it may have a bullish or a bearish tinge to it. And immediately the haters come out and the more defensive the reaction, the more I develop confidence in that view. Because people don't get defensive if they are secure with their view. Right.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the important routines that successful traders engage in are routines of preparation. When markets are open, they need to be prepared for the different possibilities that may unfold.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“A great point. I think it's very helpful to do what if scenario planning. And what if news comes out this way? What if the stock moves against us in that way? How would you respond? What would that mean to you? What would tell you your idea is wrong criteria A, B, C, D, and mapping that out in advance so that if those things should unfold you're prepared psychologically to take proper action.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“We all have blind spots, myself included, and you can't force anyone to make a change, but what you can do is process the information as thoroughly as possible and encourage people to look at the information with fresh eyes from different perspectives. So it's not uncommon, for instance, in a conversation with a trader that they'll mention to me they're along the dollar. And so I'll mention positioning and sentiment data that suggest that lots of money managers are along the dollar. It's a crowded trade. Do you still like it? What makes you think that it's going to continue? Now, I'm playing Devil's Advocate as a way of getting people to look at new information and make sure that they're making decisions for the right reasons.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“No, every so often you definitely encounter that where people feel like certain things are lucky and certain things are unlucky. But I think it's still a common practice as it was years ago if you come up behind a trader who's made money and you pat them on the back and say, you're doing great, they will look at you as if you're trying to jinx them and get away from me. Get away from me. Right, absolutely. And I think that touches on some superstitions.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the thinking is that a risk reward, the opportunity set typically changes over the course of time, and we want to recalibrate ourselves with respect to that altered risk reward. So for instance, we're investing in a stock and the stock moves our way. Well, it's not necessarily the same value that it was when we first put on the position. Is the risk reward compelling here and now if this were January 1 and I had no position in this name, would I be taking a long position right here? Those kind of questions recalibrate us. So that we don't allow the past either the gains of the past or the losses of the past to unduly color our current judgment.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things we emphasize in working with traders is the idea of this too shall pass. Trees don't grow to the sky, and losses don't continue forever. And so we try to approach markets with fresh eyes, fresh thoughts from day to day, week to week”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I read a nice quote recently that said for proper perspective, every person should have a dog that adores them. And a cat that ignores them. That puts confidence and humility in the right perspective.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I realize that that's a warning signal. So the mindfulness, the awareness of your emotional reaction can help you trade better.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's another example. Sometimes in my own trading, I'll have a series of winning trades, sort of the way you described when you're on fire. And I'll have the thought, I've got this figured out Right. Yeah, you laugh because you know what happens, okay? Well, I become aware of that overconfident thought.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“If a market sells off and he starts to feel some panicky emotions, the first thing he thinks about is, hmm, that's interesting. Maybe other participants in the market are feeling this kind of panic. And what does that mean? And how is that market behaved when we've gotten into panic times? So he's aware of his emotions, but he's not being reactive relative to those emotions.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's information in that backache. And that's true for many people. They experience emotions and that is information about what's happening in markets and what's happening to your portfolio. There's one portfolio manager I work with, for instance, who uses his emotional reactions to gauge the likely emotional reactions of other participants. And so”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I work with traders on is not simply controlling their emotions, which is helpful, but using emotions as information becoming more mindful, more aware of one's emotional reactions. Because many times there can be information in what we process emotionally.”
2017-01-13 · Masters in Business · Interview With Brett Steenbarger: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source