Sunday, February 21, 2010

Vitality, Greatness, and Success in Life and Trading

The first post in this series dealt with factors that underlie creative genius and how those relate to performance in the trading world. My own observations regarding very successful, productive, and creative individuals, however, suggest that more may be at work in generating elite levels of performance and success.

The first common element in my observations is something that, for lack of a better word, might be called "vitality". Vitality has several components:

1) A high energy level; people with a high level of vitality spend a relatively high proportion of their time actively doing things in a purposeful manner, even when those things are relaxing and recreational.

2) An active mind; people with a high level of vitality spend a good deal of their time encountering new ideas, new people, new places, and new experiences.

3) High psychological well-being; people with a high level of vitality experience positive moods more frequently than negative ones.

4) Productivity; people with a high level of vitality accomplish a great deal. They are not just active, but active toward directed ends.

The vast majority of the very successful traders I've encountered have unusually high levels of vitality. Not only do they spend more time reading about markets, researching markets, and thinking about markets than their less accomplished peers; they also are more active and productive in their personal lives. They participate in community activities, travel, spend time with their kids--it is if they are plugged into a different, higher voltage circuit than others.

"How do you have time for it all?" is a common question these high-vitality traders encounter. And yet it's not an issue of time: it's a function of how time is utilized. Low vitality people spend a great deal of vegetative time that is neither productive nor rejuvenating; it's as if they're running on spent batteries. High vitality people often have very good work/life balance because they are actively doing things that enhance life and work.

We are all familiar with the distinction between active and passive learners. An active learner is one who reads the chapter in the textbook before going to the lecture. She comes to the lecture with questions and ideas already percolating. A passive learner simply copies notes on the board from the lecturer and then reviews the chapter before the test--perhaps never generating meaningful questions or ideas.

Or how about the difference between truly religious people who attend a service and those that are not religious? The religious person meditates on the meanings of the prayers and uses the time to actively connect to a higher spiritual power. The non-religious person simply repeats the prayers and never seeks or makes a connection. Who feels vitalized and who feels bored during the service?

High vitality people attack life the way that the active student attacks learning; the way that a devout monk approaches prayer: with interest and intent. The secret to their vitality is that they engage in effortful activities in a manner which gives energy, rather than drains it. This enables them to persist where others drain their batteries.

Think of how you review your trading performance (and how often you review). Think of how you review markets and factors that influence markets. Are you digging into yourself and digging into markets, like the active learner? Or are you going through the motions like the bored person at church?