#181 Dr. Gio Valiante (Part 2): Failure and Success
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So at the end of the day, what I'm always telling people, both matter. Like you can be intrinsically motivated and like the praise and the recognition, but the order has to be love of craft. And then like, it has to be, you have to love what you're doing and then enjoy the things that come with it. Because when the order flips invariably, it's going to be a problem.

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This is the second of a special two-part episode of The Knowledge Project featuring performance psychologist Dr. Gio Valiant. If you haven't listened already, go back and check out the first portion of our interview in episode 179, either at the Farnham Street blog or wherever you usually listen to The Knowledge Project.

Gio is regarded as one of the most successful performance coaches in the world, and he's worked exclusively with golfers on the PGA and LPGA tours, Olympic athletes, and leading figures in the NCAA football, NFL, where he served as the head performance coach of the Buffalo Bills. He's also logged more than 5,000 hours coaching some of the most sophisticated investors in the world, including billionaire hedge fund manager Stephen Cohn.

On this episode, we continue our conversation beginning with his thoughts on failure and the fear that holds us back from making the most of our talent. Gio also discusses the shift from an ego orientation to a mastery mindset, common misperceptions about success and failure, what we learn from success and how we learn when it's time to cut our losses and move on to a different challenge. It's time to listen and learn.

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The direction I want to go after that is sort of in failure. I mean, often the reason we don't try things is because we don't want to fail. So we don't build these muscles because we're not failing. What happens when fear sort of like takes hold of us? Like, what does the world look like? How is it different? And how does it shape what we're about to do? And how do we get out of that?

Great question. Yeah, because one of the things that we know is people think of success and failure as opposite things, right? That the more I succeed, the less I fail. But that's really sort of a modern conception of success and failure. The fact of the matter is,

failure is woven into the fabric of success. It's not how do you avoid failure? That's the wrong question. The right question is, how do I fail or how should I fail in ways that lead to the type of skill development and belief system that allow me to succeed long-term? So it's how do we fail? Like in snow skiing, you want to teach kids how to fall so they don't get injured.

You want to teach students how to keep trying and pushing themselves as hard as they can. And the question is, what do they do with the failure? Now, here's where it gets fascinating. If you want to anticipate how someone is going to react to failure, you shouldn't address or attack how they react to failure. What you should actually do is try to go on a time machine and go back to the beginning.

And you ask them, why do you do what you do? This is, if you were to ask me to pull out some of the most, the greatest insights to come out of psychology, this would absolutely be one of them. It's research on what are called achievement goals. Achievement goals explore the why, the human why. Why do you do what you do? After you ask a thousand people this question, huge data sets,

What you come to find is these thousands of people, all of a sudden they tend to bucket into one of two categories. It's either a mastery orientation or an ego orientation. And these two different orientations as to why people do what they do tend to be very predictive of

of ultimate success. And here's why. So mastery orientation, here's the answer people with a mastery orientation typically get. Why do I do what I do? Well, I'm curious about it. I do it because I love the, I'm intrinsically motivated. I love to solve the problems. I love the work of the practice. I find it inherently interesting. Like I think about it all the time. This is what I was talking about earlier, earlier about the blending of vocation and avocation.

You go back to the why. So what you'll often see in the game of golf, or even happens with students in school, right? It's why do kids love to learn? Because learning is fun. Why do kids go on the golf course, want to play until the sun has set and they're out there all night? Because it's an amazing sport. It's super fun. It's just fascinating to get lost in the game.

So at what point in educational development do kids start to dislike school? Happens around third grade. What happens in third grade? We start giving kids grades. So what happens is there's a shift.

From a mastery orientation to what's called an ego orientation the ego orientation when you ask people with an ego orientation Hey, why do you do what you do? What you'll often see is well, I like to beat other people or I want to prove something I need to prove myself to other people or it's some version of image management like you're trying to show show off and improve yourself to other people right so imagine

Shane, give me a domain of functioning or an arena or an area that's interesting to you. So give me any arena or domain. Business. Business is a great example. Certain people go into business because they want to make a lot of money. It's just it. They want to make a lot of money. So that's their driving force.

Other people go into business and they find that business is fascinating, certain components of business, motivation, business management, organizing people, innovation, product innovation, research and development. What happens is when you get lost in the problem solving of it all, like the Steve Jobs, and what it leads to is deeper cognitive processing, more creative problem solving. But here's the key thing, the key thing.

When mastery-oriented individuals fail, the reaction is curiosity. It's what Thomas Edison said. When asked, hey, what was it like to fail a thousand times? He said, he was reported as saying, the light bulb was not an invention with a thousand failures. It was an invention that simply required a thousand steps.

Tiger Woods, when you watch the way he handles career and his approach to it, it was a purely mastery-oriented mindset. It was get a little bit better every day, make better mistakes. Conversely, what you see out of an ego-oriented individual in business is when they fail, they feel embarrassment. Now, I want you to pause here for a minute. Two individuals,

Everything else being equal, same education, same ability, same training, same everything. One of them goes at their craft or at their domain or at their career from a place of, I love to learn, I love to problem solve, I go into depth with these things and I largely do it. I don't really, I'm not engaged in image management. The second individual goes in competing against other people and

caring about over caring about what people think success is only defined by that, which is palpable or tangible, like they're playing for trophies, then you fail, because if you're if you're living, you're trying to get at the tail end of the curve, you're going to fail. And you react with embarrassment. When we talk about the toxic emotions, embarrassment is is depends on the person, but it's one of the two most painful psychological experiences a person can have.

Humiliation is second only behind grief, the type of grief that comes when you lose a loved one, when you lose a child, which is like a throw switch in the brain which shuts everything down. The biological mechanisms in the brain from like when a parent loses a child, they're so strong that you shut down and you're not going to think your way out of it. Like it's unbelievable. Right behind that is humiliation. And so what happens is when people feel embarrassed,

Their brain sends signals where they create cortisol, stress, epinephrine, adrenaline, norepinephrine. Their perceptions change. So when you're embarrassed, rather than see opportunity, all you see is threat.

So all of a sudden, there's a distortion of reality. And so all of a sudden, when all you see is threat, you stop taking risks. Now it becomes some version of avoiding the pain that comes from embarrassment. So all of a sudden, why is everyone walking around embarrassed?

underperforming relative to their ability. Largely, it's because people live their lives trying to avoid embarrassment. Now, why is that? Because they approach life from an ego orientation. Imagine if every time you failed, big or small, I were to come up and smack you on the hand. Well, the brain is going to process that as pain.

And the part of the brain, the amygdala, that processes pleasure and pain, it doesn't distinguish whether it's physical pain or psychological pain. It's just pleasure pain. So now the brain equates failure with pain.

Well, all of a sudden, the brain then anticipates the next time you're in a risk-taking situation or you're going to put your ideas into the arena of a meritocracy of your company or like you think you can help. But if every time that happens, someone makes you feel embarrassed or gosh, even if they don't make you feel embarrassed, you make yourself feel embarrassed because the reason you're doing it is you want people to like you. You're going to run away from that feeling and all of a sudden,

You're on this time equation and the wash, rinse, repeat of your life is essentially avoiding embarrassment. So you're taking no risks and 20 years goes by like that. And you look back and you're like, where did the time go? And everyone else is wondering, boy,

I really thought that that person could have been better. And you're like, you know what? I thought I could have been better. And it happens at such an unconscious level that people are unaware of it. And it's even true in acting. And it's even true in sports like golf where actors, they have to make an impression on the audience. But if you talk to the best,

They're not doing it to impress other people. They're doing it for the moment. They're doing it for the performance. They're doing it for the psychological freedom that comes with the delivery. And so the number one agreement I have with anyone who ever wants to work with me is, as I tell them, is you have to promise me

that you're going to take embarrassment out of the equation because I can't make you great if you're willing to react with embarrassment because the brain will anticipate embarrassment. It'll put you into a psychological straitjacket that will forever restrict your ability to have creative problem solving, to have deep cognitive processing. It affects memory. It affects all the things that lead to success.

Is that why even elite athletes often don't practice, especially in team sports, things they're bad at because they don't want their teammates to see them failing and they're embarrassed? Happens all the time. I have an NBA player who in practice would shoot, call it like 85% from the free throw line. And in games would shoot somewhere in the 50% range. And it's all because...

He cared what people thought of him. You know, in sports, we call it having rabbit ears. You know, it's impression management. And this often happens in Hollywood where people start to believe their own press. And there's actually a psychological shift that happens, believe it or not, because Hollywood

People get great at these things because of the master, because they love them. But all it takes is a few iterations of people telling you you're great or I give you money. In fact, there's a great book called Born to Run, which talks about what happens if you look at what happened to the record times in marathoning is when Nike entered the equation and started rewarding runners with contracts.

The speeds went down because people stopped love. They stopped running for the love of the craft and they started running for the incentive for the reward itself. And what is known is that incentives are demotivating. They undermine the intrinsic motivation that lead to greatness. There's this great little parable where there's an old man with a garden and one day he wakes up and his garden is torn to bits. He doesn't know why.

And so a week later, he puts his garden back together. A week later, he goes out and the garden's torn up again. He doesn't know what's happening. So on a Saturday, he wakes up early and he goes out and he learns that the neighborhood kids were playing football and they were running right through his garden. And so he said, well, what am I going to do here? One day he called the kids over and said, kids, come here. He goes, everyone come here. He said, I'm so thankful.

That you're using my yard to play in. He goes, it gives me great joy to give you such great joy. He said, everyone, I want you to come over here. And the kids did.

And he gave all of them $5. He said, here's $5. That's how thankful I am. And the kids said, thanks, mister. And they went back to the game. And then next week, the kids played their football and they came. The old man gave them $5. And after a couple of months, kids played their football and they rushed through the game and they came and they said, where's our $5? He said, oh, I'm sorry, kids, because I don't have any more money to give you. He goes, but you're welcome to play as much as you want.

And as the parable goes, of course, that was the end of football, that the kids stopped playing because what happened is the shift. They started out playing because it was fun, and eventually you're playing for the money. And there's some version of that everywhere in life, whether it's praise, whether it's the approval of other people, whether it's the need for glory, or whether it's money. When you do a thing only for the outcome and you lose the love of the craft, the love of the game, you're not going to be any good at it. So at the end of the day, what I'm always telling people is,

both matter. Like you can be intrinsically motivated and like the praise and the recognition, but the order has to be love of craft. And then like, it has to be, you have to love what you're doing and then enjoy the things that come with it. Because when the order flips, you're,

invariably it's going to be a problem. And so this shift from mastery to ego is a real thing, and it's a real problem for professional athletes unless they figure it out and they shift back to the mastery orientation and they're willing to kick embarrassment out of the equation for good.

How do we shift from a ego orientation to a mastery orientation? Can we just think our way into this? The answer is it depends. Some can and some can't. For the ones who can, I've had dramatic results both in the markets with portfolio managers in the hedge fund world and with professional athletes. And it begins with the why.

And I always start by asking someone when they come and see me for the first time, tell me why you do what you do. And I look and they write it all and go deeper. I say, keep going. And then I say, okay, well, let's look at your reasons. And then you lay it out and you map it out. And you say, okay, well, here's the danger. Here's the reality, by the way. You can be ego-oriented and be successful. It's happened to the NBA a lot, but here's the thing. The only way to be ego-oriented and be successful is you better never lose your confidence.

Because what we know is confidence is a variable. Sometimes we're more confident than others. If you're ego-oriented and you lose your confidence, that's where the embarrassment comes into play. That's where you're screwed. So that's why athletes often surround themselves with like entourages. Essentially what they're saying is, you know, keep telling me how great I am because confidence is so important that I need it. So that's the only way to win with an ego orientation. But generally speaking, what I'm trying to do is shift people back to a mastery orientation.

And so you lay out the characteristics of a mastery orientation and it determines how you practice. And it determines the most important thing that you do, believe it or not, is you help people correct their reactions to failure and who they listen to. So one of the characteristics of an ego orientation is you care what people think about you. And like, who is they? Like, that's the thing. It's like, I'm wondering, I worry about what they're going to think. Who's they?

What you realize, most people are walking around, essentially it's what we call in psychiatry, it's called a personal fable. That they, you know, we are all the stars of, you know, Shakespeare, life is a stage, you know, but most people are the actors in their own play. But we over-index for how much people care about, you know, about us. Like we think that people are thinking about us all the time and we want to make a good impression on them. Right.

And it could be the media. It could be the writers and reporters. It could be the critics. It could be your friends. It could be the crowds. Mostly in business, it's management. It's like I care what my managers think of me, what my boss thinks of me.

People don't pay too much attention to forming opinions of other people. It tends to be just a quick reaction that they're careless about, and they care even less about the words they use. And so when you go around life caring too much what people think about you, and you actually internalize and you let it affect your decision-making, it's a recipe for...

for just a bad life with no happiness. So what I'll say is let's pick three people, maybe four, who you're going to give the power, who you're going to actually listen to, who you know, love you and care about you, who are accurate observers and who will tell you the truth.

And if you're willing to solicit the truth from those people in your circle, in your community, you have to use people as your mirror. So you need feedback from people. You just have to be intentional about who those people are, who are going to be your mirrors. And in fact, that's one of the key predictors of success are both for kids and adults is, you know, who are you surrounding yourself by?

Who are you using to populate your ego? I'm sorry, your ecosystem. So what I'll do with people is we'll intentionally pick here's who you're willing to listen to. OK, number one. Number two, we're going to pre-react. In other words, when you fail, how are you going to react? Because what we know is the toxic emotions that kill us are a function of how we react. So if you fail, you can react one of five ways. Embarrassment.

The type of pain that comes with embarrassment will flood the brain and flood the body with these chemicals that will ensure underperformance. Okay, well, second way to deal with failure, anger. People fail and they just, they rage and they get angry. Over the course of time, that's pain. So now you're also conditioning yourself for underperformance by reacting with anger too much.

Third way to react, acceptance. I failed it. I accept it and move on. No harm, no foul. Then we start getting into the elevating emotions, humor. Now, this is really hard for competitive minded people to wrap their minds around. But if you can hit a bad shot in golf or if you can fail at some particular thing and your reaction is you accept it, but then you laugh.

You're like, that was terrible. It was so bad, it's funny. And they're, well, I did everything right in the process. Bad luck. And you can find a way to infuse humor

into your failure. One of the things that happens is your body doesn't react with the toxic emotions or toxic chemical epinephrine, norepinephrine, cortisol. And, and it often leads to more joy and more abundance. I'll give a quick example. I had a golfer on the PGA tour who was over 210. He had, he had gone for like seven or eight years and never won on the PGA tour. And

And so one of the things we started to do is replace his reactions. And so, and I remember, I'll never forget, he said to me, he said, so what you're telling me is you want me to suck and enjoy it.

I'll never forget the moment, the first week, you know, he started accepting bad shots instead of beating himself up. And then you started to see more psychological freedom in his actual golf swing. And then he came out and he won the second week. So seven years, no wins, 0 for 215. And he won 15 days later. And that's a function of the reaction. And I'll never forget a moment. He was playing badly and he was out on the golf course. I saw him and his caddy laughing.

Because this, and one of the things we know in psychology is sense of humor is one of the greatest tells of psychological health and wellbeing. One of the keys to psychological health is to be able to laugh at things that are funny. And that's one of the, I think the problems of the modern times are people have lost their sense of humor. And, you know, Freud wrote about wit being critically important because life is so painful and so difficult. You have to find a way to find things funny if you're going to survive in this world. And so the way we shift people back to mastery, Shane,

as you get clarity on the why, so they're doing it for the right reasons.

We make sure that we're clear about how they're reacting to criticism, whose opinions they care about. We make sure that life is not a vanity project, that the reason that they're doing it is not to impress other people. And then we're intentional about how they're reacting so that life is not only a vanity project, it's also not an exercise in self-abuse, that they're accepting of their mistakes, forgiving of themselves and others. And then what you start to see is

is there's more joy in the work. There's more psychological freedom. There's better risk taking and ultimately better results. And as I explain it, you can see it's just a causal chain. The way the dominoes fall and they end up on the scoreboard, but it goes all the way back to the fundamental question of why do you do what you do? I love that answer. And thank you for so much detail on that.

I want to sort of explore failure and success. We often think that we can only learn from failure. We can fail ourselves. We can watch other people fail and we can learn from that. I want to take a different approach to that question. What can we learn from success? Wow. Curveball me. Let me, let me tell you how performance psychology thinks of that. Number one, you have to define what success is. Like, what do we mean by quote unquote success? Right. Number one, number two, on the one hand,

Persistence and resilience and grit are critically important to succeed. In other words, powering through failure and the idea of keeping at something and working your way. But here's the other part of the equation no one wants to talk about. A lot of winning is knowing when to quit. It's knowing when to get out of a bad bet, knowing when not to beat your head over a wall. Like in poker, for example, it's knowing when to fold. It's in the markets, knowing a bad trade and cutting your losses.

Because what happens is you see at the tail end of the curve, most people at the tail end of the curve have a puritanical work ethic. And their answer their whole lives has always been, yeah, I'm not winning. Just work harder. You see this with kids in high school. They outwork everyone. They get to college. They outwork everyone. But if you go to the tail end of the curve and you take all these people and then you lay them on a distribution, what you come to realize, they all work hard.

And they're all persistent. So then where's the advantage? If you commoditize effort and resilience and persistence along with talent and other things, then where's the advantage? Well, the advantage then is knowing, believe it or not, like how to take breaks, how to rest.

Where are the places that you think you're best? You know, it's, it's, it's, you know, if you look at, uh, of Harold Bloom's, it's called the taxonomy of higher order thinking at the tippity top of it. It's, it's, it's, you know, there's knowledge, there's knowing things and right above knowledge, the next sophisticated level of learning is called comprehension. It's to understand what you know.

And then above comprehension is what's called application. It's like, OK, here's what I know and I understand. I can apply it to my life in real ways. We know this in school. Sometimes kids will be great test takers, but like they don't apply it in their real life. So what are they really learning? Then above application is analysis. Analysis to be able to break a problem apart into its finite components.

And then above that is what's called synthesis, the ability to recombine it and put it back together, right? So knowledge, comprehension, application, analysis, synthesis. But at the tippity top of the pyramid is judgment. That's why our legal system judges. It's the ability to infuse and integrate knowledge, comprehension, application, analysis, and synthesis, and ultimately make good decisions, right? What we call inferential intelligence, to be a good decision maker.

I remember one time a few years ago, I was up in Buffalo, New York, meeting with a guy named Sean McDermott, the head coach of the Buffalo Bills. Sean McDermott is an unbelievable human being. He was 70 and 0 as a high school wrestler. Do you know how hard it is to be at 70 or anything? So to be 70 and 0 in high school wrestling, I think in Pennsylvania, which is one of the most competitive places in the world for wrestling.

And he ends up becoming an incredibly good NFL coach under consideration for coach of the year. He helped break a 17-year playoff slump for the Buffalo Bills. They're now in the playoffs seven years in a row. This is Sean McDermott. So anyway, I was up in Buffalo meeting with Sean. After Buffalo, I flew to Dallas, Texas, spent two days with a guy named Jordan Spieth. Jordan Spieth is going to be a Hall of Fame golfer. He's already got the record. It's just a matter of when they induct him.

And I flew from there to Greenwich, Connecticut, Sanford, Connecticut. I spent two days with a guy named Steve Cohen, who's a hedge fund manager, who's now the owner of the Mets, who's known in the world. There's a great article, Steve Cohen always wins. Wins in the markets. He wins in the art world. He wins and he's just a winner. His horse won the Kentucky Derby. He's just a brilliant guy. And I remember walking with Steve after these other days, and I'll never forget this. She said, oh my God, this is the same conversation I just had.

At the tail end of the curve, successful people are generally having the same conversations, different parlance, different language. You have to know different things in the markets versus engineering versus academia versus a particular sport. So there is domain expertise. But the human beings, we take away the domain expertise and

What you come to realize, it's the consistent application of the basic principles. It's Aristotelian in nature. If you want to aggregate every success book ever written, go read Aristotle's Nicomachean Ethics. There's not a whole lot happening that Aristotle didn't already write about in Nicomachean Ethics.

You see, number one, believe it or not, is humility. The best in the world readily acknowledge that they don't know. Now, I'm not saying so they're humble, but there's also a little arrogance, right? There's conviction. There's belief that what I'm doing is right. I believe in my path. But underneath that is the humility and the recognition that they don't know, which is why the second step, it's a never-ending series of problem-solving and testing and risk-taking.

So they're willing to try a bunch of different things until they get it right, which is, oh, by the way, why they're mastery oriented, because they know they're going to fail, but they refuse to react to failure with embarrassment. They react to failure like Thomas Edison with more confidence.

curiosity. Elon Musk is a perfect example of that. Tiger Woods was a perfect, how many times did Tiger Woods change his golf swing? Every expert was saying you should never do this. You have the greatest golf swing in the history of the game, but it was governed by this idea of Kaizen, which is continual improvement every day, willing to fail, and so you're constantly evolving. Jack Nicklaus, by the way, was exactly the same way. Ben Hogan was the same way.

So anyway, so what you see is humility.

You see the ability to, you're an example of this, Shane. I mean, look at what you've built. You're putting yourself out there to test ideas. You're vulnerable and taking risks every day that people are going to criticize you. And like, that takes courage, right? You know, Peter Buck, the guitarist of R.E.M., played a whole album on a mandolin, you know, in the first take. You know, R.E.M. could have been to keep making the same music and just print a lot of money, but like, no. Right?

So the next thing you see, and William James talked about this, he talked about having a bit of a vision. And this is the beautiful thing about being a snowflake about humanity is none of us are the same. Like every one of us is differentiated in a particular way. And so the ability, you know, in golf, we say the ability to play the shot that you see, to build what you see, to trust your own vision, your own eye. Again, Elon Musk is, I think, a really great modern living example of that.

is the things he's doing are the things that he set out to do a long time ago. And he's being additive to humanity in countless ways.

And you see this with really with great leaders, think Nelson Mandela, Mahatma Gandhi, the ability to lead people in a manner that is not like the Machiavellian view of politics. Politics can be a nasty business, but to stand out there and put your ideas out there and to preach love and to preach non-resistance and to live it,

Like what a contribution to humanity. I think like, believe it or not, in the world of pop, we're like Taylor Swift. Don't underestimate the power of these global influencers and the impact. You know, the brain has these things called mirror neurons that fire when we watch people do something. And so you've got a world of young women looking at these female role models. And so the mirror neurons that fire that we're all a little bit monkey see monkey do. So what are the best of the best do?

They're really intentional about what they look at. They control their focus and sort of who they put in their world so that the mirrors and the feedback they get is accountable. They'll say things like, "Hey, listen, I want you to hold me accountable for what I do." Work ethic is unequivocal. They always feel in a rush. Elon Musk's father said about him like, "Yeah, he's behind on his timelines. He's still behind."

And so what you'll see is the best of the best are always working at a feverish cadence, like they're always trying to play catch up. But again, if you ask them, they're not workaholics. You see it with people in the kitchen, the culinary arts, you see it with musicians, you see with people who love to do landscaping, you know, at the height of the human condition are what are called flow states and flow states are when we get in the zone.

And so, you know, flow states are governed by, you see, the loss of time, that hours pass by and you're like, oh, my God, where did time go? It's a transformation of time. There's an effortlessness to it. Hard things sometimes feel easy. And what you realize is flow states are the hallmark of people who are great at what they do. They get lost in what they do. And so if you're listening to this, you should ask yourself, what do I do?

Where I lose track of time. Is it reading a book? Is it being in conversation? Is it a dinner party? Is it time with my children? Is it swimming? And whatever that thing is, so long as it's healthy and so long as you're not saying, well, it's doing heroin or meth, right? If you're doing something healthy and it's characterized by a feeling of elation and you lose track of time and it's effortless, do more of it. That's what you can learn from success. And the one final thing I'll say is,

is the asterisk next to it is it's really hard to let all those things, humility, curiosity, work ethic, surrounding yourself by great people, taking risks. It's hard to create a world for yourself where those things get fertilized if you're populating yourself with people

who judge you and criticize you and who suppress your psychological freedom, who make you feel self-conscious and or who are in your life headwinds. You know, I've watched athletes who go home

men and women, and you marry the wrong person, and that person is not on board with the vision, or at the very least, they don't have to be fully supportive. But when you marry someone, or if you have someone, a boss, who get their satisfaction out of your failure, or who can't feel happy with themselves unless you're failing,

All the other things get relegated to insignificance when there's a feature of your life, typically in the form of a person or an institutional headwind where there's a bias against your success that you don't recognize when you have a blind spot.

So you really have to change your aperture and go to 30,000 feet and say, okay, am I set up for success? Yeah. Then you ask the people you trust, hey, how do I seem to you? Have other people audit you. Good. Okay. If that's the case, throw yourself all in deep immersion in the thing you love to do, lose track of time and find the hardest problems there are and set out to solve them.

And then when you come out of the flow state and you look up, you're like, man, that's the body of work I did. Wow. It didn't feel like that, but the body of work, that's, what's going to stand the test of time. One thing that the best seem to be able to do. And I think we hit on this in that answer is two things stood out there. They know when to walk away. They know when to fold it. They know when to, you know, just, okay, it's over. Move on next one. They're able to move on.

but they also know when to push their advantage. And I'm thinking Tom Brady, right? He was the ultimate sort of quarterback who would take the check down, but he also knew when to push it down the field. How do we learn to cultivate those skills in ourselves? How do we know when to push? And how do we know when, you know what, this just isn't going to get us the outcome that we want? Best question I've been asked by an interviewer in my lifetime.

Like that's an awesome question that nobody ever asks. It's the question for anyone who's trying to be successful, sustainably successful. When do you press? How do you know when to press? Both in golf and the markets, the paradox is there. Sometimes you got to let it happen. And sometimes you got to make it happen. When people try to force

force a result when they shouldn't like that's when when you get stopped out and the opposite is also true so how do you know when to oppress an advantage number one i'll say about brady don't forget a lot of failure early and so what happens is when you fail your fail early you start to recognize what a real opportunity looks like and then oh by the way when that opportunity um presents itself there's a lot of fuel to make it happen you're like oh like you should you know it's mark walberg and acting it's like you're letting me into this club okay the

There ain't no way I'm giving up my advantage. So it becomes this relentless, you know, one of the things about Tiger Woods that's so remarkable is he's the only golfer, and I mean this, in the history of the game, who's ever played better with a lead.

So even Jack Nicklaus, who's arguably the best of all time, Jack said, I was better if I was trailing because what happens is when you're, when you're chasing, you know, you play with nothing to lose. You're able to be fearless. So, so that's a real advantage is being the underdog. Tiger Woods is the only one who is the favorite every week and would start with a lead and then extend that lead blew the world away. And to this day, it blows out because how do you do that?

How do you, like, that's why greyhounds in dog racing are always chasing a rabbit. The psychological mechanism, even in running, you have somebody who's pacing you, right? Because we know the brain works in ways where having something to chase is the way to get the best out of yourself. Well, how did Tiger Woods do that when he was in the lead, the one being chased? Well, he was playing against history. So even when he was leading the tournament, he was still trailing Jack Nicklaus. So he benchmarked, he would index his thinking to the fact that he hadn't,

caught Jack Nicholson. He was, in his mind, always chasing. So it begs the question, when you talk about judgment, is knowing what an advantage looks like and when and how to press your advantage and when the situation calls to do nothing. And here's one way to assess it. Evaluate your why.

Because what happens is when people press an advantage incorrectly, it's usually out of impatience. It's usually out of frustration. It's happening right now in the markets. There's not a lot of volatility in the marketplace right now. And you're on your mandate as an investor is to return 10%, right? Let's say that's your number. And you're only up 5%. And there's no way to make money in your strategy. All of a sudden, it's like, well, I'm going to press whatever advantage I have.

What's a low probability advantage? But you're going to force a little advantage. You're going to make a mistake and then you're going to lose your job. So number one is you have to question what's underneath the desire. So let's talk about desire for a minute, which we haven't talked about, which we need to talk about. If you look at the human condition, look at all the major religious traditions.

One of the universalities of the human condition is desire. And every school of thought has found a way to try to deal with it. So, for example, you look at Catholicism. How does Catholicism deal with desire? Well, too much desire leads to you'll wreck your life and everyone else's, right? It can lead to real problems, desire. So Catholics punish it with guilt. What do the hedonists say? Hedonists say, well, if you want it, it's a good thing you satiate that desire. If you have an itch, scratch it.

And we know that that leads to overindulgence, to sloppy life, you know, typically a drug habit. In one way or the other, you know, you have sex, you're going to have an addiction, you're going to blow your life up if you're a hedonist. Buddhists and Hindus say desire is the key thing that leads to suffering, right? So if I want this pen, the moment that I want the thing that I can't have,

I feel a state of suffering. So all human suffering comes from desire. And so the way to happiness is to remove all desire, to get rid of all your worldly possessions and to sit in observation of yourself. And so happiness is to want nothing. So the universality of the human condition is desire. But what we know is that that desire is the thing that leads to all the cognitive biases.

That almost all of the mistakes people make in life is a function that they want a particular outcome. They want a particular thing. The good of it is desire, as Ayn Rand articulates, right, as Adam Smith in The Wealth of Nations when he talks about free markets.

He says that the desire leads to innovation. Innovation leads to competition, which eventually leads to the best product in the market, which is what elevates the human condition. And that's why proponents of capitalism and free markets, you can just see it in modern day. Like the world moves because individuals innovate and evolve, whether it's Bill Gates, Steve Jobs,

Jeff Bezos has created $800 billion of wealth for other people. You see the way free markets work. They're a function of desire, and that's what Freud called sublimation. If you sublimate and channel desire into evolution, it's what creates great works of art, architecture. Andrian writes about this in Fountainhead.

So desire channeled properly can lead to some of the highest highs and the best expression of the human condition. The problem is the downside of desire. Left unchecked leads to the kinds of behaviors that are duplicitous, that desire run amok. We all become a worse version of ourselves. This happened to Tiger Woods. Like, don't forget the same desire that fueled arguably the greatest body of work in the history of sports is

The fuel that burned inside him, you saw it come out in his celebrations. There's a lot of want in there. But that's the same desire that when it got channeled the wrong way that led to the bad decisions that blew up his marriage, that led to him getting these injuries and harming himself.

And he wouldn't stop practicing, so he'd get injured. He played the US Open on a broken leg and won. And so you have to go back to the first order variable, which in his case is desire. To answer the question, and if you look at the causal chain, the way the dominoes fall in decision making, which is a cognitive act,

not an emotional one. You have to understand what are the variables that have led to you wanting to push your advantage. And so essentially in modern day analytics, you're running probabilities. If you have a trading strategy and the numbers say that you have an advantage, the old saying that if you don't know who the sucker at the table is, you're the sucker. And that's true in all games in the achievement domains where there's a scoreboard and there's competition.

And so you have to find a way to map your advantages and know in the moment whether you have an advantage. And if you do, how much risk are you willing to take and what losses are you willing to tolerate? And then the psychological component under that is, can you handle losses well? And if you can't, if you're the sort of person who's going to say, you know, if I lose this much money on this trade, it's going to meaningfully affect what I do in the future. That's your tell.

So one of the things we do, even though we try to are about the human condition from decision making, you know, as Antonio Damasio writes in in in in searching for Spinoza, you know, he says, like, when you look at people with localized brain damage who have no ability to feel emotions, their decision making is not good. When human beings get localized brain damage where they can't feel emotion, their decision making is not better. It's worse, in fact.

So if you look at someone like, you know, I guess an enlightened individual, they are not without emotions.

They have refined their emotional reactions in a way that elevates their senses. So, you know, you want to push the advantage. You have to evolve to a level where you're some version of a complete human being, where you know yourself, right? The Socratic dictum of Nadi Sutra, know yourself and know others. Complicated games require complexity of thought.

Life at the tail end of the curve does not lend itself to simplistic thinking. You have to have complexity of thought, though the decision is final. The decision, yes or no, is binary. And sometimes you engage in what I call caveman golf, like seaball, hitball.

You know, don't overcomplicate it and be decisive in your decisions. We always, I'm cognizant of the time here. We always end on the same question. What is success for you? For me, back of the napkin, top of mind stuff, Shane, for me personally, and listen, I always preach middle class values because I think they work in life. Whether you're worth, you know, $20 billion or not, like, and so I don't vilify wealth. I love abundance and I love success, but like the values, right?

10 middle class values tend to work in life because they keep you humble and they keep you happy. But for me, I learned about myself something that I think it's really valuable to learn. I had a lot of success pretty early, like in my early 30s. I had a PhD from a great university. I was a college professor, a best-selling book, and a real lot of success in the world of sports psychology.

Two houses and two jet skis and two Vespas that we'd cruise around town in. And I remember one of my friends said to me, he said, oh man, he said, you know, you must be so happy. And then it was like, you know, you hear the scratch of the record. It's like, man, I'm not that happy.

And I learned about myself that stuff doesn't matter to me, like more things. You know, I was an example of Henry David Thoreau's, you know, you start by owning your possessions and eventually your possessions own you. I learned about myself that building out a big life doesn't work for me, though it works for some. So I don't script that in my clients. You build whatever life you want to build.

What I learned for myself, it's what the actor Mike Myers, Mike Myers, who ended up writing and doing Austin Powers, beautiful thinker, great comedian. In an interview, he talked about what he called no money fun, no money fun. He said, when I was a kid, we would sit out by the airport, my dad and I, and we'd watch the planes land. He said, because we had no money.

He said, and we would watch the planes land and we would guess what kind of plane they were. And then we'd go to the lake and we would skip stones and we'd watch cars and guess what color they were. He said, we grew up with not a lot of money, but I was always happy. And here's the line he said. He said, my dad was good at no money fun. We always had fun and things didn't cost a lot of money. What I learned about myself, Shane,

is the things I love to do. I love to hit golf balls. It's therapeutic for me. I could do that at the driving range. It doesn't cost any money. Five bucks for a bucket of balls. I love books. Books don't cost me any money. I get them free as an academic. I have free access to libraries. Books don't cost me anything. I love working out. Working out and being physically fit doesn't cost a lot of money.

I love the human condition. I love talking to people and learning about them, particularly people I'm fascinated by the tail end of the curve. All four of those things cost money.

Very little to no money. So what I learned about myself of the things that I love to do, they tend to be active. There's active engagement is the profile of my happiness. It's not passive. It's not lazily sitting on a beach getting drunk. It tends to be either task oriented, hitting golf balls, working out, reading books.

or people-oriented, which is I'm asking questions about how people do what they do, about their own happiness, about their own failure, about the uniqueness of their experiences, what are called crystallizing experiences, the insights they have, their insecurities. And so the profile of my happiness is exactly that. I'm very cognizant that we get, if we're lucky, call it 80 years of,

in life, you know, for the first dozen of them, you're not really, or your first five of them, you're not really conscious or conscientious. The last bunch of them, there's no physical vigor and, and objective time turns into subjective time, which means time speeds up. And so for me, it's, it's cliche, but it's, it's making sure that I'm present for every moment of it, even in, especially the pain people ask me, what do I do when I'm afraid?

stare at it. Go eyeball to eyeball with the fear. Because if you run away, if you allow life to bully you, you're not present for the moment. You're checked out. And so the type of courage required to be present for every moment of your life, oh, by the way, that's what Tiger Woods does. Oh, by the way, that's what Steve Cohen does. Oh, by the way, that's what Steve Jobs did even on his deathbed.

And you look at the ugliness of the human condition, the narrative in politics, the way people treat people. Well, that's been happening since the beginning of time. The human condition has never been Pollyannish. But if you could find a way to be realistic, but directionally positive, to celebrate the positive, to be optimistic, to continue to be kind.

to yourself and to be kind to people. You know, in times when you have no reason to be grateful, to say thank you, when you don't have a lot of resources, but you help other people. Like there's a bit of a formula there that generally leads to a good life. And we talk about the qualia of your experience, not the quantifiable, what have you accumulated or the record? It's the, it's the qualia. How

And so when you ask what happiness to me is, I always have my hand on the pulse of the quality of my experience. And I'm spending time with people that I find interesting and they're not always the most successful. Sometimes they're just really interesting. You know, the mechanic that fixed my car is a genius. In my opinion, people go into that garage with their cars every day and nobody knows that they're entering a place with a remarkable human being. Like a lot of times on Friday afternoons, I sit with them with a six pack of beer and

And he tells me the stories of his life growing up in the deep south. A guy can fix a plane and can fix any engine on earth. And nobody knows that they're going to a mechanic every day who could do anything that is interesting. And so for me to spend time with remarkable human beings who teach me at every turn, those are the things that if my life is populated with those things, I feel like I'm being successful.

That's a great answer. I want to thank you so much for one of the most amazing interviews I think I've ever been a part of. Hey, man, you set the table to invite the best ideas out of people. And I think that's why we all love you so much. So thank you. Thanks for listening and learning with us. For a complete list of episodes, show notes, transcripts, and more, go to fs.blog slash podcast or just Google The Knowledge Project.

The Farnham Street blog is also where you can learn more about my new book, Clear Thinking, turning ordinary moments into extraordinary results. It's a transformative guide that hands you the tools to master your fate, sharpen your decision-making, and set yourself up for unparalleled success. Learn more at fs.blog.com. Until next time.