I read a few things this week that had to do with control in some form or another that are worth highlighting.
A study released earlier this year found people who have high self-control tend to experience less of those things that cause impulsive behavior such as fatigue, hunger, and stress:
We found that trait self-control negatively correlates with responses to one-shot measures of hunger, fatigue, experiencing stress, and experiencing the common cold. Reports of recent sleeping and eating behavior mediated some of these relationships, consistent with the idea that healthful behaviors help individuals higher in trait self-control minimize visceral states. This research supports emerging perspectives on trait self-control’s contributions to positive outcomes.
This would seem to make sense intuitively. But there can actually be downsides to having an overabundance of self-control.
There was an outstanding interview in the New York Times this week with Maria Konnikova, herself a writer at the Times, who began studying poker for a book she’s writing. She had never played poker before so gain a better understanding of the game Konnikova began playing for hours each day, eventually winning more than $200,000 in prize money.
She discussed how a professional poker player said her background in psychology likely helped with her learning curve:
I think he was talking about my background in experimental psychology. I did a doctorate on overconfidence and risky decision-making with Walter Mischel, who invented the “marshmallow test.”
I wanted to see if people with high levels of self-control made better decisions in risky conditions, like in the stock market. Usually, people with high self-control do so much better at everything than people with low self-control.
But it ends up that in unpredictable environments like the stock market, successful high self-control people — when in an environment where control is taken away from them — take longer to figure things out. They are too confident and won’t take negative feedback from the environment.
Whereas people with lower self-control and who aren’t as successful — they’re like, “Uh oh, a bad thing is happening. I guess I should actually figure that out.”
It’s amazing how human nature can both help or hurt depending on the circumstances. So many investors try to give themselves an illusion of control in the markets by overtrading, switching strategies, following the advice of gurus, and the like. Being a control freak can work against you in something like the stock market where a lot of what happens is completely out of your control because of the inherent uncertainty.
Finally, the Times also had a short interview with Jerry Seinfeld about his new season of Comedians in Cars Getting Coffee (which I highly recommend on Netflix). They asked him if he ever second-guessed his decision to turn down $5 million an episode to do one more season of Seinfeld (a sum that no one else in TV has ever come close to earning):
No. It was the perfect moment, and the proof that it was the right moment is the number of questions you’re still asking me about it. The most important word in art is “proportion.” How much? How long is this joke going to be? How many words? How many minutes? And getting that right is what makes it art or what makes it mediocre.
I’m starting to think Seinfeld may be our greatest living philosopher. His material is mostly about nothing but it’s still very deep.
This echoes the Jack White quote when he said, “The whole point of the White Stripes is the liberation of limiting yourself. I’m disgusted by artists or songwriters who pretend there are no rules. There’s nothing guiding them in their creativity.”
For those who lack restraint — and I think that’s pretty much everyone in some capacity — proportion sizing is an excellent way to think about the art of self-control.
Making It Look Easy is Hard Work
Now here’s what I’ve been reading lately:
- How to change somebody’s mind about investing (Oblivious Investor)
- Spotify’s quest for global domination of music (Fast Company)
- How to deal with the high cost of higher education (Belle Curve)
- On the democratization of information (Dollars and Data)
- Taking more risk does not guarantee more reward (Monevator)
- The scapegoat (Irrelevant Investor)
- When optimism can work against you (TEBI)
- How will index fund investors do in the next crash? (Big Picture)