Part 1: The Art of Learning
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.” Charlie Munger
It was perfect weather for a bike race. Although the sun shone brightly, a gentle breeze created ideal conditions for the hundreds of racers who had gathered at the narrow starting area. I stole a glance at the clock. Two minutes to go. Soon, hundreds of riders would rush forward and race towards their bikes, jostling to get a good start on what was to be a very long race. I was lost somewhere in the middle; stuck like a sardine in a sea of lycra.
BLAST. A gun goes off, releasing the throngs of anxious riders onto the mountain and into the race.
This epic all day, all night mountain bike race is called the 24 Hours of Adrenalin and is held annually in Canmore, Alberta. For 24 hours straight, participants battle steep climbs, technical descents and their personal limits on a giant mountain bike trail in the Canadian Rockies. While the vast majority of participants tackle the course as a team, a select breed of crazies elects to take on the challenge solo. I was one of them.
Question: How does someone with zero mountain biking or ultra-endurance experience find herself in one of the most brutally punishing races out there?
Answer: one rickety, African wheelbarrow.
One year ago I was within sight of Mount Kilimanjaro’s final summit when I came down with a nasty bout of altitude sickness. Not only did I not make it up the mountain after days of trekking, I was hauled down unceremoniously in the pitch dark by six young, Swahili-speaking men, while fastened to a rickety wheelbarrow. If there is anything that cements failure in one’s mind, it is the sting of embarrassment felt while tied to a death-vehicle and high-tailed down the highest peak in Africa.
When I recovered from altitude sickness and my injured pride, I knew I could not allow this failure to weigh on me. What I needed was another extraordinary quest, and this time, I wanted to ensure success.
Around this time, I was reading the works of Tim Ferriss and Joshua Waitzkin, two authors who have worked extensively on optimal learning, and it struck me that they leveraged many of the same tools and frameworks that we use on our research team. I realized that it would be easier for me to attain big goals if my learning was optimized using the right process. For proof, I needed to look no further than our Chief Investment Officer, Jim Hall. He successfully completed the 240km marathon des Sables race without any previous marathon experience.
But where could I simultaneously push my limits and test my learning process?
A few months later, a friend told me about 24 Hours of Adrenalin. For 24 hours, cyclists navigate single-track terrain, swapping each lap with a team member; everyone, that is, but the handful of soloists who ride continuously through the entire period, stopping only to briefly refuel. Battling extreme fatigue and isolation, these soloists tested the limits of what is possible.
Perfect, I thought. Sign me up.
There was just one problem: I didn’t own a mountain bike and hadn’t the foggiest clue how to ride one.
And I had only three months to learn.
In our research department, our learning philosophy is to build trained instinct. In other words, we want to help individuals move from unconsciously unskilled to unconsciously excelling.
Joshua Waitzkin speaks eloquently on this process in his book The Art of Learning. A chess prodigy and multiple champion in martial arts, Waitzkin has dedicated his life to understanding what it takes to achieve mastery. In his view, there are four main stages of learning:
Unconscious Incompetence ► Conscious Incompetence ► Conscious Competence ► Unconscious Competence
|Unconscious Incompetence:||You have no skill and you don’t realize it|
|Conscious Incompetence:||You have no skill and you realize it (most beginners)|
|Conscious Competence:||You have skill but you have to think hard to apply it|
|Unconscious Competence:||You have skill and can apply it consciously|
The goal of most learners is to get from not knowing what they are doing (and not knowing how much they don’t know) to being so good that they could perform the skill in their sleep. When Tom Brady throws a pass, he may be surveying his opportunities, but he does not need to actively think about how to throw a spiral.
Our research team approaches the development of investment skill in a similar manner. When an analyst begins their career, they are asked to make recommendations on stocks. But how can they expect to make good recommendations when they haven’t seen many cycles or analyzed many businesses? Instead of allowing them to learn in a linear fashion—making mistake after mistake—an effort is made to accelerate their learning. This is done through mentorship, deliberate guiding and embracing several time-tested processes.
In the next three months I was up against many obstacles including learning to ride technical terrain, anaerobic training, optimal nutrition and basic bike repairs. Yet come race day, I was ready. This was only possible because I followed several learning strategies I had acquired from the team.
1. Deconstruct the problem
The first step in learning something new is to deconstruct it—i.e., break it up into smaller bits that are easy to tackle and less daunting on their own. This usually requires some preliminary research (ideally with people who have demonstrated success in the skill), in order to identify the different components.
As an example, fundamental investing can be grouped into categories such as valuation, business model, competitive advantage, business momentum and risks. For my race, the broad categories included race nutrition, fitness, technical ability, mental conditioning, bike maintenance and sleep.
2. Focus on the 80/20
Once the challenge has been deconstructed, figure out the 80/20 of what drives the most value. For the bike race, it was critical to get my basic technical abilities up to par. This included learning to corner smoothly, knowing how to use my breaks and riding in a proper position. And while endurance was necessary to survive the long-haul, I realized that what really mattered was whether I could navigate the big climbs without gassing myself so much as to ruin the rest of the race. Consequently, a big focus of my training went into improving my overall threshold levels and knowing how to ride below them for most of the race. I did not focus, for example, on which gels I should or should not be consuming.
Within investing, whether or not a company trades at 30 times earnings or 10 times earnings when you buy the stock tends to make a big difference to long-term returns. But whether the CEO has the exact kind of investor relations presentation you appreciate does not. When you begin to learn a skill, focusing on the 80/20 allows you to hone in on the most important elements.
In addition to focusing on the right areas, it is important to sequence them properly. Both Josh Waitzkin and Tim Ferriss hammer home this point in their writing; as how you proceed in your learning can have a significant impact on efficiency.
Before I began to work on steep descents, it was necessary to know how and when to brake properly. Before an analyst learns about currency, it makes sense that they can break down business models and competitive landscapes first.
Perhaps the most important element of learning proficiently is receiving effective feedback. It can be very hard to improve without knowing whether or not you are doing the right things. While skilled mountain bikers often offered me suggestions—such as, don’t yank on the brakes unless you want to go over the handlebars (said after I went over multiple times)—it became clear that I also needed self-guided feedback. Over the three months of my training, I developed a series of metrics to gauge success and logged my progress daily. This is why I now own a binder full of statistics including heart rate, thresholds, and what I ate, among other factors.
Within our research team, mentorship and a team approach helps to ensure that the right feedback is provided at the right time. This is critical, as investing is an area in which it is easy to delude oneself concerning biases.
Learning is one of the greatest competitive advantages we have in life. We need to learn well not only to be great investors, but to excel at all of life’s endeavours.
Now for the big question: How did I do?
One week before the race, I was ready to go. My fitness levels were solid, my technical abilities capable of handling the terrain, and I was feeling confident. There was just one teensy problem: my elbow was broken.
It was shaping up to be one heck of a race.
To be continued…
This post is part one in a two part series.