300: Denise Shull On Using Modern Psychoanalysis To Be A Better Investor

Denise Shull is a performance coach who uses neuroeconomics and modern psychoanalysis in her work with hedge funds and professional athletes. She is also the founder of The ReThink Group. In this conversation, we discuss the market as emotions, the importance of self-awareness, keys to being a good listener, difference in investing and sports performance, and modern psychoanalysis. =============================== Blockset by BRD is your hosted blockchain infrastructure. Blockset enables enterprises and developers around the globe to deliver high-quality blockchain-based applications in a fraction of the time, at a fraction of the cost. Using the services provided by Blockset, businesses can build professional custody solutions, accurate and near real-time portfolio management solutions, auditing platforms, commercial block explorers, and much more: blockset.com =============================== Crypto.com is the only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users currently using the Crypto.com app. Download and earn $50 USD using my code ‘pomp2020’, or use the link http://platinum.crypto.com/r/pomp2020 when you sign up for one of their metal cards today. =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off.

• 0:11Anthony Pompliano?

  Denise Scholl is a performance coach who uses neuroeconomics and modern psychoanalysis in her work with hedge funds and professional athletes. She is also the founder of The Rethink Group. In this conversation, we discuss the market as emotions, the importance of self-awareness, keys to being a good listener, the difference in investing in sports performance, and modern psychoanalysis. I really enjoyed this conversation with Denise, and I hope you do as well. Before we get into the episode though, I want to quickly talk about our sponsors. The first is Blockset by BRD. They're a hosted blockchain infrastructure company that you gotta pay attention to. They enable enterprises and developers around the globe to deliver high-quality blockchain-based applications in a fraction of the time at a fraction of the cost.

• 0:57Anthony Pompliano?

  Think of them as an Amazon AWS, but for blockchain services. Using the services provided by Blockset, businesses can build professional custody solutions, accurate and near-real-time portfolio management solutions, auditing platforms, commercial block explorers, and much, much more. Again, AWS provides infrastructure for the internet, Blockset provides infrastructure for the blockchain ecosystem. Go check them out at blockset.com. The next is crypto.com. They're an all-in-one platform that allows you to buy, sell, store, earn, loan, and invest crypto, all from one place. You can join over 1 million users currently using the crypto.com app. You can download it and earn $50 US using a code POMP2020, or use the link in the description

• 1:40Anthony Pompliano?

  when you sign up for one of their medal cards today. Again, crypto.com, not only do they have an awesome URL, but they allow you to buy, sell, store, earn, loan, or invest crypto, all from one place. Go check them out at crypto.com. Lastly, don't forget that I write a daily letter to over 50,000 investors about business technology and finance. I break down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com, or go check out the link in the description. Alright, let's get into this episode with Denise. I hope you guys enjoy this one.

• 2:17Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 2:43Anthony Pompliano?

  All right, guys. Bang, bang. I am super excited about this conversation because I was just telling Denise that she has an amazing job. I'm frankly jealous of what she gets to do every day. So, thanks for taking the time to do this.

• 2:56Speaker 02

  Thanks for having me.

• 2:58Anthony Pompliano?

  For sure. For those that don't know you and your work, maybe let's just start, kind of, what did you do growing up? And then also from an education standpoint in order to start down this path?

• 3:12Speaker 02

  Well, so here's the funny thing, you know? I do like mental and decision coaching with psychoanalysis or variations there. But I started out working for IBM. And I really started out in college. I'm a nutrition and dietetics and biology major, thinking I was going to do something in healthcare. Then got swayed by IBM and thought I was going to climb the corporate ladder and was like doing great and having big accounts and getting awards. And then I thought, oh, my gosh, if I wake up at 40 and I'm selling computers, like... So, I ditched an opportunity to go to business school on a leave of absence and then egged my way into a program at the University of Chicago, a master's program where you can

• 3:57Speaker 02

  kind of design your own. And that was in what at the time was called bio psychology, which is like, okay, if we have a psychology, like, what's the biology of it? Like, what is the brain doing really? It's now called neuropsychology analysis, but back then. But anyway, and then I was like, literally, I swear, this is true, like, took a left turn in downtown Chicago with a friend of mine who had been a floor trader at the CBO, the options exchange, and like, became a trader with no plan. Like, like, and before I'd always been like, what's my plan? What's my... And then that really ultimately led to this. So, it's a wacky story, really.

• 4:37Anthony Pompliano?

  And so what exactly do you spend all day doing, right? I think when people hear things like psychoanalysts and all of kind of the cool sexy terminology, they say, I know that's important and I don't want to talk to that person because they're going to analyze me, but what are you doing on a day to day basis?

• 4:56Speaker 02

  So like I literally just got off the phone with a small hedge fund manager who's been in business for 20 some years. He's got lots of things going on. He's got like a private investment vehicle. He's got a guy that's had COVID and is maybe not recovering. And so like we just went through everything that's on his plate. And he's thinking out loud with me and I'm helping him, you know, sort through what he thinks and what he feels about each situation.

• 5:28Speaker 02

  So that he can figure out like what he really believes and what he wants to do. And, and this is a call that I didn't really feel like I did much other than listen and provide a few sort of observations. And he was like, oh Denise, this is so helpful. But it's like, because you don't get the time to just sit back

• 5:48Speaker 02

  and talk to someone about like everything that's going on in your business. And have that person understand and reflect and ask some good questions. At its core, I'm always looking for what is the person feeling about what they're saying? But he was talking about having two different possibilities for this, it's called special purpose access vehicle, like a company to invest in. And at first he described the one company and then he described the other company. And I was like, oh, he definitely wants to go for the first one. And so I reflected that back. I think he was like, no, no, no, no, no. Like, well, they started telling me all the, so it's a lot of listening, reflecting, helping the person really just understand themselves better and, and get clarity.

• 6:33Speaker 02

  I mean, sometimes I psychoanalyze, but like I had another client, private equity guy. He's always saying to me, Denise, what's your psychoanalysis with me? What do you really think of me? Well, I have yet to tell him because it won't help him for me to tell him.

• 6:51Anthony Pompliano?

  In those situations, right, how much of it is when they are just listening to you, or you're just listening to them versus you're actually giving them feedback, like the value of just sitting and thinking out loud and talking through it, and then all of a sudden they're like, oh, I know what to do because I just had to sit and think about it. Versus you're sitting there and say, ah, you're thinking about this wrong, or you're being incredibly biased. And actually, almost acting as like guardrails mentally. How do you balance the value between those two things that you provide?

• 7:26Speaker 02

  Yeah, I, I say I never give advice. Now, that's less true than it used to be. It's been particularly less true during this crazy market period. But I think of it in terms of I create my own analysis of what that person's going through. What's really happening for them, like where they're conflicted, what they're confident in. They probably can't see for themselves because it's just too hard to see for yourself. And then I try to ask questions such that then they'll figure out what I see. But what tends to happen is I do, you know, people do end up trusting me.

• 8:10Speaker 02

  And because I have some market background, then they want to know what I think. I'll sometimes early on with a client say, we'll say, well, how would it be helpful to know what I think? I think my skill is really helping them know what they think, like really what they think. And getting out of their heads, you know, and, and understanding what their intuition is, what their experiential pattern recognition is, you know, or like, or where they're conflicted. Like, look at a guy, another client, well, this is the one that I don't want to psychoanalyze. I don't want to tell him what my psychoanalysis of him is. Which, by the way, I'm not even allowed to do psychoanalysis. That's all a other problem.

• 8:56Speaker 02

  He wants to be a leader. Like, that was really why he hired me, to be more of a leader in his small organization. But, yeah, like, he's really afraid of stepping out and taking a risk. Or afraid of disagreeing too much. Or even really kind of afraid of being seen. So I'm like, okay, let's make a list of the things you want. And what it takes, and let's make a list of the fears you have. I didn't, I could see that they were in conflict, right? And I bet you can see they're in conflict as I explain it to you. But it wasn't until he wrote them down on paper, he's like, wow. I can't have this if I've got that. I didn't tell him that. I, I often give, you know, little pieces of homework, you know?

• 9:40Speaker 02

  Make a list of, write down this versus that, to help people come to realizations.

• 9:48Anthony Pompliano?

  Yeah, it, it makes a ton of sense. And, and I guess you've done this for a long time, and you've come up with your own method as to kind of how to, how to think through some of this stuff. So maybe help us understand how the method works? And then we can get into more of just like how the brain works, how it processes risk and all of that. But what exactly is this method built?

• 10:12Speaker 02

  Well, it assumes that how someone feels is the most important thing. And that there's always a good reason for why the person feels the way they do. Like, in their circumstances, in their situation. So it has, like, ultimate respect, and it gives ultimate respect for whatever the person's experience of their world is. That's different, you know, that's different than a lot of methods that might have, like, a cognitive bias, you know, you're making this thinking mistake. We're not like that. We sort of assume that you're, you have, you have some conflicts between things that are important to you on different timeframes.

• 10:56Speaker 02

  But basically, everything makes sense. It's a matter of helping you sort it out. I think of it, then, as helping figure out what emotions they're conscious of. Like, what they know about themselves. And what they don't know about themselves. Like, the conscious emotional constellation and the unconscious emotional constellation. And where the unconscious one is getting in the way of whatever they want consciously.

• 11:25Speaker 02

  But it's very, you know, it's very empathetic, it's very respectful, it's very, it makes so, like, we know it makes sense. It's just figuring out what's unconscious and what's in conflict. And then leading them to it. And in the process, though, what you find is some people want to know everything. Like, tell me, tell me, tell me, want to know. A lot of people, like, want to know, but then they have a whole list of reasons why, no, that's not right, and that's not going to help me. So, we categorize that as resistance, in the same way a psychoanalyst would, but differently than most methods. We don't just, we don't try to break through the resistance. It's not about, like, we try to work with it

• 12:09Speaker 02

  so that the person changes on their own and the person comes to realize it on their own.

• 12:15Anthony Pompliano?

  Yeah, and I guess part of this is, you have the pleasure of talking to what I'll call the full stack, right? Everyone from somebody who is a young person who wants to become a leader in an organization, to somebody who is kind of, we'll call it middle management or middle of their career, and maybe happy where they are and just want to get some better performance, or may not be happy and kind of want to accelerate. But then you also talk to the absolute best in the world as well. And so as you've been doing this, what are some of the things that you've noticed? The best investors, traders, what do they do that separates them from everybody else?

• 12:58Anthony Pompliano?

  Is it simple things, or are they more complex and nuanced? Like, the top 1%, what separates them mentally from everybody else?

• 13:07Speaker 02

  Well, if it's market, investing and trading, they understand that the market is just a social game, that there's no, like, absolute, that it's really just perception. Like, and it's waves in the ocean, the perception changing. And so they're, they're trading against other people's perception. And whatever, you know, however they analyze it, whether they use technical analysis and charts or fundamentals and, you know, value, that's just like a clue to how people's perception is changing. So they just understand the market as human beings like waves in an ocean. And it's a really different way to, like, to have internalized the market.

• 13:53Speaker 02

  Plus, they use their feelings. I mean, they really do use their feelings. Like, they know that conviction is an emotion, and they can tell the difference between when they're convicted in something for the right reasons, or when they're, like, agitated and compelled to do something, but it's for the wrong reasons. Like, you know, another investment didn't go well, or the IRS showed up, or...

• 14:16Speaker 02

  Like, in my mind, they're using their... They're using their brain, the way the human brain is really designed, which is something I think neuroscience is really just starting to reveal to us, and kind of the assumptions we've had about it centuries, it's wrong. But they intuitively come to that. Like, they... Through their experience, they get the model of what's happening right, and they get, like, the mechanism of how thinking about it works best, right?

• 14:49Anthony Pompliano?

  And do you feel like that almost, um... It sounds like it reduces the pressure of some of the decision-making, right? If there are no absolutes, if you're simply playing this social game, and the market is a signal of how everyone within that market feels, it feels like that's a little bit less of a pressure situation than if I said to you, "You're gonna be right or wrong on a daily basis." Is that direct?

• 15:17Speaker 02

  Yeah, I think that's true, because it's not like you have to find a secret answer that's lurking out there, you know, behind the clouds. And you're... You have less of a feeling that you're searching for the Holy Grail, and more of a feeling that you're surfing. And so, it's like, "Keep my balance," you know? And ride with the waves. And that is easier. It is easier.

• 15:43Anthony Pompliano?

  Yeah, and would it be fair to say, the other thing that you said, that I think I understand, is that the best in the world are focused more on the decision-making process rather than the actual decisions themselves?

• 16:00Speaker 02

  I think that's true. I'm not sure I said it, but I think that is true. That people have a, you know, they have a strategy. That they don't want, you know, they want to look at it this way, this way, and this way. It checks this box, checks this box, checks this box. Now, they also understand that they're predicting an unknowable future. Because that's what it is, right? Like, none of us know what's going to happen in half an hour, let alone tomorrow. And by the way, the brain works on a prediction mechanism. So again, they're like in concert as opposed to creating friction. But we always say that like knowing the way that you interact with the market,

• 16:42Speaker 02

  like whatever your strategy is and sticking with it is definitely the better way to go about it. So that's a process.

• 16:53Anthony Pompliano?

  Yeah, explain that more, right? So like, i- is that a discipline thing? When you say kind of understanding, almost like your circle of competency and just sticking to that?

• 17:03Speaker 02

  Well, it's how you under- it's like knowing through what lens does the market make sense to you? Like all often, like on Twitter, I'll put, I'll tell people, figure out what your philosophy of the market is and what your philosophy of stops are. And like, people will be like, what's she talking about? But you know, yeah, first of all, we do everything based on past experience and like the scaffolding of beliefs. So it helps to know what you believe. Because like all of the information you're interpreting through your beliefs. So I'm saying, look, make sure you know what you believe. There are a million different ways to make money in the market. You just have to figure out like what yours is.

• 17:45Speaker 02

  Just like, you know, there's a million different ways to play football, baseball, basketball, right? Like, people have their, their specific combination, what's the saying?

• 17:57Speaker 02

  So you gotta figure out what that is. Like, how does the market make sense to you? Like, what's your analogy for it? Like, does surfing do it? Because it's not a sport like, it's not a sport like football or baseball.

• 18:12Speaker 02

  And then how do you learn to stick with it? And how do you understand when you're confident in what you're seeing and when you're not?

• 18:21Speaker 02

  How do you learn to make choices when you're reasonably confident but not too confident? Which is a process of knowing like your own, you know, feelings, like knowing yourself.

• 18:35Anthony Pompliano?

  Yeah, you've mentioned kind of confidence or conviction a few times. And one of the things that's always fascinated me is those two lines are very blurred. And also, somebody can be convicted when everyone else isn't. And if it goes well, they look back and they say, wow, that conviction was a, an incredible ally to sticking with something and it ends up working. But obviously, if you are convicted in something and it ends up being wrong, then people look back and say, no, you were just almost religious about that, whether it was investment or trade or whatever, and it ended up leading to your demise. How, how does that break down mentally in terms of, it's the same conviction, right?

• 19:19Anthony Pompliano?

  But, but it's almost driven somewhat in hindsight by what the outcome ends up being? How do you think through that?

• 19:26Speaker 02

  Well, what I ask people to do is like, think of every single word they can possibly think of that relates to conviction or is like a degree of conviction.

• 19:41Speaker 02

  And then rank those, come up with some sort of ranking. I usually do one to seven, from like the least convicted, which people will use panicked or terrified, and then the opposite, like. Too overconfident, you know, overly convicted, if you will, like you're referring to. And always know where you are on your scale. And you're gonna move. You know, you're gonna move from, let's say, a six to a three. But you wanna be able to have a word for a degree of or an intensity of. And you wanna be able to have a word so that number one, you're you're ranking it for yourself. And you're getting to know literally your own physical experience of being convicted.

• 20:27Speaker 02

  But then when it gets like you're so sure this can't go wrong. It's like red flag, you know, flashing red lights, like when you're, so you know, when you start to cross that line. I've found over the years of doing this, that the best traits come out of this calm feeling that you're right. Like you're sure I'm just right. I just know it's right. And at the same time, you're like, I must be missing something because it can't be this easy. And being able to have both of those feelings at the same time. Where the the confident one isn't energized, isn't like do, do, do, do, do, it's just like, I just know, I just know. But I must be missing something because it feels too easy. How can I know this?

• 21:14Speaker 02

  Time and time and time and time again, clients tell me their best traits come out of that combination of feelings. So we try to figure out where that is on like a scale of one to seven.

• 21:23Anthony Pompliano?

  Yeah, it's very interesting that it almost sounds like the preparation of having a system, right? Or the scale, as you said, and always being almost able to gut check, right? And measure. It really sounds like awareness, like the self-awareness aspect of this is super, super important. Because it is able to identify the bias that some of them may have in their decision-making process.

• 21:49Speaker 02

  Yes, the self-awareness is everything. So I think of it in terms of leading people to that and then giving them tools, you know, to develop it, with mechanisms to develop it and track it.

• 22:04Speaker 02

  Yeah, bias to me is a slightly different thing because I think the more truly self-aware you are, the less you're subject to the typical cognitive biases.

• 22:19Anthony Pompliano?

  Yeah, that makes sense. And then how do, in times of uncertainty like we have right now, right? Earlier you talked about unknowns and the future being the biggest unknown. But right now, it's less about the future unknown. I think there's just a lot of uncertainty, which seems tangentially related, but almost worse. How do you talk to people about processing information, making sure that they have the sound decision-making, and then really operating in a time where every decision, every action feels like it just has more weight on it? And that there's a lot of uncertainty in the air?

• 22:59Speaker 02

  So the first skill is just to be able to sit with it. Is literally just to be able to tolerate the uncertainty and go, you know what?

• 23:11Speaker 02

  I can't make what I think is a good prediction or a good bet. That's a skill. Like, a lot of people can't do that. And I think we're seeing, like, a lot of decisions being made that are about assuaging the fact that that's an uncomfortable place to be. Because when you make a decision, it feels a little bit more certain just because you decided, even though, you know, the California schools are my example of that. Like, a week or so ago, they said, you know, no classes in the fall. I'm like, on May, whatever it was, 15th, they didn't need to make that decision, but it made them feel like more certain. So there's the skill of just being able to tolerate it. Then there's like making lists of, okay, what, what do we know?

• 23:53Speaker 02

  What's not knowable? What can we maybe find out a little bit more about? And when do we really have to make this decision? Like, I know someone, you know, startup company, New York, thinks that they've heard me talk about, like, do I really have to make the decision? And for what period of time? Their lease is coming up, I don't know when, I think it's in the fall. And the staff has all been like, are we going back? Are we going to sign the lease? The CEO has been like, I don't know, not making that decision today. We don't have to make that decision today. But again, like, how do you do that? You're just, you have to be able to tolerate the fact that you don't know.

• 24:33Speaker 02

  So, there tends to be a bias for action, and I think that bias for action is somewhat misguided. You know, there's this idea that people default to inaction. I think it's generally the other way around. People want to do something to make the feelings go away. Just live with the feelings, you'll figure out better things to do as time unfolds.

• 24:58Anthony Pompliano?

  I've always thought of it, whether it's right or not, as people want to feel in control, right? And the way that you feel in control is that you do something, I can impact the situation, whether it ends up being a good impact or not. And one of my favorite studies, I can't remember if it was Vanguard or Fidelity, you know, somebody did a analysis on the best performing accounts they had. And in the retail sector, it was people who had forgotten their passwords or died.

• 25:24Speaker 02

  Right, right.

• 25:26Anthony Pompliano?

  Because it was, it's just they didn't do anything.

• 25:28Speaker 02

  Right, right, right, right, yeah. My father, my father was one of those, just because he literally started buying stock, and he never sold any. I don't, he didn't know how to sell. He put stock in dividend reinvestment programs, and just, he wouldn't have known how to sell.

• 25:48Anthony Pompliano?

  Yeah, it look it probably wasn't a bad strategy. I guess the other aspect of kind of uncertainty and especially right now, I think is a time where people are thinking about this is fear, right? So uncertainty to me feels like, again, if you pull out a scale, it's not on the easy end, but it's not on the most extreme of the hard decision making. It's just uncomfortable aspect of it. You know, fear is like the extreme end of, I am literally scared I'm going to lose money, make a bad decision, you know, whatever it ends up being. How do you talk to especially large asset managers, right? Where that fear, if it ends up becoming reality, they don't just lose 20 bucks, right?

• 26:29Anthony Pompliano?

  We're talking, you know, millions or tens of millions of dollars, other people's money. How do you talk to them about fear and kind of walk them through when they are fearful?

• 26:39Speaker 02

  Yeah, so a superpower question to be able to answer is what am I feeling and why am I feeling? So I try to get them to put that fear into words. And I oftentimes try to get them to really get to why. And so I've, I've asked more in the past two months than I've asked in one time. What's the worst that can happen? So again, this is something I think is a little bit different about our method. Like, we're going right at the fear. And almost universally, the worst that can happen, actually, if the person really tries to answer that question, is some version of catastrophe.

• 27:23Speaker 02

  You know, they go through losing money, losing investors, losing employees, losing their fun, losing their spouse, their life is a disaster. I mean, this is a long time ago, but I went to have someone tell me, and my kids are drug dealers and prostitutes. Like, it's sort of a natural human tendency to down deep in there, you have this catastrophe scenario. And you don't realize it because you're not Going down the rabbit hole, because you're told not to, by the way. But it's that catastrophe prediction that's like just very, that's influencing you. And what happens is when you look at it, you go, oh wait.

• 28:05Speaker 02

  Well, that's probably not likely to happen, but even if it is going to happen, there's like a hundred steps between here and there that I can, you know, avert that reality. So I, that's a long-winded way of saying I get all the fears out in the open. And then we look at them, which ones are real and which ones are exaggerated? Which ones are relevant to whatever decisions you got to make right now? Um, and which ones are irrelevant, you know? Meaning that they're about something else, or they could be put off, or. Um, so it's like sorting through the spaghetti bowl, bowl of fear. But it's using this research that says emotion differentiation or emotion granularity.

• 28:48Speaker 02

  Meaning like fear, panic, nervousness, nervousness, worried doubt, like all the different intensities. Being able to sort through that shows you act on it less. Ironically.

• 29:04Speaker 02

  Being able to sort through it gives you a wider range of choices and stops you from impulsively acting on it just to feel better or to feel in control.

• 29:16Anthony Pompliano?

  Yeah. It's really interesting, uh, again, it's around awareness, right? Kind of having an understanding of what's happening makes it, uh, less powerful to some degree, like the forces being active on you. Um, the, the age old question, I know somebody listening to this will ask is, uh, are the absolute best in the world ever scared? Or are, do they have emotional control to, to avoid fear and maybe just sit with the uncertainty? Or does it ever get to that point?

• 29:49Speaker 02

  Well, I haven't talked to every last single one of them. So maybe there's somebody out there that's, you know, less human than the next one. But it's actually, I mean, it's a strength to be able to admit fear. Like, and also, in its pure form, it's a source of information.

• 30:10Speaker 02

  So I think the very best in the world understand it that way. That, you know, some fears are, are warning you of something you should be afraid of. Some are irrelevant. The skill is to know the difference.

• 30:27Anthony Pompliano?

  So speak, what are you scared of when you go to work every day?

• 30:35Speaker 02

  Uh, what am I scared of when I go to work every day?

• 30:44Speaker 02

  I don't know, but I don't know. I can tell you what I realized I was scared of using my own methods in the past two months. Because I'm really good at doing it. I mean, I teach people to do this, and so I'm always doing this. What am I feeling and why am I feeling it? Because I've learned, it doesn't matter how bad it is. If you get to the real why, the energy and intensity of that feeling goes like, oof. Like the distraction of it. I think it's because your unconscious is trying to use the feeling to lead you to some useful piece of information. So it makes you uncomfortable. And then when you get the piece of information, it goes, okay, got your attention, I'll go to sleep. So like, I don't know, mid to, you know, late March.

• 31:25Speaker 02

  When the hospital situation in New York City was, you know, really horrifying and sad. There were a few days there where I didn't sleep that well. And I could tell I was agitated.

• 31:38Speaker 02

  And obviously, like, I knew, you know, like, there's ambulances and like, this is a horrible situation and people are dying. But still, I couldn't like. And then I realized, I was brushing my teeth, and I'm like, what am I feeling? Why am I feeling it? And I'm like, what if I have to go to the emergency room? And I realized that I had this, like, if me or my husband had been in emergency room for something else, that would be bad at that point in time, right? And literally, then I was like, oh, okay, that's what I'm afraid of. Well, that's a perfectly reasonable fear right now. And then I was no longer afraid, and I slept like a rock that night. So it was just recognizing that I, and that was a perfectly reasonable fear.

• 32:19Speaker 02

  I mean, I have another crazy situation that I did it with when Kavanaugh was being confirmed, but it ends up probably not being for public consumption. But same thing, you know, I was really agitated by it and got right down to the real reason that it was so, I mean, obviously, it was going to be agitating to me as a woman and, you know. But I'm like, why is this distracting me and, like, preventing me from working and focusing? And then I, like, drilled down on what it really was. The end result was not good, but I was no longer, it wasn't disruptive. The feeling loses its ability to disrupt.

• 32:57Anthony Pompliano?

  Yeah, and so I guess, like, when somebody goes through that process, right? How do you then take, okay, I've identified what the fear is. So, you know, use the example of, I might have to go to the emergency room. Do you then take that and put action into place? Or is it almost like this mental piece that comes with, okay, I now have identified what is driving the fear? Maybe the fear doesn't necessarily go away, but, like you said, the intensity is mitigated to some degree because there's the awareness of it.

• 33:29Speaker 02

  So sometimes, all you need is the awareness of it. And then the agitation goes away. Like, in that situation, there wasn't really much I could do. I mean, like, I just, I mean, I'll be personal, I have, like, a condition in my esophagus that it's narrowed at the bottom. So sometimes, if I don't chew really, really well, the food gets stuck. And I've been in the emergency room twice in my life. So, like, my thing was, okay, I'll make sure you chew, like, all the time.

• 34:04Speaker 02

  So sometimes you get to that why and then you see what the real thing is and then you go, "Oh, this is what I need to do about that thing." And by the way, that's like way productive because you're answering the right question. You're not off trying to get rid of the feeling because you think it's one thing and it's another. But sometimes just knowing, I mean, like I have one portfolio manager that, you know, keeps a zillion positions on and trades a lot. And I'd go to his office and we'd go for a walk in New York and literally we'd start walking and he'd be like, "I have this thing and this currencies and gold and, you know, I was worried about blah blah blah," and I'll ask the question and the next thing I know he's on his phone going, "Sell such and such."

• 34:46Speaker 02

  And literally as he had said to me whatever he was worried about or conflicted, it had come to him what he should do. But it was the saying it out loud to me and the understanding, it's important that the listener actually understands, that caused him to know what move he should make his portfolio. So in other words, it could be either, it could give you an action you need to do. The action will be better over the long because it's going to be more accurate, based on something more accurate. But sometimes just the awareness is enough to calm you down and then, you know, I don't need to do anything about that right now.

• 35:22Anthony Pompliano?

  Yeah, it's super interesting. Is that normally how you interact with clients? Like you go physically in person and whether it's in the office or go for a walk? Is there kind of a method behind that madness?

• 35:36Speaker 02

  Actually, my preferred method is to be on the telephone. And it's to be on the telephone because it's kind of like being on the couch in a cyclist office where you're not looking at each other. And so like I can have my eyes closed and I'm really listening to the tone of voice and I'm really listening to the pauses and like I'm really listening to how much agitation or hesitancy is there. And if the client's not looking at me or not looking at their screen, you know, preferably they're really listening to themselves, right? So that's my preferred method. So that's been a good thing for me about the lockdown is that I've been able to, but I have certain clients who just, they don't feel comfortable if they can't see me.

• 36:16Speaker 02

  So I go into their office in New York and there's only one that's really ever insisted we take a walk on a regular basis. I actually left shoes in their office because I'm like walking shoes are different from the shoes I show up.

• 36:31Anthony Pompliano?

  How do you make sure that they're not looking at their screens while they're talking to you?

• 36:35Speaker 02

  Well, I can't if it's on the phone, you know? I mean, I can usually tell by their cadence.

• 36:43Speaker 02

  You know? I mean, I, I was born a really good listener, but I'm an even better listener now because I've been training to do it and practice doing it. And just generally speaking, I mean, you probably know this during the podcasting we're doing. I mean, it's a, it's an art to really listen. And it's a real gift to give somebody to really, really listen.

• 37:10Anthony Pompliano?

  What are the keys, what are the keys to good listening?

• 37:13Speaker 02

  No judgment. No, just hearing what they're saying.

• 37:23Speaker 02

  In a perfect world, and we use this. And this is my ten contradictory, no judgment. But like the feeling it gives us, so there's a phenomenon where someone's not in touch with the feeling, but someone like, like me or my team is listening, you'll pick up on the feeling.

• 37:46Speaker 02

  So I got certain clients over the years. I had one, literally in the first thirty seconds, I'd be angry, irritated. I had one that in the first thirty seconds, my dog would start barking.

• 37:57Speaker 02

  Like, you know, and I assume the dog would hear the person's tone, voice, tone of voice and energy. You know, I, you wouldn't think that a human being wouldn't hear it.

• 38:08Speaker 02

  So, no judgment. Seeing what feelings it gives you, that's what we call it.

• 38:17Speaker 02

  Hearing what's not being said.

• 38:21Speaker 02

  Hearing the, the conflict. Like they'll say, I think this.

• 38:27Speaker 02

  And they'll go on as if it's, it's very coherent, but if you're listening, you realize they just said two things that are in conflict. And they don't realize it's a conflict.

• 38:36Anthony Pompliano?

  Yeah.

• 38:37Speaker 02

  It's paying attention, it's just paying, you know, it's the short version, paying really close attention.

• 38:42Anthony Pompliano?

  Yeah, and I've always thought about, you know, on the podcast, for example, when you're talking with somebody, the more you focus on not just what they're saying, but how they're saying it.

• 38:54Speaker 02

  Right.

• 38:54Anthony Pompliano?

  It's like opening up a whole new world, and it sounds like that for you is like on steroids, right? It's everything from the pauses, the cadence, the tone, you know, the inflection points, all of those things, you're able to glean a lot of information is what it sounds like.

• 39:08Speaker 02

  Yeah, I like, I can hear when someone's not telling you something. Like when they're thinking something but not telling me. And then I'll think, because like I know this, say everything. Getting someone to say everything with no embarrassment and shame on their part helps them. But they need help to do it oftentimes because they will judge themselves. They'll think there are things they shouldn't say.

• 39:35Speaker 02

  So I listen for that. What do they not say?

• 39:40Anthony Pompliano?

  What about in those moments of panic, fear, uncertainty, any like late night calls where just people are freaking out?

• 39:49Speaker 02

  You know, people think I get that all the time and I don't.

• 39:55Speaker 02

  I mean, I tell my clients, you can email me or text me any time of the day or night, and I'll answer you in a reasonable period of time.

• 40:07Speaker 02

  I don't get that many.

• 40:09Anthony Pompliano?

  They just don't do it?

• 40:10Speaker 02

  I've had a few, I, the group of people that do it more are the athletes. But even then, they don't.

• 40:19Speaker 02

  I'm, well, I'm not going to say that because as soon as I say it, then it'll happen, but.

• 40:27Anthony Pompliano?

  What's the big difference between the athletes and the investment professionals?

• 40:32Speaker 02

  People ask me that all the time.

• 40:37Speaker 02

  I mean, I think the big difference is not so much between the people as it is the situation. So investing or trading is just wildly different than sports. You know, first of all, like the point in sports is to make something happen, like you physically make something happen. The point in investing or trading is to set yourself up for something to happen. It's a completely different environment.

• 41:03Speaker 02

  You, you know, the game ends, you either won or lost, like it's clear, you know, the ball goes backwards, it's not good. In investing, the game never ends. The ball goes backwards, I don't know, is it, should you get out or is it an opportunity? Like the level of ambiguity in investing is, you know, orders of magnitude greater than it is in sports, which makes investing a lot, lot, lot harder than sports.

• 41:35Speaker 02

  But as far as the people themselves.

• 41:40Speaker 02

  You know, athletes who play in a team sport think of the world in terms of the people, like

• 41:47Speaker 02

  just like the best investors do.

• 41:50Speaker 02

  The athletes that, that are in individual sports, like the New York Times did an article about Lindsay Jacob Ellis and me, she's a snowboard racer. You know, that's, I mean, well, she's racing against four other people and she does actually think a lot about other people and how she's

• 42:07Speaker 02

  and even like a pitcher I've been working with, you know, that's thinking about other people.

• 42:13Speaker 02

  You know, I think I'm, in some ways, I'm like everyone's human and everyone's brain works like human being and I'm

• 42:23Speaker 02

  At risk of sounding whatever, they're all the same to me. But, but I do think very much. What situation are they in? Like, three years ago, I had a general manager of a Major League Baseball team call me. And I watched more baseball the following two weeks than I had watched in the preceding like fifty years of my life. Because I wondered, what does it feel like to be standing at second base? You know, what, I always think, like, I'll even, I even said to some clients, what does it feel like to be you? You know, what is it?

• 42:57Speaker 02

  That's what I want to know, because I want to help them sort through that, so they're able to operate out of the feelings that are helping them and giving them information and able to avoid the ones that aren't.

• 43:09Anthony Pompliano?

  Yeah, it's pretty crazy. Before we go to wrap this up, I want to talk about routines, right? I played sports growing up, obviously. You listen to people, whether they are the best in the world at running a business, investing, or just doing some hobby. Everyone always thinks about their routine. But it's usually, here's what time I wake up, here's when I eat, you know, and it's a lot of physical action. Is there mental routines that either you help people structure? Or patterns you've seen in high achievers or high performers? In terms of how they think about like that mental routine they go through?

• 43:51Speaker 02

  Well, you know, people do things like meditating and imagery. But they use it, you know, there's not a consensus as to how people use it. I mean, I try to get them in the habit of what am I feeling and why am I feeling it? All the time. And then picking the action that gets them the thing that they want. Like, making sure they get re-centered in what they want frequently. You know, whether that's every day or multiple times a day.

• 44:27Speaker 02

  Which is the thing you want more in the long term is often in conflict with the thing you want less in the short term. And so like instead of telling, the routine I want is instead of telling yourself to do the right thing, be leaning into the thing you want more and saying, what have I got to do to get the thing leveraging desire, like a routine of leveraging desire. But I'm also very non judgmental, you know, some people have a very like step by step, I'm going to do this every day, you know, and other people just don't operate like that, you know, and I'm totally about, let's figure out what works for you, like in your situation and don't feel guilty that someone else does X, Y, and Z.

• 45:12Anthony Pompliano?

  Yeah, that makes sense. There's a lot of people who, uh, who wish that they could, uh, hire you and spend time with you and, and kind of benefit from all the great work you do, uh, but they just can't, whether it's a, uh, uh, you know, for whatever reason it is. What's your advice to them as kind of the like watered down version of the work you're able to do where they can just get started at least being more aware, um, or starting to implement some of the things that you do in your practice in their everyday lives?

• 45:41Speaker 02

  Stop judging yourself.

• 45:44Speaker 02

  Like just like, there's a reason you think and feel the way you do and you think and do the things you do. So stop judging, try to understand, figure out why it is. You know, some of it's gonna be like, if you perceive it as self-destructive, it's gonna, like, there was a reason that developed over your life for some reason to keep you safe. Just figure out what it is and then figure out what you want and work with it. So what this means is don't judge how you feel, just know how you feel, put it into words, because the more you do that, the less it's going to get in your way. And you don't have to tell yourself, do this, do this, do that, don't do that, like.

• 46:31Speaker 02

  Makes me crazy. Like the discipline. I just have to say this. Like in the brain research that like our frontal cortex is controlling us and keeping us disciplined. We're finding out that's not the way it works. We're choosing what we want. We're choosing how we want to feel. So lots of times people choose a short term feeling to take away an uncomfortable feeling. But to get the long term feeling, they have to do something different. Like they have to go work out today or whatever. You know, or you have to stay in the trade. You know what you. What are your feelings and why? Learn how to answer that question and just don't criticize yourself.

• 47:14Anthony Pompliano?

  I love how, uh, how simple of just like, what am I feeling and why? Right? It, it, it's something that's memorable and, and, uh, you can do literally without, uh, moving. You could do it in your head and in the moment.

• 47:25Speaker 02

  Right.

• 47:26Anthony Pompliano?

  Um, and that makes sense. What, uh, what's the most important book that you've ever read?

• 47:31Speaker 02

  Oh, the most important book I've ever read.

• 47:41Speaker 02

  I don't even know what it's called. It's called The Red Book in Modern Psychoanalysis.

• 47:46Speaker 02

  It's crazy book, like this is gonna be the craziest answer you ever had. I think it's.

• 47:50Anthony Pompliano?

  It's called The Red Book?

• 47:51Speaker 02

  Well, it's, it, it, the nickname for it is The Red Book. But literally it's like, the actual title is something like Modern Psychoanalysis of the Schizophrenic Patient or something like that. So I'm, I'm gonna say this because this matters.

• 48:08Speaker 02

  There's a group of psychoanalysts, they're called moderns, they're different than Freudians. They don't worry about like interpreting you're doing this because X, Y, and Z happened because it's a child. But what they figured out is anger you don't know you have is a huge thing. So back to not judging yourself. Like being able to know what you're angry about with no judgment can turn into a superpower. And it can actually eliminate like self-destructive behaviors. But it's so hard to do because we live in a culture where like anger is terrible and no one's supposed to be angry and help you or, you know, and get some criticized for it and blah, blah, blah, blah.

• 48:52Speaker 02

  The modern psychoanalysts get amazing results with really severe mental issues. Through understanding how to work with anger and we've gotten like some amazing results.

• 49:08Speaker 02

  Through helping people understand they're angry about something that when you think about it, they have darn good reason to be angry about. So let's stop judging it, let's understand. Sometimes it's all in the past, there's nothing you've done about it, but just giving yourself the respect of accepting that like creates energy and it creates optimism.

• 49:29Speaker 02

  So that's like, you know, level three or four and I usually don't talk about it in public because people can't take it.

• 49:36Speaker 02

  But so.

• 49:40Anthony Pompliano?

  So it almost feels like if people read that book, they will get a different perspective on a lot of this work. Is that fair?

• 49:50Speaker 02

  Yeah, but the average, I mean, that book's hard for me to read. Like it's written by a psychoanalyst in the 1940s or 50s.

• 50:02Anthony Pompliano?

  There's irony in calling it modern if it was written in the 40s or 50s, right?

• 50:07Speaker 02

  Well, then it was called modern, you know. Actually, the guy that started this was like kicked out of New York Psychoanalytic, which is a big deal. And like, it was probably because he said you didn't have to be a medical doctor to be a psychoanalyst. And they were all like, well, you have to be a medical doctor. He's like, no. And he actually took patients he'd cured of schizophrenia. This is true story. Your listeners are going to think I'm crazy, but oh, well. And taught them to be psychoanalysts. And he believed that you could do that. But I'm trying to think of one that, oh, here's a great one. The Body Keeps the Score by, I'm going to get his name wrong, Vanderkirk or Vanderkool. The Body Keeps the Score. It's

• 50:52Speaker 02

  a current book. And it's basically about how like things happen to us over our life and we're unable to deal with the emotions. And they get subverted into our bodies.

• 51:06Speaker 02

  Which then makes me think of another one. The drama of the gifted child.

• 51:11Anthony Pompliano?

  What is that?

• 51:13Speaker 02

  It's basically about how like little kids, you know, if you're a smart little kid, you kind of figure out what your family dynamic is early on. And kids try to save their families. You know? One thing kids do, by the way, is like if there's, you know, whatever, whatever, whatever's going on in their household that's not good, kids are narcissistic, right? So they think everything revolves around them. So they blame themselves. You know, if I just behaved that better, you know, mommy and daddy wouldn't be fighting. When you're a kid, that helps you. Because it gives you this sense of power and control in the situation for you. And that helps you. But you're, you know, you need to lose that as you, you know, what happens to some people don't lose it.

• 51:59Speaker 02

  So they always blame themselves. And then, you know, you can imagine how that gets in people's way in adult life.

• 52:09Speaker 02

  The drama of the gifted child takes you through that, like how that happens. And I've given that to a lot of clients who are like,

• 52:16Speaker 02

  "Oh, my God, this is me."

• 52:20Speaker 02

  Yeah.

• 52:21Anthony Pompliano?

  I love it. I love it.

• 52:23Speaker 02

  Not the typical books you're, you're.

• 52:27Anthony Pompliano?

  The, listen, this is why I asked the question, right? Is because I think there, there's a lot of books out there that are out of the mainstream, kind of what's popular in investing or business or technology or whatever. But they're great books, right? And so it's always fascinating to hear what, what people choose. I ask every single person, one last question, and then you get to ask me a question to end it. The question is about aliens. Are you a believer or a non-believer?

• 52:56Speaker 02

  If the question is yes or no, then I come down on yes.

• 53:01Anthony Pompliano?

  Okay, what is the logic you use to get to yes? I agree, but what is the logic behind yes?

• 53:07Speaker 02

  Oh, there's so much more than we can see. But the short version is. Shortly after my father died, I went on a cruise to hear this guy talk about past life progression, which I would have never gone to, except he was a Yale-trained psychiatrist, and my friend, who was a mergers and acquisitions attorney in Kazakhstan, oil and gas, female, so she's a serious woman, said, "You've got to hear this guy." So I go to hear this guy, and he's got a speaker with him who does like, I guess you'd call it channeling, I don't even know what the word for it is, but talk to the spirit world. And, I mean, even, it's been, I don't know how many years, but I'm like, getting, my

• 53:48Speaker 02

  father spoke to me, no uncertain terms, through that guy. It was, yeah, it was unbelievable. The things he knew, like, there was no other way, it could be anything but. So, there's a lot we don't know. So, therefore, if I've got to choose yes or no on aliens, I'm going to come down and yes.

• 54:13Anthony Pompliano?

  I love that. I've never, I've never had anyone use that, that perspective to come down and say, "Yes." Almost every, yes.

• 54:22Speaker 02

  Leave it to me. So, why do you believe in aliens?

• 54:29Anthony Pompliano?

  My, my whole thing is, um, so one, obviously, the galaxies on galaxies on galaxies that are out there, you know, it's just this vast, vast world. But I actually think, uh, there's two components, and I have, and I'll call it the bias of, uh, I have the benefit of, uh, you are the 300th person I've asked this question to. So I've heard a lot of the, the various, um, uh, theories here, but one is, um, the definition of alien is very broad, and so if you just look at something like, uh, the things in the ocean, there's probably things there that you, I, and every scientist in the world has no clue about, right? It's just, it's so big. Um, and so does that fall under kind of alien life, right?

• 55:13Anthony Pompliano?

  It's, some people will put yes, some people would say no. But on top of that, the other thing is, uh, when you start to get into things around, uh, simulation theories, or, uh, our ability to actually see, right? You know, and, and there's an example, uh, Dave Cullum, uh, from Cornell was, was talking about recently, I, I think it was him, uh, where it's like, look, if you're an ant on a highway... You only know like, I'm trying to get across this highway, right? There's like this big thing that comes, whatever. But like, you don't have the intelligence to understand kind of the vast world outside of, you know, your little kingdom of the highway, right?

• 55:50Speaker 02

  Right.

• 55:51Anthony Pompliano?

  And so if you think about it from that perspective, like, what are the odds that we as humans, uh, were the ant in some other thing?

• 56:00Anthony Pompliano?

  It's not necessarily high, in my opinion, but it's not zero.

• 56:04Speaker 02

  Right.

• 56:04Anthony Pompliano?

  And so when you start to kind of do math on all of the different variations of, uh, of a theory like that, it's like, yeah, there's probability, uh, would tell you that there, there's some other intelligent life out there. I, uh, I also come at it from a, let's make sure, let's hope we're the superior intelligence, right? I, I don't know if we want to be the, the inferior one, uh, but, but I think that's going to be more luck if, of, of anything.

• 56:30Speaker 02

  Yeah, I, there's, we're powerless to do anything about that. But I really, I did just see an article and I can't, I'm not going to be able to remember it in it, or, but it was an incredible publication about like the FBI's awareness of UFO, you know? And I mean, I like, I'm not the kind of person who's going to go down that rabbit hole, right? But I saw this and it was like a serious publication and a serious article and I'm like, huh.

• 56:55Anthony Pompliano?

  So the, the reason why probably, and I'm obviously guessing here, but, uh, back in 2014 or 2015, there was, um, a quote, quote, leak from, uh, of these UFO videos. And this was on, you know, Reddit and Twitter and kind of went, went, um, uh, very viral in the conspiracy theory world. But just recently, uh, literally during the COVID crisis, uh, the, um, I think it was the Defense Department or whoever it is in the government agency side, uh, they actually released the videos and confirmed their authenticity.

• 57:29Anthony Pompliano?

  And so that's probably

• 57:30Speaker 02

  That is exactly what it is.

• 57:31Anthony Pompliano?

  Yeah, and so it's interesting because they basically say, look, we don't know what this is. They don't nearly go as far as kind of the conspiracy theory world of like, hey, this is aliens, or you know, any of that type of stuff. But it's just, this video was taken. We do not know what the, you know.

• 57:50Speaker 02

  Yeah, we don't know what it is.

• 57:52Anthony Pompliano?

  Yeah.

• 57:52Speaker 02

  We can't say what it is.

• 57:53Anthony Pompliano?

  And also, the part to me that, that, you know, Frank, I would kind of wave my hand at all of this, except for very smart people, people way smarter than me, say, look, we don't have an explanation scientifically for how it moves that way. Right?

• 58:07Speaker 02

  Yes.

• 58:08Anthony Pompliano?

  When you get into that type of, you know, understanding of some of this stuff, it's like, look, there's obviously things that we don't understand in the world, right? There was a time when people didn't understand gravity. Now we have better understanding of gravity. I'm sure there's other things that we'll discover over time. But there is this allure of scientifically, if we can't explain something, but we can see it happening, like, what the hell is that?

• 58:33Speaker 02

  Right.

• 58:35Anthony Pompliano?

  The attention.

• 58:37Anthony Pompliano?

  So, all right.

• 58:38Speaker 02

  There's more than we know.

• 58:39Anthony Pompliano?

  There absolutely is. That's the truest thing I've heard all day. I appreciate you taking the time to do this. This is awesome. I really enjoyed the conversation. Where can people go find you? Or the work that you guys are doing on a daily basis?

• 58:52Speaker 02

  So, my company's name is The Rethink Group. And we are there, rethinkgroup.net.

• 59:00Speaker 02

  Have a website. I wrote a book called Market Mind Games, which is like taking all this psychology and applying it to market decision making and places like you.

• 59:12Anthony Pompliano?

  Market Mind Games. There are a lot of those going on right now, for sure.

• 59:18Anthony Pompliano?

  Awesome. Well, thank you so much for doing this. We'll make sure we link to all of that and we'll do this again in the future.

• 59:23Speaker 02

  Thank you so much. Appreciate it.