Since last week’s quick intro to Metaprocess was well received, here is more in the same vein.
As always, feedback is encouraged: firstname.lastname@example.org
Zen, Arete, Kaizen
Metaprocess is not just Zen — the encapsulation of right thought, right action in calm self control.
It is also about Arete, the Greek concept of excellence. Per Wikipedia:
Arete (Greek: ἀρετή; pronounced /ˈærəteɪ/ in English), in its basic sense, means goodness, excellence, or virtue of any kind. In its earliest appearance in Greek, this notion of excellence was ultimately bound up with the notion of the fulfillment of purpose or function: the act of living up to one’s full potential. Arete in ancient Greek culture was courage and strength in the face of adversity and it was to what all people aspired.
As we will later explore, Metaprocess is further rooted in Kaizen, the process of continuous self-improvement through enhanced efficiency and elimination of waste:
Kaizen is a daily activity, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work (“muri“), and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. The philosophy can be defined as bringing back the thought process into the automated production environment dominated by repetitive tasks that traditionally required little mental participation.
Putting these three things together (Zen, Arete, Kaizen) you get the three pillars of Metaprocess… a sort of natural recipe for life optimization (for lack of a more precise term).
In a nutshell, Zen allows for full emotional control — fully cultivating the ability to detach and let go at will.
Arete makes room for striving, challenge, excellence, and even a healthy sort of bloodlust; the natural desire to live life at full throttle and make the most of one’s time in existence.
And Kaizen tops it all off via constant and continuous improvement — getting a little sharper, a little leaner, a little wiser, day in and day out, in all things large and small.
As you can see, what we have here is a recipe for trading success (through personal incremental improvement) as well as life success. The overlap is no coincidence.
A key aspect of moving forward with Metaprocess is self-discovery, which, in turn, is enhanced by the experience of failure.
We feel good when we win. But we learn the most about ourselves — and the weak points in our game — when we fail…
“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
~ Michael Jordan
The Michael Jordan of Trading
One of Jack’s long-time heroes (role models from afar) is Paul Tudor Jones, or “PTJ” for short.
PTJ — who practices the global macro style — is undoubtedly one of the greatest traders of his generation. His nickname is “the Michael Jordan of trading” (giving some idea of his age).
He made something like $100 million in his early thirties in the 1987 stock market crash, has gone 25+ years in his flagship fund without a single losing year, and has circa $12 billion under management today (a good chunk of which is his).
On top of that, PTJ leads a very full and balanced life, with a strong emphasis on travel, hunting and fishing (not to mention family and friends).
That degree of success — one might reasonably call it “extreme” success, not just via lucky break or blip, but over a career and a lifetime — is important to keep in mind while digesting the man’s thoughts on failure. (This is someone who knows the heights!)
The below excerpt [bold emphasis Jack's] comes from a postscript Q&A with Paul Tudor Jones in a new, annotated version of Reminiscences of a Stock Operator, originally published circa 1923 (and still arguably the greatest trading book ever written):
Q. Part of the appeal of [Reminiscences] is Livermore’s journey of self-discovery as a person and as a trader. Have you had the same experience as a trader and portfolio manager, or was your path easier or harder?
Jones: Probably the best lessons to be learned from this book come from his repeated failures and how he dealt with them. In the book I think he lost his entire fortune four or five times. I did the same thing but was fortunate enough to do it all in my early twenties on very small stakes of capital. I think I lost $10,000 when I was 22, and when I was 25 I lost about $50,000, which was all I had to my name. It felt like a fortune at the time.
It was then that my father flew up from Memphis and sat me down in my tiny New York City apartment and began lecturing me as lawyers do. He commanded, “Leave the gambling den behind. Come home and get a real job in a safe profession like real estate.” Of course, I did not, and the rest is history. And real estate these past few years has been about as safe as shooting craps to pay the rent, so I was twice blessed. If I’d have taken my father’s advice, I might have lost all of my money again these past few years in my fifties.
Anyway, I think it’s no coincidence that our greatest champions, our greatest artists, our greatest leaders, our greatest everything all seem to have experienced some kind of gut-wrenching loss. I think their greatness, in part, was fashioned on the crucible of that defeat.
Two years before Lincoln was elected as maybe our finest president, he lost that monumental Senate race to Stephen Douglas. To a certain extent, I think that holds true in my field as well, and I am leery of traders who have never lost it all. I think that intense feeling of desperation that accompanies such a horrifically deflating experience indelibly cauterizes great risk management reflexes into a trader’s very being.
One does not have to a be a trader, or a practitioner of Metaprocess, to appreciate PTJ’s wisdom. (Arete in spades, but Zen and Kaizen in there too.)
Artist, writer, engineer… architect, programmer, entrepreneur… whatever one’s profession or found calling, the experience of failure — real failure, of the soul-searching, gut-wrenching variety — can be taken as an excuse to turtle up, wuss out, and never truly compete again, going through the motions forever more.
Or, it can be the hot burning fire that ultimately forges an iron determination and indomitable will… a passionate fuel for excellence that only a relative few have the privilege to apply and experience.
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