Advertisement
U.S. markets open in 6 hours 46 minutes
  • S&P Futures

    5,209.25
    -5.50 (-0.11%)
     
  • Dow Futures

    39,214.00
    -9.00 (-0.02%)
     
  • Nasdaq Futures

    18,190.75
    -40.75 (-0.22%)
     
  • Russell 2000 Futures

    2,047.80
    -2.00 (-0.10%)
     
  • Crude Oil

    82.56
    -0.16 (-0.19%)
     
  • Gold

    2,158.90
    -5.40 (-0.25%)
     
  • Silver

    25.11
    -0.15 (-0.59%)
     
  • EUR/USD

    1.0868
    -0.0008 (-0.08%)
     
  • 10-Yr Bond

    4.3400
    0.0000 (0.00%)
     
  • Vix

    14.33
    -0.08 (-0.56%)
     
  • GBP/USD

    1.2708
    -0.0021 (-0.16%)
     
  • USD/JPY

    150.4370
    +1.3390 (+0.90%)
     
  • Bitcoin USD

    64,851.14
    -3,548.37 (-5.19%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,722.55
    -4.87 (-0.06%)
     
  • Nikkei 225

    40,003.60
    +263.20 (+0.66%)
     

Steve Cohen's performance coach reveals how traders can better their mental game

Dr. Gio Valiante, the head performance coach at Steve Cohen’s $11 billion family-office hedge fund — Point72 Asset Management — said there are things that every day investors can do to better their mental game.

“There’s things everyone can do to be better in these achievement domains—consistent processes. We talked about doing a little bit of the same thing every day. It doesn’t have to be static. But essentially, you want to get into a consistent, sustainable, repeatable process so that as the world is changing you actually have a process to fall back on,” he told Yahoo Finance.

He added that it’s important to be disciplined, meaning you have to know yourself, your biases, and tendencies.

Confidence is also key.

“The big one is confidence,” he said. “There’s no doubt that even the best investors in the world are only correct 55% of the time, which means you’re wrong 45% of the time. In the face of of that much quote-on-quote failure, you have a way to protect your confidence and sort of be able to go all in. If you see a set-up you like, you have to be able to make that decision.”

Valiante, a famed sports psychologist, joined Cohen’s Point72 full-time back in March. Prior to that, he’s worked with many of the top PGA Tour players including Justin Rose, Matt Kuchar, and Camilo Villegas. During his 15 year career coaching golfers, his players have won more than 60 PGA and LPGA Tour events.

He said there are a lot of similarities between coaching pro athletes and portfolio managers.

“They are both high-performance industries … Any inefficiency in the mental game tends to show up when you’re competing against the best in the world.”

He spends his days meeting with portfolio managers and coaching them on their mental game. He currently works with about twenty different PMs.

In the highly competitive world of financial markets, portfolio managers spend long hours working and that can throw work-life balance off. During sessions, they talk about the portfolio manager’s process, performance, and personal life. This is especially important sense it’s a job with a lot of variability.

“You’re talking about a job where there’s a lot of variability … A portfolio manager may do everything right on the process side, do great research, sort of anticipate what might or might not happen, but if the market is in an unwind or there’s a sector implosion or some sort of variability of things that you have no control, you actually may get the print wrong. Whenever your career is tied to something that you have no control and there’s this much variability. It requires a very disciplined mindset where we’re looking for sustainable processes.”

The universal trait in successful portfolio managers is open-mindedness. Meanwhile, having an ego is what hurts performance the most.

“When a portfolio manager, an individual, gets so confident and they believe that they can do no wrong, you start to impose their beliefs on the way the world should be rather than the way the world is, which is why we talk about two types of confidence — confidence through arrogance and ego, which is one type of confidence, but also confidence through humility. And confidence through humility is what we practice at Point72.”


Julia La Roche is a finance reporter at Yahoo Finance.

Read more:

Why hedge fund billionaire Leon Cooperman is warning young people to avoid the fund management industry

Billionaire Rubenstein: These 6 traits will help you succeed on Wall Street

How a $650,100 lunch with Warren Buffett changed one hedge fund manager’s life

Warren Buffett once said these are 2 of the more important decisions you’ll make in life

Buffett: Your business will succeed if you execute this 3-word mission

A hedge fund manager gave some blunt advice to a bunch of 9th grade boys

Advertisement