Billionaire Steve Cohen's performance coach reveals the trait shared by successful traders
Dr. Gio Valiante, the performance coach at Steve Cohen’s $11 billion family-office hedge fund, said there’s one universal trait that successful portfolio managers all share.
“Open-mindedness,” he told Yahoo Finance in an interview at a 100 Women In Hedge Funds event on Tuesday evening at the St. Regis Hotel in Midtown Manhattan.
He continued: “Once you think you have all the answers, markets will just punish you. Arrogance gets punished and pummeled. Open-mindedness, again, is something that Steve [Cohen] actively promotes. When he’s talking to portfolio managers he says, ’Look, I don’t make the world. I have to live in it just like you.’ You have to be open-minded. You have to be willing to pivot and adapt and grow as a human being. So open-mindedness is the universal.”
Valiante, a famous sports psychologist, joined Cohen’s Point72 Asset Management full-time as the head performance coach in March. He had been consulting the hedge fund for about 18 months before that.
He’s not the first performance coach to join the firm. In the early 1990s, Cohen hired psychiatrist Dr. Ari Kiev, who has worked with Olympians, to coach his traders at then-SAC Capital Advisors to help them cope with the stresses that come from the market. Kiev died in 2009.
As a sports psychologist, Valiante has worked with many of the top PGA Tour players including Justin Rose, Matt Kuchar, and Camilo Villegas to help improve their mental game. Over his 15 years coaching golfers, his players have won more than 60 PGA and LPGA Tour events.
Valiante told Yahoo Finance that there are a lot of similarities between coaching athletes and portfolio managers and analysts. He said the psychology is the same.
“When you look at investment professionals there’s a scoreboard — it’s P&L. Golfers on the PGA have a scoreboard, the NBA has a scoreboard. Investment professionals have a P&L. Success and failure are public,” he said, adding, “The psychology is interesting. It’s OK to fail, but it’s a really different thing to fail publicly. And just similarly, hedge funds and portfolio managers, their performance is a public thing whether it’s internally or posted in publications.”
There’s also variability of performance that plays a role in both investing and sports.
“As a portfolio manager you can do everything right and if the market is in an unwind you’re going to lose money. As a golfer, you hit a perfect shot and the wind hits the ball and it’s going to go into the lake.”
He continued: “And the psychology behind that is controllability — the things at which you can control and the things you cannot. And that brings stress into any job. When your livelihood partially rests on things you have no control that’s a stressful state of affairs — bull markets, bear markets, unwinds, sector implosions.”
He teaches people to cope through typical psychological strategies. For example, he emphasizes discipline. This is teaching people to be aware of themselves, their habits, their patterns so they won’t keep making the same mistakes.
He also encourages patience since it’s hard to sleep on risk and wait for something to happen.
Then, there’s confidence.
“On the PGA Tour, the best golfers in the world miss more shots than they hit perfectly. You know the great portfolio managers are wrong 46% of the time. How do you protect conference in a game or a business where you’re wrong 46% of the time? Without confidence you start doubting yourself,” he said.
There’s confidence through arrogance and confidence through humility.
“We practice confidence through humility.”
Bottom line: You can be both humble and confident.
Julia La Roche is a finance reporter at Yahoo Finance.
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