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Performance coach Gio Valiante has worked with Tiger Woods and Steve Cohen.
- At a CFA Society event on Thursday night, Dr. Gio Valiante and Denise Schull told investors and traders that many people haven't trained themselves to correctly learn from mistakes.
- Mistakes can't be punished by the brain, but instead need to be seen as learning opportunities, said Valiante, who works with investors at Steve Cohen's Point72, including Cohen himself.
- "It's not about making mistakes, it's about catching them before they kill you," said Svein Backer, the managing director of global equities for Lockheed Martin's $72 billion pension, at the CFA event.
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Investing is a career path that will inevitably knock you down.
The problem is most finance pros aren't learning the right lessons from those mistakes, according to Dr. Gio Valiante and Denise Schull, two performance coaches well-known in the $3.3 trillion hedge fund industry.
At an event at the CFA Society in Manhattan Thursday night, Valiante and Schull, along with Lockheed Martin's managing director of global equities Svein Backer, touched on the importance of behavior and emotion, and their impact on a portfolio.
According to Valiante - who is currently working with Point72 founder Steve Cohen and his team and has worked with Tiger Woods in the past - the two traits constantly "under attack" as an investor are confidence and motivation.
"Most successful people are, to a degree, a little overconfident," Valiante said. The key is to train your brain to not be overly critical of your mistakes, he and Schull said.
"So many of us are concerned about being wrong when it's just a part of the job," said Schull, who founded the ReThink Group and has been said to be the model that "Billions" character Wendy Rhodes is based off of (a lawsuit Schull filed earlier this year against Showtime and the show's creators was thrown out).
Managers might need to learn these lessons quickly after the whiplash caused by momentum's slide and oil's rise over the last two weeks. Investors and managers have told Business Insider that they need to stick to their guns, and trust in their strategy in times like these.
Backer, who helps manage Lockheed Martin's $72 billion corporate pension and was a client of Schull's, pressed attendees to not be afraid to cut losses early, while also being willing to buy back in at a higher price if your intuition was wrong.
"It's not about making mistakes, it's about catching them before they kill you," he said.
What lets Backer think like this, Schull said, is the fact he is now "inoculated against being wrong." Schull and Valiante said that the brain should shift from punishing mistakes to learning from mistakes.
Fear, the two performance coaches said, is not always the best motivating factor.
"Everyone is too self-critical," Schull said.