Gonzales, Deep Survival: making plans, savoring uncertainty

On the recommendation of one of the readers of this blog I borrowed Deep Survival: Who Lives, Who Dies, and Why by Laurence Gonzales (W. W. Norton, 2003) from the public library. It was not a book I thought I needed in my permanent collection because, as I readily admitted in my post "Trading and alpine climbing," I’m not the sort who spends her weekends climbing mountains, running rapids, or snowboarding. But even I, the non-adventurer, found the book intriguing. After all, one question all traders should ponder, and ideally have an answer to, is who survives, who fails, and why.

Although Gonzales devotes the lion’s share of the book to recounting tales of disaster and survival, he regularly steps back to dissect what gets people into trouble in the first place and what separates the survivor from the victim. Over the course of two posts I’m going to look at a couple of things we do to put ourselves in harm’s way and how we can survive our own bad instincts.

We are inveterate planners. Plans, as Gonzales sees them, are not simply some emotionless ideas we write down on a piece of paper; they are suffused with the emotional values of past realities—earlier climbs, former trades. These memories are “beacons of incentive.” We apply our memories of successes, good feelings, favorable conditions to the new and unfamiliar challenge.

Plans are stored in memory just as past events are. To the brain, the future is as real as the past.” “If this is indeed the case, the pitfalls of plans should be apparent. “The difficulty begins when reality doesn’t match the plan. … If things don’t go according to the plan, revising such a robust model may be difficult. In an environment that has high objective hazards, the longer it takes to dislodge the imagined world in favor of the real one, the greater the risk. In nature, adaptation is important; the plan is not. It’s a Zen thing. We must plan. But we must be able to let go of the plan, too.” (pp. 81-82)

We must abandon the plan even as we confront unexpected turns of events and additional stresses—and hence find it difficult to think clearly. Reason can easily be overwhelmed.

How do we revise the script and learn to adapt? Rigorous training is critical—“not only in the technical stuff … but in emotional control. All elite performers train hard, and when you follow in their path, you’d better train hard, too, or be exceptionally alert. That’s the main difficulty with neophytes who go into the wilderness: We face the same challenges the experts face. Nature doesn’t adjust to our level of skill.” (pp. 87-88) Nor, of course, do the markets.

Both nature and the markets are filled with uncertainties. Gonzales quotes advice from a wildland firefighter: “… you must not merely tolerate uncertainty, you must savor it. Or you won’t last long. The most efficient preparation is a general mental, physical, and professional readiness nurtured over years of training and experience. … Preparing is itself an activity, and action is preparation.” (p. 245)

A footnote: Gonzales more or less equates letting go of a plan with breaking rules when he looks at patients who have in effect been handed a death sentence by their doctor. (“The plan … can become the equivalent of doctor’s orders, the tyrannical rule you can either obey or rebel against.”) People who survive cancer are notoriously “bad patients.” They are “unruly, troublesome. They don’t follow directions. They question everything. They’re annoying. They’re survivors.” (p. 82) I’m not sure that the equivalence holds or that we want to adopt the cancer survivor model wholeheartedly when it comes to trading. Nonetheless, experienced traders know that money is often not found where the compass points.