Data, data, everywhere data. Blockin’ out the imagination. Breakin’ my mind. Do this, don’t do that. Can’t you read the data?
Here’s one childhood dream of mine that hasn’t died: to dunk a basketball. Just one glorious flush on a rim at regulation height. To realize this dream, I would have to vastly improve my vertical performance.
With each attempt, I could analyze my speed, foot placement, distance, angles, etc. All reasonable data points. But, alas, none of them provide the most pertinent information: I am just too short to reasonably expect to dunk a basketball.
When it comes to performance, data matters but information matters most.
Even the least humble of us want to perform better at something. I want to write faster. You may want to earn more money. Nassim Taleb wants to deadlift heavier weights.
How do we improve performance?
Performance is an amalgamation of things. An athlete can’t simply choose to play better just as an investor can’t simply choose to generate higher returns. We need to tinker with the individual inputs, the data.
Except we live in a time when our thirst for improved performance is drowning us in data. With the watch on my wrist, I can tell you how much I slept, last night’s scores, the weather and the current price of wheat in Australia.
Data and information are not the same. It is information and insights that help us make better decisions and improve performance. Living in a time of abundant data holds the promise of extracting a wealth of information and valuable insights. But, being mesmerized by the loads of data can obscure the fact we are not getting what we need most.
If you go on a trip, knowing how long each traffic light stays red, or how many green sports cars are on the road, or even the route’s total elevation will not help you reach your destination faster.
That is the big data fallacy: more data does not mean an equal measure of useful information. It can produce the opposite effect, as we confuse data for information. The forest for the trees. Even when we can ascertain interesting information from a wide range of inputs, it doesn’t guarantee any of it is valuable in relation to our personal goals.
Unfortunately, we have a tendency to want to emulate the elite. We try to think like professional athletes and hedge funds, not as ourselves.
Chasing Performance
If we want to understand the behaviors associated with our obsession with performance, a good place to start is in the world of finance, which has a way of exposing our faults writ large.
A few weeks ago, Morningstar released the results of its annual “Mind the Gap”study. It found that investors earned 1.7% less than the total returns of their fund investments over a 10-year period ending on Dec. 31, 2020.
Morningstar attributes this gap to “inopportunely timed purchases and sales of fund shares, which cost investors nearly one sixth the return they would have earned if they had simply bought and held.”
In other words, the average investor tends to chase performance. That is, to let recent price changes guide their investment decisions, which leads to buying AFTER an investment rises (thus missing the gains) and selling AFTER the investment drops (thus locking in the loss). They focus on short-term price data even when it provides no financial benefit. It is an example of focusing on data that is difficult to understand and offers very little meaning, especially as they relate to your personal financial goals.
What makes the most difference in financial performance is how much you earn, how much you spend and how much you save. Take what’s left over and invest it knowing that the stock market tends to rise more than it falls. That’s it. All the other numbers, measures, figures, statistics and trends, which are generally out of your control, hardly matter.
As the late Jack Bogle said, “Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.”
The Douwalter Method
Another good place to study the concept of performance is the high-stakes world of sports, where every small competitive edge seems to matter.
Perhaps, there is no sport more obsessed with data than track and field, where a fraction of a second is the difference between the podium and a fourth place obscurity. That sliver of a difference pushes athletes to mine everything from heart rate and sleep performance to lung capacity and power output, all in hopes of cracking the code of training.
A hot performance trend among some runners and coaches is to monitor glucose, which your body turns into energy. As reported by Alex Hutchinson in Outside magazine, the hope is to use glucose levels to help determine when and how a runner needs to refuel to maintain optimal performance and avoid “hitting a wall.” But glucose levels vary widely from runner to runner. So far, studies are inconclusive on whether glucose monitoring can help improve a runner’s performance.
It begs the question: where is the line between acting on useful data and being mired in data that does more harm than good?
Tom Hughes, a medical doctor and sports science lecturer at Leeds Beckett University in Britain, worries that obsessively tracking glucose numbers is to “stress about another number we don’t understand.”
That seems to perfectly sum up the reaction of many people to every new study or hack published in the news.
Compare the big data approach to that of Courtney Douwalter, who is widely considered the best female long-distance runner on the planet. Maybe the best runner period, as she consistently dominates ultramarathons, beating both women and men.
Unlike most professional runners, however, Douwalter does not have a coach and does not follow a detailed training plan. Instead, she primarily relies on how she feels physically and mentally to determine her training load.
As she explained on the Rich Roll Podcast, “Without a plan, I do much better listening to my body.” Her aversion to coaching or following a detailed training plan, she explains, is that she wants to avoid becoming reliant on superfluous metrics and miss the more important insights of her body.
Information over data.
Whatever principles or rules or razors support the same idea, I will consider it Douwalter’s Method: listen to your most important source of relevant information and don’t sweat the superfluous details.
As the Morningstar study revealed, becoming too focused on data instead of information and insights tends to accentuate our faults rather than improve them.
Three Brief Performance Rules
Considering the fallacy that more data equals more information, here are a few guidelines for improving performance:
The biggest difference makers will always be what you most directly control. We can control what we put in our bodies. We can control how much we rest. We can control how much we save and spend. These will pay higher dividends than external forces like dietary supplements, high-tech shoes and the stock market. To obsess over measurements that are beyond your control is like trying to move an inch when what you already have can take you a mile.
No amount of data will help you, if you don’t know what to do with it. The most important aspect of information is relevance. A piece of information is only useful and valuable if it is relevant to your needs. What is relevant to me may be completely irrelevant to you, and vice versa. It is the relationship between signal and noise. As the mathematician Edward Ng put it: “One man’s signal is another man’s noise.”
Of course, there is a whole cottage industry that will try to sell you on noise. It is why people are suckered into paying hundreds of dollars for carbon-plated running shoes or putting their retirement savings in financial products they don’t need.
The boring stuff is typically the effective stuff, which makes it boring. Get plenty of rest. Eat a balanced diet. Move around a lot. Those are the keys to becoming an athlete. Spend less than you earn. Save regularly. Invest in a diversified portfolio. Those are the keys to becoming wealthy. None of which are sexy, but they work.
Take it from the greatest dunker of all time:
Get the fundamentals down and the level of everything you do will rise.
MICHAEL JORDAN
