The Power of Bacon

#leaders

With the right incentives, guiding change or shifts in behavior is easier. For trading stocks, even a little shift can have a big impact. 

I’ve been to millions of diners thousands of times and had hundreds of entrees, but as Highlander reminds us, “there can be only one.”  And for this Jersey boy, it will always be the bacon, egg and cheese, or the BEC, that wears the crown.  On a boat, at the bodega, in the kitchen, and lately, at Mike’s Deli in Norwalk. Yes, it’s a classic on a bagel, of course.   

It’s also classically applicable as the best lure for the kind of fish I’ve sometimes needed to catch over the years: the undivided attention of a 17-year-old kid under my roof.  On his way to school, and then on his way Penn, and then on his way to life.  Any time I wanted his attention, I’d make him a solid bacon, egg and cheese sandwich.  Most parents in this hemisphere can grasp the nature, née, the true power of bacon: the elixir, the magic hypnosis, shit - bacon just tastes good.   

“Hey champ, I need a favor. How about you show me your A-game for the rest of the next two years so we can see how far this car can go, and how fast we can get there?” Maybe it helped to know that the extent of his capabilities was akin to having a Ferrari in the garage.  But there are plenty of Ferraris.  He needed to learn how to drive. The point is, the raw material for that kid was always there.  It just needed a little incentive, the right mindset.  Something positive to help jar loose one bias or another and open things up to seeing it from a different angle… 

The problem: Anchoring to an idea.  

In my experience, getting a lesson to sink in is, in part, based on one’s understanding of someone’s willingness to change or learn or be adaptive.  And I’d characterize that willingness for an analyst or PM as follows:  

Stage 1: Open to improvement.   

Tell-tale signs: They’re starting to show frustration with being wrong too much about a stock or an underlying thesis.  Such people are hard on themselves but also find themselves conflicted because a lot of work was done before getting to “wrong”.  They want to move on from the trade, the loss, the idea, but they have been dragging the anchor on the bottom long enough to feel like “this is what it’s supposed to feel like”.  Letting go and moving on will be hard.