1:41
Jim O'Shaughnessy: Well, hello everyone.
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1:41
It's Jim O'Shaughnessy with my colleague, Jamie Catherwood, for yet another edition of Infinite Loops.
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I am very excited about today's guest and unfortunately, because of scheduling, we had to reschedule this so many times that her patience was legendary and I really appreciate it.
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And my guest today is Denise Shull, the author of Market Mind Games, a radical psychology of investing, trading, and risks, and is also a principle at the rethink group. Welcome Denise.
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Denise Shull: Jim, thanks so much for having me.
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I'm just happy it finally happened Jim O'Shaughnessy: This is so much fun. Yeah, me too.
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So I think your book is really fascinating because you come at this kind of 180 degrees from the other side that you normally hear from normal advice that I would normally give too.
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So what I'd like you to do is just kind of walk us through the thesis, right? Denise Shull: Yeah.
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Jim O'Shaughnessy: And I've read it.
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So I kind of know, but for our listeners benefit, I'd rather you take us through it. Denise Shull: Sure.
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Jim O'Shaughnessy: And then I'm just going to jump in and kibitz with questions. Denise Shull: Okay.
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Jim O'Shaughnessy: So, the thesis is that emotions are very powerful.
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They are required to making decisions and then you have some solutions around how you can do that to make your trading or investing.
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And the way I read it by the way was more from a trading side and we're more longer term folks.
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So we'll get into that though, too, but please. Denise Shull: Yeah.
3:09
So I would just say right off the bat, I think of it as like the human brain versus a risk decision.
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And so, whether you make, you know, a hundred a day or a hundred a year, or even whether you're a pitcher for the Mets and you have to make a pitching decision, like your brain looking at situation, what's happening is the same because you're human, basically.
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So I don't think the trading and investing thing so much matters, but you're right.
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It's a little more, this it's written a little bit more towards traders.
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So it came from the fact that I had this master's degree in neuro psychoanalysis before I became a trader.
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And then like years later after I had already been trading and managing some trading desks, this little institute wanted to publish that.
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And I was like, it's like a decade old.
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Denise Shull: You're going to look idiotic.
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But yes, in order to be published in an academic journal, I will update it.
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And when I did Antonio Damasio, particularly, he's at University of Southern California now, but, and some other people, but primarily him, had shown that we can't, we literally cannot make a decision without emotion.
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And I was like, you got to be kidding me, all this take the emotion out of it, if you literally could do it, you couldn't decide.
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And I was just like this, like changes everything. Then here we are.
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So the thesis of the book is to explain that to people.
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And there are things like the obvious is confidence or in the, in more of my, I mean my clients, these days are primarily hedge funds.
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I have some long only funds, but the emotion in investing is conviction, which is an emotion.
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It's like a physical experience of believing, right?
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Denise Shull: In trading, it's more confidence, but people don't think of those things as an emotion, you know, emotion is only the exaggerated, disruptive, like compelling.
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Well, that's actually not true.
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Like we don't make a decision on the data.
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It seems like we make a decision on the data in our analysis.
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We make the decision on how confident we are in the implication of, and just to further complicate it right now, which maybe I shouldn't do, but I'm going to go ahead and do, what the latest research is showing, which isn't in the book so much.
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I might touch on it, but it wasn't anywhere near as clear when I wrote that book, is that I make the decision based on the prediction of a future emotion.
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So like we do our analysis.
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Well, however, we come to our market analysis and we feel confident that if we buy this name or buy this asset, it's going to go up.
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Denise Shull: Well, what we're really doing is predicting that in the future, we're going to feel satisfied, happy, safe, because this worked out and that's the future emotion that actually causes us to say buy it.
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So the book is, it's first largely about persuading people that that's true.
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And then I get into the fact that these feelings and emotions, which I'll use that term interchangeably, but happened in a layered way. You know?
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So there's like relatively superficial feelings that everybody in the market has like fear of missing out or fear of future regret, which is like probably the single most important one, the average person can work with.
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And then it gets into all kinds of personal feelings that are self image and, you know, success expectation related.
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So basically I try to explain that.
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Jim O'Shaughnessy: So that's fascinating.
6:31
I actually agree with you about people not making decisions rationally.
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It's been a theme of mine for a long time.
6:42
They say they do, but they don't. Right.
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And typically, and by the way, this is true for everything, not just investing. Right. Denise Shull: Right.
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Jim O'Shaughnessy: What happens is they often, as you say, make the decision emotionally, even if they are unaware that it is being made emotionally, and then they try to paper it over after the fact with rationality.
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I use a GIF on Twitter all the time which is this young guy saying, because of reasons.
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Denise Shull: I haven't seen that one.
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Denise Shull: I've seen some of your others, particularly the guy with I think the cigar and the martini or [inaudible].
7:15
Denise Shull: Oh yeah Denise Shull: You're right.
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Jim O'Shaughnessy: So, what do you think about, cause I'm going to ask you, I'm going to pretend like I'm your hedge fund client, and I want you to maybe interact with me and tell me what I'm doing wrong, but I don't know if you've seen it, but Adam Grant has a new book out called Think Again, which I think is really a great book.
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Denise Shull: I've seen it, but I haven't read it. Jim O'Shaughnessy: Okay.
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So, I read a lot and I read that book and I think it was great.
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One of the things that came up in that book though, is that he's quoting neuroscientists recent research right now.
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And he's claiming that they're seeing that when somebody's core beliefs are challenged, that it often bypasses, it activates the amygdala. I love that word.
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And kind of bypasses all of the reason, all of the prefrontal cortex, all that kind of stuff, and goes straight to the, what he refers to as the lizard brain. What do you think?
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Denise Shull: Well, to be blunt, I don't think we have a lizard brain.
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I don't think our brain is broken into three parts.
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I don't think the amygdala is like the center of emotion.
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And I don't think these things because the neuroscientists I follow don't think these things, you know, that's not just my opinion, right?
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So my favorite current book is Seven and a Half Lessons About the Brain by Lisa Feldman Barrett. Jim O'Shaughnessy: Okay.
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Denise Shull: Now Lisa says a couple of things.
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All of the things I've just said, you know, we don't have a tri in three-part brain.
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Reason isn't stuck in the frontal cortex and amygdala isn't, we don't have a lizard brain.
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Now there she's on the east coast.
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There is another scientist at Stanford, Brian Knutson, who has done a lot of work.
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I met him through the society for neuro economics, which is like the brain on risks, basically.
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Denise Shull: And he's done a lot of work about like how this emotion thing really works in decision.
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And he's the one who's shown that we're always predicting these future feelings.
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And so like in my own coaching work, that's a cornerstone, always helping someone figure out what they're really predicting, which most of the time they're completely unaware of.
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Like completely unaware of, and that's what's actually driving that.
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Denise Shull: So in Knutson's world, it's anticipatory affect, meaning anticipating a future feeling, that he and Lisa disagree a little bit over, are there parts of the brain.
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Lisa is kind of like, you're always using your whole brain.
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And it depends on which culture you were raised in.
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And like, this is something I do know, getting that if you were raised in an Asian culture and you watch your brain do two plus two equals four, it does it in a different way than you and I that were raised with English language.
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So that tells you something like it's not set, right, but Brian can be a little bit more parts of the brain, but he will say at the same time that if you don't have this anticipating of a feeling, anticipatory affect, your dead, so it's kind of definitive.
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Denise Shull: And I, you know, the truth is the cognitive behavioral model is still, you know, your thinking and you're behaving is still the dominant model in psychology, behavioral finance, and probably even neuroscience.
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I think it's missing the point.
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Like if it's true that you have to have what you say, that you have to have confidence to make a decision, or you might have fear, but what you're doing there is you're predicting, if you do this thing that you will avoid the threats of whatever you're afraid of.
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And therefore you'll be safer in the future.
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So the feeling is fear, but the future emotion prediction is more safety and confidence.
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So I got myself off my own track there and what I was at, where I was going with that point.
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So you'll just have to bring me back. Jim O'Shaughnessy: Yeah.
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I have Denise Shull: because I lost the plot.
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Jim O'Shaughnessy: Well, that happens to me a lot too.
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So I, as you were talking, I was thinking of the philosopher, Jed McKenna, who says we are emotion-based creatures and the primary motivating emotion is fear.
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And then I think of Joseph Campbell and the hero's journey. Right.
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And that's all sort of the blueprint, I guess, if you will, for much of myth, which fuels many of our stories, something that I've loved to drive down those rabbit holes, right.
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Because you know, the too long didn't read version is most things are started as marketing campaigns.
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Denise Shull: That's probably true.
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Jim O'Shaughnessy: And like, so creation myths.
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For example, I love Greek mythology because that, you know, to explain the seasons, they would, it was like, would take them an hour, right?
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Because the seasons happened because of Persephone, who was the daughter of Demeter, and Zeus and Hades had a thing for her.
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Jim O'Shaughnessy: And so he came in and took her down to the underworld and that caused winter.
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And so, Persephone, her mom went down, negotiated with Hades and she got to come up on top of the earth for half the year, which was spring and summer.
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Denise Shull: Spring and summer.
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Jim O'Shaughnessy: But, you know, it's, we laugh now, but I was in Africa and there was this perfect sunbeam coming through the clouds.
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And we were on this huge desert and it looked God-like right.
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And I turned to my wife and I said, you know, how do you blame ancient peoples for seeing that with no knowledge base at all?
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And not saying, oh, that's the guy that's right.
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So I think that because of aggregate cultural evolution, which we're lucky to have, I think, right, because it gives us these little gadgets and what we're doing right now. Right.
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But to get back to the point that you were making, you're saying that you think most of cognitive research is headed down the wrong path.
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You think that and correct me anywhere, if I'm summarizing wrong, your thinking is that much of the current consensus, if you will, in cognitive psychology, let's take the patron Saint Danny [inaudible] . Okay.
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Are you saying Danny's wrong?
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Denise Shull: Oh my goodness. Put me on the spot. Yeah. Basically. Jim O'Shaughnessy: Okay.
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You know I'm going to lead with that.
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Denise Shull: Now In my defense, his book, which I can see right over there.
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I can't tell you exactly what page, but I can tell you approximately what page 642 or 43 in there, and he says, you know, this is paraphrasing him.
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I know all this stuff, and there's really not much I can do about it either.
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Jim O'Shaughnessy: I know. I love that quote. I love that quote.
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Denise Shull: So we're just stuck. Jim O'Shaughnessy: Yeah. It's great.
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Because again, Markowitz the founder of the efficient frontier, right?
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What did he do when he was making his allocations?
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He, he did the heuristic, a third, a third, a third. He had three options.
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So he gave a third of his money to each one of those options.
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And when questioned, as he should have been by his grad students.
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Professor, Denise Shull: Right.
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This doesn't seem all that Jim O'Shaughnessy: This doesn't seem anything like the theory that you're, you know, winning all this praise for it.
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And he goes, I didn't want to experience regret.
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Denise Shull: Well, that was sort of smart in a certain sort of way. But yes.
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So in other words, he was predicting a possible future emotion and doing what he needed to do to avoid that future emotion. So he could feel safer.
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Jim O'Shaughnessy: Right.
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Denise Shull: But the other thing, most people don't know about Markowitz and I use a picture of this in most of my presentations, the opening paragraph says stage one, a pork belly in management is using your observation, this again a paraphrase, using your observations and experiences in deciding what you believe.
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Stage two is taking those beliefs and allocating to portfolio.
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This paper, the one that won the Nobel prize deals with stage two.
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And at the end of the paper, Jim O'Shaughnessy: He qualifies it.
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Denise Shull: Well, he says, you got to know what you believe and unless, you know what you believe you can't do this allocating thing.
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And at the end of the paper, he says like three or four times now don't anyone here, forget, I skipped stage one. Stage one's important.
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I'm not in a position to explicate stage one.
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Like somebody else needs to do that.
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So like, if you believe something, you feel comfortable that it's true, which gives you a sense of confidence, which gives you a sense of safety, current and future emotions.
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Jim O'Shaughnessy: So, okay. That's interesting.
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I didn't know about that first part of the paper. And I read it.
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Denise Shull: Neither did anyone else in finance. Jim O'Shaughnessy: Yeah.
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Well, I've read it several times.
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And I, and I obviously glossed over that, which is something that I find interesting as well.
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I want to get back to Danny [inaudible] in a minute here.
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Denise Shull: Perfect, oh yeah sorry.
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Jim O'Shaughnessy: But so one of the things, one of my hypotheses is that you're better off when you're talking about beliefs.
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At least I believe that you're better off trying to put them in the framework of my thesis is.
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And the reason I believe that is that models are meant to be tested, are meant to be corrected, are meant to make it easier for you to take all of the evidence that's in front of you.
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And when new evidence comes incorporate it, in other words, correct your errors because we are continually making errors, but if we're doing things right, we're continually correcting those errors and the outcomes should be better predictions. Right? Denise Shull: Yep.
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Jim O'Shaughnessy: And one of the things that I have observed is that, and you don't have to spend more than an hour on Twitter or any of the social media to see this in real time.
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People often complate their beliefs with their sense of self, right?
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And it becomes part of their personality. Denise Shull: Totally.
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Jim O'Shaughnessy: Which becomes, I will die on that hill.
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And, and I always joke that I subscribed to the General Georgia's patent view that I want to make the other poor, dumb bastard die on his hill rather than me dying on mine. And.
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Denise Shull: Yeah, yeah really.
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Jim O'Shaughnessy: Let's say I'm coming to you and saying, Denise, I read a lot about you.
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Jim O'Shaughnessy: And there's some really interesting things that I've read about you, that we're going to get to near the end of the podcast, but you certainly heightened my interest.
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And you're this rockstar coach.
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And I have been having, I've been really successful in my hedge fund, but now I am a bundle of doubts.
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I am like, this is not the world that I think the way should the world should work.
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And obviously this isn't me, I'm creating this character. Denise Shull: Yeah. Yeah. I know.
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Jim O'Shaughnessy: Right.
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Because I think, you know, the market's always right and we need to adapt ourselves to it.
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But so I'm going to, I'm going to hire you.
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So give me your, our first session.
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What are you going to, what are you going to do?
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Denise Shull: When did that start, Jim, like think back and you felt one way, and then you started to feel another way.
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Jim O'Shaughnessy: And so for all of our listeners, for all of our listeners, I am creating on the fly out of a whole cloth, a character. I know people like this. So this is a composite.
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Denise, this started really honestly, during the great financial crisis.
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And I saw people I know that should have gone to jail and they walked away scot-free and it made me start thinking that our system is rigged.
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Denise Shull: I'm reacting to being on the spot.
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So I'm going to talk about what I would do probably in a little bit more sense than actually doing it.
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What would go through my head is, so if the system's rigged, what feelings does that leave you with?
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I would probably ask that question.
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The system is rigged, so then once that realization came, what did it feel like to be in this business?
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Jim O'Shaughnessy: So again, this is kind of fun because we're both creating these characters as we're going along.
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So let's say that I think that it used to be fair and free because it agreed with my hypotheses.
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And now, gosh, darn it, it's not agreeing with my hypotheses anymore, and I think that therefore, it's rigged and I'm obviously making this pretty easy on you because I'm externalizing my agency and blaming others for my failures. But, please.
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Denise Shull: Well, let's say that were true.
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Let's say that someone had done really well.
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And then after the financial crisis, forever, so for now, 13 years or whatever it's been, they struggled and they could say that their view of the arena changed.
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So when their view of the arena changed, they could have felt a few things.
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They could have felt confusion, they could have felt anger, they could have felt guilt for profiting.
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Now, anger usually ends up being the most interesting and the most powerful in getting people to realize when they have justified anger and then how to react to that.
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But that's usually takes a long time to do because people feel really guilty about being angry.
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But in this end, there's all kinds of things in society about, don't be angry and all kinds of things in religion and all kinds of things about positive thinking and that.
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But in your case, you said some people should have gone to jail.
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So that suggested that you were really seriously annoyed or disgusted.
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Jim O'Shaughnessy: Right. Denise Shull: Or both.
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So you may have gone from thinking that you were in a noble world, to being in a not so noble world, and maybe you're uncomfortable with that.
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So then you're conflicted about, well, I could still capitalize on this, but is that unethical to me and my own value system?
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And then that gives you this conflict.
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And this happens all the time, that I work with someone to uncover what they're really feeling and there's some fundamental conflict.
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They feel two things, and so one day, they'll act out of one set of feelings, and the other day, they'll act out of the other set of feelings.
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And they can't resolve it.
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Denise Shull: But in the coaching, we end up resolving it, and getting them centered in what they really do feel, what they believe, convicted in, and then able to use their intuition.
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And I know to a client, this is probably...
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And to semi behavioral finance guy.
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There's all sorts of research on how intuition can be valid.
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The problem is no one's been taught to use it.
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No one has been taught to work with themselves.
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We have the wrong model of the machine.
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So therefore, then there's all these things, and this even gets back to Kahneman, when your model is cognitive behavioral, thinking and behaving, as opposed to where the juice is, feeling, you're not going to solve a problem.
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It's a little bit of a flat earth problem.
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Only looking at cognition and behavior is kind of thinking that the earth of the human brain is flat.
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The truth is if you keep sailing, you're going to sail all the way around.
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Well, that gives you a whole bunch of other options that you don't know you have if you only look at cognition and behavior, or you only assume the earth is flat.
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Denise Shull: So for your hypothetical portfolio manager, my guess is if he or she were really not as productive as they used to be, and they were angry about people not going to jail and then it changed their viewpoint of the game they play, that they might feel guilty about playing the game, and angry that there's been some clearly unfair playing of it.
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And then that's getting in their way because they will use their cognition to try to talk themselves out of that thing.
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But actually, both of those emotions are trying to give them some useful piece of information.
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And what the research shows, and then I'll stop, but because of research that shows, if we have a feeling and we purposely try to override it, it actually gets more intense.
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Denise Shull: It gets louder, because somewhere in there, your psyche is trying to deliver you a piece of useful information that relates to your overall safety and survival.
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And if you ignore it, the psyche gets louder, the feeling gets worse.
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And what usually happens is people then act out the feeling and they blame the feeling, like if I hadn't had the feeling, I wouldn't have acted out.
23:31
But the real problem is their strategy for the feeling, because they're missing the fact that feeling has information in it. And so, yeah.
23:38
Jim O'Shaughnessy: Okay, so- Denise Shull: [inaudible] is taking you all sorts of places here.
23:41
Jim O'Shaughnessy: So you must be a big...
23:44
Do you know John Sarno's work?
23:45
Denise Shull: You cut out there a little bit.
23:45
I think the answer is no, but say the name again.
23:46
Jim O'Shaughnessy: John, Dr. John Sarno. Mind of Body.
23:47
Denise Shull: Oh, the backpack? Jim O'Shaughnessy: Yeah.
23:50
Denise Shull: I know of him. Jim O'Shaughnessy: Okay.
23:52
So you might like reading his books, because- Denise Shull: No, I...
23:53
Sorry, I'm interrupting you.
23:55
Jim O'Shaughnessy: No, please.
23:56
Denise Shull: I have a client who...
23:56
Well, I haven't worked with this woman in years but I did work with her, and she had horrible back pain because her mother trained horses, trained otherwise un-trainable horses.
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Her mother was known for, if you have a horse that no one can train, send it to this woman.
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And she put her daughter on bunches of these horses, and this daughter fell off these horses bunches of times growing up.
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And so when I was working with her, she's 40 something, she had back pain, which, okay, she's got a really logical reason for having back pain.
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She also really seriously hated her mother.
24:29
She either went to Sarno or worked with someone who was trained by him, and guess what? No more back pain. Jim O'Shaughnessy: Yeah.
24:38
His success rate is phenomenal.
24:38
His thesis is pretty straight forward.
24:38
It is that we sublimate all emotions that we deem as inappropriate, whether we got that idea from society or from our family or from some religious affiliation, it doesn't really matter.
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What matters is that we sublimate them and the ones that we sublimate the most are rage and hatred, because they are always seen as inappropriate by society.
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Denise Shull: I literally didn't know he went that far, and that's really important to me and connects directly to my work and how I even got to be doing my work. I'm all excited now.
25:23
Okay, now I do have to, because I didn't know...
25:28
I mean, I knew the whole...
25:28
I just didn't know he had the fulcrum or cornerstone if you will of the rage and hatred thing.
25:33
Jim O'Shaughnessy: Absolutely.
25:35
In fact, I helped finance, because I've had Sarno problems, and reading his book scared me.
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Now, I've got some right now that I'm still working on, but I know the connection and because I've read everything he's written, I've talked to people that knew him, and I actually help with a Kickstarter campaign, there's a movie out there called All The Rage. Denise Shull: Okay. Yep. Yep. It's becoming familiar.
26:00
Jim O'Shaughnessy: And it's about Dr. Sarno, who's since died.
26:04
But he had a long, great life, really insightful guy.
26:04
Amazing, and one of the reasons I became fascinated by him was not only did it help me with some neck problems that I had, but his theory was so, in my opinion, enlightening, and his success rate was crazy.
26:18
I mean literally, he could take people who had to be on motorized scooters because they couldn't walk, because their leg pain was so bad, and you'll actually see one, if you watch this movie, you'll actually see a person in the movie.
26:38
When they first go to Sarno, they're on one of these scooters, and at the end of the movie, all you see is them jogging in Central Park.
26:45
And so I've always been a huge believer.
26:51
Look, I believe our minds are these kinds of quantum computers, obviously using a metaphor, but it's a helpful metaphor, I think.
27:00
Jim O'Shaughnessy: So creativity, creativity is absolutely required, even if you're a quant.
27:06
It's just, you're creative about different things.
27:06
Your insights and creativity all work around the various models or thesis that you might want to explore, like, what if?
27:16
Hey, what if this was interesting information? Let's look at that.
27:16
So I'm a huge believer in creativity, huge believer in the power of the mind, and I think you're going to really enjoy Sarno.
27:27
Denise Shull: Well, now, you've said all the rage.
27:29
I actually even knew that, or I mean I was aware of that movie, but I have to say this.
27:33
So I got that master's degree, I started trading [inaudible], I was sitting next to a name you might know, Dmitry Balyasny of Balyasny Asset Management. He sat right there.
27:45
Then I got this opportunity to run trading desks in New York, so I thought, oh, that'd be really cool, so I up and moved to New York to run this trading desk.
27:53
Denise Shull: And I enrolled in a little Institute of Modern Psychoanalysis, which is different than Freudian psychoanalysis.
27:58
I mean, it has the commonality of you have an unconscious, but other than that, it's very different than Freudian.
28:02
And I rapidly learned that the founder of modern psychoanalysis, a guy named Hyman Spotnitz had, and forgive me for this but it's also true, cured schizophrenia through talk therapy, and the way he had done it is help these people get in touch with their rage, which to his theory, it was so overwhelming to them that they split it off into a separate reality, and so their realities were fluid.
28:33
And he found that if he could get them through all of the pressure not to feel the rage, that they could reintegrate their personalities.
28:45
Denise Shull: I met someone formerly diagnosed, paranoid schizophrenic, Bellevue, all the meds.
28:49
And when I met him, he was a cartoonist for the New Yorker, married with two kids, and as I always like to say, your normal New York neurotic.
28:56
But it was literally through the exact same thing, the idea that people have raged they can't handle.
29:00
And the seed of how I'm sitting here is the evening I understood that in this little institute, I mean, this was a joke in some ways, I was like, well, damn.
29:12
If it could help a schizophrenic, it could help these traders I work with.
29:12
I literally said that out loud, and that was like the seed of this.
29:17
And then I think that was even before they published my master's thesis, so I had that and then I found out you had to have emotion to make a decision, and then I started talking about it and people started relating to it.
29:30
Denise Shull: And I have a portfolio manager now that worries a lot about disappointing their investors.
29:42
This person's really, really, really good, really talented, really skilled, really experienced, but has a tendency to hold back from doing what they really believe out of a worry of it disappointing.
29:53
But if you find out why, highly criticized, has some anger about that that they can't yet access.
30:00
So I spend, I don't know, I don't know what percentage of time it is, but I spend a significant portion of my coaching time ultimately helping people sort out...
30:09
Really, it's a self affirming.
30:09
If you were really criticized growing up all the time, and you just wipe that away, well, it was fine.
30:15
Like I have another client, he says, "Well, I was a really horrible kid and it's a good thing he beat me." No, probably not.
30:23
And now, beats himself up all the time, but can't see that...
30:23
So obviously, I completely agree with Sarno.
30:29
Jim O'Shaughnessy: He was an amazing guy and his research obviously continues, but let's get back to Danny Kahneman for a minute.
30:39
So I learned something recently that I didn't know about Kahneman, and I've studied a lot, all of his work, and that was that his original idea came when he was doing research for I believe the US government.
30:54
And what they were doing, I think it was the late 40s, early 50s, and they finally had instrumentation that would allow them to watch pupils in people's eyes dilate or be constricted.
31:07
And they would ask them questions, they would ask them to do simple mathematics, they would show them pictures.
31:14
So some pictures were very unhappy, very kind of scary pictures.
31:20
Other pictures were very bucolic, et cetera.
31:28
And one of the things that he was quoted as saying was his aha moment was that we have a need, an illusion of certainty, whereby we will...
31:37
And it kind of actually fits with your idea about the human mind or brain being a predictive machine, because- Denise Shull: Around safety.
31:51
Jim O'Shaughnessy: Good, yeah, right.
31:51
So, but what he says is, yeah, that's right.
31:55
But what's happening is that we're creating order even where order does not exist.
32:03
In other words, we are creating narratives that we tell ourselves to give ourselves to this illusion of safety, and one of the primary reasons people make so many mistakes in decision-making, not just financially but in decision-making, is that...
32:22
You know, there's a great quote by Proust, that we let our emotions determine the decisions that are indelible, whereas the emotion was fleeting.
32:28
I am getting it wrong, but I love the quote.
32:34
I put it up and I said, anyone working with investors should make sure they read this because...
32:39
So do you think that Kahneman's wrong around the...
32:46
Denise Shull: I have to think a little bit about the certainty piece, but as you were saying that, what Lisa Feldman Barrett is saying and what psychoanalysis has been saying for as long as it's existed is that we grow up and we have experiences which create storylines of how things are supposed to be, and how we're supposed to be treated, where we fit in the world, how much risk we can take.
33:08
We learn our place and how we're to react from our environment, and what Lisa is saying, and it is what psychoanalysis in a different way, but I don't even think she knows that, is that then, we think as adults we're reacting to the moment but we're not.
33:24
We're playing out this narrative, we're playing out the storyline, we're playing out the expectations.
33:34
Denise Shull: And so Kahneman's illusion of certainty is very parallel to that.
33:39
We're playing out a storyline that on some level, no matter how bad it is, we feel safe in because we've survived it.
33:47
And we're still alive, so in a fundamental way, our brain's working and saying this worked before, even it was bad.
33:54
It worked before, you're still alive, it'll work again.
33:58
That would create illusion of certainty of how things are, if you will.
34:03
Denise Shull: And because people don't know they're predicting the future based on what they've learned in the past, and maybe what they learned in the past is wrong, maybe they're more competent or they're worth more, or all kinds of things.
34:15
They can take more risks or...
34:15
That reminds me of a client that took a lot of risks but his mother wouldn't let him play sports.
34:20
I have all kinds of stories like that.
34:24
But that wouldn't be that different than an illusion of certainty.
34:30
So I think there's a way that I think the latest brain science could weave in.
34:36
Well, even think, his original prospect theory.
34:36
Prospective, predictive, there's a connection there.
34:44
Jim O'Shaughnessy: So then what you're saying, if I'm interpreting you right, is that there is room for kind of a unified theory, if you will, of some of the ideas of Daniel Kahneman et al, and the behavioral or what I would call the consensus behavioral advice, and your way of looking at it, which you yourself in your book called radically different than those.
35:12
So what do we learn from...
35:18
Have you ever read Timothy Leary's circuit ideas about imprinting?
35:26
Denise Shull: I know of them but I haven't read that much.
35:48
Jim O'Shaughnessy: Anyway, the thing that I'd never knew about him until I read a lot of books by Robert Anton Wilson, who I think you'd also really like, is that he was a great psychologist, and his theories before the whole psychedelic drug thing were based on some pretty solid research that went around imprinting, that when you were talking, I was thinking, wow, she's talking about imprinting.
36:34
Because you're saying, like the kid who got beat up by his father and tried to explain it away by saying his father was actually smart to do that.
36:45
No, he wasn't, and that led to really bad beliefs and bad beliefs lead to bad outcomes usually, I would think.
36:51
And so [Leary] had this idea that you're in printed early in life as either, and this is his terminology, not mine, and it shows how much society has changed, but you are either top dog or bottom dog.
37:01
And if you were a top dog, you had a winner's script.
37:08
If you were bottom dog, you had a loser's script.
37:13
Jim O'Shaughnessy: And the reason I found it fascinating was that I read other research that finds that you don't even have to change the person's perception of themselves.
37:22
If you change the perceptions of authority figures, and this was research done, I'm sure you're probably aware of it, in a school where they came in and they said they were testing aptitude.
37:32
They weren't, they were lying.
37:32
And they randomly picked 12 kids from these classes and said, these 12 are exceptionally gifted.
37:38
And then they came back a year later and you can probably anticipate what they found.
37:45
That those 12 kids had suddenly done significantly better in all of their subjects and everything, and the kids were never told, but the way other people, their teachers in this instance, interacted with and treated them changed dramatically. Right?
38:03
So I just think there's a Gordian knot here, right?
38:10
Isn't there because how do we disambiguate that for example? Right?
38:10
So these kids all change materially because their teachers started treating them differently.
38:17
And did that somehow caused unconscious changes in the kids?
38:24
Did they suddenly think, "oh, I guess I'm a winner?" I don't know.
38:28
Denise Shull: It gave them a different feeling.
38:30
The chance for a feeling person to person, is a whole fascinating mode of study.
38:36
Now, in that case, it's pretty clear, right?
38:36
The teacher all of a sudden thinks this kid is gifted and didn't know it.
38:40
So they're going to spend more time with them.
38:44
They're going to give you more personal attention.
38:44
They're going to feel more pot.
38:46
The kid's going to feel different.
38:46
The kid's are going to feel more important.
38:51
Because the teacher thinks their kids more important now.
38:51
The teacher believes the kid's more important.
38:56
And that feeling is going to get translated person to person.
39:00
So, spotless in his work with schizophrenics, use this called...
39:00
I mean, it might be slightly different, but there's this phenomenon of induction.
39:05
We use it in our coaching.
39:05
When you do this work, you find this happening to...
39:10
You'll feel one way and then you'll get on the call with the next client.
39:14
And all of a sudden you'll feel completely different.
39:18
And it's their feelings, not yours.
39:18
Jim O'Shaughnessy: Interesting [crosstalk]. Denise Shull: Yeah.
39:22
It happens particularly when they're not feeling their feelings.
39:22
They're not aware of them and you pick them up.
39:26
So then we use that as a piece of information in spot next to the modern psychoanalysts use that really with a lot of expertise more than we do.
39:30
I mean, we're adopting some ideas for modern psychoanalysis into our coaching paradigm, but I'm going to make an audacious statement, but I think it's true.
39:40
You can explain anything in human behavior.
39:45
If you understand what the person thinks they're feeling and what they're predicting they're feeling, anything.
39:51
I mean, it's the sunrises in the yeast of human behavior.
39:57
Denise Shull: Now not everyone's ready to hear it ready.
39:58
No one wants to know it because really what people end up being afraid.
40:02
If they acknowledge their rage.
40:02
For example, they're afraid that they'll act it out.
40:08
And they know that will be bad.
40:08
I have a client whose life changed, really changed.
40:16
It's a young man, not an investor.
40:16
Through him being able to realize, he literally just wanted to murder his completely narcissistic mother.
40:22
And I mean, she, like the kids never been there.
40:28
You know, it's been her in this sort of extension of herself, but not another actual human being.
40:33
Denise Shull: And once he was able to admit that and get comfortable with it, like he just started hitting on all cylinders. People are afraid of it.
40:42
Denise Shull: There was something else you said that I wanted to reply to, but, oh, I know.
40:44
So when I did my master's thesis, it's literally called the neurobiology of Freud's theory of the repetition compulsion.
40:50
And basically [inaudible] that we repeat things over and over and over.
40:54
People get divorced, they get married again.
40:58
They have the exact same problems.
40:58
They switched jobs with one boss.
40:58
They have exact same problems with another boss.
41:02
It's because of this imprinting.
41:02
And I don't have a problem with imprinting, the word imprinting.
41:06
Like we have this expectation.
41:06
We have this script of where we fit in relationship to other types of people.
41:14
Like in my workshops, I'll give the exercise of write out, what do you expect to get from people who are either in authority, famous or way wealthier than you.
41:27
Just what's your to expect?
41:27
Because I want people to be able to realize they're expecting to have some sort of experience in relationship to these people with more cloud of some sort or another.
41:36
Denise Shull: But there's a concept in biology called critical period.
41:38
So like with birds, if they don't hear their own song during the critical period, they'll never sing it. Jim O'Shaughnessy: Yep.
41:47
Denise Shull: So my hypothesis in my master's research is that we have a critical period for self-image kind of who we are and how important we are and will we be treated with respect and fairly, do we have the right to be equal and succeed,
42:00
granted that all of those things are a lot of things that probably developed over 10 or 20 years, which isn't to say things can happen that interrupt them because things do, but, and then we play that script out. Or whether it's Brian Newton's anticipatory
42:08
Or whether it's Brian Newton's anticipatory aspect, or at least a [Belbin bear] just saying, we're playing out our expectations.
42:14
There's a lot of people who've got the same idea, maybe slightly different language, but the same basic concept.
42:24
Jim O'Shaughnessy: So, let me ask you this question then.
42:26
So, is there a personality type that succeeds more in investing than other personality types or no?
42:41
Denise Shull: I don't think so.
42:41
I think really the markets are aggregate human behavior, right.
42:44
And any individual has a way of aggregating or interacting.
42:51
I mean, with the markets that make sense to them, they need to figure out what that is.
42:56
But I think there's kind of a fingerprint analogy in there.
42:56
You know, it all, it looks very similar, but it's not actually, and it's more about like how comfortable can you get with the fact that no one really knows. Right. And it's uncertain.
43:08
And how do you navigate the anxiety that uncertainty creates? How do you understand?
43:13
Like, I will often encourage people to come up, like write out their view of like what the markets are and how they work with a blank sheet of paper on a Saturday afternoon.
43:27
Jim O'Shaughnessy: I'm a huge, huge, huge fan of writing everything up. Denise Shull: Yeah.
43:32
Jim O'Shaughnessy: Because I believe that our memories are unreliable narrators, and you can't see them, but if I put it the computer down there, you would see boxes and boxes of journals that I've kept since I was 18. Yeah.
43:42
What's interesting about it is I think writing is a forcing mechanism because a lot of people, I've worked with a lot of people just mentoring. Right.
43:50
And one of the first things, the thing that I have found to be like a zero to one improvement is people who have never written out what they think who when they start to do it...
44:05
I mean, literally I've had people, now it's on zoom, but I've had people in person and then over zoom just like, get really emotional when [crosstalk], when we came back and they're like, I had no idea. Denise Shull: Right. You know? Right.
44:17
Jim O'Shaughnessy: And I think that writing is that forcing mechanism that helps you understand whether you understand or not.
44:24
Denise Shull: [crosstalk]. Jim O'Shaughnessy: Yeah. No, that's okay. That's okay. It's a conversation.
44:26
The other thing I think that's great about writing is that when you can go back, I have a theory about our memories and I think that there's some good information available that we update, unconsciously update our memories.
44:42
Once the quantum probability function has collapsed, we forget about all the things that we were thinking might happen.
44:48
And we believe, we truly believe that we believe that the thing that happened, however, unlikely that thing was that we knew it at the time. Hindsight bias.
45:00
Denise Shull: Yeah, yeah. Yes.
45:01
There's research that shows if athletes write about a failure, write out all their feelings, they get over it more quickly as opposed to the, as my husband likes to say, rub a little dirt on it, or as most sports coaches will say, shake it off.
45:12
No, you need to go through that kind of grieving process because, well, number one, it helps you learn something.
45:21
That's what it's really for.
45:21
Like, what did I do wrong?
45:21
I could have avoided that, but there's actually now all sorts of information about the power of language. So...
45:29
Jim O'Shaughnessy: We could do three hours on that.
45:30
I mean, I'm so heavily into that, but...
45:34
Denise Shull: Literally emotion differentiation and emotion granularity like differentiation is the difference between fear, frustration, disappointment, different categories.
45:41
Granularities like layers of fear, levels of aggression, levels of disappointment.
45:47
Research shows by the way that portfolio managers who can better differentiate their negative emotions make more money.
45:52
It shows that high school kids, you can better differentiate their negative emotions, study more, drink less, it goes on and on and on, but there's this cultural pressure to not differentiate amongst our negative emotions.
46:04
And I used to say that the neuroscientists didn't know why, why language is as powerful as it is.
46:15
I mean, I have some clients call me once a month.
46:15
Don't really talk about anything that [subjective], in my opinion and tell me, "oh my, this is so helpful".
46:20
Like they're putting things into words.
46:27
Like you're talking about putting things into words on paper but they're not contemplating day-to-day life, they're staying busy with their family and their tasks, but they're not thinking about what they're thinking about.
46:37
So when they talk to me or they put it on paper and I had another point there that went out of my mind, but...
46:44
Jim O'Shaughnessy: Well, we're kind of, yeah.
46:44
Talk basically about metacognition, right? Denise Shull: Yes.
46:48
Lisa, in this recent book, seven and a half lessons about the brain, says that the language neurons infiltrate all of our organ systems and that's at least the beginning of maybe how language has the power that it has.
47:04
Jim O'Shaughnessy: Interesting.
47:04
Have you ever read anything by Candace ?
47:06
The molecules of emotion?
47:06
Denise Shull: I think I have it on a shelf, but like most books you're going to ask me about it.
47:09
I haven't actually read it.
47:13
Jim O'Shaughnessy: Ah, so she's unfortunately deceased, but she was very early in looking at what she...
47:14
Obviously the title of her book, molecules of emotion, that neuro peptides and others flood our system, our entire body with thoughts, they become things and they actually flood our body.
47:28
And we need to understand this.
47:36
And anyway, if you have the book, you'd probably really enjoy it.
47:42
Denise Shull: I think I quoted her in my thesis. Jim O'Shaughnessy: Yeah.
47:46
She was a smart [crosstalk].
47:46
Denise Shull: Yeah, I'm almost sure I did.
47:49
Basically Freud said this thing about repeating things that I saw in my twenties, that all my friends repeated things in their relationships.
47:52
And I was like, if that's true, there has to be like a template there. Jim O'Shaughnessy: Sure.
48:02
Denise Shull: It has to be a template.
48:02
So if there's a template in there, it's like neuro electoral chemistry of some sort.
48:04
So university of Chicago has design, you're in masters program.
48:09
And I said, I want to figure out how that is.
48:09
And lots of people would say to me, "well, it can't be like neurons and electricity and neurochemicals".
48:20
And I'm like, "well, it can't not be". It's not out here. I'm putting my hand out. Jim O'Shaughnessy: Yeah.
48:27
Denise Shull: Like I made this guy, I have the same scenario with him.
48:29
I mean, another guy had the same scenario with him. That's not out there.
48:29
That's my behavior in here somewhere behaving in a certain way reacting to certain,...
48:33
It has to ask, it's inside here.
48:38
So it has to be biological.
48:39
Jim O'Shaughnessy: And it's also sort of one of the foundational principles of propaganda repetition.
48:44
And what I've written about is you can propagandize yourself.
48:51
If you want to change a habit.
48:51
One of the things that I have found that is very helpful is repetition and writing and then writing more and then repetition.
48:57
And I thought I felt silly doing it.
49:04
So I'll just give you an example.
49:04
I want to exercise more consistently.
49:10
I have a gym here and I have no excuse for not exercising. And I was just lazy. Right?
49:17
And I didn't want to do it.
49:17
I'd always let it get too late.
49:17
Now I would do it like twice or three times a week, but I wanted to do it every day.
49:24
Jim O'Shaughnessy: And so I just decided, okay, I'm going to try this as an experiment on myself.
49:27
I love trying experiments on myself and I'd read a lot about this and it was like, okay, so write it out and then repeat it and just keep repeating it.
49:37
And you feel really silly for the first seven days of doing it because you're saying something that you immediately follow with.
49:46
Jim O'Shaughnessy: So one of the things I said was I love to exercise and right after I would say it, I would say it's the biggest lie in the world. And guess what happened?
49:54
About 25 days in, I would always have this thing where if it got past a certain hour, I would never actually resize.
50:01
And so we were at my son's house for dinner and playing with the grandkids and we came home and without thinking about it, I went up, this was now 8:30 in the evening.
50:12
I went up to my bedroom, changing an exercise gear, started going down to the gym and my wife goes, "what are you doing?"
50:18
And I said, "I'm just going to get a workout in".
50:23
And she goes, "you, you never exercise at this time".
50:27
And I went, "yeah, it just..."
50:27
Literally, and I'm really not kidding. I'm like, holy shit. That really works. Denise Shull: Right. Yeah. Right, right.
50:36
Jim O'Shaughnessy: And so I just think, I...
50:38
Denise Shull: You've changed how you felt about it.
50:41
Jim O'Shaughnessy: Right. Exactly.
50:42
And one of the things that I've learned through all this is that premature certainty is really bad habit. Denise Shull: Yeah.
50:49
Jim O'Shaughnessy: Because once we become prematurely certain, we stop really thinking about it. Right?
50:50
And it leads to lots of mistakes, I think.
50:55
But you can't force people to be open-minded, right? Denise Shull: Yeah.
51:02
Jim O'Shaughnessy: You might be able to force them to do repetition exercises. I don't know.
51:05
Denise Shull: They feel threatened.
51:05
So if someone's belief system, isn't true, it's very threatening, right?
51:09
Because your whole like angle on life is then maybe incorrect.
51:15
And that's usually pretty scary.
51:19
Jim O'Shaughnessy: Right.
51:19
And it's like you have the, Robert Anton Wilson calls it the," we all have a correct answer machine programmed into our brains, by society, family, religion, whatever". Denise Shull: Yeah.
51:29
Jim O'Shaughnessy: And if that correct answer, I'm making air quotes here for those who are just listening to us is wrong and it's often wrong by the way. And we can't change it.
51:35
We're going to kind of suck at life.
51:41
Denise Shull: That's very threatening.
51:43
Jim O'Shaughnessy: Right.
51:44
Denise Shull: It puts us in a really bad position because then we know we're powerless.
51:45
I mean, it still reminds me of kids have a tendency to blame themselves because it gives them a sense of control.
51:54
And then cause if they change their behavior, then their parents would change.
51:57
And then what happens is people retain that blaming themselves and stay too self-critical and so that's one thing, like in terms of like how much agency do you feel like you can have?
52:07
Jim O'Shaughnessy: Right.
52:08
Denise Shull: It also reminds me of something you said earlier, you said, you like to think in terms of a hypothesis. And I always say...
52:14
Well, my theory is, I think it's for the [inaudible] obviously similar reword, but for the same reasons.
52:20
The point is, well, I know I believe this, but there's possibility I could be wrong.
52:26
And in both cases we're making it...
52:26
Like we're giving ourselves the feeling like it will be okay if we're wrong.
52:35
Denise Shull: Now we probably both already have enough life experience to feel like it will be okay if we're wrong, we'll cope and navigate and we'll figure it out and it'll be fine. Jim O'Shaughnessy: Yeah.
52:43
Denise Shull: But not everyone does but you can take just about any way that a person sees the world and navigates the world, nevermind sees the market and navigates the market.
52:51
And I never used this word, but I will re language it to see what the feelings are involved in that scenario.
53:01
And then when people see that those are the...
53:01
The emotional logic of it, it gives them more latitude of behavioral choices.
53:07
Jim O'Shaughnessy: I agree that language is much more powerful than people might believe at first blush.
53:19
There's another book that I'm going to get the title wrong.
53:19
It's a weirder, but it's an acronym for Western bridge industrialized people.
53:23
And I did a summation of it on Twitter because I thought it was so good, even though it was overly academic.
53:31
And normally I don't try to recommend those for general readers, but there so what was that all of these psychological research that most of us refer to is incredibly selection biased, because it's all, like 93% of it is done on American grad students. Denise Shull: Right. Right. Right.
53:56
Right Jim O'Shaughnessy: And they make the point that those are hardly universal findings.
53:59
And you brought up Asians doing math differently.
54:06
And I instantly thought of that book because they back you up. Denise Shull: Right.
54:12
Jim O'Shaughnessy: And, and why those societies are so different.
54:14
So I'm looking at time here, wow, this has been amazingly fun for me.
54:14
I love talking about this stuff, but now I... Denise Shull: wow.
54:22
Jim O'Shaughnessy: Now I want to talk about the one that probably will be what everyone will really want to hear about, which is, and I didn't know this until today.
54:29
So I was today's year old, when I learned that you are the basis for the Wendy Rhodes character in Billions, and that you're suing them. Denise Shull: Yeah.
54:49
Jim O'Shaughnessy: Tell all.
54:50
Tell all Denise Shull: Where do I start?
54:52
This is not a question you should ask me when I have like five minutes.
54:56
Jim O'Shaughnessy: Oh no, you have more than five minutes.
54:58
Denise Shull: When I found out about Billions, Andrew Ross Sorkin emailed me.
55:03
I've been on a show in 2012 about the book, and this was August of 2015.
55:10
And he said, "Hey, I'm working on this drama.
55:10
We've got a hedge fund performance coach in it.
55:15
And she'd love to talk to you.
55:15
Would you mind chatting with her?"
55:20
Jim O'Shaughnessy: Seems [inaudible] So far? Denise Shull: Yeah. Yeah. I'm like, I guess.
55:22
I Google it, I see that the show has been created and sold and it's going to come out and show time and I'm like, oh, that's interesting.
55:30
I'm thinking where in New York, should I have a glass of wine with this woman?
55:34
I mean, there's so many details.
55:34
It's hard so many details, so he introduces me to her and before I know it, I'm in the writer's room with Brian Koppelman and David Levien.
55:44
I never know if it's Levien or Levien. And she's not there.
55:44
Now, I realize that was all a plan or it sure seems like it was a plan.
55:49
And I told him a bunch of stuff and Brian was really like, what motivates you? What motivates you? What makes you tick? Why do you do it?
55:58
And then I realized, wait a minute, I'm not sure I'm making a deal with these people.
56:02
Which was the intention and what my lawyer had said, "Go to the first meeting I'll make a deal with them."
56:05
Denise Shull: And so I'm thinking, I don't know if this is turning into a deal and I'm starting to tell them too much. I think I'm going to go.
56:09
So I said, "I'm going to leave."
56:09
And Maggie brings up my book and how good it is and how much she's enjoying it.
56:13
And Brian's like, "I got to download it tonight."
56:18
And I say, because I was embarrassed that it has a fictional envelope, fictional story in the face of a Hollywood screenwriter.
56:24
I'm like, "Well, you know it's written as a fictional book. And I play myself."
56:29
I knew right then I was in trouble.
56:35
Steam started coming out of his ears. What? How can that be? It's a nonfiction book.
56:40
It's a [inaudible] psychology. What do you mean?
56:41
Denise Shull: Well, you said you were going.
56:41
So in the meantime David's asking me if I will continue to work with Maggie.
56:43
Brian can't get me out of the room fast enough.
56:47
Maggie's talking about the article I wrote about interviewing Ben S. A. C.
56:52
Capital, trying to keep me in the room.
56:52
And then I met my friend, Josh, right after that for a drink.
56:57
And I was like, "I don't know, what the heck that... This is not good."
57:01
Then the next day I get a call from marketing and they want to set up a conference call with me and they want me to do a private screening of the pilot and they want to sign a contract and they want to know if I'll do a joint interview with Maggie.
57:12
And I'm thinking, did I run my script or something? Did I misread that?
57:17
And then Maggie and I communicate by email and she went to take our tests.
57:21
We have a talent assessment test, and then they all go dark.
57:28
And I'm like, " Something about that is slimy. I don't know what."
57:28
But this is before the shows ever aired. Right? Jim O'Shaughnessy: Sure.
57:35
Denise Shull: So I communicate with Maggie a couple of times.
57:36
And then marketing sort of goes into never, never land.
57:41
Really after begging me to do all this stuff with them.
57:41
I never hear from Brian or David.
57:45
I send them a congratulatory note. I never hear from them.
57:45
And so I thought, well, there was something about my book being as fiction, but I don't really know what, but whatever.
57:53
The show comes out, she's gone to Matrix and I'm like, "Oh God, I'm glad I didn't."
57:57
But then as it goes on that first season, basically people start saying, "Oh my God, you're Wendy."
58:04
Denise Shull: And the season one episode 11, it's called "Magical Thinking".
58:06
Axe loses a bunch of money.
58:12
I can't remember all the characters names, but the other guy who does the options trading is like, no, no, we need to get out of this.
58:15
That the earnings now that's going to be bad. And he's like, no, no.
58:19
You know, and he leaves loses 485 million or something and 17 seconds or whatever.
58:23
And then he, and Wendy ended up on this evening session where she's figuring out what was really going on with him.
58:29
I get an email from a client in Australia who I hadn't talked to in two or three years, Sing. Oh my God. That was just so shawl.
58:34
And I'm like, yeah, I know.
58:40
But, so I just figured we had a truce, you know, I'd help them.
58:40
They cut me out everywhere.
58:47
I went, people would say, who knew me and do my work would say it was me.
58:51
Denise Shull: I never said I consulted until somewhere in the first season, I've gotten calls from reporters left and right.
58:59
And actually there was an article that was about me.
58:59
There was an article where a reporter called and said, I'm going to do a profile on you.
59:04
And you're obviously the real life Wendy, this is before I ever said it.
59:07
And I didn't say it in that article.
59:11
And then they call Brian and David and they're like, yeah, we use Tony Robbins.
59:11
And I was like, guys, that was kind of crummy. Really?
59:15
The article was about supposed to be about me.
59:22
Like you could have at least mentioned.
59:22
So then the next significant thing that happened was CNBC Asia that I had been on had invited me.
59:26
Well, not only invited me, they basically begged me to come on and do a segment about hedge fund performance coaches.
59:35
Denise Shull: And it was like, please, please, please, please, please. It'll be great.
59:38
It's 11:30 on Friday night, but we know that's our Thursday night, Friday morning over there, I wake up the next morning after really like, I'd never seen a producer from a TV show, like be this specific in this, you know, please to, we won't be pursuing this anymore.
59:53
I was like, oh, and that about 20 minutes later, another producer at CNBC who I'd worked with randomly unsubscribes from my newsletter, like who does, you know, particularly a producer.
1:00:06
So I knew that, you know, not only did they go dark, but there was some, let's just say interruption of, you know, my media career such as it was.
1:00:17
Not that it was, but I knew that because it was just no other explanation for those things.
1:00:21
And then I figured we want to choose.
1:00:21
Denise Shull: And I just started saying I consulted, which was the truth.
1:00:23
And then they sent me a cease and desist letter in 2017 and said that meeting those meetings were meant to be private.
1:00:26
And you know, don't say you consulted.
1:00:30
And so I felt like I had to hire a lawyer because that's like Showtime coming after me, my little consulting firm telling me I'm doing something wrong, which I didn't think I was doing.
1:00:39
Then the entertainment lawyer looked at situation, she goes, not only, you're not doing anything wrong, you should shout it from the rooftops.
1:00:46
Denise Shull: So then back and forth and back and forth for a long, long, long time, which I think was, we're CVS and we can give the little guy the run around. Right.
1:00:55
And like, she won't be able to afford the legal fees.
1:00:55
And then, they like to say that I had to shop for lawyers and like anything that nothing could be further from the truth.
1:01:04
Like I had lots of lawyers, and someone persuaded me that I really had a copyright case.
1:01:07
Now that turns out copyright is like really incredibly difficult.
1:01:07
I've had other lawyers come to me and say, the copyright law needs to go to the Supreme court and be changed, and could they sign onto my case so that they could do that.
1:01:16
But not in that anatomy, there's a 100,000 other details.
1:01:18
But like where we are today is I just want my day in court.
1:01:24
The original case got dismissed on the idea that there's a bunch of performance coaches.
1:01:32
And there's nothing unique about me with a bunch of technicalities that my lawyers say are bad.
1:01:37
I mean, like not the way things are supposed to happen.
1:01:40
Jim O'Shaughnessy: So, so what exactly is being decided?
1:01:40
You say you want your day in court, what exactly is being decided, whether they infringed on your intellectual property, whether they infringe on your copyright, what is going to be, what is going to be adjudicated?
1:01:56
Denise Shull: Did they actually use my book and how much confusion is there in the public over whether I'm Wendy or not which is called false endorsement? Right?
1:02:05
So the standard in copyright is substantial similarity.
1:02:13
And the reason other lawyers have approached me saying copyright law is a mess.
1:02:20
And there's even, I just happened to quote a judge to somebody yesterday about copyright laws and mass and district court judges are deciding it at the pleading stage without really knowing.
1:02:32
This is what the judge said without really knowing like the substance of the material that's being copyrighted, which that's what happened in my case.
1:02:40
Denise Shull: So copyright of market mind games and this idea of false endorsement, but there's so much confusion between whether I'm Wendy or not Wendy, and have they benefited from it or not.
1:02:49
The standard, there is likelihood of confusion.
1:02:54
And it was one of my lawyers told me, he's never seen more evidence for actual confusion, which goes beyond the standard, but the original case was dismissed.
1:02:59
So we've appealed it saying, the dismissal was incorrect.
1:03:04
I deserve my day in court and oral arguments are May 20th and still we'll get it.
1:03:11
That decision on the appeal of the dismissal sometime soon.
1:03:17
It's a hell of a learning experience. Jim O'Shaughnessy: Yeah. So good for you.
1:03:24
My strategy is pretty materially different and that is, I will do almost anything to avoid having to actually go to court just because I know too many lawyers as good friends.
1:03:38
And I know that unfortunately, lady justice is not so blind and there are especially, on issues.
1:03:47
Mercifully I haven't had any things happen in my life where I need to go to court.
1:03:52
So I'm lucky knock on wood, but you know, there's just so much capriciousness to it.
1:03:57
I think in terms of just like, back to behavioral research, right.
1:03:57
About, the parole board, not paroling anyone right before lunch. Right?
1:04:08
Denise Shull: Yeah or late in the afternoon. Jim O'Shaughnessy: Why?
1:04:09
Because they're hungry or they want to go home.
1:04:12
Denise Shull: Yeah, yeah, yeah.
1:04:13
I mean, first of all, anyone who looks at every piece of evidence, like start to finish.
1:04:19
My book was open in the writer's room.
1:04:19
Like it's not possible that it wasn't.
1:04:25
When you take a real look at, what happened to me in terms of all media opportunities drying up now, I haven't sued him for anything around that because it's so impossible to do anything with, but those things really happen.
1:04:35
And chances are, I mean the producer that unsubscribed and said "la" had me on before, love you, you were fabulous.
1:04:39
Keep the ideas coming, look forward to having you back, you know, same with other fan BTAC opportunities. So something happened.
1:04:50
I think Brian Koppelman realized he, this is my theory.
1:04:50
I could be wrong, but, what I think happened is Brian Koppelman at that moment, I said, my book was fiction realized he had a copyright exposure.
1:04:59
Denise Shull: He may have known that Sorkin had already, mentioned my book.
1:05:03
But he knew he had a copyright exposure.
1:05:19
Because it turns out you have more copyright exposure with a fiction book, [Inaudible].
1:05:20
And so he wanted, he not only wanted nothing to do with me.
1:05:20
He wanted me not to exist.
1:05:21
That's my theory, and he couldn't because they actually had based the character on me and I there's a lot of evidence behind the scenes that, that's true.
1:05:22
I mean, way beyond what I talked about, and so many people recognize that, how she would work when it came to her professional work. Right.
1:05:30
Sounded like me Jim O'Shaughnessy: Interesting.
1:05:34
Well, I shall be watching from the peanut gallery, as I said, I didn't know this before today.
1:05:39
So I like learning new things.
1:05:39
I certainly don't wish you, the the difficulties of having to go through a court case. Ouch.
1:05:46
But I guess if you say you're learning a lot, then maybe that's a good thing.
1:05:50
Denise Shull: You know, as I said to someone the other day, all the worst parts behind me, all the journalists who aren't going to interview me because they want to be somewhere either where theres the financial press or the entertainment press.
1:06:03
All that's already happened. Right?
1:06:03
But I put this on Twitter and it's really true when, when the lawyer who originally filed was persuading me to file a copyright case.
1:06:12
And I was disinclined to do it at that point in time, it was the fall of 18. Yeah.
1:06:16
But they persuaded me that I should.
1:06:16
I thought to myself, I coach these people managing billions of dollars.
1:06:24
I coach these professional athletes.
1:06:24
I coach these Olympic athletes whose decisions are under the microscope and it's really hard and uncertain in what right do I have to coach them?
1:06:34
I'm going to start to cry if I back down, if I can't find my own fight, why hire me. Sorry.
1:06:40
Jim O'Shaughnessy: No you don't need be sorry at all.
1:06:44
Denise Shull: That was like the thing I thought it's sort of unethical in a way, you know what right do I have to coach somebody who's, under pressure under the spotlight, high pressure, high consequence.
1:07:01
If, when I'm faced with a high pressure, high consequence circumstance of my own, I don't actually stand up. So here we are.
1:07:07
Jim O'Shaughnessy: Interesting.
1:07:11
Jim O'Shaughnessy: Well, I can tell you it, walking the walk is certainly different than talking the talk and you know, Yung said something very profound.
1:07:16
It is, we are not what we say we will do.
1:07:24
We are, we are what we do.
1:07:24
So, that's in fact, I was talking to a person, a friend earlier today and they were talking about being calm.
1:07:30
And I said, well, it's pretty easy to be calm when things aren't, aren't going poorly.
1:07:35
Denise Shull: Right, right. Right.
1:07:38
Jim O'Shaughnessy: When the is hitting the fan everywhere and everything is going nuts.
1:07:40
That's when it's nice if you can be calm. Denise Shull: Yeah. Yeah.
1:07:47
Jim O'Shaughnessy: And, and so good luck.
1:07:48
Now you're going to have me following this.
1:07:48
I might even have a Google alert on it.
1:07:52
Just because I find it fascinating.
1:07:56
Denise Shull: I mean, can I say one more thing?
1:07:58
Jim O'Shaughnessy: Of course.
1:07:59
Denise Shull: The super power is being able to answer the question.
1:08:02
What am I feeling and why am I feeling it and get both parts right. It's easy to say.
1:08:08
Not easy to do, but that's true when you were talking about calm.
1:08:08
Like when you can go, I'm really agitated because of this and get both those sides right. Jim O'Shaughnessy: Yep.
1:08:17
Denise Shull: If they're right, you usually get calmer because you've got clarity about what's really happening, and then you can make a decision about what to do.
1:08:24
Jim O'Shaughnessy: Would you repeat that one more time?
1:08:26
Because I'm writing it down.
1:08:28
Denise Shull: So when you get both sides, right?
1:08:28
What am I feeling and why am I feeling it?
1:08:31
You get a clarity about your reality.
1:08:31
And I teach my students all the time and I apply it to, we'll say like I had one yesterday. I can't get it. I can't get it.
1:08:44
So I'm not getting any relief.
1:08:44
So I was agitated all weekend, but he's learned in other situations where he's got the answer right.
1:08:50
It calms him down because then he's like, okay, this is what I'm actually dealing with.
1:08:55
Now that I know what I'm actually dealing with, I'll make these choices.
1:08:59
But because people don't know how to ask the question, nevermind answer it.
1:09:04
They're like trying to assuage that prediction of a future feeling that they don't even know they have, and they're missing the information that the emotion is giving them, and then they're like flailing around the issue.
1:09:18
Jim O'Shaughnessy: All right, by the way, I always have a question for everyone at the end, which is kind of fun, and that is this, and this is perfect for you because this is kind of your job.
1:09:27
Were going to wave a wand and make you the empress of the universe or our little planet, third rock from the sun for a day.
1:09:32
You can't kill anybody nor can you inter anybody in a camp or reeducation camp.
1:09:44
Jim O'Shaughnessy: But what you can do is you can say something and suddenly everyone will kind of think that it was their own idea and they'll start doing it.
1:09:54
What two things would you say, if you could get everybody to say, wow, I'm going to start. I want to do that. Denise Shull: Answer.
1:10:03
What am I feeling and why, accurately. Yeah. And be kind to yourself.
1:10:08
Jim O'Shaughnessy: Oh, those are two very good ones.
1:10:08
Now I have to ask for your permission.
1:10:11
Can I take a picture of you?
1:10:11
Because I often put up pictures of people that I do interviews with. Is that okay? Denise Shull: Sure.
1:10:14
Jim O'Shaughnessy: I always ask because some people are funny.
1:10:15
Well, this has really been fun, Denise, amazing and fascinating in terms of, this whole Wendy thing.
1:10:17
Like I'm reading along and I'm reading all the research and what people have been writing or writing about you.
1:10:21
And I've, I've read, I haven't read your entire book, but I've read enough parts so that I could have a good conversation with you.
1:10:24
Kind of just kind of just like doing the last minute thing and I'm like, what's this? Denise Shull: Yeah. Yeah.
1:10:33
I had a client who I just started with a few months ago who never heard about it, and just heard about it the other day and has wanted to spend their last two sessions strategizing, strategizing with me about what I should do from a PR point of view.
1:10:48
Jim O'Shaughnessy: That's really cool. That's really cool.
1:10:52
Denise Shull: They started their session today.
1:10:53
Like I know you said Friday, you didn't want to talk about it anymore, but I just got to talk about it a little bit more.
1:10:57
I see why you need to do this, this, this, and this and this.
1:11:00
You realize you're paying me. Right.
1:11:04
Jim O'Shaughnessy: Fantastic.