15 November 2017

Book review: The Pressure Principle

This month we read something slightly out of the norm, a book that you wouldn’t initially associate with the investment process – The Pressure Principle by Dr Dave Alred MBE.

Dave began his career as a teacher, something he says led him directly to coaching a wide array of different sports. Countless household names including Luke Donald, Jonny Wilkinson, the Lions Rugby Team and the England Cricket Team have been disciples of his.

The concept of the book is not to regurgitate nonsensical slogans such as “be the ball”, more to be constructive and ordered in your approach to any circumstance, dealing with situations at face value and thinking clearly when it’s easy to cloud your judgement. Dave has a tendency of continually highlighting bad habits that we are all guilty of from time to time.

“It’s not a case of getting rid of the butterflies, it’s a question of getting them to fly in formation” otherwise known as coping with anxiety. Dave sets out two different forms of anxiety in the first chapter, trait – being the level felt in day to day environments, and state – which is event specific, this disappears as quickly as it builds. The effects anxiety have on you before an event can directly impact your performance.

To train the butterflies there are a few techniques we can employ, one of which I know best as a pre-shot routine, essentially repeating a process designed to lead to a desired outcome. This directly ties into both the sporting world and making investment decisions. If I were to pitch you a stock, I would feel much more comfortable with my decision if I had checked-off criteria that I had predetermined a good company should meet. Thereby ensuring I have been unbiased and rational in my thinking and as a result, less anxious about the outcome.

One of the main talking points in our book club meeting was around a technique that Dave mentions regularly in his book, underpinning every chapter, the use of language. Reframing questions or situations in a more effective manner can prompt a more positive response, changing your reference rather than the facts. Dave illustrates how this can help turn anxiety into excitement and then channel that excitement into a better performance. It is at this point I begin to lean back towards golf as an example, for that I can only apologise. At training sessions we would often practise talking in front of groups of people as if we were in a press conference. When watching any of the Americans ever being interviewed, we would look out for how they manipulate language. They have been trained from a young age to become experts in reframing situations to reflect well on themselves and in the same breath, managing to brush aside any negative comments. This effective tool is key if you wish to remain in control of your state of mind.

Throughout the book, Dave talks in great detail about dozens of techniques to handle pressure, often chapters are dedicated to one principle which he then explains with several examples using a variety of sports. The one grievance that I have with this book is that in parts it becomes a little repetitive.

For anyone that doesn’t enjoy a pressured environment I would recommend reading this book, even if it’s public speaking, awkward family encounters or sports competitions. Don’t get me wrong, it’s unlikely you will break out of your cocoon as Jonny Wilkinson. However, you might look forward to a situation that you previously dreaded with newfound optimism.

The JM Finn book club, consisting of a dozen or so investment professionals across the firm, was conceived in 2017 with the hope being that, month by month, some of the wisdom of investing gurus such as Warren Buffet, Charlie Munger, and Mohnish Pabrai, might rub off on their eager selves.

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