Yen Liow’s Mastery: Learning How to Learn Notes

Yen Liow is the Managing Partner at Aravt Global LLC. This is from a presentation he gave to the Columbia Business School MBA program, Yen shared his core fundamentals for high performance learning as applied to investing and all walks of life. This presentation had such a profound impact on me I wanted to put together some notes to capture the key ideas. 

 

Video Link Yen Liow on Mastery: Learning How to Learn 

Checkout my deep dive on Yen – The Distillation of Yen Liow 

To be a great investor it start with a great mind or IQ with great taste. Second is a great temperament or an emotional quotient and finally a huge work ethic. 

• To be a skillful investor, there is a lifetime of skills you need to acquire. You have to learn in dog years in order to compete at a high level early in your career. If you do not train and refine your learning style, you can’t see great investments if they were literally in front of your face.

You, inc. 

• You have to think of yourself as the CEO of You, inc
• You have to be able to invest in that core intellectual property, you have to own it. And everything you do must control how fast and how effective you control that IP.
• There is no shortcut and you have to own it.
• To play this game, you have to become a highly functional, committed learning machine.
• Ea. It’s a Polynesian word for personal sovereignty. The point is, you must own your journey. You are accountable for the entire ride.

Life is Finite

• You may feel like this is going on forever, but this is very finite. You don’t have a lot of time to waste so get on with it quickly.

Pain, Discomfort & Struggle 

• Everything that you seek or want from your life, it’s just outside of your comfort zone. Otherwise, you are likely to already have it.
• Struggle will be your companion for your entire life, if your journey is based on excellence. The easy decisions will always be passed to others.
• The difference between struggle and suffering is context. Specifically, struggling with meaning, it’s just pain with meaning. Suffering is pain without meaning.
• “Being able to understand the context of your pain is extremely important. It can become motivating or destroying. Struggling is actually the neurological precursor to insight. If you are struggling, it means you are learning and you are growing. Don’t fight it. You have to learn to embrace it. The aha moment is literally, your brain struggling to a point where it’s preparing itself to rewire with insight.”
• To excel, challenges will increase. So the quote here is from Billie Jean King,  “Pressure is a privilege and it only comes to those who earn it”
• “As you ascend into higher levels of responsibility, the easy decisions should be handed to others. And henceforth, the struggle will only increase, as you become more privileged in the decisions you are empowered to make. It becomes a lot more fun when you understand that struggle is your journey, your partner in this journey, and you don’t want to be fighting it.”
  

Find Your Why

• If you find your WHY, you will always find your HOW.
• Ubuntu, is your reason for being. The bigger the WHY, the more powerful the HOW. If there is no consequence to your WHY, you will not have good solutions.
• If your WHY is extraordinarily large, you will be more creative than any problem can overwhelm.

Game Selection

• The most important question I implore you to ask is, What game will you choose?
• Where should you spend your time? Spend real time and resources working out this question. Most people follow a path because it creates momentum and it’s too difficult for them to change path. The point is, try to pick unfair fights, games that are valuable and that you can win.
• Before you start pouring your entire life force in terms of mastering an art, actually have the ability to sample enough in your career to know that’s what you want to spend your life in.

Compound Math 

• Compound math is by far the most important force in the universe. And you have to get on the right side of it as early as you possibly can. And this applies to literally everything in your life, whether it’s capital, ability, insights, contacts.

Controlled & Uncontrolled Learning Leaps 

• Learning leaps are step function increases in ability 
• Uncontrolled Leaps 
  • The uncontrolled leaps, is where you have aha moments. Your brain has a piece of insight that solves complex problems that you are literally rewiring your brain. You are different once you’ve solved that equation or you have that insight than you were before.
• Controlled Leaps 
  • Where you create environments that create that leap capability. You must compress your learning and increase the number of controlled leaps. 
  • The more time and money you invest in these step function growth opportunities is what will determine your outcomes and quality of life. 

Plateaus 

• Masters live in the learning plateaus. 
• Mastery and the whole pursuit of mastery is the journey. There is no end point. The point is, the masters don’t get bored. They recognize the plateaus are part of the journey.

Deconstruction

• Starts with knowing your goal and then breaking down the skill, and then training it very rigorously.
• Tiger woods reverse engineers every single hole. He starts from the green back to the T. Tiger deconstructs probabilities putting in the game of golf.
• The point here is, “every master I have ever studied, there is a game within the game and they deconstruct the core elements of the game, to give them advantage, and then they mold the game to their strengths.“

Deliberate practice 

• It starts with a mental model of perfect execution. If you don’t know what to practice, you can’t become great at it. No amount of effort will solve this.
• You need to know what really good looks and feels like.Break down the components into its technical components, and if you can do it very, very slowly, then you really understand it. Don’t allow speed to hide poor technique. 
• “You need to practice a lot. This means pushing it to the absolute edge of your abilities. It’s hard, but it’s really fun. 
• Deep practice is built on this paradox of struggle. You need to embrace that, struggling in a certain targeted way, is operating at the edge of your ability. It makes you smarter. 
• All growth comes at the point of resistance. This is both physical and mental. If it’s not hard, you already know how to do it. Henceforth, you will not become stronger, you will not become wiser.”

Mistakes

• Mistakes are another partner on this journey to excellence. All the greats have stumbled and you can’t get there without making lots of mistakes. 
• The way you should segment your career path is early on. If you’re not making lots of mistakes while you’re being watched over and risk managed by others, you’re not doing your job because you haven’t made the mistakes to learn from, by the time you’ve become a senior leader. You’re too fragile and you’re too early on this, so Munger, who’s about to speak this afternoon will tell you it’s like if you really want to sharpen your cognition, you need to learn from your mistakes.

 

“All of mastery comes from depth. Excellence always comes on the basis of strength.”

 

Learning From Pain

• In the long run, your most painful losses proved to be far more valuable than your wins. Our greatest insights by far have come from mistakes, not victories.
•  Josh Waitzkin’s book The Art of Learning, I would also recommend and I wholeheartedly agree with this, is in the long run, your most painful losses proved to be far more valuable than your wins. Our greatest insights by far have come from mistakes, not victories. 
• There is one wrinkle in here which is emotional versus intellectual learning. And I call that the Gandalf moment, which if mistakes for you only appear at an intellectual layer, you won’t actually learn them. It needs to go one layer deeper. Your emotions are far, far more important.

Mindset

• All of us will seek perfection, but a perfectionist mindset in an investing environment where we’re dealing with the future and we’re wrong, almost half the time, you’re going to have a real struggle. And so it’s an essential book. I think this is a masterful piece of work by Carol Dweck in her book Mindset.

Leadership

• Leadership starts with leading yourself. 
• What it comes down to is, do you know what’s important? And do you know what moves the ball forward on what’s important? And if you don’t, keep asking questions for people that do. That’s where having mentors really helps. 

Upgrade Your Operating Software 

• Learning is hyper-personalized and so in upgrading your OS, the first part of this is learning how you learn.
• Know yourself, work yourself out. This is effectively the user’s guide to you. How people teach doesn’t mean how you need to learn.
• Roger Federer doesn’t hit a forehand any differently than anyone else. He hits it perfectly and I think that’s the difference. You have a few select skills that absolutely matter.
• Each of us all have three learning modalities. Neuro linguistic programming is the broad concept here. The three learning modalities are visual, auditory, and kinesthetic. Know which works best for you.
  • Visual- Over 85% of people are visual and the brain actually works in pictures, not in linear words.
  • “I like to condense information into pictorial form. How I process is I type, I need to get very active and translate what I’m hearing, what I’m seeing, what I’m thinking into word form and pictures and then I need to talk it through with my team. That’s the way I process and output and actually own the parts that have come to me. It needs to be very active and not at all passive.”

Signal to Noise 

• Find the highest quality resources that distill down the keys.
• Must be very careful on the signals that you use to train your feedback loops. 
• You want to learn in clusters. You don’t want to learn individual signals. Individual signals are prone to tremendous amounts of noise. You want to look for clusters of patterns in the way that you’re evolving your insights.

Feedback Loops

• You can’t refine your skills without a feedback loop, and it’s not about hitting a thousand balls each day. It’s about going out there and hitting a hundred absolutely perfectly, and there needs to be an evaluative process that lets you do this. So this is not about speed. This is about purposefulness in the fastest path to mastery.
• Feedback loops require an action and an output. The more reps you can put into that, the better.
• “It’s anything that can add reps, that will accelerate your learning curve. And also the other parts of this is there are ways to break down the game within the game. It shouldn’t be all into one mega decision. There should be sub-parts of the decisions or your actions where you can tune to work out of it. So I’ll give you again a small example of this, on primary research, you can tune how you engage with primary sources and do three different formats of emails or voice scripts and see what the take rate is. That’s a feedback loop.”

Frameworks and Patterns 

• “The last part is we like to learn within frameworks, not all decisions and not all styles of investing are the same. And the last part is to break it down into constituent parts. So you’re looking for consistent patterns within elements of your investment process, elements of your thinking, it’s not just one decision.”
• The more you explore your learning, thinking and decision making the more apparent these patterns and frameworks become. 

Control of Your Schedule and Habits 

• Early in your career, you should say yes to most things, late in your career you should say no to most things. 
• I think one of the most powerful habits of great investors and great leaders in general is offensive control of their schedules. 
• You have to be in control. If you aren’t in control, you’re always reacting. Frankly, other people are dictating to you what’s important. So you’ve got to be an offense.
• Find habits that work for many other people and pull parts of it and make them your own. You have to formulate and steal or borrow things that you’d like from others that you can use for yourself.
• “For me, the optimal zone is mornings. So from 8:00 AM till 1:00 PM or 2:00 PM in the afternoon is absolutely the highest flow zone. I have to protect that at all costs.”

“Deconstructing investing, it’s effectively like saying tennis. Go play tennis. Tennis is a game made up of lots of games, right? And so deconstruction for us in investing for example, primary research is a component of our research process. Modeling is another part of our process. Risk is another part of our process. And all of these come together in order to create our research process. So in decoupling it, and this is an element of how you train, also. Primary research is an example of that. What that means for us is going and talking to primary sources. You break that down another layer. Primary sources are how do you identify people of knowledge who can help you deepen your understanding of an investment situation? The point is to keep breaking down all parts of your investment process and keep double clicking down and that’s what lets you refine it.”

Subject Matter Learning Concepts 

Questions

• It starts with the power of questions. All problem solving comes down to the quality of your question and I would argue we can gauge intelligence far more from the quality of the question than the quality of the answer.
• It comes with the quality of the question and the structure of the problem. The better the question, the stronger the answer.
• The litmus test for this is, is there a so what? If there is no so what, move on and what we mean by that is even if you had the answer in any direction, does it change the outcome? But the power of questions is absolutely essential. 
• You should study philosophy in some form for the art of asking awesome questions. 

Pareto Principle 80/20 

• 80% of the effect comes from 20% of the action. And the irony in mastery is once you’ve got that 80% focus on the remaining 20 and that takes it all the way. To even work out what that 20% of effort is to get to the 80 requires deep thought right up front in your process.

“We are dealing with a probabilistic future business. We deal with a constantly dynamic world. We have to focus on the important and the knowable. What is not knowable and not important, irrelevant. What is not important and knowable? It’s just busy work. And then the really hard part of this, is really important and not knowable and that requires inference and deduction.”

Using Your Subconscious Mind 

• To handle incredibly complex problems and learn deeply you need your entire mind and that means your subconscious mind. Your conscious mind is a very small part of the power of your brain.
• Meditation, the power of white space.  the way that the brain distills it needs to quieten and it needs to connect dots, and if your conscious mind is trying to do all the work, the subconscious can’t. The subconscious works when you quiet your mind. Meditation is really important.
• There is a pattern to the aha moment. It’s why you have these breakthrough moments on holiday or in the shower. 
• Exercise is not optional. In order to be a peak performer, your body needs to be fueled in an incredible way. The journey for excellence is exhausting.
• You need a huge amount of exercise because you need a big tank. It also obviously makes you more resilient to stress, but it also creates white space that lets your mind and your body absorb all this crazy information that you filled it with.

“The way we do this is how do you find there certain zones in your day where your conscious mind is not fully fired up yet and you can use the power of your unconscious mind. The way that I’ve found it most powerful is you need to focus overnight on one to maximum three questions. Commit them into a journal, literally write them down for that last half hour before you go to bed. When you get up, before you check your email, before you flood yourself with all of the useless stuff that comes in, in the morning, journal like crazy on what the answer to those questions are, don’t question it. Just go, go for half an hour, go for as long as you can. It doesn’t even matter, get in the practice of this, try it for five days. I can tell you the stuff that comes in there, if you don’t question it and you flow it and you keep letting it through, you will see deep patterns of problem solving that are truly extraordinary and when you’re under more stress, it’s even more powerful.”

• Put questions into your mind before going to bed. As soon as you get up, start powering away at either writing it. Some people have to hand write it, some people like to type it, just get all of this genius on to paper, don’t even question it, and then get on with your day.

Understand your why. If you understand your why, you find your how

• You have to have the strength and you have to invest in knowing yourself.
• The same job, the same role for two different people is misery or bliss. So deeply investing in going introspective is really, really important.
• “I think, knowing yourself is probably the first and most important part of investing or any career.“

Practice and Skill Refinement 

• Where is your 10 X and what that means is if you double the inputs that you can 10 times your outputs? 
• This changes through your career and you need to constantly be asking this question because you have to reorient your resources, which is time, energy and financial resources.
• What resources do you need to accomplish these goals? If you’re an intellectual property asset, you need to be investing real time and real money and real effort as early as you possibly can in your career. The exponential growth chart tells you for anybody even vaguely mathematical the more you are upfront in your efforts the faster that curve goes up. So you need to spend real time and real money on this.
  • “I had the great fortune of spending some time with Eddie Lampert in 2005 and 2006 at two retreats at Ziff Brothers Investments and I asked Eddie, how did you manage to be such an accomplished investor? He compounded at 30% for 20 years and he did it early in his career and he said to me, he spent 50% of his time training five zero for 10 years studying the best investments in history. We spent the next 10 years after that doing the exact same thing to about 20-25% of our time. Are you being passive or active in acquiring these skills? Nothing worthy of life comes easily.”
• What is the plan for developing yourself? Can you articulate your immediate and intermediate and long term goals?

Flow State 

• Also known as being in the zone. It’s the mental state in which a person performing some activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process of the activity.
• The sweet spot where optimal learning takes off. 
• The question is can you recreate it regularly (at will), this is what lets you tap into your creative genius. There is a pattern and again it’s within your control.
• It only lasts three hours a day max. Your brain doesn’t have enough brain sugar to do any more than this. The fortunate part is it’s all you need.
• Needs to stress your capabilities. 
• To perform at the highest levels in anything you do requires an element of stress, but the question is how much of it and can you balance it? If it’s too little and you’re well within your zone, nothing happens. You’re performing below your capability. If it’s well beyond it, you can’t handle it and eventually you’ll break. It’s finding that balance and that toggle and again, you and your organization needs to learn how to control it.
• Flow state  sits just outside of your existing capability. That’s why certain types of puzzles and games are so enthralling. Video game programmers are masterful at layering this because it’s incredibly fun when it’s just a little bit too hard, but if it’s too easy, it’s boring and if it’s way too hard, you get super anxious. There is a fine line in there and that is the flow state and my God, dose Dopamine flow when that happens.

Decision Making 

• If you want to understand how people think and act, you need to understand their mental model of the world. Absolutely critical.
• Frameworks are a critical part or refining great judgment on literally anything. Good judgment is a function of mental models or frameworks. 
• It’s iterative within a finite set of variables. You iterate towards refined judgment, but you need to develop and refine these frameworks constantly.
• 80% of decisions are generic, so use your energy resources on the most important stuff.
• Your brain is a finite amount of resources. Frameworks remove the things that are decisions that are effectively already made and as leaders you shouldn’t be making those decisions. It saves a tremendous amount of time and energy that lets you use that energy on critical factors.
• If you want to become something special quickly in your life, you need to put yourself in a position to be accountable for your decisions as early as possible. To learn rapidly, you have to own your outcomes. Everybody I’ve ever studied that’s been incredibly successful in their life, this is absolutely true. You will eventually become the product of your decisions.

Mental Models 

• Use it to see opportunity and act with more conviction quickly. This is how rapid acceleration of knowledge takes place. We do it for styles of investing. We do it for decision making. We do it for the research process. We do it for hiring, we do it from meeting structures. The whole point of it is excellence requires constant refinement of a process that can be scaled and judgment is a process. The variables constantly change, but you need to probabilistically be able to develop the mental models in order to make and refine great judgment.
• Look for disconfirming evidence. Write up your thinking and don’t look for things to confirm your thinking, look for things to disconfirm. 

Upgrading your Operating Software 

• Active speed and critical reading. It takes eight hours to upgrade your life forever. If you read between three, four or five times faster than your peers, this is a game of information, advantage, and knowledge.
• Upgrading your memory comes in two forms.
  • The first is, to connect dots you need to create dots, and that is mind maps- Your mind isn’t linear, it’s contextual and it loves pictures. The mind learns with connecting pictures. It doesn’t deal well with the abstract. So go onto Google, it’ll take you 20 minutes to understand mind maps.
• Contrast and Comparative Learning and to teach you a little bit about the physics of how your eyes actually work.
• Deconstruction– To break down a complex problem, to solve a complex problem, requires you to break it. You need to break it down and then reassemble it. Dummy down a complex problem into simple blocks
• Associative learning– Abstract learning is incredibly difficult. What that means is the first time you learn a language, your brain has no framework to base that learning from.We learn a lot faster when it’s linked to prior experiences or knowledge. This is the lattice work of your brain. We learn in links and analogies
  • The human body is designed, if you have patterns of recognition or patterns that get constantly used, it goes super fast. If it needs to be wired for the first time, it’s super slow.
  • “To take some sporting analogies, it’s a lot easier to learn golf when you know how to play tennis, than it is when you do it for the first time. There’s elements to balance, coordination, and stroke motion. If you learn a language for the first time, it’s extraordinarily painful because to the brain, it’s completely abstract. The second time it’s easier. Third, it’s better. The fourth time’s incredibly fast because there is a structure to the way that you break down the problem.”

Mastery of your emotions is far more important than the technical skills

• “You will fail more in this business in the first year than your entire life to date. It will be miserable. If you don’t know how to overcome that, you probably shouldn’t come.”
• “You’ve got to know who you are, and investing is, in many ways, a spiritual game and I don’t mean that by hiding under your desk and praying to God when you have a crisis like what we’re facing. It’s a deep test of conviction under certain periods of time and it will find dark places in your analysis that no other way can do it. Stress reveals, and so you find an investment style that matches your skills, your talent, and your temperament.“

Mentors and Peers

• This is a critical success factor in every successful person I’ve ever studied. Mentors will help you navigate the path. They’ll open your eyes, they’ll open doors, they’ll help you avoid landmines. Peers, they’ll elevate your standards and help you redefine the possible.
  • You have to earn the right to become a mentee. “That means being a good person and paying it forward. It’s a very unusual relationship mentor, mentee. It’s the only relationship that isn’t truly bi-directional. We’re aligned in the same direction. What that means is a mentor wants a mentee just to pay it forward, amplify their good will into this world.”
  • Act on the advice given. There’s nothing harder for a mentor who is already short of time than to keep repeating themselves with a mentee. Then invest in long term relationships.

 

“Finally, here’s my wish for you. You find your why, you work out your how. You choose a game wisely that you find fulfilling. Don’t just choose success, seek fulfillment. Learn to lead yourself and then others. Surround yourself with peers you admire and respect. Acquire mentors who show you the path or assist you, and then learn like crazy, work like crazy, and win like crazy. I hope you embrace and enjoy the struggle that is the journey of excellence.“