Life isn’t Linear: What Dieters and Stockbrokers have in Common

by Tan Yew Wei on February 4, 2010

A linear relationship means that if you put in 3 units of effort and get say 2 units of reward, adding another 3 units of effort should yield you another 2 units of reward.

Life isn’t like that of course. More often than not, the progress of any condition comes in spurts and stops.

Let’s illustrate this simply by some popular cases in the health and fitness realm: Weight gain and loss. We can then see what this has got to do with stockbrokers. Let’s start with weight loss.

As noted in the whoosh effect, weight loss is seldom linear. Especially for ladies, progress may go something like:

Week 1: Loss one pound (hooray!)
Week 2: Loss another pound (*celebrations*)
Week 3: Nothing (!)
Week 4: Nothing (!!)
Week 5: Gained back one pound (!!!!!)
Week 6: Loss 4 pounds (WTF!? But hooray!)

Then proceed to repeat the same cycle of worry the next time you diet, failing to learn anything from the experience.

In this case, progress happens weekly over measurable intervals, and yet it manages to cause people so much grief. I’d blame it on short-term mindedness.

What I mean is best illustrated by a second example, where I take off on a tangent and talk about stocks. Consider a 20% gain from the baseline price, the price that you paid for the stock, after 1 year. It would look something like this:
Stock

This definitely isn’t very accurate (and maybe not over a year), but the trend line is pretty much close to what you see in reality. The key feature is: that a 20% annual gain in real value is accompanied by thousands and thousands of randomised fluctuations.

You can see why the dieter has it much easier. He/she is only measuring progress once a week. The stockbroker on the other hand can literally see progress second by second. Imagine the impact on heart health!

Yet, I repeat, that this causes the dieter much distress. Just like the stockbroker who is losing his/her own money, the dieter ties ownership to fat loss (in a funny reversed way). Just like the stockbroker who can brag, even if it to themselves, about the money he/she made, the dieter can brag about the weight he/she lost.

A measurable quantity buys us the most important reward of all: Peace of Mind.
Foreinger to my Mind

Muscle Gain

I think the case of muscle gain mimics stock price fluctuations a little more. It also clarifies my point about peace of mind, mainly because muscle gain isn’t easily measurable (at least not directly). Let us also assume that the muscle gain reflects real life, natural, rates-of-gain.

For sake of argument, let’s say a beginner trainee can gain 20 lbs of muscle in a year. Divide that by 52 weeks, and you get somewhere close to 0.4 lbs a week.

Now try to imagine a 0.4 lbs gain in a week. I’d bet that you can’t. By simply drinking 200 mL of water, you’d already have gained 0.4 lbs of weight. Trying to measure 0.4 lbs of muscle gained in a week is going to be incredibly hard.

On top of that, we have to realise that not all weight gain will be muscle. In fact, one would usually expect a gain ratio of 1:1 – every unit of lean tissue gained yields also a unit of fat. Note that I said lean tissue, and not muscle.

You can think of fat gain as the positive price fluctuations in stock price (especially that high peak in the graph) in as far as that they cloud your vision. They introduce “imaginary gains” which make you feel good for a while, and then set you up for disappointment later.

To top that off, we were talking about a beginner trainee who could gain 20 lbs of muscle in a year. Even an intermediate trainee will probably only be able to gain 10 lbs of muscle in a year. That’s less than 0.2 lbs a week.

Lessons to be Learnt:

  • Only measure at select time intervals. Every 8 weeks for body composition changes.
  • Do not judge progress from actual weight gained. Use a different metric, with the two best ones being strength gain and the mirror (literally how you look naked)
  • Stick to your plan, and nothing else, between set measurement intervals.

These are straightforward recommendatinos. But like I said earlier, dieters and stockbrokers alike fail to learn from their past experience. I think this is because the experience was spread over an extended period of time with objective change being very small, but with the emotional change being very large. But more importantly, expectations were not set correctly.

I think that 2 different types of people prosper in both realms. The first is the type who is patient enough to wait for the long term gain, and the second is the type who isn’t patient enough, but has the sheer conscious stubbornness to sprint for a long enough stretch to see tangible results.

In the case of the second type of person, a successful dieter of the sort would commit 100% to the plan for a specific time frame of 6 weeks, and then assess. Very often, there would have been tangible progress.

If there was no progress, then one can plan for the next 6 week cycle and then charge once again. I find that these blocks of effort become much easier to tackle, even if they are in succession.

Dieters are already lucky compared to stockbrokers. The former only has a 6 week sprint, while the latter has to stick to their plan for at least a year to see tangible results (This likely explains the number of people who fail in the stock market). So celebrate that you already have it much easier as a dieter, and get on with your plan.

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