When I was trading trainee we used to play a put/call parity game to sharpen our mental arithmetic.
I used to get perfect accuracy in the 30-40 second range at my best. My friend Tina was the firm champ at about 18 seconds. Just over 1 second per question.
Being fast was a job requirement, but you knew who the aliens were. It’s often hard to appreciate just how steep the performance curve is at the right tail of any skill in a competitive domain. We tend to get a glimpse of it in sports where everyone knows someone who was extreme (a friend of mine who was top 50 soccer player in US college soccer, another friend whose sister is bottom half of the top 100 tennis players on the women’s tour) but readily concedes there is still a world of difference between them and anyone famous in the field.
The trading floor was a humbling place because it’s very obvious that not all synapses are created equal. The strategic inferences and therefore actions you make with this information is heavily modulated by how much self-awareness you have. Sometimes being overconfident comes from never being exposed to the right-tail (your local big fish in a small pond) but it also comes from not realizing how far apart 2 standard devs is from 3 standard devs is in probability space.
[I tried to teach my older kid this idea recently in the context of his math MAP score. He is 99.5 percentile for 7th grade fall testing. He has a friend that is 99.8. Sounds similar. But my kid’s score is 5 in 1000 or 1 in 200. His friend is 1 in 500. In the population of Bay Area burbs with a good public school ranking, my kid is more like 1 in 40 and doesn’t make the gifted and talented cut, but those extra .3 percentiles keep you in the 99th percentile of the local pool.
99.8 vs 99.5 is 2.5x more rare. Proportionally those .3 percentile points are as wide as being in the 50th percentile, or 1 in 2, vs the 80th or 1/5. That range covers 30 percentile points!
The extreme is yet steeper.
99.9 percentile is half as common as the 99.8…almost a similar jump in rarity from my son to his friend for just .1 percentile points.
💡See Tails Explained to see more application to everyday reasoning]
If you do Tina’s morning routine, you’re not gonna be Tina. It’s more obvious when the Tina’s of the world look like Lebron. But don’t be fooled when they don’t. Figure out the games you can win. Playing to your strengths is wisdom but first you must identify them. Self-awareness means stop wishcasting, see reality, and adapt to it.