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The Metagame: How Bill Belichick and Warren Buffett Play a Different Game

The metagame is playing a different game than your competitors. A game they can't play.

The metagame is a strategy that involves understanding the structural or unconscious reasons that things are the way they are. This is the strategy that Warren Buffett and Bill Belichick use to create an advantage. It's what smart managers like Ken Iverson do to get the best out of people.

There is an interesting section in an obscure poker book called The Raiser's Edge that explains the concept of a metagame:

The metagame is this psychological game that exists among players, involving adjustments – adjustments based on how an opponent is likely to interpret a given set of actions. Better players adjust their strategies and styles to those of particular opponents, always analyzing how the opponents are playing in terms of how the opponents believe they're playing.

Maintaining a well-balanced strategy, while deciphering your opponents' strategies, is the key to the metagame. If you comprehend the concept of the metagame, accurately perceive the flow of your table and then tournament, and stay alerted to and aware of current strategy trends, you'll be able to successfully mix up your play when considering your image and that of your opponents. In return, your game will be high unpredictable and difficult to read, which should be your ultimate goal.

Warren Buffett and Bill Belichick both use the metagame to create an advantage that others have a hard time matching.

Let's look at Buffett first.

Buffett is widely considered to be the best investor in the world. The company he controls, Berkshire Hathaway, often purchases companies that are public and makes them (effectively) private. For better or worse, public companies have certain environmental constraints. There are numbers to meet (or manage, depending on how you look at it). Expectations to meet. Shareholders who want different things.

The environmental impact of being public often nudges companies toward a path away from their best long-term interest. The timelines of CEOs and shareholders are often not the same.

For example, even if the investment made long-term sense, established companies would have a hard time increasing investment in research and development without an immediate impact (as this reduces earnings.) They'd also have a hard time building inventory (as this increases the amount of the capital required to operate the business).

This divide creates an interesting scenario where public companies can be at a long-term disadvantage to private companies. Private companies can do things that public companies can't do because of the perceived (or real) environmental norms.

This is where Buffett comes in. He can encourage the CEO of the companies he acquires to take another path. They can take a longer-term view. They can make investments without penalty that won't pay off for years. They can increase inventory. They can run the company without the worry of meeting quarterly expectations. Because they can take advantage of the environmental factors that public companies are under, private companies can't easily be copied in this sense.

This isn't limited to finance and investments. It relates to everything. Bill Belichick, perhaps the best coach in NFL history, uses the same strategy. He plays a different game.

Here's an example. Last year Belichick traded away one of the team's most gifted athletes (Jamie Collins) in the first part of the season. While Belichick never came out publicly to say the reasons Collins was traded, he effectively traded one of the teams best players for nothing. Very few coaches would have traded away a star for nothing. Belichick, was playing a version of metagame. He was able to do something that was for the good of the team that would be controversial in the media. A strategy that almost no other coach could get away with.

Now you can argue that Buffett and Belichick can do things no other person can. You can argue these are Hall-Of-Famers they get more leeway. But interestingly, that's the point. Part of their greatness comes from identifying the constraints of others and capitalizing on those structural disadvantages.

In any system where there are norms, there are strengths and weaknesses to those norms. If you follow the norms of the system, the results you get are likely to be the norm. When you play a different game, a metagame, you have the opportunity to outperform.

The Power of Your Subconscious Mind

We think that we're in control. We believe that our conscious mind directs our thoughts and somehow controls our subconscious mind. We're wrong.

In Richard Restak's The Brain Has a Mind of Its Own:

At the moment of decision we all feel we are acting freely, selecting at will from an infinity of choices. Yet research suggests this sense of freedom may be merely an illusory by-product of the way the human brain operates.

Restak gives the example of reading this essay. You scan the title and a few sentences here and there and eventually make a decision to stop reading or read on. You might then go back to the beginning and start reading, or you might start reading wherever it was in the article when you decided to stop skimming.

“The internal sequence,” Restak writes, “was always thought to be: 1. you make a conscious decision to read; 2. that decision triggers your brain into action; 3. your brain then signals the hands to stop turning pages, focuses the eyes on the paragraph, and so on.”

But this isn't what happens at all. “An inexplicable but plainly measurable burst of activity occurs in your brain prior to your conscious desire to act.”

The subconscious mind controls a lot of what we think and the connections we make. And, of course, our thoughts influence what we do.

In The Thinker's Toolkit, Morgan Jones recalls the story found in David Kahn's The Codebreakers.

Breaking codes in World War II was perhaps the largest big data project ever to happen in the world up until that point. The conscious mind could only do so much. One German cryptanalyst recalled, “You must concentrate almost in a nervous trace when working on a code. It is not often done by conscious effort. The solution often seems to crop up from the subconscious.”

Believing that the conscious mind calls the shots prevents us from understanding ourselves, others, and how to make better decisions to name but a few things.

In Plain Talk, Ken Iverson offers some insight on how to turn these thoughts into practical utility.

“Every manager,” he writes “should be something of a psychologist—what makes people tick, what they want, what they need. And much of what people want and need resides in the subconscious. The job of a manager is to help the people accomplish extraordinary things. And that means shaping a work environment that stimulates people to explore their own potential.”

We place too much emphasis on the conscious mind and not enough on the subconscious one.

Unless you manage your environment, it will manage you. The old question ‘would you rather be the poorest in a wealthy neighborhood or the richest in a poor neighborhood?' is based on how the environment controls our subconscious and our subconscious controls our happiness.

Rich Thinking Versus Poor Thinking

“Thought is the original source of all wealth, all success, all material gain,
all great discoveries and inventions, and of all achievement.”
—Claude M. Bristol

***

One of the most controversial chapters in Brian Tracy’s book, Get Smart!, is “Rich Thinking versus Poor Thinking.”

In that chapter, he shares a series of simple ideas you can learn and apply. While I fundamentally disagree with much of the gross over-simplification, there are veins of excellence that we can use to add to our mental toolkit.

(Pause for a second before we continue. Just to be clear, this isn’t an article about going from zero to a million in a lifetime. No clickbait here. No, this article is about giving you tools you can add to your mental toolbox.)

The Role of Mindset

Best-selling author Og Mandino says:

There are no secrets of success. There are simply timeless truths and universal principles that have been discovered and rediscovered throughout human history. All you have to do is to learn and practice them to enjoy all the success that you could desire.

Sounds a lot like what we’re trying to discover.

Fearing Failure

A lot of us do things not to succeed but to avoid failure. This is what Elon Musk calls the fundamental problem with regulators. Tracy writes:

Because of destructive criticism in early childhood and mistakes they have made as adults, they are paralyzed by the fear of making a mistake, of losing their time or money. Even if they are presented with an opportunity, they go into a form of paralysis.

Their fear of failure causes them to create all kinds of reasons not to take action. They don’t have the time. They can’t make the minimum investment. They don’t have the necessary knowledge and skills. Like a deer caught in the headlights, they are paralyzed by the idea of failure, which causes them to never take any action at all.

As it happens, most fortunes in America were started by the sale of personal services. The people had no money, but they had the ability to work hard, to upgrade their skills, and to become more and more valuable. As a result, more and more doors of opportunity opened up for them.

Fearing Disapproval and Criticism

This relates to our fear of criticism and disapproval, which results in approval-seeking behavior. And when we’re seeking approval and acceptance, we’re more likely to think conventionally. And when we think conventionally, we're unlikely to get above-average results.

We don’t want to look different. As a result, we stop learning and growing.

***

“I will study and prepare myself and someday my chance will come.”
— Abraham Lincoln

Tracy writes:

To achieve something you’ve never achieved before, you must learn and practice something that you’ve never done before.

If you’re learning something universal you’ll always have an opportunity to practice what you learn.

Putting all of this together becomes tricky.

Often we have the courage to think and act differently, we mentally prepare ourselves for the critical feedback and then we dip our toe in the water only to find it’s not to our liking.

This is where persistence comes in.

Most of us are simply unwilling to sacrifice in order to succeed. We want our cake and we want to eat it too. Most of the people I know that are incredibly successful have suffered some setback that they had to overcome. A lot of people would have given up. Only they persisted. (Of course, there are plenty of people that persist and fail too.) I’m generalizing a bit here but the people who look for the nearest exit when things get tough are usually the ones with the average results.

Something-For-Something

There is only one type of relationship that is sustainable over a long period of time and that's one where everyone wins. Tracy writes:

Rich people are always looking for ways to create value, to develop and produce products and services that enrich and enhance the lives and work of other people.

They are always willing to put in before they take out. They do not believe in easy money or something for nothing. Rich people believe that you have to justly earn and pay for, in terms of toil and treasure, any rewards and riches that you desire.

Poor people lack this fundamental understanding, the direct relationship between what you put in and what you get out. They are always seeking to get something for nothing or for as little as possible. They want success without achievement, riches without labor, money without effort, and fame without talent.

Poor people gamble, buy lottery tickets, come to work at the last possible moment, waste time while they are there, and then leave work at the first possible minute. They line up by the hundreds and thousands to audition for programs like American Idol, thinking that they can become rich and famous without ever having paid the price necessary to develop the level of talent and ability that enables them to rise above their competitors.

One of the great secrets of becoming wealthy is to always do more than you are paid for. If you do, you will always be paid more than you’re getting today. And there is no other way.

Go the extra mile. Be willing to put in far more than you are taking out. There are never any traffic jams on the extra mile.

Fear can often keep us mediocre. We don’t risk being wrong.

Getting rich isn't as simple as changing your mindset. However changing your mindset can go a long way to changing the way you see the world. And when you see the world differently you can behave and respond differently to the stimuli around you. When you do that, you have the potential to outperform.

Focusing is an Art, Not a Science

Productivity is all the rage. People want to get more done in less time. Productivity systems abound: Getting Things Done, Pomodoro, the Seinfeld thing, etc. There’s certainly something to be said for each of them.

But have you thought about something a little simpler and more basic: How to focus? Like, really how to focus your mind on one hard, long project until it’s done?

Productivity systems are great in that they keep you accountable for getting lots of task-oriented work completed. But they don’t answer the larger question, which is: What do you do that creates value in your career? And more than that, what are you doing that’s going to have a cumulative effect, that’s really going to matter years down the road?

I see these two concepts as intertwined and incredibly important, and ignored by overly task-oriented productivity methods.

The first is figuring out where you’re going to create a massive amount of value in your career, The second is figuring out how you’re going to carve out the time and energy to focus deeply on the first.

The thing is, that type of work — whether it’s building a new product, writing a book, learning a hard subject, building a keynote speech, writing a complicated piece of software, whatever — doesn’t happen by saying “I’ll get to it”, and then allocating 15 minutes here or there in between checking your email and going to meetings.

It happens by stringing together sessions of deep, focused effort. Hours at a time, over and over. The intense kind where you sort of lose yourself and wake up later with a lot of awesome work done.

Learning how to do that kind of work, I think, is something of an art.

I say “art” for a reason. I see a lot of people out there promoting their “science-based” system for getting a lot done. Let me tell you something: The word science is being used to fool you and trick you. To make you salivate, Pavlov-style. “Science” is not some monolith that tells you how to create really meaningful work. There’s no “science” of success. There’s no “science” of productivity. That’s pure charlatanism.

Doing great work is an art. A group of researchers can’t answer the complex question of how to live and work correctly; the real world is too varied. We don’t live in a controlled experiment and we’re not lab rats, or worse, college students in psych labs.

Some scientific research papers can certainly give you hints on how the mind works, sure. They might even tell you a few things about information retention and task-based memory. I can see how that might be useful.

But that’s a long way away from creating a career you care about, where you regularly do focused, meaningful work that feels satisfying. Your life is not the one measured in the labs: You’re not trying to memorize flashcards or strings of numbers; what I’m talking about cannot be boiled down to rigorous science. (And anyone who reads Farnam Street knows the deep respect I have for real science.)

No — it’s art! Or more properly, artisanship. And the essence of being an artisan is that it’s deeply personal: It has to speak to you. You must be willing to put your soul into the game. This means everyone will go about the Art of Focus in their own way. It takes experimentation, dedication, and an understanding that no one can do it for you.

I even called a course I put together The Art of Focus, for this very reason. I don’t claim to have all the answers, or to “scientifically” solve your problems or fix your brain, like you’re a mouse in a lab. I just wanted to give people all of the tips and tricks I knew about doing focused, meaningful work, so they could build a system themselves.

Because the truth of the matter is that, however you go about it, you do need to build your capacity for hard, focused work. That is vital in an age of complexity, where we need to carve out a niche. Most of us aren’t making widgets anymore, and much of that work is being replaced by machines anyways.

And if you’ll let me be controversial for a second, I think that’s a good thing for humanity. Humans aren’t meant to live on a factory assembly line (or the white-collar equivalent – spreadsheets and Powerpoint). We’re meant to lose ourselves in valuable and satisfying work that smacks of originality and humanity.

I know a lot of finance people who want to switch into some related craftsmanship, or writing, or software-building, but not the other way around. Do you know any woodworkers who want to switch into finance? Do you know any writers who want to switch into corporate accounting? Me neither.

But in order to build an awesome career doing hard but satisfying long-term work, you need to build your ability to focus for hours at a time. You need to learn hard skills. You need to let go of multitasking, distraction, and the temptation to be “busy.”

I built the Art of Focus to get people started on that path, but I recommend doing it any way you feel comfortable. With apologies to Phil Knight, just do it.

Friedrich Nietzsche on Making Something Worthwhile of Ourselves

Friedrich Nietzsche (1844-1900) explored many subjects, perhaps the most important was himself.

A member of our learning community directed me to the passage below, written by Richard Schacht in the introduction to Nietzsche: Human, All Too Human: A Book for Free Spirits.

​If we are to make something worthwhile of ourselves, we have to take a good hard look at ourselves. And this, for Nietzsche, means many things. It means looking at ourselves in the light of everything we can learn about the world and ourselves from the natural sciences — most emphatically including evolutionary biology, physiology and even medical science. It also means looking at ourselves in the light of everything we can learn about human life from history, from the social sciences, from the study of arts, religions, literatures, mores and other features of various cultures. It further means attending to human conduct on different levels of human interaction, to the relation between what people say and seem to think about themselves and what they do, to their reactions in different sorts of situations, and to everything about them that affords clues to what makes them tick. All of this, and more, is what Nietzsche is up to in Human, All Too Human. He is at once developing and employing the various perspectival techniques that seem to him to be relevant to the understanding of what we have come to be and what we have it in us to become. This involves gathering materials for a reinterpretation and reassessment of human life, making tentative efforts along those lines and then trying them out on other human phenomena both to put them to the test and to see what further light can be shed by doing so.

Nietzsche realized that mental models were the key to not only understanding the world but understanding ourselves. Understanding how the world works is the key making more effective decisions and gaining insights. However, its through the journey of discovery of these ideas, that we learn about ourselves. Most of us want to skip the work, so we skim the surface of not only knowledge but ourselves.

Seneca on The Shortness of Time

“A man who dares to waste an hour of time
has not discovered the value of his life.”

—Charles Darwin

***

If we see someone throwing money away, we call that person crazy. This bothers us, in part, because money has value. Wasting it seems nuts. And yet we see others—and ourselves—throw away something far more valuable everyday: Time.

Unlike the predictable reaction we have to someone throwing away money (they're crazy), we fail to think of the person who wastes time as crazy. And yet time is a truly finite, expendable resource: The amount we get is uncertain, but surely limited. It's even more insane to waste than money — we can't make any more when it runs out!

The Roman philosopher Seneca said it well in a letter to Paulinus:

It is not that we have a short space of time, but that we waste much of it. Life is long enough, and it has been given in sufficiently generous measure to allow the accomplishment of the very greatest things if the whole of it is well invested. But when it is squandered in luxury and carelessness, when it is devoted to no good end, forced at last by the ultimate necessity we perceive that it has passed away before we were aware that it was passing. So it is—the life we receive is not short, but we make it so, nor do we have any lack of it, but are wasteful of it.

[…]

I cannot doubt the truth of that utterance which the greatest of poets delivered with all the seeming of an oracle: “The part of life we really live is small.” For all the rest of existence is not life, but merely time. Vices beset us and surround us on every side, and they do not permit us to rise anew and lift up our eyes for the discernment of truth, but they keep us down when once they have overwhelmed us and we are chained to lust. Their victims are never allowed to return to their true selves; if ever they chance to find some release, like the waters of the deep sea which continue to heave even after the storm is past, they are tossed about and no rest from their lusts abides.

In life and business, the people we admire are often the ones who have firm control over their time. Rarely are they wasting a moment, and if they find themselves wasting it, they adjust quickly.

Time is one of the most under appreciated models that we all encounter, and yet it's the most ubiquitous. When employed correctly, wise use of time becomes an amplifier of our life satisfaction. When spent without consideration, it becomes a persistent source of regret.

Here are four examples of how we misunderstand time.

First, take productivity. We actually don't want to be more productive. What we really want is more time. And yet because we don't properly value time, we never end up with more; even when we find ways to work more efficiently, we don't actually use it wisely. We simply layer in more work.

Second, consider investing in learning. The upfront costs are real and visible and, like any investment, the future payoff is uncertain. So we tend to skim the surface, thinking this will “save us time” versus doing the real work. Yet this surface approach leads to zero improvement in our actual decision-making. In fact, it may harm us if we think we've learned something for real. Thus, surface learning is a true waste of time. It's just that the link to our bad learning is unclear, so we rarely identify the root cause.

Third, let's look at relationships. We're often too “busy” to spend time with the ones we care about. The very parent at the park playing on his iPhone while his children run around playing and laughing is the same one, who, when you fast-forward the axis of time, wants those precious moments back. Likewise, the “busy” 30-something who can't make time to see their parents wishes to have them back after they're gone. They wish for more time with them.

Finally, we have meetings. Meetings are part of how many of us earn a living. Often, however, they're poorly organized and poorly run. Lacking an agenda or decision, they become nothing more than half-meeting half-gossip session. A giant waste of time.

Time is invisible, so it's easy to spend. It's only near the end of our life that most of us will realize the value of time. Make sure you're not too busy to pay attention to life.

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