Sometimes you need to swallow a seal’s eyeball

Most professional chefs believe that the best fried chicken isn’t found in some shack on a dirt road in Louisiana  but at the 3,000 Popeyes locations all around the world. Don’t take my word for it. There is a whole Vice article on this topic and the main reason for such fandom from some of the best culinary talents of the world is that Popeyes has absolutely perfected the whole fried chicken process - from the seasoning, to the crust, to the softness of the poultry  meat. There are actually some technical reasons for how they are able to achieve this which I won’t bore you with, but the truly interesting question is why does the idea of a perfectly cooked, consistently good tasting fried chicken hold such appeal for us all?

Scientists surmise that this need for the familiar  is deeply embedded in us as part of evolutionary biology. In the prehistoric era the need to have confidence in the safety of your food was more than just a matter of taste, it was the very key to survival.

The whole fast food industry relies on this instinct. There is an amazing scene in the Founder where Micheal Keaton playing Ray Kroc goes off on a soliloquy about how McDonalds will be become the “church” in every town square, effectively uniting the polyglot, multi enthnic American society with one common menu that would always taste good and be safe to eat. This is why when Americans are in Tbilisi or Timbuktu they are always relieved to find the Golden Arches as our beacon of safety and security. It is the cultural touchstone for us all.

Anthony Bourdain was a big fan of Popeyes as well, but he was decidedly not a McDonalds guy. In fact his life motto was be a traveler not a tourist, meaning that in order to truly learn about a place one had to take risks and explore the local culture. In one of the most famous episodes of No Reservations Bourdain sits down with the Intuit to eat a freshly clubbed raw seal ending the meal by swallowing a seal eyeball - considered a delicacy in that part of the world. It’s not an easy episode to watch and must have been an even more difficult episode to film as you can see by the expression on his face that Bourdain is clearly taken well out of his comfort zone. Still, he does it - staying true to his motto. 

If we are honest, we all like to stay in our comfort zone. We may talk bravely about thriving amidst chaos, but the reality is that turbulence is not fun in the air,  in real life and certainly  not in the markets, especially if we are on the wrong side of the trade.

My friend @donnelly_brent tweeted the other day that “One of the greatest challenges of trading for a large institution is that your manager wants an annuity and you generate variance.” To which I replied that this is literally the central paradox of all finance. Don’t we all as traders want the warm comfort of an annuity and instead are always grappling with market variance?

This is why the Bourdain motto should be the guiding principle for us all. You can’t demo trade your way to success. You can’t find your winning strategy by running  one thousand Monte Carlo simulations. You can’t truly appreciate risk until you’ve blown an account or two. 

In trading as in life, sometimes you need to swallow a seal’s eyeball.

That’s why the central paradox of finance is so difficult to overcome. We all want to bank basis points with the consistency of a Big Mac, but markets aren’t Mikey D’s and never will be. The best traders in the world learn to live with variance even though it goes against every evolutionary instinct we have. For the rest of us we need to at least appreciate this fundamental fact of our business.