Old School Endurance

This week, I am going to have some fun and write about a topic dear to my heart -- Old School Endurance.  Not quite "Old Time Hockey" but Paul Newman's passing has been on my mind.  Watching Slapshot is a rite of passage for a lot of my Canadian pals.

Management and communication tips can wait for another week -- if you are like me then you could be a little burnt out on reading about the dire state of the global economy.  There is going to be plenty of time for working through the aftermath.

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Two quick announcements before we get started:

I was looking for photos on the web this past weekend and discovered my interview on Endurance Planet -- scroll down the page, I am July 1st.  13 minutes long with some ideas about performance and coaching that might interest.  

Bobby McGee, world-class running and triathlon coach, is featured on Endurance Corner Radio.  Greg Bennett is coming in two weeks.  Send questions to Justin Daerr.

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This past week, I was running (in the rain, wearing a cotton t-shirt... Chuckie you would have been proud).  I was rolling along thinking about this article and Ironman Hawaii in particular.  

The legend of Ironman is fairly well known... a few military guys sitting around trying to dream up the wildest event they can consider... Waikiki rough water swim, ride around Ohau, Honolulu marathon... something like that.  For me, that's Old School Endurance.

Sit around with your pals, dream up something off-the-charts then figure out how to do it.  Outside of Ultraman, there aren't a lot of triathlon events that fit that mould any more.  You are most likely to discover old school endurance on events like the Triple Bypass, Leadville 100, Hard Rock 100 or by bumping into an ultra-amigo on the Continental Divide trail.

Ironman has gained a lot over the years, lives have been changed for the better, and many cottage industries have popped up -- pretty much as a direct result of that original dare.

As a private equity guy, I think the sale this year could mark the high water mark for Ironman, but not necessarily for the WTC, as a company.  From the outside looking in, I can see clear opportunities for further profit enhancement:

• The launch of the 70.3 series was a good move, when faced with an aging demographic as well as a need to attract younger customers.
• The ability to bring race management in-house via acquisition, or competition.
• Superior licensing arrangements -- to me, there has always been a disconnect between the marketing strategy (mass market) and the people that actually do the races (niche market).  Perhaps the most lucrative customers are the one's watching the NBC broadcast?  I suspect that there is a lot more that can be done with those of us that are actually doing the races.
  

Ramp things up and either fold into a larger entertainment group, or sell a piece of Ironman through the public markets.  I keep coming back to Planet Hollywood in my mind, though -- not a great outcome for the IPO shareholders but a great franchise name.  I'd be wary if they take m-dot public.  Of course, history tells us that select buyers will pay a large premium to own world-class brands.  My concern would be the risk of declining cash flow.

Why sell?  Long term capital gains tax rates are likely heading up; and a vendor wants to leave enough in it for the next buyer to generate a fair return.  The deal made sense to me from both sides. 

How to maintain growth of an expensive and time consuming hobby in the face of a declining economic environment?  The 70.3 series is a good strategic move.  It will be interesting to see how Ironman handles a significant economic slowdown within its demographic -- the Ironman target market has had a sustained bull run -- we should get Dan Empfield to share his thoughts.  Perhaps he'll write something about his -- SlowTwitch reflects the pulse of the sport and Dan has a historical perspective that few can match.

Back to Old School Endurance.  Before I ever did a swim set or bike repeat, I was a weightlifter, hiker, and (very average) sport climber.  Like many of us, I got a kick out of dreaming up new projects -- my progression to mountaineering was the ultimate in Old School.  Find a volcano somewhere in Asia -- use a three-, or four-, day weekend to fly-in, summit and fly-out.  I would sleep rough and listen to the jungle.

These days a ten-mile climb wears me out... still it is September.  A guy's got to rest some time!

Some of you might recognize the guy in the photo below -- this summer during Epic Camp Italy, I used my easy day, to ride past the turn off for the Messner Museum in the Dolomites.  Everest, solo, no oxygen, no one else on the mountain.  Pretty Old School! 

Endurance has a number of different qualities -- all of which are important to consider if you want to (ultimately) race well.  Each of these attributes is linked with the others and a breakdown in one area ends our ability "to endure".

Mental Endurance -- the ability to keep moving forward until the objective is met.  Chip away, bit by bit, day after day.  The downside is that people that score high here are the sorts the die in the mountains, or spend years pounding away at an area where they have little potential.  I score reasonably well here, so need to balance persistence (good thing) with consistency bias (risky thing).

Working on our physical endurance benefits our mental endurance in many ways. 

Anger management -- I experience a lot of background anger in the world, specifically what drives a lot of ultraendurance athletes to get so far away from home, from the 'real' world, from everyone else.  

To truly endure, we need to accept the way things are.  Somehow, years of physical endurance training managed to work-out a lot of situations, histories, and people that used to upset me.

Humility -- This could be the ingredient that creates the later life peak for the ultra-endurance athlete.  It takes most of us a many years to have enough setbacks to gain the humility required to stop repeating our mistakes.  The only sure fire way to increase my humility is wait around until an unexpected setback reminds me that I don't have all the answers.

Fear -- for me, fear is what leads anger.  I struggle to see the emotional roots of my fears... ...I only feel the anger.  I spend a lot of time searching for the fear that lies beneath my emotions.  My main fear has to do with disappointing people that I respect. 

Physical Endurance -- just like VO2 max, many people appear to be gifted with bodies that are created to tolerate volume well.  Expeditions are a great example of this trait.  When I was in peak mountaineering shape, I could carry/haul 130 lbs of gear daily, at altitude, for a week -- good for me, "easy" for a sherpa!  I could do a tremendous amount of low intensity work then handle hours of tempo on a final "summit day".  

What I couldn't do was swim, bike or run quickly -- let alone put them all together.  Endurance is an essential component of fitness but it is only a component.  At my mountaineering peak, I was a mediocre athlete.  But my solid endurance base, enabled surprisingly rapid progress when I started converting endurance to race fitness.

Most adult triathletes come to our sport with a focus on race fitness prior to the creation of an endurance (and strength) platform.  This is the piece of the performance puzzle that is missed by intensity-driven programs -- most likely because they are created by life-long athletes that haven't experienced an absence of endurance.

Metabolic Endurance -- I don't read a lot about this in the literature but I see it with people that are able to survive when placed in extreme situations -- as well as athletes that are (ultimately) able to go 'fast' in an Ironman.  Physical endurance is the ability to walk from Boulder to Vail.  Metabolic endurance is the ability to do it on minimal food and water.  Some coaches/athletes seek to train this through (effectively) starvation.  

Perhaps a future article will talk about self-starvation, and self-denial, in an attempt to exert control within a mind that feels out of control.  It's a complex psychological issue that is far easier to observe than treat.  I have had my greatest success with simple acceptance and affection for (fellow) crazies.

Constitutional Endurance -- relates to how fast we recover, our immune systems and what we generally call our "constitution".  We see this a lot at Epic Camp... there is normally one, or two, campers that manage to get stronger as the camp progresses.  Some individuals can simply take more than others -- and keep bouncing back.  In my mid-30s I could get away with extreme training -- at least I thought I was getting away with it!

Molina once managed the first week of an Epic Camp on nothing but liquid calories.  He'd had the trots for a week leading into the camp!  He didn't mention this to anyone lest we rip him to shreds -- Epic Campers can behave a bit like hyenas when they get fatigued... 

Scott's not the only example of World Champions that score off-the-charts for Old School Endurance -- Tom Dolan is a guy that springs to mind.  Talent, motivation, and the capacity to out-train any swimmer of his generation.

Now you might think that Ironman Hawaii is the ultimate test of endurance -- we could be fooling ourselves.  The photo above is how Amundsen chose to spend his summer when he raced Scott to the South Pole.  Great story.  Guts will only get you so far without preparation.

The real test of Ironman is the months, and years, of daily training that are required to put together a fast race.  That is the true test and probably why we see such an emotional release at the finish line -- so much went into that one day.

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Some suggested reading to get your Old School mojo working...

Race to the South Pole, Amundsen

Endurance, Shackleton (pictured above, likely the greatest demonstration of human endurance, ever -- gotta love the frosty beard, Monica won't let me grow one...)

Many enjoy the romanticism of endurance-Samurai that go down in flames -- the problem with that approach is you can't write up your adventures if you are dead on the mountain.  

Being a success oriented guy, I like the stories that centre around getting the team home in one piece.

Molina's 50 in 2010 -- it's going to take me a while to build back up but I'm looking forward to Going' Old School one more time with my good buddy.  We'll need to come up with something special.

Good luck to everyone racing Kona -- when it gets tough remember that it's just one day!

Back next week,

gordo

Big Meeting Protocol

I have been in a few big meetings over the course of my business career and had another this past week.  The meeting went as well as could be expected and I wanted to share the approach I took to give myself the best shot at a good outcome.  

Before we get into the BMP, a couple of announcements:

It's my brother's birthday today.  Happy Birthday Chuck!  Relevant to the US elections, there is a clip about the Canadian Health Care system -- not exactly G-rated, you've been warned.

Brooke Davison just won the overall female AG title at Nationals in Portland last weekend.  She's interviewed (with her 2 year old) over on Endurance Corner Radio.

Coffees of Hawaii now have decaf.  Albert was kind enough to send me a sample bag and I'm hooked.  Out photo this week is from the plantation on Molokai.  When you grind the beans, they look the reddish color of the earth (seen in the picture).  Enter "EC" at checkout for a 20% discount.

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It's amazing what we can get done when something _really_ matters to us.  My main client in the UK is working through its business plan with banks, shareholders and suppliers.  As part of this process, we have been having a series of meetings with people that are fundamental to a successful outcome.  Separate from content, I have found that my approach has a BIG impact on outcome.  So here's my Big Meeting Protocol.

Be Prepared

I had eleven days of preparation for the Big Meeting this past week. 

I undertook independent discussions with senior managers; key shareholders; and lenders.  I wanted to speak with people one-on-one because it reduces the tendencies we have in crowds -- peer agreement, avoiding bad news, consistency bias, deferral to authority.  As the listener, I need to be aware of my own tendency to use these conversations to confirm, rather than to learn. 

Prior to our meeting, I wanted to have a clear idea on the position of each of the company's projects.  Our final internal meeting was a top-to-bottom review of every project on the company's books -- took three hours and we already knew the deals.  We might not have identified all the issues, but we did our best to make sure that we all knew the same issues.  This enables clarity in communication.

Finally, I believe that it is essential to have a clear understand on the cash position of a business.  Running out of cash is not a good thing.  I probably spent a full day considering the very short term cash position for the business.  As I wrote last week, a buffer of liquid assets provides time -- in business, as in life, time can be very valuable.

Visualization

Visualization is not just for Ironman swim starts!  Throughout my business career, I have used visualization to prepare for, and rehearse, important meetings.  While things rarely go as mentally (or actually) scripted, having mental and written plans increases your chance for a successful outcome.  It also increases relaxation during your competitive event (in this case a business meeting!).

Pre-Meeting Routine

I have the exact same routine that I use for Big Meetings.

• Snack
  
• An hour of aerobic exercise (no higher than steady)
  
• Shower
  
• Good sized meal with carbohydrate
  
• Head to the meeting
  

If the meeting is in the afternoon, or evening, then I will leave the office early to get my training done.  I'll eat my pre-meeting meal and return to the office.

The routine makes sure that I am alert, relaxed, stress-free and fueled.  Generally, key meetings don't last more than 3 hours.

In an important, or crisis, situation... it can be tempting to skimp on nutrition, sleep, or exercise.  For me, that is always a mistake.  My productivity and clarity are far higher when I stick with my routines.  As well, I do my best problem solving when exercising (a meditation of movement, perhaps).

Stimulants

Big Meetings are stressful.  When work stress increases, my caffeine intake halves.  Clear decisions require us to slow our reaction time.  Pausing, before acting, is tough enough when stressed, near impossible with a quad-latte coursing through our veins.

WingMan

I didn't have a wingman this past week but have had one on the past.  

In the UK, they have a habit of placing a small plate of cookies on the table at business meetings.  Quite civilized, one meets for tea, cookies and business discussion...

If you have a wingman, ideally one with a low emotional attachment to outcome, then your wingman can "offer you a cookie" if you start to freak, or get off track.  The pause to eat your cookie, could enable you to reset.  You don't really need a cookie to use this technique... what you need is a calm friend and a pre-agreed strategy for signaling a need to pause.  I suppose that is the role that an attorney takes in many situations.  However... if you turn up with a lawyer then you might freak the other parties at the meeting!

If you don't know... ...then just say so

Kind of sounds like something Johnny Cochran would say.  He really was a character.

Managing serious situations is about trust -- you might get away with spinning things in normal times but it is a poor strategy when faced with important decisions.

For my meeting this week I had two computer screens running (three spreadhseets); two reports open on my desk; and a hard bound book containing a year's worth of notes.  With all that information, days of preparation and over ten years of advising the client... I was STILL stumped a few times!  

If the stakes are high, and the quality of the decision relies on the accuracy of information, then people don't mind waiting a couple of minutes (or even another hour) while you calculate the right answer.  

A commitment to accuracy/transparency is an attractive trait in a trusted advisor.

Summing Up

You'll see that I use a lot of "race tactics" for my Big Meetings.  In reality, these are performance tactics.  High performance in business, athletics and academics is all the same.  

Take time to learn from successful outcomes and remember that the toughest situations are ripe with opportunities for learning.

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Next week, I'm going to share specific ideas for managing through a recession.  As I predicted last spring, we are moving into the action phase of global liquidity shock which was triggered back in August 2007.  

As we saw with the demise of the American Investment Banks, it is a lot better to take action, than be acted upon.

Until next week,

gordo

Financial Security and Capital Allocation

Financial security and capital allocation are the topics for this week's letter. I have been wanting to write about these for some time. What a background in the capital markets -- a very rough week for people.

I am extremely busy on the business front.  As you can imagine, we face a very challenging time in UK Property.  If you are waiting for an email reply then I will get to you, just need some more time. Each day, I have had to parcel my energy, prioritize tasks and schedule recovery.

OK -- a couple of announcements...

***I turned on comments so that so we can interact. Take it easy on me. You'll find that moderation is 'on' so I need to review before they go live.

***Endurance Corner Radio has podcasts from Joe Friel and Chris McDonald. Send feedback to D.J. J.D., who is leading our effort.  Joe is talking about his background (very interesting) and training. Chris explains how we can break Chris Lieto's course record at IM-Moo by using IM-Loo as part of our taper -- its easy if you just follow his point-by-point instruction for race week...

***Joe is going to be speaking at our Boulder Triathlon Camp next July. The camp is open to all levels/distances and will have a mix of hands-on instruction, training and discussions. Cost is $1,250 -- drop me a line for more details.  We've got some great speakers lined up.

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Who knew the markets would melt down? Personally, I don't blame the short sellers. They are only acting on what insiders and smart researchers have been telling us for months... our financial system needs to be recapitalized. Massive global deleverage is tough. In my own ventures, it is the main cause of the difficult situation faced by friends and clients. 

What lessons can we learn?

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Acquisition of capital is different than borrowing debt. Because debt comes from third party sources, we need to be wary of the tendency to view it as 'free' money. When I work with individuals, or companies, that run into trouble, it is often a crisis created by borrowing to the maximum extent permitted. Permitted under law, permitted under debt agreements, permitted by running X creditcards. An appropriate amount of leverage is well, well below the maximum that can be borrowed.

To me, capital in its most simple form is cash and liquid assets. Before we talk about how to allocate, let's consider how to acquire:

1 -- spend less than you make
2 -- pay yourself first

Physically, I have been overweight before. When I was heavy, I would often wish that I could wave a wand and "be thin". If I could just get a chance to start all over then everything would be alright. I would tell myself that I wouldn't make the same mistakes again.

Finances are a lot like that. When we have no capital, we can spend a lot of time wishing that we had capital.

Physical fitness is just like financial health. Until we take actions, and create habits, that change the direction we are heading... we will keep heading the same direction. We have to make the change.

The two tips that I shared above come from The Richest Man in Babylon -- a good read on the topic of personal finances. I like that book because it doesn't make things too complicated.

3 -- Protect core capital.

What is core capital?  Put simply, it is capital that you cannot afford to lose.  Having no assets at 65 years old is a far different situation than being wiped out in your 20s.

At 40 years old, my view on core capital is ten years living expenses.  While the income from that capital doesn't come close to covering my living expenses, it does give me years to adjust when faced with an unexpected setback.  Across a full career in business, we can be certain that we will face multiple setbacks.  After the past 14 days, the importance of core capital has become very apparent. 

How do I protect core capital?

4 -- Be wary of leverage.

My core capital is completely unleveraged.  While this reduces my return, it greatly reduces the risk profile on my portfolio.

I go even further in that I don't care about my investment return on core capital, I care about safety.

Within my business projects, I am willing to use leverage but, these days, only with capital that is above my core capital.  Why am I so conservative?

5 -- You only need to achieve financial security once.

By following the basic principles in my book recommendation you can give yourself an excellent chance to achieve financial security over your lifetime.

Sure we are exposed to Black Swans but you can stack the deck in your favor if you educate yourself and stick to the basics.

It is surprisingly difficult to stick to the basics.  We let our guard down, we cut corners, we are less careful.  We need to be constantly vigilant!

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For capital allocation, my first consideration is where I will be living in the future.

This is important to make sure that I have assets (and currencies) that will balance my future liabilities.  While I don't trade currencies, I consider purchasing power parity when deciding about large investments which match, or don't match, future plans.

I don't have a lot of sophistication in my review -- I look at things such as daily living costs, relative prices of accommodation, interest rates.

When I think about property purchases, I am very specific -- seeking good value, in a specific neighborhood, of an appealing city.  I define value back to my long term currency.  For me, that means converting back to USD, the US is my likely home.

The cities that I really like are: Edinburgh (GBP); Paris (EUR); San Francisco (USD); Hong Kong (quasi-USD).  I don't have any exposure to those markets presently but I keep an eye on them.

Currencies that I like are USD (matched to long term liabilities); CHF/EUR (long term stability).  Some people like Singapore dollars but you only need to look at a map to see that there is real political risk in the neighborhood.  In terms of Asian exposure, my preference would be a moderate yielding real property investment in Hong Kong.

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When I was starting out, I thought that it would be nice to "be rich" -- whatever that means.  Along my journey, I have realized that wealth is neither the goal, not the benefit of financial security.

The two main benefits are ethical reinforcement and personal freedom.  If the pursuit of wealth forces you to compromise your values, or ties you to unpleasant situations... then one really needs to consider if that is a benefit at all.

Following the events of this past week, a very relevant consideration.

gordo

Principles of Breakthrough Performance

This week I am going to shift back to a discussion of athletic performance. However, this article is also a summary of what's worked for me in academics, marriage and business.

Our photo this week is my buddy, Chris McDonald. Much of this article has come from considering his approach, as well as observing myself. I think he'd admit that he's taken himself far, far beyond what he thought possible even a few years ago.

Simplicity -- Whether you are considering an investment portfolio, new project development, sales strategy, or how to complete a stretch week of triathlon training. Increased simplicity improves your probability for success. Remove as much as possible from your life.

Specifically, to achieve top success requires the capacity to outperform your competition, daily, for a very long time. Some of the competition are more talented, more experienced, better funded, smarter... simplicity is an edge that you can give yourself.

Dilution of effort -- every item, thought and obligation added to your life dilutes your ability to fully commit to what is required for success. Single minded obsession is often a recipe for a future crisis -- still... if we are having a discussion about performance... then alternating obsession with recovery can be an effective strategy.

For any task requiring high quality, focused output (creative, technical, athletic) the periods when you are doing nothing are equally important to the periods where you are following your vocation. In athletics, periods of unstructured training (easy days, transition periods) can fulfill this role but you will still need some time where you are free to sit in a chair and chill out.

So when you are laying out your plan for breakthrough performance, I would encourage you to plan, and protect, your rejuvenation periods. I have watched some truly great athletes destroy themselves by trying to hold their athletic "high" a few months too long.

Stability -- there are a lot of areas where we dilute performance with instability:

Financial -- assuming that you have shown aptitude for your passion, you should allow at least five years to see what's possible in terms of performance. Being able to stay the course is very important -- you are looking at 10,000 hours worth of effort to see what's possible. Consider your out-goings and in-comings, the athletes that get this "right" follow a clear written plan.

If you are following a high-pay vocation then be wary of spending "because you can". A high burn-rate limits flexibility, personal freedom and can leave you beholden to the company, or person, that signs your pay check. I also believe that it makes ethical purity much more challenging.

If you are forced to ratchet down an expensive lifestyle that never generated incremental happiness then you will feel _real_ pain and loss.

Alan wrote a recent article on athletic periodization -- as I read it, I realized that it is a parable of my approach to life -- moving between business, investing, marriage, spirituality, triathlon and coaching. For each "run" I take at Ironman excellence, there are months, sometimes years, of careful preparation -- Base training for life!

So... I will offer some specifics that are proven for triathlon success.

Finances -- a minimum of three years living expenses, in cash, in the bank and a plan for maintaining your financial security. Financial stress drains performance. Figure out your personal financial weak link and create a simple plan to improve it.

Geography -- no more than two training bases, one VERY low cost, the other in an environment that makes it easy to address your key personal limiter, whatever that might be. Access to at least eight months of pleasant outdoor riding; and access to at least four months of long course swimming. Altitude isn't important. Watch what you spend on airfares.

Approach -- early in your athletic career, your #1 focus should be building your capacity to absorb steady-state training load. If you aspire to be a top Ironman athlete then progress gradually until an average training volume of 25 hours per week can be achieved within a five month span. Just focus on the training, you'll learn a lot. Once you can handle that load then increasing the average speed will offer a lot more gains than cranking the volume even further.

Note, the time requirements for athletic success imply very flexible part-time employment, or unemployment! With meaningful work obligations (that require analytic capacity), it simply isn't possible for me to move much past 12-18 hours per week. Even then, I need to be HIGHLY organized.

Timelines -- Five years of dedicated endurance training would be a fast progression to where you need to worry about your specific protocol. In the early days, any reasonable protocol will show progress. Train every day and avoid doing anything too silly.

Be very wary of seeking an intensity-driven short cut. You will make gains but you will limit your ultimate development. Running is a great example where "run easy every day" can result in fantastic gains, for years, for all new runners. It is also my preferred protocol for elite swimmers/cyclists that must give their connective tissues years to catch up to their aerobic engines.

Competitive Exposure -- Maintaining a challenging, but not overwhelming, competitive environment is important for motivation and progression.

I recommend that you podium at agegroup World Champs before racing elite. If you can't podium then the best decision may be to develop as a fast amateur. This will free you to consider options, and opportunities, that present themselves outside of athletics. Realistically, until you can podium at agegroup World's then you are unlikely to be able to survive as an elite athlete. Even then, the road is a fun, but tough, one.

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Pulling all of that together. The big things that I have observed over the years:

• Maintain simplicity in weekly routine.
  
• Follow a low cost annual plan that limits travel, yet makes it mentally easy to train.
  
• Good training partners are golden -- they get you through the inevitable down periods and help you stay the course.
• Focus on building your capacity to train. Stop doing anything that results in missing tomorrow's training.
  
• Sleep lots.
  
• Until you can beat everyone within a two hour drive from home, there is no need to spend money traveling to races.
  
• Focus on executing your weekly training plan, not achieving weekly results. Progress can lay hidden for months. I've had plateaus that lasted years.
  

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Next week, I am going to shift back to investing, specifically the process that I go through when deciding how to allocate capital.

All my best,

gordo

2008 Review, Part Two

This week’s letter is about taking the time to consider the long term implications of our current choices as well as offering some insight into how I approach my personal planning.

The photo above has me thinking about some additional adjustments to my TT position - I will be tinkering this winter!

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If you haven’t been to the Alternative Perspectives page in a while then you might enjoy two articles from Coach Kevin Purcell. The most recent was a thought provoker for me and very enjoyable.

2009 Boulder Camp – I am very happy to confirm Joe Friel and Bobby McGee as guest coaches at our Summer Triathlon Camp. Joe and Bobby have been instrumental in my athletic career and share more than fifty years of collective coaching experience.

As a reminder, the camp will run from July 20 to 25, 2009. By letting you handle your accommodation and morning meals, we have been able to set the cost at a very affordable $1,250. This camp is open to all abilities, all-distances and will have a balanced focus between skills development, triathlon training and athlete education. To confirm a slot, please drop me an email.

Two book recommendations for you: FIASCO is a great read about structured products and investment banking – it fits with my observations from a career inside the financial services industry.

Website Optimization is a good read for anyone that runs a web driven business, or brand. The book made me realize how little I know -- lots of easy ways to improve the reach of my writing. I read the book with pen, paper and a high speed internet connection. I approached the read like a "workbook" taking notes and making changes to my website outline.

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I was walking around Edinburgh this week and noticed that it is impossible to see a credit crunch. The buildings don’t know who owns them, or the prices that we place on them. That realization settled me down at the start of a very busy week. The UK faces challenging economic times.

My trip to Scotland confirmed suspicions on the state of my personal NAV. Long time readers may remember that I sold my UK property exposure in 2005/2006 and used a portion of the proceeds to help establish a Scottish residential property developer. While the development business is stable, the market outlook for sector is weak.

I’ve seen a big reduction in the upside component of my personal portfolio and a stack of paper profits went up in smoke. My marked-to-market net worth went down significatly in 2008. No wonder investment banks are looking for a way to avoid reporting the true market value of their illiquid securities. It was a (very) good thing that I am not personally leveraged -- I would be toast if I was a hedge fund.

Interestingly, prime residential rents are way up in Scotland. We have seen a 50% increase in our portfolio yields over the last three years and, I suspect, there are more rental increases to come. The upward yield shift gives comfort to our bankers (in a time when they aren’t hearing a whole lot of good news).

We haven’t seen any evidence of forced selling by developers. This could change if the main lenders take a hard line but, to date, all the key participants seem content to sit-it-out until market conditions improve.

Times like this are potentially volatile because if everyone is doing nothing then there is substantial downside risk if assets (at the margin) are forced through the market. Prices always move at the margin and, in a thin market, the actions of a few can impact the balance sheets of the many.

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The Tri Biz
While there isn’t much that I can (or want to) do with my personal balance sheet, I have taken a hard look at my personal profit and loss account.

Over the last three years, my largest single expense category has been “triathlon”. In 2005, I downsized my sources of triathlon revenue to create space for a big increase in my financial consulting business. The net cost of doing that was probably on the order of $100,000. I suspect that is a much smaller cost than many athletes bear when they downsize work commitments to focus on qualifying for World Champs. A single year off as a doctor, investment banker or CEO can cost a multiple of my figure.

I’m fond of saying that the easiest way to increase net income is to reduce personal expenditure. I remind myself of this because the consumption treadmill is a seductive trap, constantly marketed to us through the media.

In my annual review, I look at my expenses (current, projected, core and surplus) as well as my revenues (current, projected, downside, potential). I would encourage you to do the same.

Why? Because we always underestimate the large effect that small changes have over the time lines of our lives.

$33K per annum, for seventeen years, at 4% is $782,000.

By taking action to eliminate my net triathlon cost (today), I can finance my unborn daughter’s college education (tomorrow). Of course, all this is contingent on not spending the money elsewhere, or being miserable with the change. We can take cost control too far.

For me, starting a business helps spending discipline. My accountant tells me that the IRS will "help" further by disallowing losses if we lose money for three consecutive years. As well, I have considered bringing in a financial partner to create social, and profit, pressure. There are a lot of benefits to 100% ownership (see Raising the Bar) but I also benefit from having obligations to people I respect.

My game plan for personal expenditure control:

***Focus on the training camps that I am hosting Tucson (April); Epic France (June); and Boulder (July). Last year, I attended nine training camps and only one made a positive contribution to Gordo Incorporated.

***Consolidate the best of my writings into a single location for you (the reader) to access easily. The best marketing lesson from my triathlon experience is “give away good information for free”. Helping people is fun and creates massive goodwill. I have a stack of content spread between five websites. My content is underutilized and tough to access.

***Place my library within a website where I will be able to combine: (a) my coaching skills; (b) my writing skills; and (c) my enjoyment of helping people learn from athletics.

My financial consulting business has (effectively) total concentration with a single client. I am a big believer in the value of concentration (and the illusion of diversification). However, small things matter over long timeframes… one, or two, additional relationships will make a difference.

The benefit of my business model is it fits with my desire to main freedom of location and schedule. Commitments given to clients limit my freedom of occupation (somewhat), but I love working and there is a fair exchange.

An up-coming letter will discuss (in detail) my current personal portfolio strategy. While my outlook hasn’t changed, my portfolio structure changed (due to those paper profits evaporating).

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The Truly Precious
Because time is far more precious than money, I also do a time inventory. I have become provicient at considering my happiness return per hour. Still, it takes constant pruning to maintain a high quality life.

There are clear requirements to a long term focus on elite athletics. These requirements have associated costs that can increase over time.

Financial – outlined above.

Structural – to run well in triathlon, I need to maintain a high level of annual run volume. Having spent most of 2007 walking around my house in fluffy slippers (to comfort bruised feet), I know that the required level of volume is wearing my feet out.

Emotional – I don’t know about you… but I am not a whole lot of fun from three to eleven weeks out from a key competition. I used to get around this by living alone in the spare room of a fellow endurance athlete, or hibernating upstairs at my house in Christchurch. The IronMonk-gig worked for athletic performance but lacked in terms of emotional well-being. I have increasingly found that I can’t be the husband I want be while spending 20 weeks a year on the knife edge of human endurance.

Monica is so completely loyal that she’d back me for another five years of relentless focus. She respects me too much to offer the soft option of backing off to please-the-wife. I didn’t truly understand the brilliance of doing that for your husband until this year. If you are married to somebody like me, it is the best way to ensure peace of mind in your man. I’ve got a couple buddies that have managed the freedom but haven’t (yet) found their peace. Don’t think that I’ve necessarily found any!

Addicts come up with all sorts of ways to justify their actions. Generally, I am only able to fool myself for five to fifteen years at a given vocation. Increasingly, I find better and better things to focus on. Fatherhood represents another opportunity for self-knowledge.

I have been truly fortunate to have the opportunity to spend much of the last decade living as an elite athlete. It has been a tremendous experience and worth all the overtraining, financial costs and other occupational hazards. I rarely regret the past, even my mistakes and “hard times”.

One of the main hazards of objective decision making is caused by a combination of consistency bias, overvaluing what we own and overweighing sunk costs. “I have given up too much to change course” is a common thought pattern that can skew clear judgment. There are also tremendous social pressures that we place on each other to remain consistent in approach. We have an in-built bias against “flip-floppers”. This is a bit odd in a world where most of our key decisions are made against a background of incomplete, and changing, information.

I have always enjoyed “doing what it takes” and, I suspect, that most obsessed folks are excellent at getting the job done. Seeing this trait, could be why Monica likes me to have a project. Too much idle time leaves me short on endorphins.

It’s an interesting time for me. With my sport, increasing costs are reducing my enjoyment from doing what it takes. Frankly, I’d rather be a world class person than a world class athlete. I am fortunate to have been exposed to role models that manage to do both.

Since 2004, I hoped that winning Ironman Canada would give me a fairy tale ending. Just like Monica, Life doesn’t appear to have offered me an easy way out.

Back next week,
gordo

2008 Year In Review, Part One, Athletics

This week's photo was taken while I was competing in the speedo division of Ironman Canada 2008. I am going to write up my race report for the Planet-X website. Additionally, my pals at XTri.Com have published a recent Q&A.

Long time readers will know that I like to spend September reflecting on how things went over the last year. This year, I am a bit ahead of schedule and will share some ideas that I have been considering throughout August.

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Why Compete?
It may surprise you to learn that I don't really enjoy the "competing" part of athletic competition. While it is fun to win, how many of us are consistently dominating? Not me. Even when I win (or my clients win), I have concerns that the pleasure that I experience is just my ego being inflated. Humility does not come naturally to me and requires constant vigilance.

For short course racing, John Hellemans says that if you feel like quitting then you are going the correct effort. He is a multiple agegroup world champion and Olympic coach, so I remember his words. For much of this summer, I had that sensation in training -- I noted those feelings and reminded myself that, for Ironman, they were a clear indication that I was on edge and needed to be careful. I counted down my sessions, and the days, until Ironman Canada.

So why compete?

I have been getting slower for my last three years of Ironman racing. Similar to dying... we all know that slowing down is coming but it is a bit of a surprise when it actually arrives!

Why compete? Many valuable experiences are not pleasurable. The main personal benefits that I receive from racing all seem to come with "coping". We are all going to get knocked around a bit in life. Racing gives us a safe environment to train our coping skills. More specifically:

Coping with Public Success and Failure -- IMC 2007 was a public failure of a clearly stated goal. The failure caused me a lot of personal pain. However, trying our absolute best then failing... is liberating once we get past the pain. I am, mostly, free from concern over public performances. When I faced challenges in 2008, I looked inward... how do I want to respond to this decision, not... what will others think of this decision.

Pain results when Expectations (not performance) diverge from Results. Crisis comes from our expectations -- an athlete preferring to quit, rather than face the reality of their performance. Quiting stifles personal growth and, speaking from experience, it is far better to fail than quit. Getting across the finish line creates closure -- a DNF (that doesn't involve an ambulance ride) often remains an open wound.

Learning to cope with success is also challenging. People that like us for no reason aren't much different than people that hate us for no reason. It takes considerable self-esteem to remain ethically centered in the face of consistent positive feedback (social, financial, athletic...).

Dealing with a Lack of Control -- Control and stability are illusions, just ask any 68-minute Ironman swimmer! Racing drives that home to me, again, in a safe environment. Learning to manage our emotions, and decisions, while under extreme duress is a HIGHLY valuable skill that we take back into our daily lives.

Reaching Beyond Ourselves -- I have never made the lead swim pack in an international level triathlon. But... I don't rule it out! Racing provides us with an environment where we can achieve things that we thought were impossible. I've had a couple of disappointing Ironman races but... if I do happen to RIP one in the future... wouldn't it be great. Athletics have consistently shown me that I am capable of much more than I can imagine.

For me, the lessons of competition revolve primarily around self-awareness and self-control. Which leads nicely to...

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Race Status, Elite versus Amateur
While I was counting down the days to Ironman Canada, I was also counting down the end of my elite career. There are elements of elite ironman training (high run mileage and risk of immuno-destruction) that don't fit with my personal plan for the next 30 years. On reflection, I also wanted to experience the (hoax) joy of winning without having to cope with the extreme duress and health risks that come from elite level training.

To explain my current thinking, I need to set the stage with a couple of stories...

A -- I have a few good friends that are former military officers. I have always been drawn to "something" that all good officers share -- the calling to be an exemplar. Charlie Munger uses the term with respect to CEOs but it applies to any person in a position of leadership (teachers, parents, coaches...). An exemplar is a leader that consistently holds themselves to a higher standard than their students.

B -- Within my own athletic career, the highlights aren't the times that I won races. The real highlights came when I performed close to the level of a great athlete (Tom Evans, Steve Larsen, Peter Reid). Not so often with Peter and not any more with Tom & Steve... but I hope you get my point... it is extremely motivating to have the opportunity to race alongside athletes that played a role in our entering sport in the first place.

C -- The quickest way to learn that external success is an illusion is to "win". Even then, "victory" is a powerful drug and highly addictive. There are many ways to keep score. In athletics, we use a clock. In other fields, they may count mistresses, dollars, clients, page views, sales transactions... external success can become a trap.

A long introduction to say that I have decided to race elite for another year. Slowing down with style will make me a better man, at a minimum a more humble man!

Racing beside Simon Lessing, and the traveling Aussies, at Boulder Peak 2009 should provide me with a solid stress management opportunity. As well, there are athletes out there that will enjoy taking me down. Why deny them that pleasure? Scott jokes that our Epic Camp clients enjoy taking down "the Ultraman".

Outside of Worlds, I'm not quite slow enough to make it a fair fight in the agegroup ranks (it could get a lot more fair during an up-coming break). In business, I have tried to be willing to sacrifice success to remain true to my values. So, you guys in the 40-44 next year will be safe from me... but I will be benchmarking against you. When you track me, remember that I have a 10 meter draft zone and, likely, had to swim alone, often without a wetsuit!

The Canadian federation makes it a bit challenging for non-resident nationals to receive their elite cards. As a result, I am going to seek a US Elite Card (once my Green Card comes through). To my friends north of the border, know that I love Canada and am a proud Canuck.

Next week, I will publish Part Two. That letter will cover the intersection of Business, Athletics and my Personal Plan. I have things sorted for my 40s but have discovered a few areas that need to be addressed to prepare for my 50s and 60s.

I play a long game.
gordo

Real World Bike Speed

This week, I'm going to talk a bit about the evolution of my approach to the bike leg in triathlon. I have gone DEEP into the archives for your reading enjoyment!

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But first, two multimedia links for you.

Laura Bennett Olympic Video -- great if you have kids that are wondering what it might take to get themselves into the Olympics! The video is about 24 minutes long -- so let it buffer.

Chris McDonald Podcast -- The Big Unit updates on his year since winning IM Louisville last August. Great info on racing Challenge Roth as well as life at the sharp end. More Chris can be found at his blog.

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You can waste a ton of energy thinking about your bike position -- each year, I try a few changes in January/February then tinker through the year based on optimizing COMFORT, not power.

Short course athletes might think that comfort doesn't matter. However, if it takes you a few miles to loosen up then your race is OVER before you get into your run groove.

For Ironman, if your back locks up on the bike then you give away tons of "aero". 112 miles of riding is a heck of a long way to endure a tight position.

So, remember what really matters to triathlon performance:

1. Consistency -- consistent training over many years
2. Nutrition -- high quality fuel for optimal recovery, body composition and performance
3. Aerobic Stamina -- maximizing aerobic economy and endurance at your optimal race effort
4. Pacing -- back-end loaded race effort to optimize speed across each leg and increase the probability of outstanding run performance
   

Bike position has NOTHING to do with how your bike looks racked in transition. Your bike position is about how you perform on your bike as well as how you run off your bike.

Your true bike position is what you are holding when tired, not fresh.

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Let's get into a few photos to kick off.


You might recognize the guy above. Craig Walton is one of the most respected, and fastest, non-drafting athletes in the World. I throw this up to remind myself that my nose doesn't need to touch my stem.

OK, now for a bit of raw reality with some of the positions that I've used over the years. Below is a shot from my first bike fit with John Cobb, April 2002.

The position looks great on the trainer. Trouble is... how the heck do I see where I am going? Look at my vision. Straight down. So I would have to crane my neck upwards even to see a few meters up the road. Not great for long distance triathlon.

As an interesting aside... I look fit in that photo but I am totally smoked and only a few weeks away from my first bout of serious overtraining. If I knew then what I know now...

Below are my next two bikes -- the position I rode in 2004 as well as what I changed to in 2005. The reason I changed in 2005 was I wanted to get my saddle more forward. I will come to the "why" in a little bit.

As you can see above, different frame but, in reality, same position. Two important aspects to note about the picture on the left:

1 - look at the angle of my arms, they are pointing down. You see this a lot at the races. My front end is too low for my flexibility. As a result, my low back is constantly firing and my back will tighten as my ride progresses. Eventually, I'll have my wrists on my aerobar pads and form a big wind scoop with my body. My bike, however, looked excellent racked in transition!

2 -- I corrected this point in the picture on the right. I'm able to relax my back in the position. An important point... a higher front end can result in a lower, more relaxed, back. This is very important to remember for all distances.

The positions above worked out well for me -- they weren't all that aero but they were, on balance, comfortable enough for me to run very well (3 hours flat on the day photographed below).

In 2003/2004/2005, I had three podium finishes at Ironman events and managed one of the fastest times ever at Ironman Canada 2004 (8:29). However, those races were done with a 7 meter draft zone.

Bump the draft zone out to 10 meters and my position becomes more relevant. Why? Try sitting fourth wheel at 40 km.h with 5 meter gaps between bikes. You will very quickly see that 7 meters Ironman (front to front) is quasi-draft legal once you can hold 40 km.h. To race well in the agegroup ranks you must learn how to use your competition both effectively and ethically.

Recognizing this fact, I have been working on getting more slippery. With four months until my 40th birthday, there is limited upside with my horsepower. My current position is photographed below.

Things that I want you to notice:

Wheels -- 1080 front, sub-9 disc rear -- this is an insanely fast wheel combo. If you are going to run the 1080 then you must practice in training. If I had to choose my single greatest source of speed then the wheel set wins. I used to be highly skeptical about the impact of wheels until I put these on my bike.

Vision -- I can see up the road without straining my neck. I can't see far... but I can see far enough.

Helmet -- Giro Advantage Two -- if you are a heavy sweater, racing in hot weather, or suffer from dehydration on the run... then GO VENTS. If you are racing in the cold then an aerohelmet is the most efficient way to keep your core temperature up. Keep the tail down against your back (my IMNZ race photo shows a big gap, that is a no-no).

Seat Height -- at the high end of acceptable, seems to work for me.

Cleanliness -- no bottles catching the air coming down my back. My spares are in a bike bottle in my seat tube bottle cage. Fluids are via aerobar mount and down tube bottles -- can be accessed with minimal body movement. I wear a skinsuit, so there is no flapping clothing.

Arm position -- Going narrow as sped me up (see differences in photos below). The ONLY way that I can hold a narrow position is to pull my elbows backwards towards my hips. I run a very shot stem.

OLD ARM POSITION, wide
NEW ARM POSITION, tight
One more photo so you can see nose of saddle relative to BB (below). When TTing at high power (>FTP), I slide forward to the nose of the saddle. This saddle position is a compromise, I have found that I lose too much climbing power/comfort if the saddle goes any more forward. With the PX frame geometry, I am at the limit of how far forward I can go.

While it might be tempting to slam even more forward... remember that you need a place to put your head and you don't want to create chronic neck pain. Your TT position needs to be comfortable, otherwise you'll never train in it!

A couple of final points to consider:

Wind Tunnels -- I spent several thousand dollars with wind tunnel testing a few years ago. Frankly, it gave me the wrong answer. I recommend field testing, ideally race performance data.

Ride Strategy -- How you use your position is as important as the position itself. I am looking for a position that enables me to relax in the fast parts of the course and be comfortably powerful in the slow parts of the course.

I have power variability in my rides because I rest at high speed. I avoid power spikes as they impair my run for very little time gain. I will, however, lift my power in the slow part of the course. I am constantly considering effort versus air speed when TTing.

The bike is the only part of a triathlon where you can coast with very little time penalty. The run provides ample opportunity to lay it down, as well as, the greatest time penalty for cracking.

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What to Optimize?
Triathlon cycling has little to do with elite road TTing or the 4K pursuit. While we can learn from elite cyclists, we need to remember that our event has different physiological requirements.

Here is my ride logic:

#1 -- what is my best case scenario for power output and average speed across the race distance, ignoring the run?

#2 -- what is the fastest position that I can hold at 95% of best case power?

#3 -- open with (at least) the first fifth of the ride at 90% of best case power. Lower heart rate into my target zone and establish hydration, nutrition and comfort.

#4 -- if I am feeling good then gradually shift upwards to 95% of best case power and hold as RPE increases across the ride duration.

#5 -- invest my greatest effort into the slowest parts of the course. Remember that (nearly) every meter of the run will be slower than the bike.

#6 -- until I run well, keep lowering my target bike effort.

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What is it Worth?
The changes that I outline above have removed 30 watts (~11%) from the power required for me to average 40 km.h here in Boulder. I suspect the key three changes are: improved wheels; smaller wind scoop; and smarter application of power. I have field tested with aerobic TTs from 20 minutes to 2 hours.

The two things left for me to consider are my fork/front wheel combo as well as my wrist height (guys like Levi seem to lift arm angle to close off the wind scoop entrance, Fabian less so).

With a bit of luck, I may be able to pull a couple more watts out.

Cheers,
gordo