Tuesday, July 5, 2011

A Doctor's Take on Risk Management

Hey there,

I’m still in the middle of the Australian Medical Student Association Convention and it has been amazing so far. Yesterday, I heard a talk by Dr Glen Singleman. While working in the ED, he found a love for adventure and exploration so he decided that he wanted to work for the National Geographic Channel. He figured that he’ll be more employable if he had a filmmaking degree so he went back to Uni and then went on to work for NatGeo Channel as a cameraman/doctor for expeditions.

Oh and I probably should also mention that he holds various records like the highest altitude basejump, and highest wingsuit basejump. He also makes documentaries and did some deep sea explorations with the director of Avatar. Oh and remember that he is also a doctor. Lol, the things you can do.

With all these achievements under his belt, it is only appropriate that he gave a talk on risk management and fear. I usually learn about risk management from traders so it was really an interesting experience to hear a talk about risk management from the point of view of a doctor/explorer.

He loves what he does because in his point of view, if there is no exploration, there can be no discovery and when there is no discovery, there can be no progress. I think this is true in almost every aspect of life. If we do not want to put ourselves in a difficult situation every once in a while, how are we to learn? That’s why doctors often put medical students on the spot and even humiliate us every once in a while so that we learn.

As humans we experience fear a lot. That is probably because it is hardwired into our brains. It is part of every decision we make, from crossing the road, to deciding how much risk to take in the markets. It is because of fear that some students do not ask questions in classes, some researchers do not do certain experiments, some paths do not get explored, or if you are like my mum, sometimes the fear of flying can really affect your dream to travel the world. Fear, especially irrational fear can really limit our potentials as a human being.

There is a part in the brain called the amygdala, it is in the limbic system and it is a fairly primitive part of the brain so most if not all animals has this structure. All 5 senses: touch, taste, sight, hearing and smell goes through this structure and anything risky is identified and your brain can react in 0.1 second. You either fight, flight or freeze. So we cannot help but to decide if we want do so something based on how risky it is.

However, humans have another structure in the brain called the prefrontal cortex. Nerve roots from the prefrontal cortex can override these fears by carefully rationalizing, analysing and reasoning with the proper education and knowledge. The only way to do this well is if we have the knowledge to rationalize in the first place. It takes practice and discipline to do this. That’s why taking a history from a patient is easier the 100th time if compared to your 1st. I still remember how nervous I was the first time I had to talk to a patient. Same goes to deciding to make a trade in the stock exchange or closing a losing position. It is not easy to tell yourself to realize the loss and it takes practice to numb down the feeling.

Just imagine how many times you have to tell yourself that the parachute is going to work and statistically you are very unlikely to die from parachuting out of a plane if you were this doctor. Imagine how much discipline it takes.

His take home message was that we overcome fear by managing risk and we manage risk by educating ourselves. That’s why we go to medical school, so that we don’t kill patients and that’s why we read so many books about investing and practice with mock money before actually invest.

He ended his speech with a quote of T.S. Elliot
"Only those who will risk going too far can possibly find out how far one can go"

So how do you overcome your fears?

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Next post Thursday! xoxo

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