There is a lot of discussion on TRP about trying to become alpha, what it means to be it, how to know whether you have achieved it, and that misses the point. I'm just another guy muddling through this, but I've got some experience from other places that might shed some light.

A couple of years ago I had drinks with a guy who had all the physicality and background to be the alpha in the group that night, but the moment he had to say to me that he was, he had folded frame without even knowing it. I would never acknowledge it in the moment, but by needing my approval he had folded it to me. We've all tried to impress others, but the hardest part that needs practice is the discipline of not actually trying. Fucking zen fuckers get you every time.

It isn't a state that you achieve that you can go and bestow on others, or that someone tells you that you have it. It's not like you get there and then you are never underdog again. Growth means change, sacrifice, and loss. It is about seeking out and learning from new masters, whom you must approach with humility (or lose to) to learn from. \"Alpha\" is a dynamic quality, which I will get into in a second.

The reason I cede the floor to whomever has demonstrated mastery in a situation is because their skills don't change who I am. In most situations I have nothing to prove and can afford to be humble, but it's a luxury. What I do not cede is initiative.

When I see it in other guys, it's a lot like being cool. It's never anything you can say you are or try to be. Merely trying is failing. Yoda's \"do. or do not. there is no try.\" applies. It is not an action or a behavior, it is an effect. It is a quality that others attribute to you through their own behaviors in response to you. This means your ability to listen and elicit responses has more influence than your attempts to outwardly direct them. What is leadership but drawing people to you, instead of simply driving them toward something? It is not how you act, it is how they react.

This \"alpha\" is a quality that only exists in the present, and in the moment. It is the result of disciplined habits over time, which you have had long enough you don't remember what it feels like to do it any other way. You will also meet other dudes who have been doing it longer, but as you become wiser, the opportunities to learn just become rarer and more valuable. The best indicator that you have it is that you can recognize, admire and appreciate it in others.

In the stock market, returns from indices (averages) are called beta, where the returns that are over and above the market are called alpha. Hedge funds sell themselves to investors based on the implication that they have some secret sauce that will return alpha, and that investors are better off putting their money into their funds. Traders with a long run of alpha either have dumb luck, inside information, a secret arbitrage strategy, or hidden, massively asymmetrical risk that will cause them to blow up \"unexpectedly.\" In the market, a trader can have significant alpha for a few quarters based on some good bets, but nothing long term. The received wisdom is that even if you have a winning strategy, the markets can stay irrational longer than you can stay solvent, so you may never get the chance to be right. In 2008, there were more hedge funds than taco bell franchises, and the distribution of returns (see Andrew Lo's work) was weighted heavily in the top percentiles, with most failing. That we think of high-alpha returning hedge funds as a successful business is pure survivorship bias. That is, yes, when you remove the %90 that failed, only the %10 that survived were even profitable. Nobody talks about the funds that went bust shorting the housing market in 2007 because investors got tired and they suffered drawdowns, or their options expired worthless.

Alpha in finance has some useful lessons. First, it's situational and temporary. Second, it's risk adjusted, which means when you multiply it by the percent chance of failure, you get the true value over the near term. Third, the gutter is littered with failed attempts, but we don't talk about them because we never hear about them again. Be patient, that is where it starts.

So from the perspective of TRP, lifting and improving yourself prepares you for the opportunity to be the most alpha guy in the room. By being prepared, you increase the likelihood of exhibiting this quality in a given situation. But like anything, you don't own it, it's just your turn. It's not something that is measured in plates, squats, or salaries, but you probably can't have it unless you have those other things. They are definitely the best way to get it.

Not to be all mystical, but it may be more useful to reason about alpha as a general quality to be appreciated than a state that one achieves.