Inspirational Life Advice From Neil Gaiman

As I said before, I am in the midst of a transition phase in my life at the moment and as we all know it, transitions are hard. For starters, we no longer have the comfort of getting up and doing what we have done every single day for the past few years. Transitioning means change. And we all hate change. 

Transitioning also means that we have to start doing something that we are totally new at. This means that we have to become beginners all over again. And just like everything meaningful in life, it's hard when you are just starting out.

This really reminds me of the feeling I got when I graduated from college. Leaving the familiarity of books and entering the great big world of "work" can sometimes be scary, especially for those of you who don't really know what you want to do.

Fortunately, in the closing days of my college life, I found a great motivational commencement speech from Steve Jobs. For those of you who have not watched it, click here (Seriously, where the heck were you living?)

Now, as I contemplate the next stage of my life, I am lucky again to have found something that is equally motivational and inspiring. Here is the video of the speech given by Neil Gaiman (Wiki him if you don't know who Neil Gaiman is) at the commencement of the University of the Arts. This speech was just given a few days ago. What impeccable timing!

And for those of you who prefer reading over sitting and watching a 19-minute video, here is the transcript of the speech:

I never really expected to find myself giving advice to people graduating from an establishment of higher education.  I never graduated from any such establishment. I never even started at one. I escaped from school as soon as I could, when the prospect of four more years of enforced learning before I'd become the writer I wanted to be was stifling. 

I got out into the world, I wrote, and I became a better writer the more I wrote, and I wrote some more, and nobody ever seemed to mind that I was making it up as I went along, they just read what I wrote and they paid for it, or they didn't, and often they commissioned me to write something else for them. 

Which has left me with a healthy respect and fondness for higher education that those of my friends and family, who attended Universities, were cured of long ago. 

Looking back, I've had a remarkable ride. I'm not sure I can call it a career, because a career implies that I had some kind of career plan, and I never did. The nearest thing I had was a list I made when I was 15 of everything I wanted to do: to write an adult novel, a children's book, a comic, a movie, record an audiobook, write an episode of Doctor Who... and so on. I didn't have a career. I just did the next thing on the list. 

So I thought I'd tell you everything I wish I'd known starting out, and a few things that, looking back on it, I suppose that I did know. And that I would also give you the best piece of advice I'd ever got, which I completely failed to follow. 

First of all: When you start out on a career in the arts you have no idea what you are doing. 

This is great. People who know what they are doing know the rules, and know what is possible and impossible. You do not. And you should not. The rules on what is possible and impossible in the arts were made by people who had not tested the bounds of the possible by going beyond them. And you can. 

If you don't know it's impossible it's easier to do. And because nobody's done it before, they haven't made up rules to stop anyone doing that again, yet. 

Secondly, If you have an idea of what you want to make, what you were put here to do, then just go and do that. 

And that's much harder than it sounds and, sometimes in the end, so much easier than you might imagine. Because normally, there are things you have to do before you can get to the place you want to be. I wanted to write comics and novels and stories and films, so I became a journalist, because journalists are allowed to ask questions, and to simply go and find out how the world works, and besides, to do those things I needed to write and to write well, and I was being paid to learn how to write economically,  crisply, sometimes under adverse conditions, and on time. 

Sometimes the way to do what you hope to do will be clear cut, and sometimes  it will be almost impossible to decide whether or not you are doing the correct thing, because you'll have to balance your goals and hopes with feeding yourself, paying debts, finding work, settling for what you can get. 

Something that worked for me was imagining that where I wanted to be – an author, primarily of fiction, making good books, making good comics and supporting myself through my words – was a mountain. A distant mountain. My goal. 

And I knew that as long as I kept walking towards the mountain I would be all right. And when I truly was not sure what to do, I could stop, and think about whether it was taking me towards or away from the mountain. I said no to editorial jobs on magazines, proper jobs that would have paid proper money because I knew that, attractive though they were, for me they would have been walking away from the mountain. And if those job offers had come along earlier I might have taken them, because they still would have been closer to the mountain than I was at the time. 

I learned to write by writing. I tended to do anything as long as it felt like an adventure, and to stop when it felt like work, which meant that life did not feel like work. 

Thirdly, When you start off, you have to deal with the problems of failure. You need to be thickskinned, to learn that not every project will survive. A freelance life, a life in the arts, is sometimes like putting messages in bottles, on a desert island, and hoping that someone will find one of your bottles and open it and read it, and put something in a bottle that will wash its way back to you: appreciation, or a commission, or money, or love. And you have to accept that you may put out a hundred things for every bottle that winds up coming back. 

The problems of failure are problems of discouragement, of hopelessness, of hunger. You want everything to happen and you want it now, and things go wrong. My first book – a piece of journalism I had done for the money, and which had already bought me an electric typewriter  from the advance – should have been a bestseller. It should have paid me a lot of money. If the publisher hadn't gone into involuntary liquidation between the first print run selling out and the second printing, and before any royalties could be paid, it would have done. 

And I shrugged, and I still had my electric typewriter and enough money to pay the rent for a couple of months, and I decided that I would do my best in future not to write books just for the money. If you didn't get the money, then you didn't have anything. If I did work I was proud of, and I didn't get the money, at least I'd have the work. 

Every now and again, I forget that rule, and whenever I do, the universe kicks me hard and reminds me. I don't know that it's an issue for anybody but me, but it's true that nothing I did where the only reason for doing it was the money was ever worth it, except as bitter experience. Usually I didn't wind up getting the money, either.  The things I did because I was excited, and wanted to see them exist in reality have never let me down, and I've never regretted the time I spent on any of them. 

The problems of failure are hard. 

The problems of success can be harder, because nobody warns you about them. 

The first problem of any kind of even limited success is the unshakable conviction that you are getting away with something, and that any moment now they will discover you. It's Imposter Syndrome, something my wife Amanda christened the Fraud Police. 

In my case, I was convinced that there would be a knock on the door, and a man with a clipboard (I don't know why he carried a clipboard, in my head, but he did) would be there, to tell me it was all over, and they had caught up with me, and now I would have to go and get a real job, one that didn't consist of making things up and writing them down, and reading books I wanted to read. And then I would go away quietly and get the kind of job where you don't have to make things up any more. 

The problems of success. They're real, and with luck you'll experience them. The point where you stop saying yes to everything, because now the bottles you threw in the ocean are all coming back, and have to learn to say no. 

I watched my peers, and my friends, and the ones who were older than me and watch how miserable some of them were: I'd listen to them telling me that they couldn't envisage a world where they did what they had always wanted to do any more, because now they had to earn a certain amount every month just to keep where they were. They couldn't go and do the things that mattered, and that they had really wanted to do; and that seemed as a big a tragedy as any problem of failure. 

And after that, the biggest problem of success is that the world conspires to stop you doing the thing that you do, because you are successful. There was a day when I looked up and realised that I had become someone who professionally replied to email, and who wrote as a hobby.  I started answering fewer emails, and was relieved to find I was writing much more. 

Fourthly, I hope you'll make mistakes. If you're making mistakes, it means you're out there doing something. And the mistakes in themselves can be useful. I once misspelled Caroline, in a letter, transposing the A and the O, and I thought, “Coraline looks like a real name...” 

And remember that whatever discipline you are in, whether you are a musician or a photographer, a fine artist or a cartoonist, a writer, a dancer, a designer, whatever you do you have one thing that's unique. You have the ability to make art. 

And for me, and for so many of the people I have known, that's been a lifesaver. The ultimate lifesaver. It gets you through good times and it gets you through the other ones. 

Life is sometimes hard. Things go wrong, in life and in love and in business and in friendship and in health and in all the other ways that life can go wrong. And when things get tough, this is what you should do. 

Make good art. 

I'm serious. Husband runs off with a politician? Make good art. Leg crushed and then eaten by mutated boa constrictor? Make good art. IRS on your trail? Make good art. Cat exploded? Make good art. Somebody on the Internet thinks what you do is stupid or evil or it's all been done before? Make good art. Probably things will work out somehow, and eventually time will take the sting away, but that doesn't matter. Do what only you do best. Make good art. 

Make it on the good days too. 

And Fifthly, while you are at it, make your art. Do the stuff that only you can do. 

The urge, starting out, is to copy. And that's not a bad thing. Most of us only find our own voices after we've sounded like a lot of other people. But the one thing that you have that nobody else has is you. Your voice, your mind, your story, your vision. So write and draw and build and play and dance and live as only you can. 

The moment that you feel that, just possibly, you're walking down the street naked, exposing too much of your heart and your mind and what exists on the inside, showing too much of yourself. That's the moment you may be starting to get it right. 

The things I've done that worked the best were the things I was the least certain about, the stories where I was sure they would either work, or more likely be the kinds of embarrassing failures people would gather together and talk about  until the end of time. They always had that in common: looking back at them, people explain why they were inevitable successes. While I was doing them, I had no idea. 

I still don't. And where would be the fun in making something you knew was going to work? 

And sometimes the things I did really didn't work. There are stories of mine that have never been reprinted. Some of them never even left the house. But I learned as much from them as I did from the things that worked. 

Sixthly. I will pass on some secret freelancer knowledge. Secret knowledge is always good. And it is useful for anyone who ever plans to create art for other people, to enter a freelance world of any kind. I learned it in comics, but it applies to other fields too. And it's this: 

People get hired because, somehow, they get hired. In my case I did something which these days would be easy to check, and would get me into trouble, and when I started out, in those pre-internet days, seemed like a sensible career strategy: when I was asked by editors who I'd worked for, I lied. I listed a handful of magazines that sounded likely, and I sounded confident, and I got jobs. I then made it a point of honour to have written something for each of the magazines I'd listed to get that first job, so that I hadn't actually lied, I'd just been chronologically challenged... You get work however you get work. 

People keep working, in a freelance world, and more and more of today's world is freelance, because their work is good, and because they are easy to get along with, and because they deliver the work on time. And you don't even need all three. Two out of three is fine. People will tolerate how unpleasant you are if your work is good and you deliver it on time. They'll forgive the lateness of the work if it's good, and if they like you. And you don't have to be as good as the others if you're on time and it's always a pleasure to hear from you. 

When I agreed to give this address, I started trying to think what the best advice I'd been given over the years was. 

And it came from Stephen King twenty years ago, at the height of the success of Sandman. I was writing a comic that people loved and were taking seriously. King had liked Sandman and my novel with Terry Pratchett, Good Omens, and he saw the madness, the long signing lines, all that, and his advice was this: 

“This is really great. You should enjoy it.” 

And I didn't. Best advice I got that I ignored.Instead I worried about it. I worried about the next deadline, the next idea, the next story. There wasn't a moment for the next fourteen or fifteen years that I wasn't writing something in my head, or wondering about it. And I didn't stop and look around and go, this is really fun. I wish I'd enjoyed it more. It's been an amazing ride. But there were parts of the ride I missed, because I was too worried about things going wrong, about what came next, to enjoy the bit I was on. 

That was the hardest lesson for me, I think: to let go and enjoy the ride, because the ride takes you to some remarkable and unexpected places. 

And here, on this platform, today, is one of those places. (I am enjoying myself immensely.) 

To all today's graduates: I wish you luck. Luck is useful. Often you will discover that the harder you work, and the more wisely you work, the luckier you get. But there is luck, and it helps. 

We're in a transitional world right now, if you're in any kind of artistic field, because the nature of distribution is changing, the models by which creators got their work out into the world, and got to keep a roof over their heads and buy sandwiches while they did that, are all changing. I've talked to people at the top of the food chain in publishing, in bookselling, in all those areas, and nobody knows what the landscape will look like two years from now, let alone a decade away. The distribution channels that people had built over the last century or so are in flux for print, for visual artists, for musicians, for creative people of all kinds. 

Which is, on the one hand, intimidating, and on the other, immensely liberating. The rules, the assumptions, the now-we're supposed to's of how you get your work seen, and what you do then, are breaking down. The gatekeepers are leaving their gates. You can be as creative as you need to be to get your work seen. YouTube and the web (and whatever comes after YouTube and the web) can give you more people watching than television ever did. The old rules are crumbling and nobody knows what the new rules are. 

So make up your own rules. 

Someone asked me recently how to do something she thought was going to be difficult, in this case recording an audio book, and I suggested she pretend that she was someone who could do it. Not pretend to do it, but pretend she was someone who could. She put up a notice to this effect on the studio wall, and she said it helped. 

So be wise, because the world needs more wisdom, and if you cannot be wise, pretend to be someone who is wise, and then just behave like they would. 

And now go, and make interesting mistakes, make amazing mistakes, make glorious and fantastic mistakes. Break rules. Leave the world more interesting for your being here. Make good art.

Keep It Simple, Stupid

Monkey Business in India

This story about monkeys more or less taking over Delhi is so sad to the extent that it is borderline funny. OK, not in a humorous way, but in a tragic way. Here is the extract:

The monkey population of Delhi has grown so large and aggressive that overwhelmed city officials have petitioned India’s Supreme Court to relieve them of the task of monkey control. 

“We have trapped 13,013 monkeys since 2007,” said R. B. S. Tyagi, director of veterinary services for Delhi’s principal city government. Nonetheless, Delhi’s monkey population has only increased. 

The reason is simple: People feed them. Monkeys are the living representatives of the cherished Hindu god Hanuman, and Hindu tradition calls for feeding monkeys on Tuesdays and Saturdays.

...

Roopi Saran, a Delhi resident, has seen monkeys steal candy from the hands of her children. And tribes of monkeys often take over her yard, preventing her and her children from venturing outside. 

“So we sit inside our house like caged animals, like we’re the ones in the zoo and they’re the owners outside looking at us,” Ms. Saran said. 

With the city’s trapping program a failure, some residents are getting a bigger monkey, a langur, to urinate around their homes. The acrid smell of the urine scares the smaller rhesus monkeys away for weeks. But the odor is no bouquet for humans, either, and as soon as it disappears, the rhesus monkeys return.

Amar Singh, a langur handler, was sitting across the street recently from one of his langurs in Delhi’s diplomatic neighborhood while his monkey systematically stripped the leaves off a tree in the yard of well-tended home. The langur, a large monkey with a black face dramatically framed by white fur, was tied to a pole with a six-foot leash. Mr. Singh cautioned against getting anywhere near the animal because “a langur’s slap is so hard, it can send its target back by five feet.”

Langur = Badass

How Can Investment Bankers Survive Bonus Cuts?

This article from Bloomberg about how the cut in investment bankers' bonuses are affecting their lives was published a while ago, but I still can't get over how funny it is. Not that I am amused by the misfortune of others, but quite simply, I am amused at how unfortunate they think they are. Here are some excerpts:

Schiff, 46, is facing another kind of jam this year: Paid a lower bonus, he said the $350,000 he earns, enough to put him in the country’s top 1 percent by income, doesn’t cover his family’s private-school tuition, a Kent, Connecticut, summer rental and the upgrade they would like from their 1,200-square- foot Brooklyn duplex. 

“I feel stuck,” Schiff said. “The New York that I wanted to have is still just beyond my reach.” 

... 

The malaise is shared by Schiff, the New York-based marketing director for Euro Pacific Capital, where his brother is CEO. His family rents the lower duplex of a brownstone in Cobble Hill, where his two children share a room. His 10-year- old daughter is a student at $32,000-a-year Poly Prep Country Day School in Brooklyn. His son, 7, will apply in a few years. 

“I can’t imagine what I’m going to do,” Schiff said. “I’m crammed into 1,200 square feet. I don’t have a dishwasher. We do all our dishes by hand.”
He wants 1,800 square feet -- “a room for each kid, three bedrooms, maybe four,” he said. “Imagine four bedrooms. You have the luxury of a guest room, how crazy is that?”

... 

“People who don’t have money don’t understand the stress,” said Alan Dlugash, a partner at accounting firm Marks Paneth & Shron LLP in New York who specializes in financial planning for the wealthy. “Could you imagine what it’s like to say I got three kids in private school, I have to think about pulling them out? How do you do that?” 

... 

Scheiner said he spends about $500 a month to park one of his two Audis in a garage and at least $7,500 a year each for memberships at the Trump National Golf Club in Westchester and a gun club in upstate New York. A labradoodle named Zelda and a rescued bichon frise, Duke, cost $17,000 a year, including food, health care, boarding and a daily dog-walker who charges $17 each per outing, he said.

Now, you can imagine why you will never have enough money. The animal in us always want what we can't have. Being human is having the discipline to control that urge.

Volume 4 Issue 21: Intelligent Investing

Facebook IPO Tanking - Just As Expected?

So, after two days of trading, arguably the hottest IPO of this year has come in line with our expectations. It started off with a short period of euphoria, causing the price to jump to USD42 but then on Monday's trading, it fell back to USD34, way below its IPO price of USD38. (Update: Facebook's price has hit USD31.00 after Tuesday's (22 May 2012) trading)

In the past, I have written about how IPOs are just a bunch of expensive and evil lottery tickets, and this still holds true. If you remember, I also previously showed that 20 out of 25 IPOs in the last two years have tanked.

Even before the Facebook IPO, some analysts have argued that it would be very hard to justify a USD100 billion valuation on Facebook. But as I said, it is difficult to trust analysts sometimes. So let's do a bit of simple calculation on our own. Let us first note that in 2011, Facebook recorded a net income of USD1 billion. For you P/E junkies, simple mathematics would show that the P/E ratio is about 100 times. But as we all know, the Facebook faithful surely believes that the current price that they are paying is for Facebook's future earnings.

So let us now satisfy the thirst of the Facebook faithfuls. I am going to assume that Facebook's net income will grow at 50% for the next four years, and 30% for another four years, and eventually at 15% after that. I think this is by every means a very generous growth rate, which I would be more than happy to get for any investment I own. But what we are trying to figure out now is, is this kind of earnings growth worth the price tag of USD100 billion. (P/S: For those of you who caught me using net income instead of free cashflow, I am just trying to prove a point and I don't want to go into the intricacies of depreciation, amortization, capital expenditure etc.). Take a look at the Chart 1.

Chart 1

So the blue bar shows the cumulative net income in each year after the IPO. The orange line marks the USD100 billion that you would pay for Facebook if you bought the whole company straight up. I am just going to ignore the Mark Zuckerberg premium because there is no way I know how to value that. As you can see, it would take you about 10+ years for your investment to break even. In other words, it would take you more than 10 years before you begin to start making profits for your investment. Now, from an investor's standpoint, you have to ask yourself, is there a better way for you to get better returns for the next 10 years?

Those of you who are more observant would have noticed that I did not use the net present value of the net income. Assuming that I use a discount rate of 5% per year, the discounted payback period (the smart people's term for breakeven point) would be almost 13 years. Of course, the 5% that I am using is arbitrary. It varies from person to person, but it should be based on your required rate of return or at least, be based on the possible return of your next best alternative.

I will not pretend to know how to value a company like Facebook. Some of you may claim that the growth rates that I have assumed are too conservative. Facebook's potential is much larger that I think. Maybe, maybe not. Nonetheless, you must realize that I have assumed that in the next 10 years or so, there will be no recessions. This is very unlikely, and as we all know, recessions lead to lower advertising revenue for Facebook. The second point is, we have all seen the death of Friendster and Myspace. Now, maybe Mark Zuckerberg is much smarter than the people at those other social networking sites, but honestly, who knows?

I suppose only time will tell.

Disclaimer: All company analyses, including the paper portfolio that appear in this newsletter are derived from facts gathered from various sources and the contributors' personal opinions and for education purposes. It is NOT an invitation to deal in securities, and especially not a recommendation for buying or selling any stock. The contributor(s) do not guarantee the accuracy of the facts being presented. The accuracy of such facts are only as reliable as the sources that they are obtained from. Please consult your investment advisers before acting on any information provided by the analyses here. The authors most likely have interests in the stocks that are discussed in this website.  

There Are No Bad Bosses?

This is one of those articles for you who feel like you are dragging yourselves to work on Monday morning. In most working environments, there is usually a group of complainers. They drag themselves out of bed every day, go to work begrudgingly and find every opportunity possible, be it lunch break, tea breaks, etc., to complain about the company and their bosses, and sometimes, even their co-workers. They talk about how their hard work is not being appreciated, or how one particular colleague is a constant brownnoser etc. Does this sound familiar?

I call such complainers “Us Against The World” people. They seemingly believe that they can do no wrong while other people around them, especially “the management” are the biggest idiots in the world. These people emit so much negativity that it is like a black hole sucking whatever little ounces of motivation you have for work. It is always very easy to sit back and criticize others and be supported by a group of like-minded people. This generally creates a self-reinforcing vicious cycle until one day, some of these people can’t take it anymore and decide to leave the company.  A few months back, I shared a bunch of stories about staying positive in a negative environment. Perhaps it is worth a re-read. 

But today, as the title suggest, is about managing bosses. I must again reiterate the awesomeness of Penelope Trunk's blog. Her article here talks about how to manage your relationship with your boss to make your working environment a lot more conducive for learning:

I could have spent my time complaining. There was a lot to complain about. Instead I always approached him with empathy (“I'm sorry she dumped you”), and I always knew my boundaries (“We can't fire her. It's illegal”). Even when he was at his worst, I never took what he said personally (“When you are done yelling, I'd be happy to talk to you”).

Aside from cutting a deal, he didn't have a lot of management skills, and this gap left more room for me to shine. My solid interpersonal skills helped fill in what he was missing and helped me to get what I wanted: A (reluctant and difficult but ultimately) very useful mentor.

So take another look at the boss you call bad. Think about what motivates him: What is he scared about that you can make easier? What is he lacking that you can compensate for? What does he wish you would do that you don't? Once you start managing this relationship more skillfully, you will be able to get more from your boss in terms of coaching and support: You'll be able to tip the scales from the bad boss side to the learning opportunity side.

In fact, you should always hope for a little incompetence on your boss's part. The hole in his list of talents provides a place for you to shine. The point, after all, is for you to shine, and no one shines when they're complaining.

Volume 14 Issue 20: Intelligent Investing

We Are What We Choose - Jeff Bezos

Below is the Baccalaureate Remarks that Jeff Bezos, the CEO and founder of Amazon, gave at Princeton in 2010. I have included the whole speech, which I think is necessary to read to get the whole context. 

As a kid, I spent my summers with my grandparents on their ranch in Texas. I helped fix windmills, vaccinate cattle, and do other chores. We also watched soap operas every afternoon, especially "Days of our Lives." My grandparents belonged to a Caravan Club, a group of Airstream trailer owners who travel together around the U.S. and Canada. And every few summers, we'd join the caravan. We'd hitch up the Airstream trailer to my grandfather's car, and off we'd go, in a line with 300 other Airstream adventurers. I loved and worshipped my grandparents and I really looked forward to these trips. On one particular trip, I was about 10 years old. I was rolling around in the big bench seat in the back of the car. My grandfather was driving. And my grandmother had the passenger seat. She smoked throughout these trips, and I hated the smell.

At that age, I'd take any excuse to make estimates and do minor arithmetic. I'd calculate our gas mileage -- figure out useless statistics on things like grocery spending. I'd been hearing an ad campaign about smoking. I can't remember the details, but basically the ad said, every puff of a cigarette takes some number of minutes off of your life: I think it might have been two minutes per puff. At any rate, I decided to do the math for my grandmother. I estimated the number of cigarettes per days, estimated the number of puffs per cigarette and so on. When I was satisfied that I'd come up with a reasonable number, I poked my head into the front of the car, tapped my grandmother on the shoulder, and proudly proclaimed, "At two minutes per puff, you've taken nine years off your life!"

I have a vivid memory of what happened, and it was not what I expected. I expected to be applauded for my cleverness and arithmetic skills. "Jeff, you're so smart. You had to have made some tricky estimates, figure out the number of minutes in a year and do some division." That's not what happened. Instead, my grandmother burst into tears. I sat in the backseat and did not know what to do. While my grandmother sat crying, my grandfather, who had been driving in silence, pulled over onto the shoulder of the highway. He got out of the car and came around and opened my door and waited for me to follow. Was I in trouble? My grandfather was a highly intelligent, quiet man. He had never said a harsh word to me, and maybe this was to be the first time? Or maybe he would ask that I get back in the car and apologize to my grandmother. I had no experience in this realm with my grandparents and no way to gauge what the consequences might be. We stopped beside the trailer. My grandfather looked at me, and after a bit of silence, he gently and calmly said, "Jeff, one day you'll understand that it's harder to be kind than clever."

What I want to talk to you about today is the difference between gifts and choices. Cleverness is a gift, kindness is a choice. Gifts are easy -- they're given after all. Choices can be hard. You can seduce yourself with your gifts if you're not careful, and if you do, it'll probably be to the detriment of your choices.

This is a group with many gifts. I'm sure one of your gifts is the gift of a smart and capable brain. I'm confident that's the case because admission is competitive and if there weren't some signs that you're clever, the dean of admission wouldn't have let you in.

Your smarts will come in handy because you will travel in a land of marvels. We humans -- plodding as we are -- will astonish ourselves. We'll invent ways to generate clean energy and a lot of it. Atom by atom, we'll assemble tiny machines that will enter cell walls and make repairs. This month comes the extraordinary but also inevitable news that we've synthesized life. In the coming years, we'll not only synthesize it, but we'll engineer it to specifications. I believe you'll even see us understand the human brain. Jules Verne, Mark Twain, Galileo, Newton -- all the curious from the ages would have wanted to be alive most of all right now. As a civilization, we will have so many gifts, just as you as individuals have so many individual gifts as you sit before me.

How will you use these gifts? And will you take pride in your gifts or pride in your choices?

I got the idea to start Amazon 16 years ago. I came across the fact that Web usage was growing at 2,300 percent per year. I'd never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles -- something that simply couldn't exist in the physical world -- was very exciting to me. I had just turned 30 years old, and I'd been married for a year. I told my wife MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn't work since most startups don't, and I wasn't sure what would happen after that. MacKenzie (also a Princeton grad and sitting here in the second row) told me I should go for it. As a young boy, I'd been a garage inventor. I'd invented an automatic gate closer out of cement-filled tires, a solar cooker that didn't work very well out of an umbrella and tinfoil, baking-pan alarms to entrap my siblings. I'd always wanted to be an inventor, and she wanted me to follow my passion.

I was working at a financial firm in New York City with a bunch of very smart people, and I had a brilliant boss that I much admired. I went to my boss and told him I wanted to start a company selling books on the Internet. He took me on a long walk in Central Park, listened carefully to me, and finally said, "That sounds like a really good idea, but it would be an even better idea for someone who didn't already have a good job." That logic made some sense to me, and he convinced me to think about it for 48 hours before making a final decision. Seen in that light, it really was a difficult choice, but ultimately, I decided I had to give it a shot. I didn't think I'd regret trying and failing. And I suspected I would always be haunted by a decision to not try at all. After much consideration, I took the less safe path to follow my passion, and I'm proud of that choice.

Tomorrow, in a very real sense, your life -- the life you author from scratch on your own -- begins.

How will you use your gifts? What choices will you make?

Will inertia be your guide, or will you follow your passions?

Will you follow dogma, or will you be original?

Will you choose a life of ease, or a life of service and adventure?

Will you wilt under criticism, or will you follow your convictions?

Will you bluff it out when you're wrong, or will you apologize?

Will you guard your heart against rejection, or will you act when you fall in love?

Will you play it safe, or will you be a little bit swashbuckling?

When it's tough, will you give up, or will you be relentless?

Will you be a cynic, or will you be a builder?

Will you be clever at the expense of others, or will you be kind?

I will hazard a prediction. When you are 80 years old, and in a quiet moment of reflection narrating for only yourself the most personal version of your life story, the telling that will be most compact and meaningful will be the series of choices you have made. In the end, we are our choices. Build yourself a great story. Thank you and good luck!

I think from the anecdote that Jeff Bezos shared, it is clear that being smart is not enough. I would imagine it would be very difficult to find anyone who is smarter than Jeff Bezos. But I think what Bezos' grandfather said to him speaks volumes:

"Jeff, one day you'll understand that it's harder to be kind than clever."

I will write more about this area in the future, especially since I have read quite a decent amount on the subject mostly in preparation for the next phase of my life.

Nonetheless. not to get too sidetracked with the whole point of Bezos' story. Life is most certainly full of choices and I truly believe in what he said. Our lives will be the sum of our choices. Every difficult twist and turn you take throughout your lives will lead finally lead you to where you eventually deserve to be.

There really are not shortcuts. Initially, perhaps in the short term, no harm is done. But when you take a shortcut. sometimes, it can come back and bite you far into the future. By taking shortcuts, you are most likely to be shortchanging yourself. Everything that is worth doing, is worth doing well.

Volume 4 Issue 19: Intelligent Investing

Sacrifice of the Haves for the Have-nots

I've been meaning to share this article by Andrew Sheng for a while. It is an interesting read throughout. Here are some parts that Andrew Sheng talks about that ties in to the Western Delusion that any practice that is "un-Western" is not good enough. Here are some interesting excerpts:

In particular, the rise of emerging markets has challenged traditional Western deductive and inductive logic. Deductive inference enables us to predict effects if we know the principles (the rule) and the cause. By inductive reasoning, if we know the cause and effects, we can infer the principles. 

Eastern thinking, by contrast, has been abductive, moving from pragmatism to guessing the next steps. Abductive inference is pragmatic, looking only at outcomes, guessing at the rule, and identifying the cause. 

Like history, social-scientific theory is written by the victors and shaped by the context and challenges of its time. Free-market thinking evolved from Anglo-Saxon theorists (many from Scotland), who migrated and colonized territories, allowing fortunate individuals to assume that there were no limits to consumption. European continental thinking, responding to urbanization and the need for social order, emphasized institutional analysis of political economy. 

Thus, the emergence of neoclassical economics in the nineteenth century was very much influenced by Newtonian and Cartesian physics, moving from qualitative analysis to quantifying human behavior by assuming rational behavior and excluding uncertainty. This “predetermined equilibrium” thinking – reflected in the view that markets always self-correct – led to policy paralysis until the Great Depression, when John Maynard Keynes’s argument for government intervention to address unemployment and output gaps gained traction.

...

New thinking is required to manage these massive and systemic changes, as well as the integration of giants like China and India into the modern world. A change of mindset is needed not just in the West, but also in the East. In 1987, the historian Ray Huang explained it for China: 

“As the world enters the modern era, most countries under internal and external pressure need to reconstruct themselves by substituting the mode of governancerooted in agrarian experience with a new set of rules based on commerce.…This is easier said than done. The renewal process could affect the top and bottom layers, and inevitably it is necessary to recondition the institutional links between them. Comprehensive destruction is often the order; and it may take decades to bring the work to completion.”

Using this macro-historical framework, we can see Japanese deflation, European debt, and even the Arab Spring as phases of systemic changes within complex structures that are interacting with one another in a new, multipolar global system. We are witnessing simultaneous global convergence (the narrowing of income, wealth, and knowledge gaps between countries) and local divergence (widening income, wealth, and knowledge gaps within countries).

...
A new wave of what the economist Joseph Schumpeter famously called “creative destruction” is under way: even as central banks struggle to maintain stability by flooding markets with liquidity, credit to business and households is shrinking. We live in an age of simultaneous fear of inflation and deflation; of unprecedented prosperity amid growing inequality; and of technological advancement and resource depletion. 

Meanwhile, existing political systems promise good jobs, sound governance, a sustainable environment, and social harmony without sacrifice – a paradise of self-interested free riders that can be sustained only by sacrificing the natural environment and the welfare of future generations.

We cannot postpone the pain of adjustment forever by printing money. Sustainability can be achieved only when the haves become willing to sacrifice for the have-nots.

I particularly like that last sentence. This is precisely what economics is all about. Resources are limited (i.e. not infinite). If control over resources (be it monetary or otherwise) is concentrated in the hands of the wealthy and powerful etc., then sustainability cannot be achieved. I am not advocating a completely egalitarian society, but the need for re-balancing can no longer be ignored. Germany has prospered from the formation of the Eurozone, while the periphery rode along its coat tails. Now that the region is in dire need of unity, why can't Germany play its role as a Eurozone member and sacrifice a little for the have-nots? It may seem like an exaggeration, but the health of the global economy depends on it.