Wednesday, May 30, 2012

Recommended Readings: The Rare Find by George Anders


(You can also purchase this book from BookDepository.com by clicking here. Book Depository offers FREE international shipping)

I was introduced to this book (The Rare Find: Spotting Exceptional Talent Before Everyone Else) recently by my boss, which more or less meant that there was little choice other than to read it. On the surface, The Rare Find is meant to be a book about spotting talent as a hiring manager. The book has a myriad of examples on how and where we can find exceptional talent.

For those of you who are involved in hiring or interviewing candidates, I am sure that you understand that detecting capable candidates go far beyond classroom achievements. In this day and age, resumes come padded with overflowing information, most of which are totally irrelevant to whether the candidate is able to perform the task well. Either that or the achievements are overly exaggerated. Furthermore, in Malaysia, there is huge problem with relying on academic results. The government has a habit of handing out As like free candy. So much so, that there are THREE separate levels of As. A+, A, and A-. Is this another one of those self-bluffing tactics? We can sleep better at night knowing that we scored an A- instead of actually scoring a C (if you are using the scale of A, B and C).

This makes the task of finding the “right” candidate very costly and time consuming. How then, can we find the candidate that we want? This is exactly the kind of question that The Rare Find attempts to answer, and in my opinion, it has done so very well. In fact, the examples in the book are even more selective. It demonstrates methods that truly distinguish the good from the great.

Nonetheless, on a deeper level, the book shares so much more. Now, those of you who know me know that I do not buy into the notion that talent is a determinant of success. On its surface, The Rare Find shares how we can find talent. But what it is really telling us is how we can “create” talent. Instead of sitting back and admiring how “great talents” jump over the hoops and fires that were laid in front of them, we can and should proactively internalize the behaviors and attitudes demonstrated.

What I mean is that, the book is basically telling us how to behave like talented people. If you think about it, the reason that George Anders can write a book about finding talent in general is simply because there is a general pattern in the way that exceptionally talented people behave. I will not give the secret ingredients away and of course, not to spoil the book for you. In many ways this book serves to be some sort of a motivation to unleash your own potential. While it may sound clich├ęd, very often we are in our own way. I attribute this to the fear of failure. It is the main reason why many of us do not take risks. Our instincts are wired towards self-preservation. We tend to ask, “What if this goes wrong? Or What if that goes wrong?”. Of course this is useful more often than not, but as with all personal attributes, it is a double-edged sword. Being overcautious shuts out many of the opportunities that are available to us.

That is why The Rare Find dedicates one chapter in the book to “What Can Go Right?”. This is one of the key reasons why I have chosen to embark on a road less travelled. While many of you are already aware, I am still withholding what the road less travelled really means. The opportune moment will arise and I will reveal all then. 


(You can also purchase this book from BookDepository.com by clicking hereBook Depository offers FREE international shipping)


Disclosure: If you purchase the books from the links that I have provided, you will be participating in the great cause of making sure that the authors of the Main Streeter do not starve so that they can continue writing for your benefit and entertainment. Thank you in advance for your generosity. 


Sunday, May 27, 2012

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.





Friday, May 25, 2012

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



Tuesday, May 22, 2012

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.  

Monday, May 21, 2012

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.


Sunday, May 20, 2012

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.


Friday, May 18, 2012

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.

Wednesday, May 16, 2012

Volume 4 Issue 18: Intelligent Investing

Burma's Turn. When Is It Malaysia's Turn?

I kept this article from quite a while back but didn't manage to write anything meaningful about it. Nonetheless, it is a Stiglitz piece, and it would be a shame if I did not share it. Stiglitz talks about Burma (or now known as Myanmar) and its prospects after the leadership change which brought forth a string of rapid reform measures that makes Najib's reform measures look bad. Here is some extract:
Under the leadership of the new president, Thein Sein, the authorities have responded to calls for a political and economic opening. Progress has been made on peace agreements with ethnic-minority insurgents – conflicts rooted in the divide-and-rule strategy of colonialism, which the country’s post-independence rulers maintained for more than six decades. The Nobel laureate Daw Aung San Suu Kyi was not only released from house arrest, but is now campaigning hard for a parliamentary seat in April’s by-elections. 
On the economic front, unprecedented transparency has been introduced into the budgetary process. Expenditures on health care and education have been doubled, albeit from a low base. Licensing restrictions in a number of key areas have been loosened. The government has even committed itself to moving towards unifying its complicated exchange-rate system. 
The spirit of hope in the country is palpable, though some older people, who saw earlier moments of apparent relaxation of authoritarian rule come and go, remain cautious. Perhaps that is why some in the international community are similarly hesitant about easing Myanmar’s isolation. But most Burmese sense that if changes are managed well, the country will have embarked on an irreversible course.
I think the question that is so mind-boggling is, if countries like Myanmar and Senegal can do it, what is stopping Malaysia from implementing meaningful reforms? Are we so short of ideas? You know it is worrying when your Prime Minister has to set up a website to seek ideas on how to improve the country.

Monday, May 14, 2012

Reactions to the BPL on Sunday ala Meme

In the 93rd minute, when it all seemed doomed for Manchester City to not win the BPL. It would seem that we will once again have to hear the boasting and the gloating of all Manchester United fans for another year. But then...















Saturday, May 12, 2012

The Star - Malaysia's Best Newspaper?

I am appalled to see the kind of investigative reporting that the reporters at the Star are doing. In this article today, the Star reports that 100,000 people showed their unwavering support for UMNO:

If the reporters at the Star had an ounce of initiative, they would have obtained this picture, which was shown in the Malaysian Insider:


The stadium does not even look like it is half full. And any donkey with the ability to use Google or Wikipedia will be able to find out that the Bukit Jalil stadium has a capacity of 100,000. According to Wikipedia, the seating room is about 87,000. So, with my advanced mathematics skills, I calculated half of 100,000 to be only 50,000. How did the Star come up with the 100,000 number? Who knows... Maybe it saw fit to exaggerate the amount of support for its "masters".

The Malaysian Insider portrays a more accurate picture:
KUALA LUMPUR, May 11 — Datuk Seri Najib Razak rallied Umno tonight to defend the country from being destroyed by the opposition, which he called uncivilised, undemocratic and lacking credibility.

The Umno president told at least 50,000 in the arena and thousands more loitering outside “not to let our children and grandchildren become destitute (terbangsat).”
Why is anyone still reading the Star?

Thursday, May 03, 2012

Being An Investment Banker - Part 5

How many times do I have to emphasize the insanity of the job as an investment banker? Let me be clear on this. I have no personal vendetta against investment banking. But does it not make you wonder that if all that soulless money-chasing is worth it? For starters, I think that question is moot. The real question is, is there a way to make money without losing your soul? 

Here is another life story of an ex-Wall Streeter:
When some people think about Wall Street, they conjure up images of traders shouting on the stock exchange, of bankers dining at five star restaurants, of CEOs whispering in the ears of captured Congress members.

When I think about Wall Street, I think about its stunted rainbow of pale pastel shirts. I think about the vaulting, highly secured, and very cold lobbies. And I think about the art passed daily by the harried workers, virtually unseen.

Before I occupied Wall Street, Wall Street occupied me. What started as a summer internship led to a seven-year career. During my time on Wall Street, I changed from a curious college student full of hope for my future, into a cynical, bitter, depressed, and exhausted “knowledge worker” who felt that everyone was out to screw me over.
 
The culture of Wall Street is pervasive and contagious. While there are Wall Street employees who are able to ignore it, or block it out, I was not one of them. I drank the Kool Aid. I’m out of it now. But I’d like to tell you what it was like.

When you are wealthy and successful, you have a choice. You can believe your success stems from luck and privilege, or you can believe it stems from hard work. Very few people like to view their success as a matter of luck. And so, perhaps understandably, most people on Wall Street believe they have earned their jobs, and the money that follows.
 
While there are many on Wall Street who come from wealthy backgrounds, there are also many people from very humble backgrounds. In my experience, it is often those who do not come from privilege who are the system’s fiercest defenders.

When I was a summer intern, we met with various executives who’d tell us about their careers and pitch us on the firm. The aim was to sell the firm to everyone, even though only a few of us would ultimately be offered full-time positions at the firm. It had an element of redundancy to it, since we were clearly already interested in the firm, or we wouldn’t be there at all. The effect of these talks, then, was to make a competitive situation even more competitive. Welcome to Wall Street. One executive described the firm as a “Golden Springboard.” If we began our careers there, his reasoning went, there wasn’t anywhere we couldn’t go. The executive was right. Background becomes irrelevant once you have “made it” to Wall Street. Once you’ve gotten in the door, you’re one of “us.”
 
Once hired, the cultural indoctrination begins in earnest, especially for those recent grads who begin their careers in “analyst training programs.” These programs are exclusively for college and graduate students, are often several months long, and are custom-tailored to the department you’ll ultimately join. The Sales & Trading analyst program is more competitive than, say, the Technology training program. And while most of the training is job-specific, there is also an air of finishing school. A trader friend of mine was instructed not only in the mathematics of the financial markets, but also in wine tasting and golf. You are trained, but also you are groomed. 
The grooming is not all fun and games and country clubs. Most of the message revolves around how hard everyone works, and how hard you are expected to work in turn. Wall Street views its own work ethic as legendary. Sixty-hour weeks are standard. An ex-boss of mine used to brag that for one six-year stretch he never took a sick day or a vacation. The streak ended when he contracted strep throat, refused to go to the doctor, and eventually had to be hospitalized (at least so he claimed).

While not everyone was as manic as my boss (Wall Street has more than its fair share of laziness and incompetence), even those who feel less committed to the job still buy into a concept of “face time.” It’s not right to leave your desk before a certain time. An ex-colleague of mine used to ask anyone who’d pass by his cubicle before 7pm on their way out the door, “Oh, half day today?”
 
This dueling masochism/machismo brings with it a tremendous superiority complex. People on Wall Street truly believe they work harder than anyone else. When confronted with the stark reality of, for example, a single mom working two jobs, the response is usually some variant of, “Well, if they’d only worked as hard as I did in school . . .” 
But the key to truly understanding superiority on Wall Street is by looking at how it’s measured: with cold, hard numbers. Numbers can be amplified by honest work, but they can also be amplified by betrayal, manipulation, and cheating. And when everything is a cold cost-benefit analysis, why wouldn’t you break regulations—provided you knew the profits you stood to make would dwarf the fines you would pay should you get caught? 
On Wall Street, the best-paid employees actively seek out their “market value” by interviewing and cultivating job offers at competing firms. Once they’ve secured an offer, they go back to their boss and try to land what’s called a “counter-offer.” If the new firm is offering to pay $300,000, the old firm may counter that offer with $400,000. 
But even in this game of betrayal, a little bit of lying will optimize your results. You can solicit a counter by handing in a resignation letter. But to resign and then accept a counter is to admit you’re a mercenary. This will get you labeled a “high flight risk.” No, playing the game correctly to maximize money means pretending the game is not about money at all. A more strategic route is to explain, “Well, this offer just fell into my lap, I really don’t want to leave, so is there anything you can do to help me out?” 
Of course, manipulation isn’t only for tricking your bosses—it extends to the clients as well. On Wall Street, it is not frowned upon to “rip the faces off” one’s own clients. If the client is dumb enough to get hoodwinked, that means the client didn’t work hard enough. He didn’t do his “due diligence.” In other words, if I screw you, you only have yourself to blame. That is the “zero-sum game” of trading. 
But perhaps the zenith of Wall Street fitness is the unpunished cheat. Around the holiday season, inter-dealer brokers will send gifts to the traders, trying to curry favor with bottles of wine or champagne. Inter-dealer brokers are brokers who allow Wall Street banks to anonymously trade with one another, since the last thing you want to do if you’re Morgan Stanley is let Goldman Sachs know your position, though you may still want to trade with them. But there is a catch to the gift-giving: according toFINRA, Wall Street’s self-regulatory agency, the brokers are only allowed to spend a maximum of $100 per trader. On slow winter days, the traders would Google the bottles of wine, trying to determine which vendors had cheated. Often they would find that, yes, this vendor breached the limit. The response to the cheat was always the same: a smirk, and an approving nod. It’s not about who cheated. It’s about who cheated successfully.

This attitude extends to higher stakes games as well. Take the case SEC v. Citigroup Global Markets, Inc. According to the SEC, in 2007 Citigroup sold their clients a portfolio of assets (mortgage-backed securities, as it happens) that Citi was actively betting against. The SEC therefore charged Citigroup with securities fraud; it’s been reported that the fearsome regulatory agency won’t settle for anything less than a $285 million fine. Looks bad, right? Well, yes, unless you consider that, according to Forbes, Citigroup allegedly made $160 million on this one deal (investors lost $700 million). Citigroup looks like it’s going to lose $125 million! But how many similar deals have gone un-prosecuted? If the answer is one, Citigroup is back in the black; if the answer is, as surely it must be, more than one, then Citigroup is doing very well, thank you.
 
This is why paying fines when you are caught breaking the rules is simply deemed “the cost of doing business” on Wall Street.

Poker is extremely popular across Wall Street, and provides an instructive lesson. The book Poker Winners Are Different by industrial psychologist and poker adviser Alan Schoonmaker presents a scenario where a player notices his best friend’s “tell”—that is, the best friend has a habit of showing when he has a good or bad hand. The book then poses the following dilemma: should you (a) tell your friend, (b) win a bit of money from him, and then tell him, or (c) exploit your friend, never telling him. The correct answer: screw your friend. Schoonmaker, who used to do “management development” work at Merrill Lynch, writes that winners will “do whatever the rules and ethics allow to maximize their profits.” This behavior is heralded in poker and it’s heralded on Wall Street. Despite what may be emblazoned on plaques or in mission statements, the ethics of Wall Street are purely about winning at any cost.

If they didn’t know it going in, Wall Street employees quickly learn that even their company is an enemy. To the firm, employees are a cost to be minimized, or a producer to be exploited. You also learn that you must never show gratitude for your bonus. To appear satisfied with your compensation is to admit that they paid you more than they had to, so you must feign outrage no matter what. What happens to a culture that discourages gratitude?

But most people on Wall Street do not feel gratitude anyway. It does not matter that their compensation is enormous compared to the average American—that is not who a Wall Street worker is comparing themselves to. They are looking at the compensation of the top sales person, the top trader, or, at the very top, the CEO.

What this environment did to me is that I began to see everyone as a threat. From that idiot two cubicles down from me, to the moron on the other end of the phone (the client), to—more than anything—the faceless, imagined people on government assistance who I assumed (incorrectly) were what was causing such large percentages to disappear from my paycheck.

Many of the adverse reactions to OWS have been along the lines of, “They’re just jealous.” Of course the Wall Street critics think OWS is about envy. Envy is part and parcel of their daily lives. When you are living in a culture of envy, you see envy everywhere you go. Why wouldn’t you think envy is at the core of our movement, too?
 
The envy and hostility of Wall Street leads many to a common goal: to amass enough money so as to enact your revenge. This end goal is called fuck-you money.

At one point in my career, I was being recruited by a hedge fund. During the recruitment process, one of my interviewers frankly described the fund’s founder—his boss’s boss—as a “spoiled brat billionaire.” My interviewer related a story about a meeting between the hedge fund and an executive at a company the fund wanted to work with. At one point, the visiting executive made statements the fund founder didn’t like. The founder turned to the visitor and said, “So, you came here just to try and fuck me over?” The visitor quickly stormed out in a rage. But the founder wasn’t satisfied just yet. He followed the man out of the room, into the elevator, shouted the entire ride down, and then yelled at him in the lobby until he finally left the building. When the founder came back upstairs to greet his shaken employees, he said, invigorated and beaming, “Wasn’t that fun?!”

This is Wall Street’s equivalent of the American Dream: to earn enough money so that you can behave in a way that makes the very existence of other people irrelevant.
 
Despite the toxicity I’ve described, Wall Street is not a collection of 1 percenters maniacally laughing at the 99 percent they have crushed under their boot. No, Wall Street is far too self-absorbed to be concerned with the outside world unless it is forced to. But Wall Street is also, on the whole, a very unhappy place. While there is always the whisper that maybe you too can one day earn fuck-you money, at the end of a long day, sometimes all you take with you are your misguided feelings of self-righteousness. 
I am far from the only Wall Street employee ever to feel chewed up by the system, even as I worked to perpetuate it. Another ex-Wall Street employee described feeling like a “hyper-specialized pawn” who “worked all the time with little control” of her life, and “little personal satisfaction at the end of the day.” I, too, felt manipulated, and why shouldn’t I? That was the game, after all. I felt overworked, demotivated, and I was clearly doing nothing to help the world.

I was able to leave once I decided that my happiness was more valuable than money. This is no great revelation to anyone at Occupy, but to someone who lived and breathed the idea that money was everything for seven years, it was not so easy. The true key to getting out was taking off my blinders: meeting others who were outside Wall Street’s bubble. This was a long process that involved a lot of psyching myself up in order to quit. Wall Street is not an easy place to walk away from. But after a year of planning, I finally submitted my resignation. I now teach computer programming at several venues, including Girl Develop It, which is a group that provides low-cost classes to women (men are welcome, too) in an environment that strives to be non-intimidating.
 
It is hard to contrast the joy of community I feel at Occupy Wall Street with the isolation I felt on Wall Street. It’s hard because I cannot think of two more disparate cultures. Wall Street believes in, and practices, a culture of scarcity. This breeds hoarding, distrust, and competition. As near as I can tell, Occupy Wall Street believes in plenty. This breeds sharing, trust, and cooperation. On Wall Street, everyone was my competitor. They’d help me only if it helped them. At Occupy Wall Street, I am offered food, warmth, and support, because it’s the right thing to do, and because joy breeds joy.

I was privileged enough to make it in the door on Wall Street, and to get bonuses during my time there. But I never felt as fortunate, or joyful, as I did the night after the eviction of Occupy Wall Street from Liberty Square, when we had our first post-raid General Assembly. When the thousands of supporters who filled the park necessitated three waves of the people’s mic. When our voices together echoed not just down the park, but up into the sky as the buildings caused the sound to ricochet off their glass walls.

And so I say to my friends who still dwell behind the Wall: come join us. The spoils of money can never match the joys of community. When you’re ready, we’ll be here.


What Successful People Do Differently

This is the transcript of an interview that was taken from the Harvard Business Review on what successful people do differently. Granted it is a very long read, but in a grand scheme of things, I would consider this a very small amount of time and effort to invest in your search for success:
SARAH GREEN: Welcome to the HBR IdeaCast from Harvard Business Review. I'm Sarah Green. What makes successful people different? Today we're talking about some of the strategies of people who are great at what they do, with Heidi Grant Halvorson, a motivational psychologist and author of the new ebook Nine Things Successful People Do Differently. That's also the title of a blog post she wrote for hbr.org which has become far and away our most popular blog post of all time. Heidi, it's so great to have you on the program today.

HEIDI GRANT HALVORSON:Thanks, Sarah.

SARAH GREEN: So first I wanted to ask you just about the genesis of this list of the nine habits of successful people, because some people have seven habits, other people have six keys, maybe someone else has five principles. So how did you settle on these nine things, and what are they based on?

HEIDI GRANT HALVORSON: Basically, the idea, for me, came from my background as a research psychologist. I come from sort of an academic background doing research on-- and the questions I was always interested in had to do with-- why some people handle difficulty better than other people do, why some people seem to be able to set goals and reach them, and other people set goals for themselves and end up not quite making it. And the answers to me were very interesting, because they're counter-intuitive. I think, particularly in the United States and in Western countries in general, we talk a lot about, we think a lot about, ability as the main explainer of success-- that if someone is very successful, they're at the top of their game, it's because they have some talent, some genius that we think of as innate, something they were born with. And that turns out to be surprisingly wrong.

Really, success, more than anything else, turns out to be about being able to set goals and reach them because you use the right strategies. And for, I think, a lot of very successful people, they kind of figure that out as they go along almost intuitively, that some kinds of strategies work for them and others don't. But I thought it'd be great to make this knowledge explicit for people and say, look, here are the nine things-- and really that number, nine, just came from me taking a look at several decades worth of research on motivation-- and saying, what are the strategies that really stand out, that we've tested again and again and found them to be the most effective, to have the biggest impact on whether or not people actually reach their goals? So it was sort of saying, what would give you the most bang for your buck?

And it just turned out to be nine. Nine things that we know from really many, many studies really make a difference. And the other thing I liked about these particular strategies that I talk about is that they're pretty straightforward in terms of once you understand what it is you're not doing, and what you need to do differently, it's fairly easy to implement these changes in your life. And really, knowledge is the key. I think for many of us, we just don't understand where we're going wrong. And why, in some areas of our lives, we seem to be very successful. In other areas we have trouble, and we don't quite understand what the difference is. So these are the nine things that really make the biggest difference.

SARAH GREEN: So one of the strategies that successful people employ is focusing on getting better rather than being good. And that's sort of feel-good, but isn't it important to really be good at something to be successful at it?

HEIDI GRANT HALVORSON: Absolutely. You know, I am glad you brought this up, because it's something that I end up talking about a lot with people. Because I really want to emphasize again and again that this is a research-based argument. So there are a lot of people out there, particularly when it comes to motivation, saying things that sound great, the kinds of things you want to hear. Like, just think positive things and everything will work out for you. And then it turns out to not really be true. But this is one of these cases where what sounds good actually turns out to be the most effective kind of mindset you can have. And so I talk about the difference between when you're doing something-- whether you're tackling a new project, or setting a goal for yourself, or taking on some challenging task, thinking about what you're doing in terms of getting better. In other words, it's about progress, rather than doing it perfectly right out of the gate.

And it turns out in many studies we've been able to show that when people think about what they're doing, whether they're taking a very difficult test of some kind, or working on a project over weeks at a time, that when they think about that as something they're going to improve on, that they're going to develop over time, that they might make mistakes along the way. But that's OK because you learn from those mistakes, and over time you'll really come to master this. When that's the mindset you're taking with you when you approach a task, you actually perform better.

The irony is, if you allow yourself to make mistakes you make fewer of them. And that has a lot to do with the fact that when we expect perfection of ourselves, and we expect to do something, regardless of how difficult it is or how new it is to us, when we expect to do it perfectly right out of the gate, we make tons of mistakes. Because we're anxious, and nothing messes up performance quite like anxiety does. So you feel tense, you're worried, you feel like you're being evaluated, and that really disrupts performance. So this attitude of, I'm going to get the hang of it eventually if I keep trying and keep working at it, actually does result in far superior performance. Particularly when things are very difficult and challenging.

SARAH GREEN: So the idea of steady improvement is so ingrained into your whole approach that some of the things you argue we can improve actually were things I always thought were innate. One of these, for instance, is having grit. That's also on your list as one of the strategies that people use. How can we actually go about making ourselves grittier?

HEIDI GRANT HALVORSON: Grittier, yeah. You actually run into the same argument about the getting better mindset, that people say, well, if I don't think that way, how can I become somebody who thinks that way? And the truth is that all of these things are very malleable. So even the mindset that you approach a task with is something that you can change over time. So the more you keep telling yourself, I'm going to think about this in terms of growth, I'm going to think about this in terms of improvement, then that becomes the new habit over time. And it's the same thing with grit. We tend to think about grittiness, which is basically persistence in pursuit of long term goals, being able to bear down and hang in there when the going gets tough, and not give up on yourself. So grit, it's tempting to think that is something that is kind of innate, that some people are gritty and others aren't. And that again turns out to not be the case.

Grit is something that is learned. And we find that grittiness really comes from, in many ways, your underlying beliefs about the nature of ability. So if you believe that you can get smarter, you can become more creative, you can become a better leader, you can become more socially skilled, you can become a better communicator, if you believe that human abilities are things that grow with effort and experience, it kind of makes you naturally gritty. Because when things become difficult you say, all right, this is really an opportunity for me to develop this skill. And if I just hang in there eventually I can master this. We find that the people who lack grit tend to be those who believe that abilities are fixed, that you sort of either win the DNA lottery or you don't. And you are born smart, or you're born creative, or you're born a good leader or you're not. And so when they encounter difficulty and things are challenging to them, that don't come easily, they are very quick to conclude, well, I guess I'm just not good at this. I guess I lack this ability. And so they give up. So grit really is just fundamentally about hanging in there. And that turns out to be really more than anything else a function of whether or not you believe you can improve.

Now if you're somebody who in the past has tended to think of your abilities as sort of fixed, and tended to say, oh, I'm just not good at this and given up on yourself, then what I encourage you to do is read the book, or read some other things that people, not just myself, but other people in psychology have written about. Abilities, as it turns out, abilities don't work that way at all. We have now decades of research showing that intelligence is profoundly malleable. It grows absolutely with experience and with effort, that creativity is something that also can be developed. Self-control can be developed, and that's another thing I talk about.

One of the nine things is working on your self-control muscle, that idea that willpower is not something that's innate. It can be developed. Leadership skills can be developed. Social skills can be developed. There are no skills, there are no human abilities that cannot be developed. So once you embrace that and realize you've been, maybe without realizing it, believing some things that weren't true about your own ability it becomes much easier to really become a gritty person.

SARAH GREEN: I'm glad you mentioned the idea of strengthening your willpower muscle. The way you talk about that is kind of surprising. This idea that as you're working towards getting better at something like improving your willpower you may actually temporarily exhaust your so-called muscle on willpower. How do you work towards getting better at something in a way, like on willpower, that makes it so that you keep moving forward instead of that suddenly you just crack and dive into the box of doughnuts or whatever?

HEIDI GRANT HALVORSON: Well, I think many of the strategies that I talk about are related to each other. I think again, with willpower you need to take the long view, that this is something you're going to develop over time. We have really several problems when it comes to willpower. One is that we don't understand how it works. Again, this willpower turns out to be one of these things people often assume you either have or you don't. You see the people, the very skinny vegetarians who are non-smokers, and you say, oh, that person was born with a lot of willpower. And again that's really not how it works. Nobody is born with a lot of willpower. It's developed over time like a muscle. So the first thing we need to do is realize anybody can get more willpower if you feel you don't have enough.

But at the same time willpower is always going to be limited because that's another way in which it's like a muscle. You can, just like your biceps or triceps, you can work them out and you can get them stronger. And you can develop huge biceps and triceps. But it's still always going to be true that after a really long, hard workout those muscles are going to be tired, and they're going to kind of feel like jelly. And so your willpower is like that. You can develop it, you can absolutely get more of it. And there are exercises, literally, you can do that I talk about, ways you can train yourself to have more willpower.

But I think at the same time you need to be thinking about your day, thinking about your life, the goals you're pursuing, the times of day where you're most likely to have low willpower because you've used it up. So for many of us that's immediately after work. You spend all day putting out fires, and dealing with stressors, and your willpower's going to be at its lowest. It needs a little bit of time to rebound. So that's going to be a time you're very susceptible to temptation.

And then we need to make plans, which is another thing I talk about among the nine things, plan how you're going to deal with that low willpower. So rather than just saying, oh well, I'll just resist temptation, don't put yourself in harm's way. Instead, come up with an alternative. Something you can do that's going to keep you out of harm's way when temptation abounds and your willpower's low. So it's about building the muscle while still being smart about how it works, and protecting yourself really, when you need to.

SARAH GREEN: So in the blog post, and then at greater length with more detail on exercises in the ebook, you talk about these nine strategies as positive ways to move forward and improve and move toward success in achieving your goals. Are there things though that are counterproductive that you see people doing, kind of shooting themselves in the foot, strategies we should avoid?

HEIDI GRANT HALVORSON: Absolutely. There are a bunch, and unfortunately there are a lot of people kind of advocating for these strategies, and I think with good intentions, because they seem like they should work. One of the things that you hear a lot about among people in the self-help literature, and then in the business world too, is this importance of a positive outlook, that optimism is so important, and that positive thinking will get you everywhere, that if you just sort of visualize the success that you want it will manifest itself. And that would be great if that were true. I mean really, I would absolutely love it if that were true.

But it turns out that not only is it not true in the sense that there is absolutely no evidence that if you visualize yourself in a successful position that that will just somehow materialize, it'll just happen. In fact, actually there's now good evidence that that kind of thinking actually sabotages your success. So in other words, when people are only positive in their thinking-- they're sort of wild-eyed optimists, they're unrealistic optimists, they just focus on the positive and they don't think at all, don't allow themselves to think about the obstacles that need to be overcome in order to make that dream a reality-- that actually they're less likely to succeed. And it has everything to do with this idea that, the way I talk about it, is sort of that visualizing success is bad. The idea is really you need to visualize the steps you need to take to make success happen.

So I still think of my message as sort of optimistic, in the sense that what I'm telling people is they really can be more successful then they are currently if they apply these strategies. But that said, it involves thinking seriously about what your obstacles are, what kind of problems might derail you and figuring out how you're going to deal with those problems. That's how you make success happen. Some people call that negative thinking, thinking about obstacles, thinking about what could go wrong, coming up with a Plan B. That kind of thinking gets, I think, a bad rap. But really it's a very critical part of being successful. Really successful people are what I call realistic optimists. They believe they can succeed, which is very important. But they believe that they're going to have to make that happen by thinking very realistically about the problems that lie in their way. So that's, I think, one example of the kind of strategy that's out there, this sort of relentless positive thinking that really sabotages people.

And related to that is, I think, this idea that we think a little bit too much about when it comes-- especially to trying to change our behavior. So to, say, stop flying off the handle and losing your temper when people, your colleagues, irritate you, or if you want to stop smoking or stop snacking. We think a lot about what we're not going to do. And we really focus on that. So I'm not going to smoke, I'm not going to lose my temper, I'm not going to eat the doughnuts in the conference room. And what we really need to be doing-- again, there's been recently quite a bit of research showing that this focusing on not doing things actually ends up being very counterproductive. And it has to do with, I think, a lot of people may be familiar with this idea, of thought suppression, that don't think about white bears idea, that when you tell yourself don't think about white bears, suddenly all you can think about is white bears. So there's this ironic rebounding that happens when you try to suppress a thought, that it kind of comes back into your mind. And it turns out the same thing happens with behavior. So if you say I'm not going to lose my temper, I'm not going to eat these doughnuts, then suddenly all you want to do is lose your temper and eat doughnuts. And it turns out that people who make those kinds of resolutions end up doing more of the thing that they promised themselves they wouldn't do.

So the key becomes, actually, instead of saying what you won't do, say what you will do instead. So instead of saying I won't lose my temper, say OK, well, the next time my colleague irritates me I'm going to step aside and take three deep breathes and remind myself that it's not worth getting angry over. Or instead of having a cigarette, I'm going to chew some gum. Or instead of having a doughnut I'm going to go make myself a cup of tea. So it's the what you will do instead part that turns out to be very powerful.

Our brains like to have an action plan. And they don't like plans that are in the form of I won't do x. They want to know what you will do, and those plans turn out to be very effective. So the strategies that are effective often turn out to be just sort of subtle changes to things we're already doing. Planning is great, and we all know planning is great, but you need to plan in the right way. Being optimistic is great. Thinking about believing in yourself is great. But you have to engage in positive thinking in the right way. And so for many of the things that I talk about in the Nine Things, it's really saying look, there's more than one way to plan. There's more than one way to be positive. There's more than one way to think about willpower. Here's the ways to do these things that are really going to pay off, that are really going to lead to greater success.

SARAH GREEN: Heidi, thanks again so much for talking with us today.

HEIDI GRANT HALVORSON: Thank you so much, Sarah.

SARAH GREEN: That was Heidi Grant Halvorson. Her new ebook, Nine Things Successful People Do Differently, is available wherever digital books are sold. For more, visit hbr.org