Touched by the Gods

If a tall man has a son, chances are the son will be shorter than him. Mean reversion. Things tend to be pulled back to their long-term average. But we tend to run like headless chickens after things that are doing well, which (if it involves limited supply and demand) leads to self-fulfilling (and often excessive) further success. Momentum. The trend is your friend. Till it isn’t. These two forces compete and create a large cloud of smoke around investment performance. Numbers mean very little over a short period, and over a long period are stale (they tell more about what has happened, than what will happen). I don’t believe investors are touched by the Gods. Even the father of value investing, Benjamin Graham, only modestly outperformed the benchmark. I believe what really matters is the actual work the Capital is doing, risk management, and making sure that the Capital is earning its keep over a long period of time. It isn’t about being clever. It isn’t about being different. It is about solving problems consistently and sustainably.

Nuts and Corners

One of the things that drives me nuts in the workplace is false deadlines. When someone gives you something to do and you bust a gut meeting the deadline... then it just sits. You know the Reaper putting the dead in the line is busy and hasn't got to moving things on. They aren't intentionally doing it to grate you. Many people just work better in a corner. So they hand out corners. And are likely in corners themselves.

A more extended version of this is 'delayed thinking'. You have a meeting and an issue is discussed with no conclusion being reached, then everyone goes away 'to think about it'. Another meeting is set up in a week's time. The truth is almost no one thinks about it until they are once again in the corner. A better approach may be to allot however much thinking time is required, go for a walk and then meet up again. Perhaps then it is only a couple of hours later. You don't lose the momentum like when things just sit.

It is nice to think what we do is what we want to do. I certainly struggle to balance inertia and what I would like 'in theory' to do. Having some sort of structure ends up adding corners which become habits. When I was working full time, I had an odd rule that I wanted to write at least one blog post a month. Often that blog post would be on the last day of the month. A friend teased me about this so I broke the rule. Once broken, I broke it again the next month, and the next, and so it was about 4 months between posts. Sometimes silly rules just provide some structure and keep things moving.

The same friend teased me about my approach to studying at university. He would ask if I wanted to watch a movie. I would give him a time I could watch it. If for whatever reason the TV room was unavailable for a bit and we were late in being able to get the right slot, I would often drop out. And head back to study. In my defence, I was only this nuts during exam time. I wasn't normally this OCD. I used to break study sessions up by time and allocate it to the various subjects based on their importance. I figured if I put the hours in, what would be would be in terms of the results. I wouldn't not make it for lack of effort. Nuts. But hopefully worth it.

Random rules sometimes help. Take saving for example. People seem to adjust their lifestyles to fit their salaries in the same way people adjust their time spent on a task to the time allocated. One way Richard Thaler, author of Nudge, suggests is very effective is to 'Save Later'. Commit to investing in a automatic debit order half of any salary increases you get. Because it is half of the increase, you aren't sucking anything up. Life still gets better, but you get some of the magic compound interest Lister was talking about.

Warren Buffett talks of multiplying the price of things by ten. So if you have to pay £30 for a £3 coffee, would you rather have a glass of water? This helps avoid conspicuous consumption because it helps you think of the future value of what you are spending now. We get annoyed when things are way too expensive and the mental trick helps add a bit of frugality.

Peter Singer, in the context of charity and giving, makes the good point that it helps no one to be a hero. Giving everything you earn to charity and living in poverty isn't sustainable. You are likely to give it up at some point and people are unlikely to emulate you as they will write your actions off as mighty impressive, but not imitable. Better than huge changes are small, sustainable tweaks.

We are weird. Sometimes we need to acknowledge that and set ourselves up for success in advance. Add some corners, but don't drive yourself or others nuts. 

Three Second Rule

You earn the right to give feedback. You can attempt to do it before that, but it seems to me that that is wasted breath. There is a temptation to play the hero. We are all adults. We don't need fluff. Give it to me straight. I think you can do that once someone values your opinion and even then there is an element of balance required. You can't always be pointing out someone's faults. Emily Heaphy and Marcial Losada, via The Harvard Business Review, puts the 'ideal ratio' at around 6-1. I think many people's reaction to that figure would be a raised eyebrow thinking they are suggesting we should all be wrapped in cotton wool.

I think part of it isn't about the facts, it is about momentum. For momentum we need Mojo. We need to have a sense that some of what we are doing is worthwhile and valued. Taking criticism, even when valid, requires energy. If all you are doing is handing out and receiving punches to the stomach, then you are mighty impressive if you keep coming back for more.

If your culture is affected by the British stiff upper lip, there is certainly a part that wants to avoid things being false. There is a book I avoided reading for years because the title made me cringe. In fact, buddies used to use the title, without having read the book to tease people when they did something socially stupid. 'How to Win Friends and Influence People' feels a bit manipulative. Surely you would rather want to just be yourself and that should do the trick? Reading the book actually gave a lot of flesh to the backbone of Heaphy & Losada's work. A lot of what Carnegie says seems like common sense, but importantly it is common sense without the hero factor. People aren't heros all the time. We do get defensive. We only listen once you have won us over. Once you keep on our side.

Carnegie uses the example of Lincoln. Lincoln, he says, didn't admonish people. In a time of war, there were plenty of mistakes made. Lincoln would often get angry and write a heavily critical letter... then tear it up and start again. In a time of war, mojo is absolutely vital. If you are expecting someone to fight for you, mistakes they have made are almost irrelevant. It is what they do next that matters.

I am still in Australia, and met another cousin yesterday. I mentioned her siblings here (Barrack Bombers) and here (normalising suffering). They rock. Anyway, she is at the beginning of an exciting new business. While wandering the wine bars, craft beer breweries, and cheese bars of Newtown, Sydney we got onto the subject of the 'Three Second Rule'. If someone, within in three seconds of hearing what it is you do, responds with 'Have you thought of...', chances are you have. If you are trying something new, it is more than likely you have been thinking about it for years. At the very least months. But definitely more than three seconds. If someones stream of consciousness has made them immediately think of some essential feedback, slim chance it is vital and earth shattering. Earn the right to feedback by listening. I think the 'three second rule' is similar to the issue with feedback in general.

The 6 positives for every negative isn't an indication that someone is being balanced. It is an indication that someone is on your side. A really good friend who sticks by you through thick and thin is far more likely to find a receptive environment for pretty harsh (but true) feedback. A boss who makes it clear that you are valued, and that they trust you, is far more likely to be able to slip in valuable, rather than generic, areas for improvement.

Basically what I am saying is we aren't heroes. But we will fight and improve for people we care for. And Newtown has great cheese.

More Fun

When we compare the amazing learning ability of kids to adults, we are often comparing thousands of hours of patient, wide-eyed, listening, playing and trying to tens or hundreds of hours in a classroom or listening to a CD on the way to work. Listening to an adult learning a language can sound to a native speaker like a beginner violinist. When young Jamie Boy learns the violin, it is cute. When James senior learns the violin, it is a case of killing me softly. You may have to wait till he becomes Grampa James, when frankly, he doesn't give a damn and will do whatever he wants.

I have always listened with a sceptical ear when people wax on about kids learning abilities. The little monsters have a completely unfair advantage since besides being surrounded by cheerleaders - they aren't busy. Learning is their full time job. Some have full time servants, sorry I meant parents, monitoring their well being. They are eating right and sleeping right. They have someone monitoring how much time they spend in front of the TV and how much time they play outside. Worrying only seems to come in the teen years. Till then, it is outsourced to Mom and Dad. I would love to outsource my worrying. I reckon that if I could recreate the environment and support a kid gets I would kick their ass. Me vs. a 5 year old. Hell, make her 10. I am not scared of you little girl. Gabriel Wyner points out that adults possess gifts of their own. 'We're very good at spotting patterns and we've developed better learning strategies than toddlers and preschoolers. Take that, kids'.

Besides trying to undo the damage of years at a desk and bad eating habits, my main learning focuses at the moment are writing, piano and French. The writing is a case of just do it. Every day. Piano too, which has been a lot of fun. It has been great being able to prioritise stuff there is very little chance of me making any money out of, and that isn't the point. I have kept up about an hour a day for the last 4 months or so. French got interrupted, and now I have lost momentum. I have a similar thing with exercise. If I am doing something regularly, and then can't do it for a few weeks, it becomes hard to get back on track. The thing is, it isn't really hard in the sense that there are actual obstacles in the way. I was just learning 10 new words a day and then stopped. I can do that, and perhaps writing a blog post on it will inspire me to start again today. I think the trick is fun. My approach to improving my diet is to try add very tasty, healthy meals rather than forcing myself to stop eating things I enjoy. If there is a better option, I will take it. I think that is what will happen with the French. The 'Fluent Forever' approach is to learn the 625 most common words first. That covers something like 80% of spoken French so you can start to have fun. You can learn by listening to music, watching TV series and reading entertaining books. Kids learn best when teachers make it fun. At the end of the day we are all really just big kids. When in doubt, choose the more fun option.

Picasso Problem

Identifying blocks to creativity is the first step to obliterating them. I like to call one block I have noticed the Picasso Problem. The incredibly prolific artist didn't just find a niche and produce lots of work. He kept reinventing himself and he kept producing.

The total number of artworks Picasso produced has been estimated at 50,000 comprising 1,885 paintings; 1,228 sculptures; 2,880 ceramics, roughly 12,000 drawings, many thousands of prints, and numerous tapestries and rugs. - Wikipedia

Portrait of Daniel-Henry Kahnweiler - Pablo Picasso

Source - Wikipedia

Whether extreme confidence or just a complete lack of respect for anyone else's opinion, he was not held back by the fact that he couldn't do something or that people would be 'judging' him. He just carried on. This fearlessness meant the creative juices gained momentum and he became used to breaking new ground. I am sure he considered much of his work 'mistakes'. Rather, others would have considered paths he went down mistakes but in experimenting some of the stuff would have worked and some of it wouldn't and he would have been learning all the time. A current artist friend of mine reminds me of this type of approach. John Bauer from Cape Town lives a few houses down from where I was before I crossed the pond. He lives in amongst his art and his house is bulging (and overflowing) at the seams with work. There is no such thing as a mistake in John's world. He dives into Porcelain in every way possible and becomes intimate with any of its possibilities. Rummaging through his house you will find a little magic.

John's Studio/House/Gallery/Playground is bursting at the seams with work

An example of one of John's bowls from a 2011 series

There is a momentum to creativity. I believe part of the trick to getting that going is just getting that going. If you want to write better - write more. If you want to learn to paint, you have to pick up a paint brush. All this sounds condescendingly obvious but I think what holds us back is a fear that what we produce won't be of a good quality. Perhaps this comes from our early years at school as things increasingly became for marks. The more we get evaluated, the more our identity gets tied up with the work. Since creative pursuits are so personal and there is no obvious right and wrong it can get you incredibly wound up. There are some techniques you either can or can't do. That can be corrected with a little work. When it comes to the juice of your work though, you can feel like when someone crits your work, they are critting your soul. So many don't produce. This isn't just external. We are often our own worst critic and so don't experiment, play and flow. 

We want every utterance to be creative genius or not at all. De Botton talks in 'How Proust Can Change Your Life' about how different Proust's later drafts were from early drafts. In conversation he was not nearly as eloquent as once he had finely crafted the work. You write the tenth draft by writing the first draft first. Steven Pinker's new book 'The Sense of Style' gives a guide to how to think about refining your writing whether you are an Academic, a Lawyer, a Teacher, a Marketer or you are writing for writings sake. The first step though is that you need to get words on a page. You need to solve the Picasso Problem. You can't wait for creativity to come to you. You need to do the work. Perhaps inspiration isn't an epiphany, it is an afterthought.

There is a beautiful film about the life of Amedeo Modigliani who was a rival of Picasso. Picasso became very successful and so some of the other obstacles to creativity (like lack of money) fell away. The movie does touch on some other sources of inspiration. Getting a little banter and rivalry going can be a great impetus. You may be lucky enough to have a muse. Pablo's solution to the problem of how to start, was to start. Every day.

Maintaining Momentum

Josh Waitzkin has an incredible story. His is the kind of book you will read over and over, savouring every word and lesson. He started life in the Chess world and moved on to Martial Arts. He talks of himself not as a prodigy but as one who is in love with the process of learning. Much of what he does is slowing things right down. Unlearning mistakes. Training muscle memory. Developing Flow. He is an Elephant whisperer.

Source: en.chessbase.com

One of the things I found interesting in his approach was his ability to maintain momentum. I sometimes get into a good habit of regular exercise, but then a work trip, holiday or injury knock the habit and it takes me a while to get back into it. Waitzkin tells a story of a broken arm that is awesome. Not long before a major Martial Arts contest, he had entered into a weight category above his to test himself. He had won but had got injured. He continued training, building up the strength in other areas he normally neglected. The result was that the injury made him a better athlete.

I haven't been great at that. Identifying the bigger picture plan and using injuries as opportunities. Since starting my new blogging/learning life, I had managed to do yoga each day. It is amazing what a difference regular practise makes and how stress starts to evaporate from the muscles. One of the lessons I have learnt though is to try and control the inner competitive South African male in me when yoga and my neck are involved. Just over a week ago I had had two rather long sessions in two days and my neck was feeling it. Had I been Josh, I would have worked on strengthening my abdominal muscles and flexibility while resting my neck. Not Josh, I took the week off exercise, and focused on other learning projects. While back into it now, I am a little removed from reality, work and life do catch up and 'restarting' can be very difficult. When I have had similar episodes before, it has often taken a few months to pick something up again if at all. I won't list good habits that lasted then faltered and disappeared. Developing an art of maintaining momentum through bumps is wonderful foundation for life.