Monthly Archives: June 2018

Top Performance from the Bottom Up

Top Performance from the Bottom Up

We can best help people improve performance not by trying to solve their problems for them but by helping them learn to solve their own problems.

We can’t approach performance improvement from a reactive and fragmented stance. Rather than reacting to each isolated performance problem, the key is making performance improvement integral to the way people manage their work. After all, steering clear of problems, identifying problems early, and resolving them so they do not occur again is what managing work is about. All people are responsible for managing their own work; some are responsible for managing work within a team or a function, others for managing across functions, and still others for managing entire firms.

Managing work consists of three components:

  1. setting goals;
  2. letting work happen and comparing work completed against goals; and
  3. deciding whether to change how the goals are being pursued.

When these things are done well, individuals and organizations almost always meet goals. But, these three things are rarely done well. Few managers consistently prevent costly performance problems or ensure that goals are achieved.

'The Performance Pipeline' by Stephen Drotter (ISBN 0470877286) Performance consulting is simply coaching people on setting goals, letting the work happen, comparing results to the goals, and then deciding how to proceed. Most emergencies are simply breakdowns in one or more of these three areas of management. The solution to performance problems is always to help the person, team, or organization manage itself more effectively.

When people learn new behaviors, not only will they resolve the current emergency, but they will know how to address or avoid the next emergency.

Think of these levels of managing work as layers of an onion.

  • The outer layer is like the upper tier where organizational goals are set and monitored. These goals involve overall direction and objectives, and decisions are large in scope.
  • Below that layer is the cross-functional (or process and project) layer. Goals at this layer cover a smaller scope but must align with organizational goals. They include things such as what products and services will be available when, and which internal processes currently need the most attention. Goals are reviewed and revised a little more frequently than at the higher layer.
  • A third layer is where individual and group goals are set and monitored. The same basic practices for helping individuals manage 1heir work apply to helping executives manage their work. Since the magnitude of distractions and decisions are much greater at the executive level, practice this approach at the lower levels.

Self-Sustaining Performance

'Fearless Leadership' by Carey Lohrenz (ISBN 1626341133) The desired end result is a selfsustaining performance system (SPS) a systemic approach that provides an immediate solution while leveraging the performance perspective for sustainable long-term success. The SPS always assumes that the performers are missing one or more of the three conditions that guarantee successful performance. Those conditions are:

  • Clear performance expectations: Each performer must know exactly what he or she is expected to do and how well, and must commit to it.
  • Frequent, self-monitored feedback: Each performer must know, at any given point, whether he or she is meeting performance expectations.
  • Control of resources: Each performer must know that, if he or she provides warning that performance is not meeting expectations, management will either help the performer succeed or change the expectation.

The three conditions summarize all the factors that affect performance in the order they should be addressed. When all three conditions are in place, we have a performance system. When most members are operating in an effective performance system most of the time, we have a SPS.

Just implementing the first two conditions usually results in productivity increases of 30 percent or more within a very short time.

The third condition, control of resources, ensures that productivity increases can be sustained. It also ensures that manager and performers have a stake in whatever performance improvements are implemented. Whether the need is for better tools or better organization, they are more likely to turn the required change into improved performance. And because they have frequent self-monitored feedback, they will be the first to know if their performance is improving.

By implementing a SPS, you help people steer clear of most problems, immediately identify problems when they do arise, and resolve those problems so that they do not reoccur.

A successful SPS means performers are consistently successful and raise the bar on their own performance. Instead of waiting for performance to get worse, they prevent problems and coordinate work effectively.

Contributing to systemic improvement as opposed to everyone tweaking their isolated functions, must be the expectation for every member.

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Posted in Management and Leadership

God is the Great Healer

Time May Be a Great Healer, but it’s a Terrible Beautician.

Time May Be a Great Healer “Time is a great healer.” You have often heard that, but have you ever paused to think how absurd a statement it is?

Time itself does not act. Only one who has a will, only one who has a mind and purpose of his own, can act. A healer is one who knows what pain is, who loves life and seeks to prolong and improve it. Time is an abstraction, the span of moments or of days within which actions occur. Therefore, time itself cannot heal us.

When we say, “Time is a great healer” we mean that apparently without man’s intervention our bodies and our spirits are mended. This is true. However, while man does not intervene, a great doctor, unseen to the human eye, does the work of healing. Our grief gradually recedes, the bruises in our skin disappear, and the ache in our hearts gives way. God who formed life endowed it with amazing recuperative powers. The process of recuperation takes time, but the restorer of health is He who is also the giver of life—Almighty God.

God is the great Healer and He heals in time.

Have you ever met a perfectly healthy person? I am certain that you have not, because such a person does not exist. Everyone suffers from some deficiency, from some impairment of one organ or another.

In addition, what is true of physical health is true of mental health. No life is perfectly serene, without some distress, without some grief.

We have already said that the air contained a variety of different substances, salts, metals, sculptures, and such-like; these when uniting with the surfaces of planetary bodies must naturally corrode them, as we see aqua forties, which is made of a mineral acid, rust iron.

Success Cannot Be Pursued; it Must Ensue

Success Cannot Be Pursued All the same, our failure to recognize this necessity often causes far more pain in the end. It prevents us from mourning our losses properly, submitting to uncomfortable medical tests and treatments, and removing splinters. In fact, our power to endure necessary pain and to delay satisfaction in general has been shown to be more strongly correlated with success than high IQ or even educational layer. Resiliency of this kind may, in fact, be the key to happiness.

Separate scales were created to ascertain for these apparent gender differences and, using the two separate scales, men and women did not differ in hostility. Even so, before we begin to assess the efforts of this flexible power, it will not be wrong to inquire from whence the power itself proceeds. The thing indeed recommends itself, and must do so to every person, whose heart is adequate two of the least tincture of compassion for such vast numbers of poor forlorn Indians.

Fledged affection, homage, devotion, does not easily convey itself. Its vocalization is low. It is modest and self-effacing; it lays in lying in wait and waits. Such is the mature fruit. Sometimes a life glides away, and finds it still ripening in the shade. The light inclinations of very young people are as dust compared to rocks. The Austrian psychiatrist and holocaust survivor Viktor E. Frankl wrote about success in his treatise Man’s Search for Meaning:

Again and again I therefore admonish my students in Europe and America: Don’t aim at success—the more you aim at it and make it a target, the more you are going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side effect of one’s personal dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself. Happiness must happen, and the same holds for success: you have to let it happen by not caring about it. I want you to listen to what your conscience commands you to do and go on to carry it out to the best of your knowledge. Then you will live to see that in the long-run—in the long-run, I say!—success will follow you precisely because you had forgotten to think about it.

That is encouraging to people who are afraid to start the recitation—to know that relating directly with your suffering is a doorway to welfare for yourself and others, rather than some kind of masochism. Thus then, continues Leibnitz, we have two kinds of forces; dead forces, which are as the weight multiplied by the velocity; and animated forces, which are as the weight multiplied by the squares of the velocity. Moreover, the people are powerless to do anything about it. Only people enjoying affluence, people on a run of good luck, make fun of such fallacies.

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Posted in Faith and Religion

Zen Koan #27: Parable of Voice of Happiness – Buddhist Teaching on Groundlessness

Zen Koan #27: Parable of Voice of Happiness - Buddhist Teaching on Groundlessness Zen meditation was found to reduce stress and blood pressure, and be efficacious for a variety of conditions, as suggested by positive findings in therapists and musicians. Subliminal processing is frequently thought to be automatic and independent of attention. However, the present framework implies that top-down attention and task set can have an effect on subliminal processing. People respond to arduousness in different ways. Let it ache away. It is for the reason that you choose and reject that you are not free. Zen meditation increases access to unconscious information.

On completing the great supreme dharma, there is the arising of the wisdom of the path of seeing. It has the nature of sixteen moments. There are also other states that are terrifying. Meditation takes gumption. It is certainly a great deal easier just to sit back and watch television. So why bother? Simple. For the reason that you are human. Heavenly states can only be attained by performing meritorious deeds with a minimum of desire. However, the methods themselves are wandering poetic conceptions. If you are really paying attention to the method, you will be aware of a stray thought as soon as it arises. Later, there will be things to learn in other places.”

Zen Koan: “Voice of Happiness” Parable

After Bankei had passed away, a blind man who lived near the master’s temple told a friend:

“Since I am blind, I cannot watch a person’s face, so I must judge his character by the sound of his voice. Ordinarily when I hear someone congratulate another upon his happiness or success, I also hear a secret tone of envy. When condolence is expressed for the misfortune of another, I hear pleasure and satisfaction, as if the one condoling was really glad there was something left to gain in his own world.

“In all my experience, however, Bankei’s voice was always sincere. Whenever he expressed happiness, I heard nothing but happiness, and whenever he expressed sorrow, sorrow was all I heard.”

Buddhist Insight on Groundlessness

Groundlessness is the enlightened world, a way of being where concepts like good and evil are empty, without substance, where there is no birth and death, and where everything is interdependent and without abiding form. In addition, it is possible to feel that because one is proficient origin of great suffering this faculty raises one above the insensitive herd. After a little while, he was able to sit up, feeling very much better than he had felt for a long time. In addition, he began to think about why it was he had fainted, and why he was now feeling so much refreshed in body and mind. The American Tibetan Buddhist nun Pema Chodron writes in Buddha’s Daughters,

When things fall apart and we’re on the verge of we know not what, the test for each of us is to stay on the brink and not concretize. The spiritual journey is not about heaven and finally getting to a place that’s really swell. In fact, that way of looking at things is what keeps us miserable. Thinking that we can find some lasting pleasure and avoid pain is what in Buddhism is called samsara, a hopeless cycle that goes round and round endlessly and causes us to suffer greatly.

The very first noble truth of the Buddha points out that suffering is inevitable for human beings as long as we believe that things last – that they don’t disintegrate, that they can be counted on to satisfy our hunger for security. From this point of view, the only time we ever know what’s really going on is when the rug’s been pulled out and we can’t find anywhere to land. We use these situations either to wake ourselves up or to put ourselves to sleep. Right now – in the very instant of groundlessness – is the seed of taking care of those who need our care and of discovering our goodness.

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Posted in Faith and Religion

Marissa Mayer’s Tardiness at Google

'Marissa Mayer and the Fight to Save Yahoo' by Nicholas Carlson (ISBN 1455556610) Tardiness has a detrimental effect on the organization. Tardiness is a display of disrespect. Establishing ground rules, documenting violations, using an official discipline process and identifying larger workplace issues can go a long way toward correcting issues with executive tardiness.

Per this noteworthy anecdote from Marissa Mayer and the Fight to Save Yahoo by Nicholas Carlson:

The other factor compounding Mayer’s coldness was that she had the awful habit of being late, all the time.

Every Monday afternoon at 3:00 p.m. California time, Mayer’s staff would gather for a three-hour meeting with the boss. Mayer demanded all of her staff across the world join the call, so executives from New York, where it was 6:00 p.m., and Europe, where it was 11:00 p.m. or later, would dial in, too. Inevitably, Mayer would show up at least forty-five minutes late. Some calls started so late that Yahoo’s executives in Europe didn’t hang up till after 3:00 a.m. their time. Mayer had approximately two dozen people reporting to her during her first year at Yahoo. In theory, she was keeping up with each of them in a regularly scheduled weekly meeting. In practice, she would go weeks without talking to people because she was so busy.

For a while, each of those two dozen people thought that Mayer was just picking on them, individually. The people who had been at Yahoo before Mayer joined assumed that this meant she was going to fire them soon. The people Mayer had hired into the company, including HR boss Jackie Reses and CMO Kathy Savitt, were even more puzzled. Why had they been hired only to be ignored?

But then, during one of those long waiting periods after 3: 00 p.m. on a Monday, a conversation unfurled that revealed all. Making small talk, one executive said to another: “Did she cancel one of your one-on-ones again?”

A third jumped in: “Oh my God, she does that to you, too?” It turned out that everyone in the room and on the call had been canceled on by Mayer, frequently.

Mayer was also constantly late to product reviews. The meeting would be scheduled for 2:00 p.m., and around 2:15 p.m., Mayer’s assistant, Trish Crawley, would come out and say, “Really sorry. She’s going to be late. We’re not sure when she’ll get here.” Then it would 3:00 p.m. and then 4:00 p.m., and then Crawley would come out and say the meeting was canceled.

The standard joke was that if you had a review with Mayer, you should expect not to know when it was going to be and that it would change at the last minute. It was annoying for people who worked in Sunnyvale. It was brutal for remote teams in India and Europe.

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Posted in Leaders and Innovators Management and Leadership

Top 10 Russian Authors and Their Masterpieces

Top 10 Russian Authors and Their Masterpieces

1. Leo Tolstoy (1828–1910)

  • Anna Karenina (1875–7)—“All happy families resemble one another, but each unhappy family is unhappy in its own way.”
  • War and Peace (1865–9)—“The strongest of all warriors are these two—time and patience.”

2. Fyodor Dostoevsky (1821–1881)

  • Crime and Punishment (1866)—“Pain and suffering are always inevitable for a large intelligence and a deep heart. The really great men must, I think, have great sadness on earth.”
  • The Brothers Karamazov (1880)—“Above all, don’t lie to yourself. The man who lies to himself and listens to his own lie comes to a point that he cannot distinguish the truth within him, or around him, and so loses all respect for himself and for others. And having no respect he ceases to love.”

3. Anton Chekhov (1860–1904)

  • The Three Sisters (1901)—“Man must work by the sweat of his brow whatever his class, and that should make up the whole meaning and purpose of his life and happiness and contentment.”
  • Uncle Vanya (1897)—“When a woman isn’t beautiful, people always say, ‘You have lovely eyes, you have lovely hair.”
  • The Cherry Orchard (1904)—“To begin to live in the present, we must first atone for our past and be finished with it, and we can only atone for it by suffering, by extraordinary, unceasing exertion.”

4. Alexander Pushkin (1799–1837)

  • Eugene Onegin (1833)
    “A woman’s love for us increases
    The less we love her, sooth to say—
    She stoops, she falls, her struggling ceases;
    Caught fast, she cannot get away.”
  • Boris Godunov (1825)
    “Pimen [writing in front of a sacred lamp]:
    One more, the final record, and my annals
    Are ended, and fulfilled the duty laid
    By God on me a sinner. Not in vain
    Hath God appointed me for many years
    A witness, teaching me the art of letters;
    A day will come when some laborious monk
    Will bring to light my zealous, nameless toil,
    Kindle, as I, his lamp, and from the parchment
    Shaking the dust of ages will transcribe
    My true narrations.”

5. Nikolai Gogol (1809–1852)

  • Taras Bulba (1835)—“Turn around, son! What a funny figure you are! Are those priests’ cassocks you are wearing? And do they all go about like that at the academy?” With these words old Bulba greeted his two sons who had been studying at the Kiev college and had come home to their father.”
  • Dead Souls (1842)—“As you pass from the tender years of youth into harsh and embittered manhood, make sure you take with you on your journey all the human emotions! Don’t leave them on the road, for you will not pick them up afterwards!”

6. Mikhail Sholokhov (1905–1984)

  • And Quiet Flows the Don (1934)—“The grass grows over the graves, time overgrows the pain. The wind blew away the traces of those who had departed; time blows away the bloody pain and the memory of those who did not live to see their dear ones again—and will not live, for brief is human life, and not for long is any of us granted to tread the grass.”

7. Mikhail Bulgakov (1891–1940)

  • The Master and Margarita (1966-67)—“The tongue can conceal the truth, but the eyes never! You’re asked an unexpected question, you don’t even flinch, it takes just a second to get yourself under control, you know just what you have to say to hide the truth, and you speak very convincingly, and nothing in your face twitches to give you away. But the truth, alas, has been disturbed by the question, and it rises up from the depths of your soul to flicker in your eyes and all is lost.”

8. Ivan Turgenev (1818–1883)

  • Fathers and Sons (1862)—“Nature is not a temple, but a workshop, and man’s the workman in it.”
  • On the Eve (1860)—“No matter how often you knock at nature’s door, she won’t answer in words you can understand—for Nature is dumb. She’ll vibrate and moan like a violin, but you mustn’t expect a song.”

9. Maxim Gorky (1868–1936)

  • The Lower Depths (1902)—“Everybody, my friend, everybody lives for something better to come. That’s why we want to be considerate of every man—Who knows what’s in him, why he was born and what he can do?”

10. Mikhail Lermontov (1814–1841)

  • A Hero of our Time (1840)—“The love of savages isn’t much better than the love of noble ladies; ignorance and simple-heartedness can be as tiresome as coquetry.”
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Posted in Hobbies and Pursuits Music, Arts, and Culture

Seven Innovation Rules for Microproducts & Low-Cost Design

  • Seven Innovation Rules for Microproducts & Low-Cost Design Understand the problem your product needs to solve. You can do this by bringing customers into the development process. Don’t know what it is like living without electricity? Talk to people who do.
  • Make it uber-cheap. Brands like Louis Vuitton and Apple add to a product’s price tag. Microproduct designers do the opposite. If it’s not affordable for somebody living on a few dollars a day, it’s not going to fly.
  • Shrink it down, make it small, and divide it by 600. Small units keep a product cheap, manageable, and easy to transport and distribute. Choose materials accordingly.
  • High tech is OK. Since the 1970s, a movement championing “appropriate technology” for developing countries has shunned high tech. However, it’s come so far that it’s no longer expensive. Modern information technology is a pillar of the micro revolution.
  • Combine ideas. Learn to think in an interdisciplinary way. Harness sustainable energy to new payment systems, education to unconventional design methods. Microproducts bring together innovations in different areas.
  • Think big. Scale up as fast as you can. How can you help millions of people access this product or service quickly? How will you distribute it?
  • Perfect it. Make prototypes and test them before rushing your product to market. It might be small and cheap, but that does not mean it doesn’t need refining. Your product is too important not to perfect—it could change someone’s life for the better.
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Posted in Leaders and Innovators Management and Leadership

Diversify Your Business Risk through Shared Risk and Reward Programs

Diversify Your Business Risk through Shared Risk and Reward Programs Risk assessment is a principal tool used to make current environmental decisions, but it is still crude, expensive, and controversial.

While diversification is indispensable to managing financial investment risk, business leaders need to prevaricate their bets and manage their financial vulnerabilities.

Risk taking is the part of business strategy that involves assessing how a business’s decisions will damage or benefit the company. Every business encounters risks, which may or may not be anticipated or controlled by the company.

This does not mean you attempt into markets or embrace technologies you don’t understand, but instead that you look at what you are already doing and categorize natural market synergies and product line extensions. In addition, it is best to be ahead of the curve on market trends and changes rather than lagging behind them.

Leaders Comprehend the Value of Shared Risk and Reward Programs

'Enterprise Risk Management' by James Lam (ISBN 111841361X) There is no seamless diversification strategy. It is more of an art than a science. The significant thing is to protect your margins and stabilize your cash flow while growing your top line. For example, you may have some parts of the business that are in a fast growth mode and eating cash. In this case, it would be helpful to have other areas of the business that are growing more incrementally, generating surplus cash flow and steady margins.

Risk assessment is a form of analysis of the probability and magnitude of harm from various events and activities. Related to the science of risk assessment, risk management determines how to plan for and communicate about risks. Risk perception is a science devoted to examining the qualitative aspects of risk, not simply its quantitative aspects.

To bring together the various disciplines and implement integrated risk management, ensuring the buy-in of top-level executives is vital. These executives can institute the processes that enable people and resources across the company to participate in identifying and assessing risks, and tracking the actions taken to mitigate or eliminate those risks.

'The Essentials of Risk Management' by Michel Crouhy (ISBN 0071818510) You may also have become too reliant upon one client and need to have a marketing strategy that pushes you to identify multiple new prospects that have the potential to grow with you in the same way. You may entered one market as much as you can and need to expand to other geographies. Never rest on your marketing laurels or get too self-satisfied. Companies needed to take advantage of regional management contracts.

I realize that business size does come into play here. However, regardless of how big you are, do not become a “one trick pony.” Anticipate that your business will have up and down periods and then think of imaginative ways to smooth out this curve. All good leaders understand and embrace the importance of diversification. To the maximum degree possible, put your fate in your own hands instead of being subject to whims of the marketplace.

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Posted in Business and Strategy

Mighty in Deeds and Not in Words

The Wisdom of Deeds Will Be Necessary for the World to Come

Wisdom of Deeds Will Be Necessary The man sweeping the synagogue paused for a moment. He looked at die flowers lying about in disorder. “What waste!” he said to himself. Those roses had adorned the pulpit at a wedding an hour before. Now all was over and they were waiting to be discarded.

The attendant leaning on his sweeper was lost in thought when suddenly he heard a strange sound. One of the roses replied to him.

“Do you call this a waste?” the flower protested. “What is life anyway, yours or mine, but a means of service? My mission was to create some fragrance and beauty, and when I have fulfilled it, my life has not been wasted. And what greater privilege is there than to adorn a bride’s way to her beloved, what greater privilege than to help glorify the moment when a bride and groom seal their faith in each other by entering the covenant of marriage?”

Our listed flower paused for a moment to watch the man’s face, and then continued her discourse.

Roses are like people. They live in deeds, not in time.

My glory was but for a brief hour, but you should have seen the joy in the bride’s eye, “I like to believe that I had something to do with it, by creating a suitable setting for the moment of her supreme happiness. So do not grieve for me. My life has been worthwhile”

Having spoken her little piece, the rose was once more silent. The attendant, startled from his reverie and a little wiser, pushed the sweeper again and continued with his work.

If only the people who agonize about their financial obligation would think about the riches they do possess, they would stop troubling. Would you sell both your eyes for a one hundred thousand dollars … or your two legs … or your hands … or your hearing? Add up what you do have, and you will find that you will not sell them for all the gold in the planet. The best things in life are yours, if you can acknowledge the economic value of yourself.

Be Not Careless in Deeds

Be Not Careless in Deeds In all cases and constitutions, in all habits of body, at every point of life, and under possibly every circumstance, cool air, drinking cold water bountifully, and bathing the whole body, or at least the private parts with tepid or icy cold water, agrees absolutely well, and produces the happiest and most providential effects. Therefore, it is strongly connected with a detestation of oppression of every kind; and forms a taste for liberty and laws.

The great majority of psychiatrists not only hold that dementia consists in the constipation of such encompassing mental powers as memory, judgment, conception, etc., but also believe—in company with most psychologists—that an average mental test measures one of these powers. The Lebanese-American scholar, statistician, and essayist Nassim Nicholas Taleb writes in Antifragile,

While in the past people of rank or status were those and only those who took risks, who had the downside for their actions, and heroes were those who did so for the sake of others, today the exact reverse is taking place. We are witnessing the rise of a new class of inverse heroes, that is, bureaucrats, bankers, Davos-attending members of the I.A.N.D. (International Association of Name Droppers), and academics with too much power and no real downside and/or accountability. They game the system while citizens pay the price.

At no point in history have so many non-risk-takers, that is, those with no personal exposure, exerted so much control.

The chief ethical rule is the following: Thou shalt not have antifragility at the expense of the fragility of others.

In all matters of opinion and science, the case it diametrical: The divergence among men is there oftener found to lie in generals than in particulars; and to be less in reality than in appearance. The reliable harvest of my daily life is as impalpable and untellable as the tints of morning or evening. It is a little stardust caught a section of the rainbow, which I have clutched. If the flash should reach so low as the earth, and a person should regrettably be in the place of its detonation, he is broadly struck dead in a moment, and feels the most instant of all kinds of death. Mighty in deeds and not in words.

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Posted in Philosophy and Wisdom

Peter Cundill Quotes from ‘There’s Always Something to Do’

Peter Cundill Quotes from 'There's Always Something to Do'

F. Peter Cundill (1938–2011) was a Canadian value investor of the Benjamin Graham investment school. He was most well known for his flagship investment fund, Cundill Value Fund. His The Mac Cundill Value Fund Series A has returned 10.1% per annum during 1993 until 2003, compared with 8.1% for the benchmark Citigroup World Equity index, according to Morningstar.

  • On Forecasting: “I think that intelligent forecasting (company revenues, earnings, etc.) should not seek to predict what will in fact happen in the future. Its purpose ought to be to illuminate the road, to point out obstacles and potential pitfalls and so assist management to tailor events and to bend them in a desired direction. Forecasting should be used as a device to put both problems and opportunities into perspective. It is a management tool, but it can never be a substitute for strategy, nor should it ever be used as the primary basis for portfolio investment decisions.”
  • On Skepticism: “Scepticism is good, but be a sceptic, not an iconoclast. Have rigour and flexibility, which might be considered an oxymoron but is exactly what I meant when I quoted Peter Robertson’s dictum ‘always change a winning game.’ An investment framework ought to include a liberal dose of scepticism both in terms of markets and of company accounts. Taking this a step further, a lot of MBA programs, particularly these days, teach you about market efficiency and accounting rules, but this is not a perfect world and there will always be anomalies and there is always “wriggle room” within company accounts so you have to stick to your guns and forget the hype.”
  • On Patience for Investors and Selling Too Early: “This is a recurring problem for most value investors—that tendency to buy and to sell too early. The virtues of patience are severely tested and you get to thinking it’s never going to work and then finally your ship comes home and you’re so relieved that you sell before it’s time. What we ought to do is go off to Bali or some such place and sit in the sun to avoid the temptation to sell too early.”
  • 'There is Always Something to Do' by Peter Cundill (ISBN 0773535373) On Statistical Overvaluation: “I almost stopped selling Japan short in the last quarter of 1989 because I couldn’t stand it anymore. But intellectually I was convinced that I was right and so I carried on and then in the first quarter of 1990 the Japanese market fell by 25% in eight weeks and I made back everything I’d given away since 1987 plus a good deal more. But I tell you statistical overvaluation is a funny thing—it can go on for a very long time, far beyond the limits of rationality, and it is a problem for the value investor in two ways: it can tempt one to compromise standards on the buy side and it may lure one into selling things far too early. I have less of a problem with the selling temptation because I have always loved cash—if you’ve got lots of it you will never have to pass up a great opportunity.”
  • On Curiosity: “Curiosity is the engine of civilization. If I were to elaborate it would be to say read, read, read, and don’t forget to talk to people, really talk, listening with attention and having conversations, on whatever topic, that are an exchange of thoughts. Keep the reading broad, beyond just the professional. This helps to develop one’s sense of perspective in all matters.”
  • On Patience: “For all my emphasis on the virtues of patience in value investment it has to go hand in hand with minute attention to the detail, with conviction and determination, otherwise patience is just futile endurance.”
  • On Intellectual Distractions for Investors: “Just as many smart people fail in the investment business as stupid ones. Intellectually active people are particularly attracted to elegant concepts, which can have the effect of distracting them from the simpler, more fundamental, truths.”

On the Worst Investment He Ever Made

The worst investment we have ever had was Cable & Wireless, which had built up a large cash pile through the sale of telephone companies in Hong Kong and Australia and their mobile telephone business in the UK. They were well negotiated, judicious sales. What they had left was a stand-alone operation in the Caribbean, which still exists, and they were in the fibre optic business that was blowing cash. So we said, look they’ve got cash, they’ve got a valuable, viable business and let’s assume the fibre optic business is worth zero—it wasn’t, it was worth less than zero, much, much less! Their accounting was flawed to say the least and they became obsessed by a technological dream. In this respect it was reminiscent of Nortel and that should have caused me to think twice.

I talked to John Templeton about it afterwards and he took a worse hit than us. He said “this is why we diversify, if you are right 60% of the time and wrong 40% you’re always going to be a hero, if you are right 40% of the time and wrong 60% you will be a bum.” I think he probably put it more elegantly than that! But there’s one more thing. We had put a huge amount of time and energy into that one and we were willing it to save itself and, on the face of it, it could have. What we needed was a dissenter in the team—a contrarian among contrarians, a lateral thinker watching out for the left field. On that occasion there wasn’t one. So my thought is, if there’s no natural sceptic on an investment maybe it would be wise to appoint one of the team to play Devil’s Advocate anyway.

'Routines and Orgies- The Life of Peter Cundill' by Christopher Risso-Gill (ISBN 0773544720) Peter Cundill was the founder of Cundill Investment Research and was named Canada’s fund manager of the year at the Canadian Investment Awards gala held in early December 2004. Born in Montreal and based in London, Cundill spent much of the year scouring the globe in search of value opportunities for Mackenzie Financial‘s Cundill fund family.

On Investors’ Biggest Challenges

The ultimate skill in this business is in knowing when to make the judgement call to let profits run. While it is true that 99% of investment effort is routine, unspectacular enquiry, checking and double checking, laboriously building up a web of information with single threads until it constitutes a complete tableau, just occasionally a flash of inspiration may be necessary. Once we have begun to build a position it has to be recognized that our intentions may change in the course of its construction. An influential, or even controlling, position quite often results from a situation where a cheap security does little or nothing price-wise for such a long time that we are able to buy a significant percentage of the equity. Whether our intentions remain passive under these circumstances depends on an assessment of the outlook for the company and the capability of its management, but I don’t think that we ought to be pro-active merely for the sake of it. My task is principally the identification of opportunity and the decision to press the buy button. This may sometimes turn out to be a catalyst in itself, but normally we should rely on others to do the promotional work or to put the company directly into play. Otherwise it will turn into a constant and time-consuming distraction from our prime objective of finding cheap securities to buy.

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Zen Koan #26: Parable of Trading Dialogue for Lodging – Buddhist Teaching on the Eyes of Love

Zen Koan #26: Parable of Trading Dialogue for Lodging - Buddhist Teaching on the Eyes of Love In our most tenebrous times of being disoriented or inundated, there is additionally sapience in reaching out to ask for avail. The mentors, sagacious friends, and guides who treasure our celebrity, are allies to call upon in the moments of greatest pain. However, if you go one step further into no mind, you cannot even be in the present. There is a saying that is useful for practitioners: “Put down the myriad thoughts.” Even if you convince yourself intellectually that everything is illusory, you may still have a lurking concept of the reality of things and be attached to them.

The feeling of resistance to the pain, the feeling of utter helplessness, and the feeling of hopelessness disappear. To respond appropriately to any given situation, an individual must have some understanding of that situation. A practitioner should not consider his own security. However, the effort to still your mind will cause it to become more active. There might be more placidity. Originally, you had to work very hard on your method, but when you get to the second level, everything flows naturally.

This does not mean that you do nothing, but that your mind is in a state of rest. Their minds are filled with thoughts of misery and a sense of failure.

Zen Koan: “Trading Dialogue for Lodging” Parable

Provided he makes and wins an argument about Buddhism with those who live there, any wondering monk can remain in a Zen temple. If he is defeated, he has to move on.

In a temple in the northern part of Japan two brother monks were dwelling together. The elder one was learned, but the younger one was stupid and had but one eye.

A wandering monk came and asked for lodging, properly challenging them to a debate about the sublime teachings. The elder brother, tired that day from much studying, told the younger one to take his place. “Go and request the dialogue in silence,” he cautioned.

So the young monk and the stranger went to the shrine and sat down.

Shortly afterwards the traveler rose and went in to the elder brother and said: “Your young brother is a wonderful fellow. He defeated me.”

“Relate the dialogue to me,” said the elder one.

“Well,” explained the traveler, “first I held up one finger, representing Buddha, the enlightened one. So he held up two fingers, signifying Buddha and his teaching. I held up three fingers, representing Buddha, his teaching, and his followers, living the harmonious life. Then he shook his clenched fist in my face, indicating that all three come from one realization. Thus he won and so I have no right to remain here.” With this, the traveler left.

“Where is that fellow?” asked the younger one, running in to his elder brother.

“I understand you won the debate.”

“Won nothing. I’m going to beat him up.”

“Tell me the subject of the debate,” asked the elder one.

“Why, the minute he saw me he held up one finger, insulting me by insinuating that I have only one eye. Since he was a stranger I thought I would be polite to him, so I held up two fingers, congratulating him that he has two eyes. Then the impolite wretch held up three fingers, suggesting that between us we only have three eyes. So I got mad and started to punch him, but he ran out and that ended it!”

Buddhist Insight on Seeing With The Eyes of Love

In Zen Buddhism, it is quite likely that the mental faculty is most active at every crucial hour. If there’s confusion and doubt, to read something or to speak with someone—it just reminds you of another part of yourself that’s a counter to that, so then you come into enough stability to watch it. By the damp womb, it is fettered, in unbearable fearful stench. Practically anything useful can be given as a gift when seen with the eyes of love. The Vietnamese Buddhist monk Thich Nhat Hanh writes in Teachings On Love,

When the energy of love is strong in us, we can send it to beings in all directions. But we must not think that love meditation is only an act of imagination – we might imagine our love as being like waves of sound or light, or like a pure, white cloud that forms slowly and gradually spreads out to envelop the whole world. A true cloud produces rain. Sound and light penetrate everywhere, and our love must do the same. We have to observe whether our mind of love is present in our actual contact with others. Practicing love meditation in the sitting position is only the beginning.

But it is an important beginning. We sit quietly and look deeply into ourselves. With practice, our love will increase naturally, becoming all-inclusive and all-embracing. As we learn to see with the eyes of love, we empty our minds of anger and hatred.

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