If you are making a vegetable pulav, do you boil the rice first or chop the vegetables? If you want to learn Android, do you download the software first or start reading the tutorials? If you answered the first choice in both cases, then you are on the right track. You have the ability to spot invisible, trivial, but important tasks that need to be kick-started and performed in the background, while you move onto focus-requiring important tasks.
Life is full of tasks where you pay active attention to what you are doing. You can only do one, or at most two, such activities at a time. Let’s call them hands-on tasks. However, some other tasks chug along merrily in the background not seeking your undivided attention. But they need you to kick-start them before you walk away. Ideally, you want the results of such tasks to be ready by the time you are done with your hands-on tasks. These tasks are called hands-off tasks.
Often, the most productive days in your life are when you remember to start the hands-off tasks, with their results waiting for you when you need them. You sail smoothly from one activity to another in a seamless fashion.
When I was a child, No one just asked us “Who is your favourite actor?”. They always asked Do you like Rajinikanth or Kamalhassan? Our prime time debates with panels were of topics like: What is good: Nuclear Family or Joint Family? Or Who is the better warrior – Arjuna or Karna? We were expected to pick a stand and argue our best. We spent considerable time arguing over these topics without ever having one person to our side from the other.
In ancient times, the question was like – Who is the more powerful God – Shiva or Vishnu? Today the questions have just been modified and become – Who is a better cricketer – Dhoni or Kohli ? or Who is a bigger star – Sharukh or Salman? Continue reading Choices and Impact
Title: What got you here won’t get you there Author: Marshall Goldsmith Publisher: Hachette books ISBN-10: 1781251568 ISBN-13: 978-1781251560 Buy here:Amazon.in | Amazon.com
Marshall Goldsmith is a behaviour coach in leading companies. His day-to-day life involves working with CEOs of top companies, entrepreneurs, top lawyers and dignitaries. Goldsmith takes these already successful people and makes them more successful. How can he do that? Is he an engineer? A businessman? A mystic?
None of these. Goldman has discovered that for the people who are already in the top 2 percentile in their field, further growth is not limited by skill or lack of magic. Instead it is limited by their own behaviour. The way they behave with themselves, their colleagues, their families and their support group influences their success. Goldsmith describes 20 habits that act as a hindrance to further growth of these already highly successful people. With these habits, people stand in their own way. Some of them hit a plateau, while a few of them self-destruct, throwing away their careers and relationships. Continue reading Book Summary: What Got You Here Won’t Get You There by Marshall Goldsmith
Recently, I read the post Avoiding the GIGO trap, by author and marketing guru Seth Godin. It mentions how several systems punish the user by rejecting inputs not suited for those systems. A seasoned or a highly qualified user usually learns how to use such a system properly through experience or through a high level of aptitude for that system, but the rest of the world continues to struggle to even gain entry. Usually the users come to know about these limitations ONLY after their input is rejected after a lot of hard work or when a sub-standard input causes the system to come crashing down on them.
Seth Godin points out that these systems try to obsess with ‘Garbage In, Garbage Out’ principle. He argues that is not a good thing. Examples of such systems include computer programming languages, some top-rated schools in India and Formula race cars. We’ll see why in the sections that follow. Continue reading The myth of Garbage in, Garbage out
India is a country with several thousands of communities based on language, religion and native region. In the modern Indian workplace, it is difficult to tell one community from another. However, pick a few sample individuals and visit their homes. The lifestyle they live at home says a lot about the community they hail from. Given the same level of household income, some communities treat themselves like royalty, while others intentionally deprive themselves, calling it frugality. They only loosen up when guests visit them. Continue reading Be your own guest
Warning: This book is an advanced read even for finance professionals. You must have basic knowledge on capital markets to be able to understand and appreciate the book. Like high echelons of Carnatic music, this book is a God send for those obsessed with return on and of their investment, but most others may be unable to appreciate the finesse of the mentioned points.
This book is one of Investment Classics vouched by none other than the most well-known investor of our times Mr. Warren Buffett. Most revelations in the field of investment lose relevance overtime and even prove dismal in succeeding cycles, as can be seen in some of the commentary by the supplementary author Jason Zweig (more on that later) but Graham’s principles have themselves have survived several market cycles. Infact these principles thrive on the market cyclicality. So let’s go about to explore the voluminous book.
Speculation Vs. Investment
A shareholder is a part owner of the company and has to study the business fundamentals thoroughly before deciding to put his money into it. The investor must be convinced that he is receiving more value of the company for the price he is paying. Purchasing shares with the hope that it would increase in price is speculation. A non-professional who is speculating on share prices is purely gambling. It is an exciting past time worth being pursued with only a small portion considered as fun money which you are okay to loose.
Investor’s Biggest Enemy- Inflation
A good investment must deliver an inflation beating return with an acceptable level of risk. Graham considers bonds (debt securities) as one of the most important vehicle to achieve the same. Since secure return of principal is of prime importance, Graham prefers Govt.bonds over corporate bonds as there is nil risk of default by the Government and a few additional points from corporate bonds do not justify the additional risk. However, Graham recommends buying bonds of corporates when available at a steep discount in the secondary market due to temporary adverse conditions faced by the company or market.
Two Types of Investor – Defensive and Enterprising
Myth in investing world is that you have to take higher risks to obtain higher returns. According to Graham higher returns go to the investor who actively pursues it, i.e an enterprising investor while the passive or defensive investors get average returns.
Between stocks and bonds, Graham recommends a minimum of 25% and a maximum of 75% allocation on each of them. Only investors who are prepared for a huge draw down(notional loss on quoted price) should allocate 75% on stocks at any point in time. Conservative investors may be better off with maximum allocation on bonds.
Rules for Common stock Component
There should be adequate but not excessive diversification. i.e a minimum of 10 and a maximum of 30 stocks.
Each of the selected company should be large, prominent and conservatively financed.
Each company should have a long record of continuous dividend payments of atleast 10 years.
Set a limit to max price one would pay for the stock. Suggested: Trailing 12 months PE of 20 or average of 25.
Graham in general advices against picking stocks individually as he considers an individual cannot do a better job at stock picking than the professionals who seem to do a pretty average job themselves. His preferred way of investment in equity is through index funds.
For an enterprising investor who is willing to put in more efforts into stock picking he advises following guidelines:
Financial Condition: (a) Current assets at least 1.5 times current liabilities and (b) debt not more than 110% of net current assets (for industrial companies)
Earnings Stability: No deficit in the last five years.
Dividend Record: some current dividend
Earnings growth: Last year’s earnings more than of prev years
Price: Less than 120% of net tangible assets.
Dollar(Rupee) Cost Averaging:
Such carefully selected stocks must be purchased through a monthly purchase plan of a fixed amount every month as long as the basis premise of selection holds good.
Portfolio Tracking and Updation:
The portfolio must be reviewed atleast once a year. But frequent urge to check the stock prices must be avoided.
Graham is extremely critical of companies that retain more earnings than required for growth. For the company managers to believe that they are more qualified in growing the retained earnings than the shareholders is incorrect, unproven and misaligned incentives.
My Critic on the book: The commentary of the book by Jason Zweig adds number of recent examples. However, the commentary is dated only till 2003. So the book completely skips the 2008 crash and the lessons from it. Jason Zweig has also recommends investing in junk funds as he says risk has been significantly reduced due to diversification. Diversification does not do away with systemic risks which while adequately addressed by Graham need to continue to be adhered too.
This book is a great read if you want to understand more on Asset Allocation in capital markets. For more in depth knowledge on picking stocks please read ‘Security Analysis‘ by Graham and Dodd.
Book title: Miracle Morning Author: Hal Elrod Publisher: Self ISBN-10: 0979019710 ISBN-13: 978-0979019715 Buy on:Amazon.in | Amazon.com
In this book, the author Hal Elrod talks about how waking up early in the morning and then following 6 simple practices transformed his life. The author abbreviates the 6 things in his morning routine as SAVERS. In his 1-hour routine, he goes through 6 activities that give him the perspective he needs for the day. Continue reading Book summary: Miracle Morning
We have all wanted to learn new skills like painting, singing, playing an instrument as an adult when we do not have the luxury of attending series of classes or the 10,000 hours as claimed by several. It is not so hard and even some life skills like swimming, driving can be learnt in as low as 20 hours. In this post we discuss the method for acquiring a skill at an amateur level at the shortest possible time.
Step 1: Define Success
A clearly defined goal is the starting point of the journey. Don’t start with more than one skill or goal.
Eg: 1) To be able to type 60 wpm using a qwerty keyboard with not more than 3 mistakes.
2) To be able to do a portrait sketch in pencil with reasonable semblance.
3) To be able to play ‘chinna chinna asai‘ song in my keyboard with correct tempo and tune.
4) To be able to swim across the 50m pool in freestyle without stopping
5) To be able to park the car in any parking lot properly
You can always build upon your knowledge sequentially, but it is important to do it only one at a time. Once you have reached your goal, you can give yourself a tougher goal in the same skill, or move on to a different one, as you choose.
Let us also address, motivation issues here. Learning a skill is hard, a goal with a purpose often works better than learning for leaning sake. For Eg: I want to learn conversational Gujarati so that I can talk to my fiance’s parents when I meet them in 5 weeks works better than I want to learn Gujarati.
So let your goal be,
“I want to learn ___________ in ___ time, so that I may ________”
Step 2: Deconstruct the Process
You may have noticed swimming, driving classes for absolute beginners are for about 20 hours in general. In 20 hours they are able to take you from someone who has never been inside water to be able to swim reach from one end of the pool to another, or in case driving as someone who has never been on driver seat to be able to handle from the highways to the chaotic Indian roads.
Josh Kauffman in his research as found similarly that learning any skill can be done in 20 hours.
You are by no means going to come out the other side as the next Michael Phelps or Michael Schumacher but would have learnt just enough to survive the roads or the water.
Any skill involves a series of steps. so first we need to deconstruct the steps. For example, the goal of swimming across the pool would involve mastering steps like:
Landing a Jump
Step 3: Select: Identify Key Components
Pareto’s rule of 80/20 fits well into this context i.e 80% of your learning is going to come from 20% of your components. The most important components for the considered Goal according to me would be
So from about 10 + components we have identified key components that we will focus on for our 20 hours of learning. For critical skills like swimming, driving etc which can endanger your or other lives when not practiced properly, it is preferable to have a trainer or atleast an experienced person around you while practicing. But for all skills, it is beneficial to have a trainer, who can provide good feedback and prevent you from practicing incorrectly. But professionals can at times impart incorrect/non-beneficial industry practices that does not suit your lifestyle or goal. You may notice that your driving methods resemble a lot to the person you have learnt from. So choose your trainer well.
Step 4: Sequence the Learning
In pencil sketching, the learning would start with choosing the right HB Pencils, holding the pencil, lines and then shades.
Similarly in swimming, one has to learn to float to be able to get over the fear of drowning, then combine it with learning of hand, leg movements and breathing to be able to swim. Each of this can be identified as a sub skill and learnt and until it is reasonably mastered.
Step 5: Plan for failures
Visualizing that you have failed and to find out reasons for failure is one of the easiest ways to find out where we may fall before we even start. Pre-mortem your result and identify the weak links that may have caused you to fail and account for them in your practice. You may be too lazy to pull the guitar out to practice, put a stand near your favorite chair. Your partner may get too busy to practice salsa, find an alternative. You’d be too lazy to follow through and finish lessons on your Gujarati, schedule the sessions with your tutor and pay for them ahead of time. You think you might put off learning cooking again – Invite your friends over a home cooked dinner at a scheduled date. Websites like StickK can really help you in sticking to your commitments.
This is the most important stage of the learning, where the initial enthusiasm of learning a new skill can quickly get replaced by the frustration of not making a progress fast enough. This is why the purpose of the goal that we mentioned in planning stage is very important. While our tactics will help you get through it in record time, it is still going to be frustrating and will need the purpose powered willpower to drag you through.
Short spurts of learning (say 20 mins) before and after your bed is the most efficient time for you to learn. While this can be definitely used for learning a musical instrument, language, typing etc it can understandably be difficult to learn swimming or windsurfing if your practice area is not in your vicinity or if the industry only provides standard slots like flight log or scuba. Go for the next best alternative.
Set up low stakes Environment
This might sound contradictory to the high stake target we set for ourselves. But it is not. For practicing set up a low stakes environment where you can fail without hurting yourself much. Start swimming in shallow waters, practice uni – cycling or bare foot running in soft grass, practice the new language with non-critical native speakers, try rope walking at a lower height or trapeze with the nets underneath.
Practice – Repeat – Commit to 20 hours
20 hours is not a lot of time. Most of us might watch more TV than that in a week. But this 20 hours may seem excruciatingly long, while practicing and miserably failing along the way. But do it anyway.
Monitor progress – Get Feedback – Get better
Have sub goals and timeline for the sub-skills that you have to develop and allot a time to integrate them. This will be no different than assembling a car, while each part that goes into making the car is quality checked on production or purchase, assembling it together will also take time and due steps need to be followed.
Keep realistic timelines for your sub- goals and measure your progress against them. Seek feedback and help as required to adjust your process and routine to help you get to the finishing line.
Taking care of Basics
I was tempted to leave this part, but it surprised me how many people mentioned this as one key part of learning that I couldn’t help but putting this in a separate section.
Over 70% of the body is comprised of water and water play a huge role in helping to regulate nervous system and brain function. All the learning experts swear by the need to hydrate oneself well while attempting any learning exercise.
Regular exercises benefits your brain as much as it benefits your body. A fit mind in a fit body. So lace up and get going.
In today’s world, we have an acronym called TGIF (Thank God It’s Friday). The basis for this acronym is that people who put in difficult hours at work during the weekdays do not have to do so during the weekend. Instead they ‘get to do’ something leisurely and things they really love. TGIF suggests that you are slogging through your week and doing what’s not important to you. It says that you have given up control of your life to someone else who isn’t allowing you to do what you please. It says that you are a slave. It says that your life as you want it only happens during the weekends. TGIF is a depressing acronym.
With a career I love and with my each day being an opportunity to learn more and work on things I care about, the concept of TGIF is lost on me. But, I agree with one aspect TGIF suggests. Do something different from your daily routine at least once a week. Here is why. Continue reading Why to break your routine for one day?
Schools, the hub of education has taught us what to learn. But has surprisingly never taught us ‘how to learn’. So often kids with different learning requirements are labelled ‘slow’ than find compatible teaching methods. No wonder Einstein, Edison, Graham Bell were all labelled ‘learning challenged’.