Saturday, August 24, 2013

"The business of life is too important to be taken seriously."

I previously asked whether a goal worth pursuing must be challenging enough so that there is a real possibility of failing to achieve it.

It's important to emphasize that failure does not diminish the goal or the attempt.  Most (all?) of us are afraid to fail.  So we don't attempt (and not attempting is worse than failing, I think) or we attempt timidly (and thus increase our chances of failing) or we quit after our first failure.  

My approach to overcoming the fear of failure is to remind myself that one of my life goals should be to fail often.  Fail as many times as I can, as quickly as I can.  Try different approaches.  Learn different ideas.  Maybe I was just unlucky in my first five attempts. Try, try, try.

Consider Gerald M. Weinberg's take on failure:
[S]ooner or later everybody stumbles. It helps to understand why you stumble, but most important things can be explained only in jokes, riddles, and paradoxes. Survival requires that we learn to laugh things off and start over, which leads us to the next paradox: The business of life is too important to be taken seriously.
 Seriously, where did we get such a ridiculously serious idea that we won't fail ever?

Wednesday, August 21, 2013

That doesn't apply to us . . .

From Carmen M. Reinhart & Kenneth S. Rogoff's This Time is Different:
"The essence of the this-time-is-different syndrome is simple.  It is rooted in the firmly held belief that financial crises are things that happen to other people in other countries at other times; crises do not happen to us, here and now.  We are doing things better, we are smarter, we have learned from past mistakes.  The old rules of valuation no longer apply."
Such confidence was abundant in the years leading up to the financial crisis that started in 2007.

Today, the stock market is just below its all-time high reached in early August 2013 and above top reached in 2007 before the crash.  Some people believe we're due for another epic crash while others think March 2009 was the generational bottom for the market and that we're in another long-running stock market boom (though there will be short-term market declines).

I have no idea where the market is going.  For years after the 2007-2009 market crash, I expected the market to resume a sharp decline and drop further than the low point reached in March 2009.  The market has more than doubled since then.  Having a dogmatic view blinded me to trading opportunities.

Since then I've truly accepted the possibility that the market can go much higher.  And of course the market can go lower.  Whatever happens, we live in very interesting times.

Tuesday, August 20, 2013

"Past glories are future graves."

From Gerald M. Weinberg's The Secrets of Consulting:
"As soon as you lose your nerve, you stop investing in new ideas and try to milk your last idea for the maximum return.  But as soon as you lock onto a single idea, your days as a consultant [or anything else] are numbered."
"I've come to understand that my anger [when somebody copies my ideas] actually is a symptom of something else - a strong feeling of inadequacy.  I'm afraid that I no longer have what it takes to turn out new ideas.  Instead of reacting by creating a batch of new ideas, I start grasping for ways to protect the ones I've already produced.  In short, I've lost my nerve."
"Past glories are future graves."  [Or, as John Wooden said: "Success is never final, failure is never fatal.  It's courage that counts."]
I enjoyed the book a lot.  It's one of those books that seems superficial until you realize that the clear, breezy writing contains deep insights.  I hesitated to read the book because I thought it was for a narrow audience of technology or management consultants.  In fact, the book offers universal insights on working with others, problem solving, and becoming a better person (not just a better consultant: Weinberg notes that we're all consultants from time to time).

Thursday, August 15, 2013

What's "outside" the universe?

An idea that is always weird and amazing to me:
"When the universe begins to expand, it won't be spreading out to fill a larger emptiness.  The only space that exists is the space it creates as it goes."
"The singularity has no 'around' around it."
That's from Bill Bryson's A Short History of Nearly Everything.

Tuesday, August 13, 2013

Book Quote

From Thomas Hardy's Far From the Madding Crowd:
"Oak was an intensely humane man: indeed, his humanity often tore in pieces any politic intentions of his bordering on strategy . . . ."
What goes through your mind when you meet a person like Oak in real life?

Do you experience a renewed faith in humanity?

Do you feel uncomfortable because you have a calculating and shrewd mind?  Is the source of discomfort the fact that you have a calculating mind or that you use your shrewdness to drive a hard bargain with others?

Tuesday, August 6, 2013

Book: The Giving Tree by Shel Silverstein

Several days ago I read for the first time The Giving Tree by Shel Silverstein.  It's a short children's book, but it raises serious issues.  

The story is about a boy and a tree.  As the boy grows up, the boy spends less time with the tree.  When the boy does come back to the tree, the boy asks for money.  When the boy is an adult, he asks for a house.  As an old man, he asks for a boat.  The tree sacrifices itself to give these things to the boy. 

Is this a story of unconditional love, like that of a mother for her child?  Is it a story of an unfair relationship where the boy takes advantage of the generous tree?  Is it a story of redemption when the boy returns to the tree as a very old man and the boy just wants to sit on the tree? 

My interpretation of the story is that helping another person can mean very difficult sacrifices on the helper's part. (Some might argue that assistance that doesn't involve real sacrifice isn't really assistance.)  I think one can justifiably say that the boy could be more self-sufficient and that the tree could say no to the boy's demands to encourage the boy to be more independent.  But what if the boy can't fend for himself? 

And if we choose to help such a person, a person who cannot fully take care of himself for whatever reason, then we'll have to make real and difficult sacrifices (of our time, resources, energy) to help.  And such charity and love are special things. 

Monday, August 5, 2013

Wisdom in quotations

Good novels contain insight and wisdom.  Where else can we find timeless truths?  

Short essays can contain much knowledge and perspective.

What about single-sentence quotes?  I'm always amazed at how much insight and energy quotes can pack.  I often read a book of quotations or search the web for quotes whenever I need inspiration or an energy boost.  Quotes are energy bars for the mind.  

Here are some of my favorite quotes:
Try not to become a man of success but rather a man of value. - Albert Einstein
It's never too late to be who you might have been. - George Eliot
It takes a long time to become young. - Pablo Picasso
Time you enjoy wasting, was not wasted. - John Lennon
What has been will be again, what has been done will be done again; there is nothing new under the sun. - Ecclesiastes 1:9
Books are the quietest and most constant of friends; they are the most accessible and wisest of counselors, and the most patient teachers. - Charles W. Eliot


Tuesday, July 30, 2013

There must be a real chance that you may fail

If you know exactly how a challenge or task will turn out, is it really a challenge and will its completion mean much to us?

Paul Graham writes:
"The best protection is always to be working on hard problems.  Writing novels is hard.  Reading novels isn't.  Hard means worry: if you're not worrying that something you're making will come out badly, or that you won't be able to understand something you're studying, then it isn't hard enough. There has to be suspense.
 Well, this seems a grim view of the world, you may think.  What I'm telling you is that you should worry?  Yes, but it's not as bad as it sounds.  It's exhilarating to overcome worries. You don't see faces much happier than people winning gold medals.  And you know why they're so happy?  Relief.
I'm not saying this is the only way to be happy.  Just that some kinds of worry are not as bad as they sound."
On a harsher note, Nassim Nicholas Taleb writes in The Bed of Procrustes:
"If you know, in the morning, what your day looks like with any precision, you are a little bid dead - the more precision, the more dead you are."
Charles Murray offers this view in Coming Apart:
"People need self-respect, but self-respect must be earned - it cannot be self-respect if it's not earned - and the only way to earn anything is to achieve it in the face of the possibility of failing.  . . .  People need self-actualization, but self-actualization is not a straight road, visible in advance, running from point A to point B.  Self-actualization intrinsically requires an exploration of possibilities for life beyond the obvious and convenient."
It's not supposed to be easy.

Stock market always goes up over the long run? Define long run.

My passion for following the financial markets had a basic start.  For many years, my thinking on investing was limited to this idea: picking individual stocks is difficult.  Not a bad start considering that almost all fund managers cannot beat the S&P 500 and there's a good argument to be made that those who do beat the overall market in the long run are simply lucky (except Warren Buffett and a few other people: they seem to have real and rare skill).

Then I discovered low-cost index funds.  Again, not a bad idea.  Low-cost index funds are endorsed by Buffett and other master investors as most appropriate for most people. 

But then I learned about how the stock market alternates between long periods of boom and long periods of bust (or going sideways).  And my awareness of how the stock market can go down or sideways for 20 years or more (a generation) led me to dig deep into different investment approaches.  What can an investor do during generation-long periods of declining stock prices?

I do believe that index funds are the most appropriate investment vehicle for almost all of us.  I also think long-running bear markets (a bear market is when the overall direction of the stock market is down) pose a difficult challenge to index funds.

The admirable John Bogle, founder of Vanguard and the first index mutual fund available to the public, might say index fund investors should hold on through thick and thin and for the long run.  But what if the long run is 20-30 years of a declining and highly volatile stock market?  Even if we believe America will always bounce back from difficulty, how many of us can keep that faith in the stock market as we watch our 401(k) account tank?

Consider just the most recent 15 years or so.  The stock market is essentially flat since the technology bubble's peak in 2000.  And if I had invested in the market in 1999 or 2000, I would be about even if I held on to my index fund shares through two gut-wrenching stock market crashes (dot-com and housing crashes). 

So then do you try to find a good stock picker who can identify stocks that will go up when the overall market is going down?  But remember how difficult it is to pick individual stocks: almost nobody can do it consistently as Buffett has done.  How about trading stocks?  While I personally feel that trading is a compelling way to navigate the markets with a portion of my portfolio, I feel that trading doesn't seem like a good idea for most people.  Stay out of the market?  But how do we know when to get out of the market?  Of course we can avoid the stock market.  There is no law that says we have to invest in the stock market. 

For those who want to be in stocks, it seems Mr. Bogle's advice can be sound.  If we can follow it.

Sunday, July 28, 2013

Have some source of income, however modest

You can certainly have multiple jobs while having a full-time job.  But if you left your full-time job to pursue several careers with uncertain prospects for pay, then having some income, however modest, is a huge confidence boost.  Any job will do.  Remember, there is dignity in all labor.

When you leave a regular job to pursue your interests, you are likely full of confidence and excitement.  That's good.  We have to protect and capture our moments of inspiration.  But all of us will surely face difficult challenges in our new careers.  Even if you have savings, your confidence and excitement will dip at times as you make mistakes, face rejection, and face the realities of making a living.

It's especially important to give your motivation and confidence a boost every now and then when starting a business because there are so many things to do and the outcome seems so uncertain.  Having some income stream, however small, will give you reassurance and confidence during difficult times.

And no one is immune from difficult times.  There is nothing wrong with difficulty.  The problem is wishing you will never face any.  Since difficulty is inevitable, prepare yourself by keeping busy and having some income.

What is a portfolio career?

Hello and welcome!

I'm excited to start this blog on my adventures with a portfolio career.  I define a portfolio careerist as someone who wears several hats (e.g., writer, freelance photographer, and part-time restaurant server), may have multiple sources of income, and perhaps best of all, is able to pursue his or her passion as a result of having multiple and flexible jobs.

Despite the word careerist, a portfolio careerist can achieve a more balanced life compared to someone who has an office job.  Indeed, for the person who is able to pursue their passion through a portfolio career, being a portfolio careerist is anything but the sole and mindless pursuit of "success." I've certainly found that having a portfolio career allows me to pursue my interests, have more time for family and friends, and be more productive.

Always feel free to contact me with comments and questions.  Welcome and I'm looking forward to the journey ahead.