A Learning a Day

I’ve learnt a few things about myself over the years that have greatly helped me learn better.

1. I need a coach. I lean towards the attention deficit side of the spectrum and need coaches to help me focus. I do not have the capability to be self taught. If I taught myself a skill, I’d miss the important aspects. I spent a few months trying to teach myself the guitar in university. But, I invested in a teacher last year and it made all the difference in the world. I’ve since made “finding coaches” a habit.

2. You don’t need a high IQ to get good in most things. Learning most things is hardly dependent on IQ. Sure, a high IQ helps but getting good requires other sorts of traits – tenacity, grit, willpower, openness and a willingness to ask for help. And you know what’s amazing about these skills right? They can all be developed.

3. I need to teach and share. I learn very well when I need to teach and share. I’ve attempted to create systems to be able to do that via this blog, the weekend book learning initiative, and The Bookbytes project.

There are a few other learnings but these are probably the 3 most important ones. Admitting to myself that I am not capable of being self taught when I have a close friend who seems to do it with ease wasn’t easy. Neither was it easy to admit that I was failing on my expectations on willpower. But it helped. Learning isn’t easy. We pay lip service to the idea too often. That doesn’t mean it isn’t doable. It can done and made into a habit.

It just begins with self awareness.

As I get ready to push the publish button on a post every morning, I typically ask myself two questions –

Am I sharing an interesting idea?
Am I articulating it nicely?

I don’t think I do a great job articulating my ideas in these posts. I am not all that good a writer – my grammar and choice of words is average and my sentence construction is weak at best. That means I need to spend a lot more time editing and rewriting posts than better writers and there’s never enough time to do that in the morning. I’m hoping I’ll get better at this as the years pass.

But, I do feel I owe it to everyone to write about something insightful or interesting. And, when I go through a couple of days when I wonder if I have been sharing something of value, the subsequent days become tough till I break out of that cycle.

I have to go back to the “why” behind this blog. Broadly, it involves 3 things –

– Share my failures so I remember they are learnings and don’t take them too seriously
– Help you gain some occasional perspective in your daily life – we can learn from someone else’s experiences
– Live the “a learning a day” philosophy and hopefully spread it as I believe the outcome of doing so is a happy one..

Writing when I feel I’m not on a roll is painful as I feel like I’m not meeting objectives 2 and 3.

But, visiting the “why” helps.. because I realize that my failure to share something insightful is still just that – a failure. They aren’t to be taken too seriously. And perhaps I’m meant to learn that, on some days, just showing up is a small win worth celebrating.

We are always judged on 2 broad dimensions – our ability and our willingness.

We naturally focus on our ability since it takes time to develop it and hone it. In fact, we’re normally in danger of focusing so much on our ability that we get caught up in it. If we’re really skilled, we drink ability kool aid. And if we’re not, we feel we’re worthless.

Willingness involves the “soft stuff.” But, here’s the amazing part – while willingness seems less important ability, it is more important than ever before. In a round world, ability mattered a lot more. If you were the best thinker in your village, you were bound to be sought after even if you were an asshole.

Now, however, the likelihood that your village council will find a thinker who is better than you and cheaper than you from elsewhere is really high. Even if they can’t fly the person in to the job, they can always engage him on Skype. Ability can no longer be your only differentiator.

That’s a huge shift – no matter what skills you posses, what you offer is probably not unique.

But your attitude or willingness? Just being the most enthusiastic, tenacious, and positive version of “you” can make all the difference in the world.

Discount willingness at your peril.

I’ll do better in the game.”

I can’t tell you how many times I’ve made this mistake.

There is no excuse to not performing your best in practice. If you haven’t done consistently well in practice, the chances aren’t high that you will do better in the game.

You plan to win, practice to win, prepare to win, expect to win, and only then win.

And, let’s not forget, if you don’t do well in practice, it’s not very likely you’ll get a game in the first place.

A few months back, I wrote about an initiative to help people pick up skills at their own pace.

We are now ready with Skilldom.org

There are tons of improvements planned but we finally have a starting place. We intend to keep Skilldom.org free and open source and to get us started on the path to improvement, we look forward to your feedback.

Would you find this useful?

This week’s learning is part 10 of a 12 part series on The Ascent of Money by Niall Ferguson. (Parts 1, 2, 3, 4, 5, 6, 7, 8, 9)

The origins of hedging are agricultural. A farmer enters into a “futures” contract with a merchant promising to sell his crop at $5/kg. If the price goes down, the farmer is protected as he still receives $5/kg. However, if the price is $6/kg then the merchant makes $1 for every kg he bought.

This futures market created a home for hedging in Chicago. Partly because of unease at futures being like gambling, the futures market led to the birth of derivatives.

Derivatives are the financial equivalent of “options.” Instead of signing a “futures” contract, the same merchant can sign a “buy option” giving him the right (not obligation) to buy an agreed quantity of the crop at $5/kg (the “strike price“) within a specific time after harvest, at an agreed quantity before a certain time at a certain price known as strike price. The merchant buys options because he expects the price of the crop to rise.

If, instead, the farmer had signed a “put option,” he would now have the right to sell the crop at $5/kg to the merchant at a particular time. He would do this if he felt the crop price is going down. If it’s heading up, he would keep it and sell at a higher price.

Finally, we have a “swap” or an exchange of a bet between parties. Let’s assume the farmer wanted to raise money and issued farm “bonds” that assured 5% interest for 10 years to investors (the farmer assumes he’ll be rich enough in 10 years to pay everyone). Since the investors take a risk on the farmer’s success, they can pay a portion of the interest they receive into a “credit default swap“/CDS to an insurance company who will pay the investors the original amount they paid in case the farmer “defaults.” In essence, a CDS is a bet on whether the farmer will go bankrupt.

In 2007, there were many trillion of credit default swaps betting on households being able to pay for their home loans. When these bets failed altogether, the global economic crisis was triggered..

Source

As much as derivatives are despised by investors like Buffett (who has nevertheless made money from them), they are a key part of the finance system and have divided the world into those who can and can’t be hedged. For example, weather derivatives are sold by insurance companies to hedge funds. This means that hedge funds will pay the insurance amount should bad weather/catastrophes happen. And until then, they get an attractive rate of interest on their principle amount from insurance companies.

While companies and large organizations can hedge to protect their assets, individuals can’t do any hedging and have to rely on insurance. Many go for saving for a rainy day and betting on houses.. More on that in the next 2 editions.

The great speech isn’t the one with no mistakes. It’s the one where you feel the speaker is human.

Have you watched Ben Zander’s ted talk?

When you watch Ben, it feels like he putting all of himself in front of you – his love for classical music, his passion, excitement. He’s out there for you to see and critique. He isn’t guarded, diplomatic and definitely not polished. You can see and feel his rough edges. You might not like him.. but you can’t help feeling you know the guy.

Polish and perfection don’t create connection. Being human does. Vulnerability does. And blemishes are the surest sign of being human.

Polish those edges.. But not too much. It’s those rough edges that are lovable.

I’ve been helped a lot – definitely more than I really deserve. I’ve done my best over the years to pay it forward and help people where possible. This has been in the form of advice, resume reviews, connecting people, helping with job searches and the like. The small things are always easy e.g. making a quick email connection but the bigger things like helping someone improve their resume or improve an application to university or graduate school take a lot of investment.

I have learnt a couple of things over the years –

– More people say they want to learn and grow than they really do. Learning is one of those things that receives a lot of lip service. Very few truly care and make the effort..
– Very few are truly willing to help themselves/work hard for it. They are often reaching out in desperation looking for a silver bullet. And you know what they say about silver bullets..

Since I feel taken advantage of every time I help someone who either doesn’t care about learning or isn’t truly looking to help himself/herself, I work to figure this out early. While there are a few signs, my limited experience has shown me that the best approach is to give them some home work to test their intent. This home work could be absolutely anything – e.g. you want help with your job search? Go read “So Good They Can’t Ignore You” and share your learnings with me or go redo your resume based on this format and we’ll get started with the finer edits.

This acts as a natural filter since the ones who get back are the ones who I truly want to help. That’s not to say everyone else is beyond help – maybe they found someone else whose way of helping suited them more. That’s great too. I wish them the best. I’m just working to make sure I walk out of the experience with a smile.

So, if you’ve ever found yourself in a similar position where you felt like you put in a lot of effort to help someone only to feel it was wasted, don’t question the act of caring and helping out. Just make sure you work with people who would appreciate the sort of effort you would put in and use it to get better. The simplest way to test that is to give them something to do.

A manager I respect a lot was fanatical about understanding financial data. He refused to get any analysis started without sitting down with the data provider and asking all the basic questions. “Why this number? What exactly does it mean? Do the numbers make sense to you?” Here’s why – you often begin by making simple assumptions – oh sales must refer to gross sales and very soon, you build on these assumptions and make a few more of your own. As you begin looking at the data in various ways, your initial assumptions become embedded.

When Disney were building their theme park in France, the projections always assumed there would be 3 million people/year visiting the theme park – the same as the Orlando theme park. At the end of the first year, the projected 3 million people had shown up but the revenues were significantly smaller. Why?

The theme park in France was smaller than the one in Orlando. As a result, most people just made it in and out with just a day trip. This wasn’t possible in Orlando and people stayed for 2-3 days when they visited. This assumption about size just got embedded within the numbers until no one questioned it. It took Disney a year or so to modify assumptions and fix this problem by adding attractions.

D’oh? Well, yes and no. If you are an analyst who has made financial models and projections, you know that such errors can happen to anyone.

The lesson I’ve taken away is – if you are inheriting data, a tool, or a framework created by someone else – don’t assume anything. Go through each and every part of it with the creator making sure you understand everything where possible. Once you ask and understand the ‘why’, go crazy with the ‘why not.’

There are two ways to approach anything – to wait for permission or to take initiative and apologize later.

Yes, there are limits to this approach but too many people sit around waiting for permission most of the time. The problem? The people giving permission don’t often see the issue or the fix as clearly as you do.

So, go do it. Back yourself. Fix it. And apologize later if necessary. Here’s the funny part – it’s hardly ever necessary.