Sunday, November 20, 2011


Philosophy
My Philosophy of Blogging



There are two ways of spreading light: to be the candle or to be the mirror that reflects it.


- Edith Wharton

Ms. Wharton sums up how I think of blogs. My desire is to reflect the articles and pictures that inspire me when surfing the Web by posting them on my blogs. Blogs create a scrapbook of events to review later inspiring me for a second time. This is a great pleasure and an educational activity providing me with learning missed when I was in school. The Web has demonstrated its great value in generating and spreading new ideas. Tunisia, Egypt, Libya, Occupy Wall Street and other revolutions have gained momentum on the Web.
If you have a favorite cause like animal rights, you can play a part in education the world by posting to your blog. The possibilities are limited only by your imagination.


"To read means to borrow; to create out of one's reading is paying off one's debts."



- Charles Lillard

Communicating my worldview, as seen from my backwater home town situated on an island in the Pacific, is my way of staying engaged with current events.  Multiple Sclerosis has reduced my physical energy and keeps me close to home so I need to adapt and find new ways of relating to the world at large


Saturday, November 12, 2011

Principles of Investing


1. Start Investing Now


We say this not just to discourage procrastination, but because an early start can make all the difference. In general, every six years you wait doubles the required monthly savings to reach the same level of retirement income. Another motivational statistic: If you contributed some amount each month for the next nine years, and then nothing afterwards, or if you contributed nothing for the first nine years, then contributed the same amount each month for the next 41 years, you would have about the same amount. Compounding is a beautiful thing.

2. Know Thyself

The right course of action depends on your current situation, your future goals,and your personality. If you don't take a close look at these, and make them explicit, you might be headed in the wrong direction.
Current Situation: How healthy are you, financially? What's your net worth right now?What's your monthly income? What are your expenses (and where could they be reduced)? How much debt are you carrying? At what rate of interest? How much are you saving?How are you investing it? What are your returns? What are your expenses?
Goals: What are your financial goals? How much will you need to achieve them?Are you on the right track?
Risk Tolerance: How much risk are you willing and able to accept in pursuit of your objectives? The appropriate level of risk is determined by your personality, age, job security, health, net worth, amount of cash you have to cover emergencies, and the length of your investing horizon.3. Get Your Financial House In Order

Even though investing may be more fun than personal finance, it makes more sense to get started on them in the reverse order.If you don't know where the money goes each month, you shouldn't be thinking about investing yet. Tracking your spending habits is the first step toward improving them.If you're carrying debt at a high rate of interest (especially credit card debt), you should unburden yourself before you begin investing. If you don't know how much you save each month and how much you'll need to save to reach your goals, there's no way to know what investments are right for you.

If you've transitioned from a debt situation to a paycheck-to-paycheck situation to a saving some money every month situation, you're ready to begin investing what you save. You should start by amassing enough to cover three to six months of expenses, and keep this money in a very safe investment like a money market account, so you're prepared in the event of an emergency. Once you've saved up this emergency reserve, you can progress to higher risk(and higher return) investments: bonds for money that you expect to need in the next few years, and stocks or stock mutual funds for the rest. Use dollar cost averaging, by investing about the same amount each month. This is always a good idea,but even more so with the dramatic fluctuations in the market in the past 10 years. Dollar cost averaging will make it easier to stomach the inevitable dips.

And remember, never invest in anything you don't understand.

4. Develop A Long Term Plan

Now that you know your current situation, goals, and personality, you should have a pretty good idea of what your long term plan should be. It should detail where the money will go: cars, houses, college, retirement. It should also detail where the money will come from. Hopefully the numbers will be about the
same.

Don't try to time the market. Get in and stay in. We don't know what direction the next 10% move will be, but we do know what direction the next100% move will be.

Review your plan periodically, and whenever your needs or circumstances change. If you are not confident that your plan makes sense, talk to an investment advisor or someone you trust.

5. Buy Stocks

Now that you've got a long term view, you can more safely invest in 'riskier' investments, which the market rewards (in general). This requires patience and discipline, but it increases returns. This approach reduces the entire universe of investment vehicles to two choices: stocks and stock mutual funds. In the long run, they're the winners: In this century, stocks beat bonds 8 out of 9 decades, and they're well in the lead again. According to Ibbotson's Stocks, Bonds, Bills and Inflation 1995 Yearbook, here are the average annual returns from 1926 to 1994 (before inflation):
Stocks: 10.2% (and small company stocks were 12.1%)
Intermediate term treasury bonds: 5.1%
30-day T-bills: 3.7%But is it really worth the additional risk just for a few percentage points?The answer is yes. 10% a year for 20 years is 570%, but 7% a year for 20 years is only 280%. Compounding is God's gift to long term planners.

If you buy outstanding companies, and hold them through the market's gyrations, you will be rewarded. If you aren't good at selecting stocks, select some mutual funds.If you aren't good at selecting mutual funds, go with an index fund(like the Vanguard S&P 500).

6. Investigate Before You Invest

Always do your homework. The more you know, the better off you are.This requires that you keep learning, and pay attention to events that might affect you.Understand personal finance matters that could affect you (for example, proposed tax changes). Understand how each of your investments fits in with the rest of your portfolio and with your overall strategy. Understand the risks associated with each investment.Gather unbiased, objective information. Get a second opinion, a third opinion, etc. Be cautious when evaluating the advice of anyone with a vested interest.

If you're going to invest in stocks, learn as much as you can about the companies you're considering. Understand before you invest. Research, research, research.Read books. Consider joining an investment club or an organization like the American Association of Individual Investors . Experiment with various strategies before you put your own money on the line. Examine historical data or participate in a stock market simulation. Try a momentum portfolio, a technical analysis portfolio, a bottom fisher portfolio, a dividend portfolio,a price/earnings growth portfolio, an intuition portfolio, a megatrends portfolio,and any others you think of. In the process you'll find out which ones work best for you. Learn from your own mistakes, and learn from the mistakes of others.

If you don't have time for all this work, consider mutual funds, especially index funds.

7. Develop The Right Attitude

The following personality traits will help you achieve financial success:

Discipline: Develop a plan, and stick with it. As you continue to learn,you'll become more confident that you're on the right track. Alter your asset allocation based on changes in your personal situation, not because of some short term market fluctuation.
Confidence. Let your intelligence, not your emotions, make your decisions for you.Understand that you will make mistakes and take losses; even the best investors do.Re-evaluate your strategy from time to time, but don't second-guess it.
Patience: Don't let your emotions be ruled by today's performance.In most cases, you shouldn't even be watching the day-to-day performance, unless you like to.Also, don't ever feel like it's now or never; don't be pressured into an investment you don't yet understand or feel comfortable with.The following personality traits will hurt your chances of financial success:
Fear. If you are unwilling to take any risk, you will be stuck with investments that barely beat inflation.
Greed. As an investment class, 'get rich quick' schemes have the worst returns.If your expectations are unrealistically high, you'll go for the big scores, which usually don't work.It is generally a good idea to avoid making financial decisions based on emotional factors.

8. Get Help If You Need It

The do-it-yourself approach isn't for everyone. If you try it and it's not working, or you're afraid to try it at all, or you just don't have the time or desire, there's nothing wrong with seeking professional assistance.

If you want others to handle your financial affairs for you, you will nevertheless want to remain involved to some degree, to make sure your money is being spent wisely.








Sunday, October 30, 2011

Return On Luck


article below

Luck Is Just the Spark for Business Giants - NYTimes.com

Luck Is Just the Spark for Business Giants - NYTimes.com:



October 29, 2011

What’s Luck Got to Do With It?



BETTER to be lucky than good, the adage goes.
And maybe that’s true — if you just want to be merely good, not much better than average. But what if you want to build or do something great? And what if you want to do so in today’s unstable and unpredictable world?
Recently, we completed a nine-year research study of some of the most extreme business successes of modern times. We examined entrepreneurs who built small enterprises into companies that outperformed their industries by a factor of 10 in highly turbulent environments. We call them 10Xers, for “10 times success.”
The very nature of this study — how some people thrive in uncertainty, lead in chaos, deal with a world full of big, disruptive forces that we cannot predict or control — led us to smack into the question, “Just what is the role of luck?”
Could it be that leaders’ skills account for the difference between just meeting their industry’s average performance (1X success) and doubling it (2X)? But that luck accounts for all the difference between 2X and 10X?
Maybe, or maybe not.
But how on Earth could we go about quantifying something as elusive as “luck”? The breakthrough came in seeing luck as an event, not as some indefinable aura. We defined a “luck event” as one that meets three tests. First, some significant aspect of the event occurs largely or entirely independent of the actions of the enterprise’s main actors. Second, the event has a potentially significant consequence — good or bad. And, third, it has some element of unpredictability.
We systematically found 230 significant luck events across the history of our study’s subjects. We considered good luck, bad luck, the timing of luck and the size of “luck spikes.” Adding up the evidence, we found that the 10X cases weren’t generally “luckier” than the comparison cases. (We compared the 10X companies with a control group of companies that failed to become great in the same extreme environments.)
The 10X cases and the control group both had luck, good and bad, in comparable amounts, so the evidence leads us to conclude that luck doesn’t cause 10X success. The crucial question is not, “Are you lucky?” but “Do you get a high return on luck?”
Return on luck: We call it ROL.
SO why did Bill Gates become a 10Xer, building a great software company in the personal computer revolution? Through one lens, you might see Mr. Gates as incredibly lucky. He just happened to have been born into an upper-middle-class American family that had the resources to send him to a private school. His family happened to enroll him at Lakeside School in Seattle, which had a Teletype connection to a computer upon which he could learn to program — something that was unusual for schools in the late 1960s and early ’70s.
He also just happened to have been born at the right time, coming of age as the advancement of microelectronics made the PC inevitable. Had he been born 10 years later, or even just five years later, he would have missed the moment.
Mr. Gates’s friend Paul Allen just happened to see a cover article in the January 1975 issue of Popular Electronics, titled “World’s First Microcomputer Kit to Rival Commercial Models.” It was about the Altair, designed by a small company in Albuquerque. Mr. Gates and Mr. Allen had the idea to convert the programming language Basic into a product that could be used on the Altair, which would put them in position to be the first to sell such a product for a personal computer. Mr. Gates went to college at Harvard, which just happened to have a PDP-10 computer upon which he could develop and test his ideas.
Wow, Bill Gates was really lucky, right?
Yes, he was. But luck is not why Bill Gates became a 10Xer. Consider these questions:
• Was Bill Gates the only person of his era who grew up in an upper middle-class American family?
• Was he the only person born in the mid-1950s who attended a secondary school with access to computing?
• Was he the only person who went to a college with computer resources in the mid-’70s? The only one who read the Popular Electronics article? The only one who knew how to program in Basic?
No, no, no, no and no.
Lakeside may have been one of the first schools to have a computer that students could use during those years, but it wasn’t the only such school.
Mr. Gates may have been a math and computer whiz kid at a top college that had computers in 1975, but he wasn’t the only math and computer whiz kid at Harvard, Stanford, Princeton, Yale, M.I.T., Caltech, Carnegie Mellon, Berkeley, U.C.L.A., the University of Chicago, Georgia Tech, Cornell, Dartmouth, Southern Cal, Columbia, Northwestern, Penn, Michigan or any number of other top colleges with comparable or even better computer resources.
Mr. Gates wasn’t the only person who knew how to program in Basic; the language was developed a decade earlier by Dartmouth professors, and it was widely known by 1975, used in academics and industry. And what about all the master’s and Ph.D. students in electrical engineering and computer science who had even more computer expertise than Mr. Gates on the day the Popular Electronics article appeared? Any could have decided to abandon their studies and start a personal computer software company. And computer experts already working in industry and academia could have done the same.
But how many of them changed their life plans — and cut their sleep to near zero, essentially inhaling food so as not to let eating interfere with work — to throw themselves into writing Basic for the Altair? How many defied their parents, dropped out of college and moved to Albuquerque to work with the Altair? How many had Basic for the Altair written, debugged and ready to ship before anyone else?
Thousands of people could have done the same thing that Mr. Gates did, at the same time. But they didn’t.
The difference between Mr. Gates and similarly advantaged people is not luck. Mr. Gates went further, taking a confluence of lucky circumstances and creating a huge return on his luck. And this is the important difference.
Luck, good and bad, happens to everyone, whether we like it or not. But when we look at the 10Xers, we see people like Mr. Gates who recognize luck and seize it, leaders who grab luck events and make much more of them.
This ability to achieve a high ROL at pivotal moments has a huge multiplicative effect for 10Xers. They zoom out to recognize when a luck event has happened and to consider whether they should let it disrupt their plans. Imagine if Mr. Gates had said to Paul Allen after seeing the Popular Electronics article: “Well, Paul, I’m kind of focused on my studies here at Harvard right now. Let’s wait a few years, and then I’ll be ready to start.”
When we examined less successful companies, we saw a generally poor overall return on luck. Some of the comparison cases had extraordinary sequences of good luck yet showed a spectacular ability to fritter that luck away. When the time came to execute on their good fortune, they stumbled. They didn’t fail for lack of good luck. They failed for lack of superb execution.
WHILE getting a high return on good luck is an essential skill for 10Xers, getting a high return on bad luck can be a truly defining moment. Consider the 10X case of Progressive Insurance.
On Nov. 8, 1988, Peter Lewis, the chief executive, received news that shocked the insurance industry. California voters had passed Proposition 103, a punitive attack on car insurance companies. Prop 103 required 20 percent price reductions and refunds to customers, plunging a huge auto insurance market into chaos. Progressive had significant exposure, with nearly a quarter of its entire business from that one state — bang! — severely damaged by a 51 percent vote on a single day.
Mr. Lewis zoomed out to ask, “What the heck is going on?” He placed a call to a former Princeton classmate, Ralph Nader. Mr. Nader had long been a consumer rights activist, at one point leading a sort of special forces unit nicknamed Nader’s Raiders, and he had championed Proposition 103. The message that Mr. Lewis heard: People hate you. Or, in other words, people simply hated dealing with insurance companies, so they revolted, screaming with their votes.
“People were saying, ‘We hate your guts. We’re going to kill you. And we don’t give a damn,’ ” Mr. Lewis said.
Chastened by what he had heard, he called his staff together and told everyone, “Our customers actually hate us.” He challenged his team to create a better company.
Mr. Lewis came to see Proposition 103 as a gift, and he used it to deepen the company’s core purpose and to reduce the economic cost and trauma caused by auto accidents. The company would create its “immediate response” claims service: No matter when you had an accident, Progressive would be available — 24 hours a day, 365 days a year. Claims adjusters would work from a fleet of vans and S.U.V.’s dispatched to policy holders’ homes or even directly to an accident scene.
By 1995, Progressive could note this achievement: in 80 percent of cases, its adjusters would have visited the customer, ready to issue a check within 24 hours of an accident.
In 1987, the year before Proposition 103, Progressive ranked No. 13 in the American private-passenger auto insurance market. By 2002, it had reached No. 4. Years later, Mr. Lewis called Proposition 103 “the best thing that ever happened to this company.”
Progressive and Mr. Lewis illustrate how 10Xers shine when clobbered by setbacks and misfortune, turning bad luck into good results. They use difficulty as a catalyst to deepen purpose, recommit to values, increase discipline, respond with creativity and heighten productive paranoia — translating fear into extensive preparation and calm, clearheaded action. Resilience, not luck, is the signature of greatness.
Nietzsche wrote, “What does not kill me, makes me stronger.” We all get bad luck. The question is how to use it to turn it into “one of the best things that ever happened,” to not let it become a psychological prison.
WE came across a remarkable moment at the very start of the history of Southwest Airlines, described by its first chief executive, Lamar Muse, in his book, “Southwest Passage.”
“The very first Sunday morning of Southwest’s life, we narrowly escaped a disaster,” Mr. Muse wrote. “During the takeoff run, the right thrust-reverser deployed. Only the captain’s instantaneous reaction allowed him to recover control and make a tight turn for an emergency landing on one engine.”
What if the jet had smashed into the ground in the first week of building the company? Would there even be a Southwest Airlines today? If we all have some combination of both heads (lucky flips) and tails (unlucky flips), and if the ratio of heads to tails tends to even out over time, we need to be skilled, strong, prepared and resilient to endure the bad luck long enough to eventually get good luck. The Southwest pilot had to be skilled and prepared before the thrust-reverser deployed.
There’s an interesting asymmetry between good and bad luck. A single stroke of good luck, no matter how big, cannot by itself make a great company. But a single stroke of extremely bad luck, or an extended sequence of bad-luck events that creates a catastrophic outcome, can terminate the quest.
The 10Xers exercise productive paranoia, combined with empirical creativity and fanatic discipline, to create huge margins of safety. If you stay in the game long enough, good luck tends to return, but if you get knocked out, you’ll never have the chance to be lucky again. Luck favors the persistent, but you can persist only if you survive.
After finishing our luck analysis for “Great by Choice,” we realized that getting a high ROL required a new mental muscle. There are smart decisions and wise decisions. And one form of wisdom is the ability to judge when to let luck disrupt our plans. Not all time in life is equal. The question is, when the unequal moment comes, do we recognize it, or just let it slip? But, just as important, do we have the fanatic, obsessive discipline to keep marching, to push the opportunity to the extreme, to make the most of the chances we’re given?
Getting a high ROL requires throwing yourself at the luck event with ferocious intensity, disrupting your life and not letting up. Bill Gates didn’t just get a lucky break and cash in his chips. He kept pushing, driving, working — and sustained that effort for more than two decades. That’s not luck — that’s return on luck.

Jim Collins is the author of the worldwide best seller “Good to Great.” This article was adapted from “Great by Choice: Uncertainty, Chaos, and Luck — Why Some Thrive Despite Them All,” which was written with Morten T. Hansen and published this month.



October 29, 2011

What’s Luck Got to Do With It?



BETTER to be lucky than good, the adage goes.
And maybe that’s true — if you just want to be merely good, not much better than average. But what if you want to build or do something great? And what if you want to do so in today’s unstable and unpredictable world?
Recently, we completed a nine-year research study of some of the most extreme business successes of modern times. We examined entrepreneurs who built small enterprises into companies that outperformed their industries by a factor of 10 in highly turbulent environments. We call them 10Xers, for “10 times success.”
The very nature of this study — how some people thrive in uncertainty, lead in chaos, deal with a world full of big, disruptive forces that we cannot predict or control — led us to smack into the question, “Just what is the role of luck?”
Could it be that leaders’ skills account for the difference between just meeting their industry’s average performance (1X success) and doubling it (2X)? But that luck accounts for all the difference between 2X and 10X?
Maybe, or maybe not.
But how on Earth could we go about quantifying something as elusive as “luck”? The breakthrough came in seeing luck as an event, not as some indefinable aura. We defined a “luck event” as one that meets three tests. First, some significant aspect of the event occurs largely or entirely independent of the actions of the enterprise’s main actors. Second, the event has a potentially significant consequence — good or bad. And, third, it has some element of unpredictability.
We systematically found 230 significant luck events across the history of our study’s subjects. We considered good luck, bad luck, the timing of luck and the size of “luck spikes.” Adding up the evidence, we found that the 10X cases weren’t generally “luckier” than the comparison cases. (We compared the 10X companies with a control group of companies that failed to become great in the same extreme environments.)
The 10X cases and the control group both had luck, good and bad, in comparable amounts, so the evidence leads us to conclude that luck doesn’t cause 10X success. The crucial question is not, “Are you lucky?” but “Do you get a high return on luck?”
Return on luck: We call it ROL.
SO why did Bill Gates become a 10Xer, building a great software company in the personal computer revolution? Through one lens, you might see Mr. Gates as incredibly lucky. He just happened to have been born into an upper-middle-class American family that had the resources to send him to a private school. His family happened to enroll him at Lakeside School in Seattle, which had a Teletype connection to a computer upon which he could learn to program — something that was unusual for schools in the late 1960s and early ’70s.
He also just happened to have been born at the right time, coming of age as the advancement of microelectronics made the PC inevitable. Had he been born 10 years later, or even just five years later, he would have missed the moment.
Mr. Gates’s friend Paul Allen just happened to see a cover article in the January 1975 issue of Popular Electronics, titled “World’s First Microcomputer Kit to Rival Commercial Models.” It was about the Altair, designed by a small company in Albuquerque. Mr. Gates and Mr. Allen had the idea to convert the programming language Basic into a product that could be used on the Altair, which would put them in position to be the first to sell such a product for a personal computer. Mr. Gates went to college at Harvard, which just happened to have a PDP-10 computer upon which he could develop and test his ideas.
Wow, Bill Gates was really lucky, right?
Yes, he was. But luck is not why Bill Gates became a 10Xer. Consider these questions:
• Was Bill Gates the only person of his era who grew up in an upper middle-class American family?
• Was he the only person born in the mid-1950s who attended a secondary school with access to computing?
• Was he the only person who went to a college with computer resources in the mid-’70s? The only one who read the Popular Electronics article? The only one who knew how to program in Basic?
No, no, no, no and no.
Lakeside may have been one of the first schools to have a computer that students could use during those years, but it wasn’t the only such school.
Mr. Gates may have been a math and computer whiz kid at a top college that had computers in 1975, but he wasn’t the only math and computer whiz kid at Harvard, Stanford, Princeton, Yale, M.I.T., Caltech, Carnegie Mellon, Berkeley, U.C.L.A., the University of Chicago, Georgia Tech, Cornell, Dartmouth, Southern Cal, Columbia, Northwestern, Penn, Michigan or any number of other top colleges with comparable or even better computer resources.
Mr. Gates wasn’t the only person who knew how to program in Basic; the language was developed a decade earlier by Dartmouth professors, and it was widely known by 1975, used in academics and industry. And what about all the master’s and Ph.D. students in electrical engineering and computer science who had even more computer expertise than Mr. Gates on the day the Popular Electronics article appeared? Any could have decided to abandon their studies and start a personal computer software company. And computer experts already working in industry and academia could have done the same.
But how many of them changed their life plans — and cut their sleep to near zero, essentially inhaling food so as not to let eating interfere with work — to throw themselves into writing Basic for the Altair? How many defied their parents, dropped out of college and moved to Albuquerque to work with the Altair? How many had Basic for the Altair written, debugged and ready to ship before anyone else?
Thousands of people could have done the same thing that Mr. Gates did, at the same time. But they didn’t.
The difference between Mr. Gates and similarly advantaged people is not luck. Mr. Gates went further, taking a confluence of lucky circumstances and creating a huge return on his luck. And this is the important difference.
Luck, good and bad, happens to everyone, whether we like it or not. But when we look at the 10Xers, we see people like Mr. Gates who recognize luck and seize it, leaders who grab luck events and make much more of them.
This ability to achieve a high ROL at pivotal moments has a huge multiplicative effect for 10Xers. They zoom out to recognize when a luck event has happened and to consider whether they should let it disrupt their plans. Imagine if Mr. Gates had said to Paul Allen after seeing the Popular Electronics article: “Well, Paul, I’m kind of focused on my studies here at Harvard right now. Let’s wait a few years, and then I’ll be ready to start.”
When we examined less successful companies, we saw a generally poor overall return on luck. Some of the comparison cases had extraordinary sequences of good luck yet showed a spectacular ability to fritter that luck away. When the time came to execute on their good fortune, they stumbled. They didn’t fail for lack of good luck. They failed for lack of superb execution.
WHILE getting a high return on good luck is an essential skill for 10Xers, getting a high return on bad luck can be a truly defining moment. Consider the 10X case of Progressive Insurance.
On Nov. 8, 1988, Peter Lewis, the chief executive, received news that shocked the insurance industry. California voters had passed Proposition 103, a punitive attack on car insurance companies. Prop 103 required 20 percent price reductions and refunds to customers, plunging a huge auto insurance market into chaos. Progressive had significant exposure, with nearly a quarter of its entire business from that one state — bang! — severely damaged by a 51 percent vote on a single day.
Mr. Lewis zoomed out to ask, “What the heck is going on?” He placed a call to a former Princeton classmate, Ralph Nader. Mr. Nader had long been a consumer rights activist, at one point leading a sort of special forces unit nicknamed Nader’s Raiders, and he had championed Proposition 103. The message that Mr. Lewis heard: People hate you. Or, in other words, people simply hated dealing with insurance companies, so they revolted, screaming with their votes.
“People were saying, ‘We hate your guts. We’re going to kill you. And we don’t give a damn,’ ” Mr. Lewis said.
Chastened by what he had heard, he called his staff together and told everyone, “Our customers actually hate us.” He challenged his team to create a better company.
Mr. Lewis came to see Proposition 103 as a gift, and he used it to deepen the company’s core purpose and to reduce the economic cost and trauma caused by auto accidents. The company would create its “immediate response” claims service: No matter when you had an accident, Progressive would be available — 24 hours a day, 365 days a year. Claims adjusters would work from a fleet of vans and S.U.V.’s dispatched to policy holders’ homes or even directly to an accident scene.
By 1995, Progressive could note this achievement: in 80 percent of cases, its adjusters would have visited the customer, ready to issue a check within 24 hours of an accident.
In 1987, the year before Proposition 103, Progressive ranked No. 13 in the American private-passenger auto insurance market. By 2002, it had reached No. 4. Years later, Mr. Lewis called Proposition 103 “the best thing that ever happened to this company.”
Progressive and Mr. Lewis illustrate how 10Xers shine when clobbered by setbacks and misfortune, turning bad luck into good results. They use difficulty as a catalyst to deepen purpose, recommit to values, increase discipline, respond with creativity and heighten productive paranoia — translating fear into extensive preparation and calm, clearheaded action. Resilience, not luck, is the signature of greatness.
Nietzsche wrote, “What does not kill me, makes me stronger.” We all get bad luck. The question is how to use it to turn it into “one of the best things that ever happened,” to not let it become a psychological prison.
WE came across a remarkable moment at the very start of the history of Southwest Airlines, described by its first chief executive, Lamar Muse, in his book, “Southwest Passage.”
“The very first Sunday morning of Southwest’s life, we narrowly escaped a disaster,” Mr. Muse wrote. “During the takeoff run, the right thrust-reverser deployed. Only the captain’s instantaneous reaction allowed him to recover control and make a tight turn for an emergency landing on one engine.”
What if the jet had smashed into the ground in the first week of building the company? Would there even be a Southwest Airlines today? If we all have some combination of both heads (lucky flips) and tails (unlucky flips), and if the ratio of heads to tails tends to even out over time, we need to be skilled, strong, prepared and resilient to endure the bad luck long enough to eventually get good luck. The Southwest pilot had to be skilled and prepared before the thrust-reverser deployed.
There’s an interesting asymmetry between good and bad luck. A single stroke of good luck, no matter how big, cannot by itself make a great company. But a single stroke of extremely bad luck, or an extended sequence of bad-luck events that creates a catastrophic outcome, can terminate the quest.
The 10Xers exercise productive paranoia, combined with empirical creativity and fanatic discipline, to create huge margins of safety. If you stay in the game long enough, good luck tends to return, but if you get knocked out, you’ll never have the chance to be lucky again. Luck favors the persistent, but you can persist only if you survive.
After finishing our luck analysis for “Great by Choice,” we realized that getting a high ROL required a new mental muscle. There are smart decisions and wise decisions. And one form of wisdom is the ability to judge when to let luck disrupt our plans. Not all time in life is equal. The question is, when the unequal moment comes, do we recognize it, or just let it slip? But, just as important, do we have the fanatic, obsessive discipline to keep marching, to push the opportunity to the extreme, to make the most of the chances we’re given?
Getting a high ROL requires throwing yourself at the luck event with ferocious intensity, disrupting your life and not letting up. Bill Gates didn’t just get a lucky break and cash in his chips. He kept pushing, driving, working — and sustained that effort for more than two decades. That’s not luck — that’s return on luck.

Jim Collins is the author of the worldwide best seller “Good to Great.” This article was adapted from “Great by Choice: Uncertainty, Chaos, and Luck — Why Some Thrive Despite Them All,” which was written with Morten T. Hansen and published this month.

'via Blog this'

Monday, October 17, 2011

Five Things We Cannot Change:


1.) Everything changes and ends.

2.) Things do no always go as planned.

3.) Life is not always fair.

4.) Pain is part of life.

5.) People are not loving and loyal all the time.




Monday, October 10, 2011

"A government that is big enough to give you all you want is big enough to take it all away."
- Thomas Jefferson




Saturday, October 8, 2011

Where are all the bankers?




Jailed Protesters but no jailed Perpetrators...




Friday, October 7, 2011

Its a Mean Old World



WHERE DO WE START TO MAKE THE WORLD A BETTER PLACE?


The place to improve the world is first in one's own heart and head and hands, and then work outward from there."


— Robert M. Pirsig (Zen and the Art of Motorcycle Maintenance)




Wall Street Protests Are Growing



"Men., it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."

- Charles Mackay
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds

Sunday, October 2, 2011

Beginner's Mind

Sit down before facts like a little child, and be prepared to give up every preconceived notion.  Follow humbly whatever and to whatever abyss nature leads, or you shall learn nothing.
- T.H. Huxley

Wednesday, March 30, 2011

War and Inflation

"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists."

 - Ernest Hemingway




"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz


I must follow the people. Am I not their leader?"

Benjamin Disraeli,  19th century British Prime Minister.


"When paper money systems begin to crack at the seams, the run to gold could be explosive."

Harry Browne


"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker



"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."

Oakley R. Bramble