Thursday, 17 November 2011

Laws You Don't Have to Follow (But You Should)

The study of leadership is a life long pursuit. It's a journey. Most people when they hear “leader” think of flamboyant CEO’s or fast talking politicians.  When you dig deeper the opposite holds true. John C. Maxwell's "The 21 Irrefutable Laws of Leadership" is a work that highly I recommend.When you build a company, people have to follow you if they work for you because their livelihood depends on it.  Building non-profits is not the same.  People CHOOSE to follow you and that is what makes his work so profound.

For the sake of time, I am going to highlight 4 of the 21 laws in this book.  All the laws are critical

and they all can be studied and improved upon independently so you do not have to master one to get to the next one.

1. The Law of Solid Ground: Trust is the foundation of Leadership.  When you look at Apple, people trust Steve Jobs.  There are no two ways about it.  You can't build a billion dollar business without it. Now think of Enron. These executives were building a house of cards.  They hid their motives and lied to employees and once the trust was broken, their careers were over. None of those executives could run another company again because they violated the Law of Solid Ground. It takes 30 years to build trust, integrity and character and 30 seconds to destroy it to an irreparable degree.

2. The Law of Influence: The True measure of leadership is influence- nothing more, nothing less. Think about this. Why would anybody retell  history from 480 BC?  The Spartan King Leonidas lead 300 Spartan soldiers into battle against the Persian army rumored to be in the millions.  The Persian army was made of slaves while the Spartans were free men.  The Law of Influence is seen in the fact
that Xerxes (the Persian leader) would kill any of his men for victory and Leonidas would die for any of his men. Needless to say the stand of the famous 300 Spartans is still remembered today as one of the greatest battles in history. All the Spartans stayed and died because they were fighting for what they believed in and following a leader bigger than themselves. That, my friends, is influence.

These are only 2 of the laws from Maxwell's book that I am summarizing for you. The others discussed in the book are just as important. What's great about this text is that none of the "laws" are deal breakers, per se. Everyone has their own distinct leadership style. What's yours? What aspects of a leader do you put the most pride in? Definitely makes you think. Thanks for reading, have a great weekend!


Thursday, 10 November 2011

Focus on This

"How to Survive the Most Critical 5 Seconds of Your Life" written by Tim Larkin talks about true self defense. By true, I mean street. I mean the real deal. Target Focus Training (we'll call it TFT) is the focus of this book, and it's how you're going to survive.  There are several aspects of this program that are very easy to do.  The key is to do them. Tim's a pretty credible guy. He has trained special forces and Navy Seals using the very techniques he reveals in this book. With that being said, I urge you to read on.

Life or death? You pick. To me, Life is important so I will spend the time studying a program that is taught to our nation’s elite fighting teams. The key differentiator, however, is that you can learn these concepts in a weekend. This is not a 20 year study. Good for us, bad for the bad guys.

 For this blog post, I am going to cover three key concepts that are the meat of the TFT program.

1. The Cause-State: The fighter has "first strike" capability. After the initial strike, the fighter continues to step into the man performing techniques in a constant rhythm, knocking him off-balance and conquering his space. The assault continues until he is completely incapacitated. Let's talk about this. When you look at a drugged up thug, they probably are not in the best shape. So why is that they are victorious against 99% of their victims?  They use the Cause-State along with A-Social violence as tools for victory.  I have studied martial arts and the targeting that Tim talks about to create the Cause-State can be seen in any good program.  The thing that is unique is the concept behind it and the true definition of violence and the Cause-State.

2. The Effect-State: The human body reacts instinctively to particular stimuli.  If you kick a man in the groin, he doubles over, extending his chin.  That gives you a chance to strike again, using the new target that has now become open.  Fighting with a solid understanding of reactions means never having to compete at the level of brute force. Techniques based on these principles lead to predictable results:
The man's incapacitation, disability or death.

3. Result: Your goal once you have identified the situation as life threatening is to use the Cause-State to keep the assailant in the effect-state until they are incapacitated.  This is where the true understand of violence needs to be understood.  You may be a companionate person but you can NOT assume if
somebody has a gun in your face that they are the same.  You need to use the Cause-State to save your life.

While this book is packed with tons of relevant information, if you are to take away any one thing from it, I hope it is the Cause-State. You can use this concept in any part of your life to be successful.  In business, you simply use it to keep your competitors in the effect-state. Understand this concept and
good things will come your way, my friend.


Thursday, 3 November 2011

Attention! Investors Read Up

"The Ivy Portfolio: How to invest like the top endowments and avoid bear markets" by Mebane Faber & Eric Richardson

Endowments have an investment outlook of forever.  They know how to avoid bear markets and bubble crashes.  These endowments use sophisticated investment strategies to limit the risk and maximize their gains.

This is important to me for a few reasons.

1. We need to emulate the best.  To figure out what these endowments have done on our own would result in lost time, money and opportunity.  Why not emulate the best.  Here is what the Yale Endowment has done.  If you would have invested $100,000 in 1985 then your investment would be worth $4 million today compared to the S&P at $1.5 million, 10-year Government bonds at $950,000.  The same amount invested in Harvard’s endowment would have gotten you $3 million.  These endowments know what they are doing.

2. Get Rich Quick in stocks is not a smart way to go.  Over the long haul you will probably lose money.  This does not mean that you will not make money in stocks but it means you need to be educated.  Think about it – we would be competing with guys like this who are the best of the best.  When you see get rich quick scams on TV just think about these endowments.  These guys are the best of the best and they
know who how to invest.  They beat the S&P by an additional 4% per year with 33% less volatility.  Competing with these guys would be like advising your son to drop out of school to play basketball with the goal of becoming the next Michael Jordan.

A fair warning, though: This book is not for the faint of heart.  They get into some pretty in depth stuff like mathematical algorithms, portfolio rebalancing, momentum, hedge funds, private equity, active management and passive management.

Rule one is critical.  Don’t lose money. Think about this if you invest $1000 dollars and lose 50% of it then you have to make a 100% gain just to get even.  This is the biggest destroyer of wealth. The Ivy Portfolio uses rebalancing and passive management to achieve results.  This is doable for the little guy. All in all, "The Ivy Portfolio" is a pretty intense book on investing but it profiles the two best endowments and how they do it.  The good news is there are a couple of things the small investor can learn from the book.  They are asset allocation, rebalancing and 13Fs (see these in the book).

I hope you enjoyed this short blog post. Thanks for reading! Discussion welcome.