Systematic risk

December 31, 2018

Via  Article

Systematic risk is the risk inherent to the entire market or market segment. Systematic risk, also known as ‘undiversifiable risk,’ ‘volatility,’ or ‘market risk,’ affects the overall market, not just a particular stock or industry. This type of risk is both unpredictable and impossible to completely avoid. It cannot be mitigated through diversification, only through hedging or by using the correct asset allocation strategy. …

Systematic risk underlies other investment risks, such as industry risk. If an investor has placed too much emphasis on cybersecurity stocks, for example, she/he can diversify this by investing in a range of stocks in other sectors, such as healthcare and infrastructure. Systematic risk, however, incorporates interest rate changes, inflation, recessions and wars, among other major changes. Shifts in these domains have the ability to affect the entire market and cannot be mitigated by changing around positions within a portfolio of public equities.

To help manage systematic risk, investors should ensure that their portfolios include a variety of asset classes, such as fixed income and cash, each of which will react differently in the event of a major systemic change. An increase in interest rates, for example, will make some new issue bonds more valuable, while causing some company stocks to decrease in price as investors perceive executive teams to be cutting back on spending. In the event of an interest rate rise, ensuring a portfolio incorporates ample income-generating securities will mitigate the loss of value in some equities.”

A mistake we make over and over

December 31, 2018

By Pascal Finette via  Article

Understanding Convergence

“A common mistake we all tend to make over and over again is to look at the world of technology in isolation. We see AI and consider it as a thing in and of itself. We observe autonomous vehicles and ponder what this will mean for car manufacturers. We watch the latest Boston Dynamics robot doing parkour or happily dancing away and consider the implications their progress will have on manufacturing.

The more interesting and insightful question to ask is: What will this technology enable and what else will change?

Most technologies drive very specific change in somewhat narrow industries (self-drive tech combined with the electrification of cars will likely dramatically change the automobile landscape) and radiate into many other sectors, industries and technologies. Autonomous vehicles will change the way we think and build cities (which in turn will dramatically alter long-held real estate practices), will lead to fewer car accidents and thus influence the insurance industry as well as eradicate most car repair shops and redefine what the word ‘commute’ means. And this is just scratching the surface.

Technologies like AI, blockchain or quantum computing are mostly enablers — which will influence, change and disrupt countless industries and adjacent technologies.

Whenever you encounter a new technology, ask yourself not only what the direct implications are but what else will change due to the convergence of technologies. New products, services, and whole industries are born in the newly formed gaps resulting from convergence.”

Masculinity contests

December 31, 2018

By Jennifer L. BerdahlPeter Glick ,Marianne Cooper via  Article

How Masculinity Contests Undermine Organizations, and What to Do About It

“From Uber to Nike to CBS, recent exposés have revealed seemingly dysfunctional workplaces rife with misconduct, bullying, and sexual harassment. For example, Susan Fowler’s 2017 blog about Uber detailed not only her recollections of being repeatedly harassed, but what she described as a ‘game-of-thrones’ environment, in which managers sought to one-up and sabotage colleagues to get ahead. A New York Times investigation described Uber as a ‘Hobbesian environment…in which workers are pitted against one another and where a blind eye is turned to infractions from top performers.’

Why do companies get caught up in illegal behavior, harassment, and toxic leadership? Our research identifies an underlying cause: what we call a ‘masculinity contest culture.’ This kind of culture endorses winner-take-all competition, where winners demonstrate stereotypically masculine traits such as emotional toughness, physical stamina, and ruthlessness. It produces organizational dysfunction, as employees become hyper competitive to win. …

At work, this pressure to prove ‘I have what it takes’ shifts the focus from accomplishing the organization’s mission to proving one’s masculinity. The result: endless ‘mine’s bigger than yours’ contests, such as taking on and bragging about heavy workloads or long hours, cutting corners to out-earn others, and taking unreasonable risks either physically (in blue-collar jobs) or in decision-making (e.g., rogue traders in finance). The competition breeds unspoken anxiety (because admitting anxiety is seen as weak) and defensiveness (e.g., blaming subordinates for any failure), undermining cooperation, psychological safety, trust in coworkers, and the ability to admit uncertainty or mistakes. Together this creates miserable, counterproductive work environments that increase stress, burnout, and turnover.”


A walk around the block

December 31, 2018

By Steve Keating via  Article

See More Success

“Some people see more in a walk around the block than others see in a trip around the world. That first group of people also tend to be far more successful than the second group.

The more you see the more you”ll know and the more you know the more you’ll understand. Understanding allows you to change the things you can and accept the things you can’t.

The more you see the more you’ll see things that less successful people will never notice. You’ll see things from angles that most people didn’t even know existed. Your perspective will change, sometimes frequently.

Seeing things from different perspectives brings them to life. It creates the curiosity needed to understand them.

But here’s the thing about ‘seeing’ more, it has very little to do with your eyes. Seeing more starts from your heart. It comes from being genuinely interested in other people and other things, even when those people are very different than you. Even when you initially believed those ‘things’ would never be of interest to you.

If you only associate with people who have similar beliefs as you, people who look like you, people who dress like you, then you will likely fall into the trap of thinking you’re always right. You could even believe you know enough that you don’t need to know anything more.

You would be wrong on both counts.

When you make the decision to consciously choose to ‘see’ with your eyes, your ears, your heart, your brain, your experience and your compassion then you’ll begin to see many things differently and many more things for the very first time.

You might notice people who you’ve ‘seen’ many times but now you’ll actually see them.

The more things you see, the more places you see, and the more people you see, the more success you’ll see as well. It takes a bit of practice and a lot of focus but once once you fully develop your ‘eyesight’ it’ll be almost like you have x-ray vision.

There will be no limit to what you can learn and that will almost certainly lead to greater success.”

Work until you die

December 24, 2018

“If you don’t find a way to make money while you sleep, you will work until you die.”

                                                                               — Warren Buffett



A bit of good news

December 24, 2018

By Alan Murray via  Article

“JUST Capital polled some 9,000 people this year—across age, region and demographic groups, and by both phone and online—on their views of businesses. Key takeaways:

– The public’s negative impression of business has softened. Only 38% of respondents think the behavior of American companies is moving ‘in the wrong direction,’ down noticeably from 47% in 2017; while 30% think it’s moving ‘in the right direction,’ compared to 27% last year.

– More people see companies prioritizing workers on par with shareholders. To be sure, a full 59% still believe shareholders are ‘the top priority,’ and only 20% believe workers are ‘the top priority.’ But that’s a significant change from 2017, when 69% said shareholders were top priority, and only 9% said workers.

Needless to say, negative impressions of business still outweigh positive, and shareholders are still perceived as getting a higher priority than workers. But this is the strongest evidence I’ve seen to date that things are inching in the right direction. It also suggests that the recent trend in CEO behavior—with a steadily growing group of CEOs consciously working to maximize their company’s positive influence on society—is having an impact. CEOs speaking out on important social issues—a related trend that’s accelerated in the last few years—may also be making a difference. The poll showed that 63% of Americans think CEOs of large corporations ‘have a responsibility to take a stand on important social issues.’

JUST Capital, which was founded by hedge fund manager Paul Tudor Jones, uses this polling data to guide its annual index of companies, rating them on how well they meet the public’s expectations. From the data, it’s clear that how a company treats its own employees and contractors is at the top of the public’s list of concerns. But how it treats its customers, the value of its products, and its impact on the community and the environment also come into play.

You can find more on the report here, and get the full report here.”

The smartest person

December 24, 2018

By Steve Keating via  Article

The Smartest Person in the Room

“If you’re the smartest person in the room you’re likely in the wrong room. If you’re always the smartest person in the room you’ve got a big problem.

Smart people work hard to make certain they invest their time with people smarter than they are. They also know that there are a whole lot of people smarter than they are.

You may be the smartest person in a particular topic but that doesn’t mean you can’t still learn from other people.

If you ever actually are the smartest person in the room then you had better find a different room or fill the room you have with smarter people. But it’s highly unlikely you’re really the smartest person in the room. Believing you are is a problem, it’s a problem because more than anything else that arrogance is an attitude issue.

Believing you’re always the smartest person in the room is reflected in how you speak with, or more likely speak, at people. What you say will often come out with a level of snark that everyone notices … well, everyone except you.

Believing you’re the smartest person in the room also affects how effectively you listen. Actually, it completely prevents you from doing anything that remotely resembles active listening. You may think you’re fooling people into thinking you’re listening but you are not.

If you’re a leader with the smartest person attitude you have an even bigger problem. The most effective leaders interact with their people in a way that makes their people feel as if they are the smartest people in the room. The least effective leaders interact in a way that leaves no doubt they believe their people are less intelligent than they are. That’s no way to help people grow.

You can’t grow, professionally or personally, without people in your life who are smarter than you at times. Once you find those people listen to them, watch them and always be open minded about what they say and do.

It may not make you the smartest person in the room but I’ll guarantee it will make you smarter.”