Archive for the ‘Ideas’ Category
Theories and Solutions
Last spring I received a gift card to an ‘eMall’. The card could be used at several different retailers accessible through the eMall’s portal. These retailers offered the usual fare–electronics, books, clothes, CDs–but instead of simply directing traffic to Amazon.com or Best Buy, the mall’s designer contracted firms that were either obscure or in business solely to support the eMall. Money is money, though, so I selected several books from ‘DirectBooksOutlet.com’ (hereafter referred to as DBO) and checked-out.
Think Like a Child
Tom Kelley, the General Manager of IDEO, began his much anticipated 12 November talk at Stanford with an anecdote. While doing research for his whimsical book ‘Orbiting the Giant Hairball’, Kelley’s friend Gordon Mackenzie visited a grammar school in search of artists. To the kindergarten class, he asked, “Who here is an artist?” An eruption of shouting, jumping, and enthusiastic gesticulations confirmed that everyone in the room made art. The first-graders responded similarly, albeit with perceptibly less earnestness. By the second grade, a few had retired from the vanguard, though the majority still remained. At the sixth-grade level, MacKenzie offered his question to a group of obviously annoyed youth: “Who here is an artist?” At first, no hands moved. Then a few timid adolescents volunteered, conscious of the snickers and grins that such an admission produced. MacKenzie resisted the conclusion that artistic skill deteriorates with age. For Kelley, the lesson is clear: creative potential must be nurtured, for there are forces–envy, criticism, and worst of all, inertia–that stifle it. “You’re too young to be stuck in a rut,” he exclaimed, “There is a difference between being ‘childish’ and being ‘childlike’. Creative people cultivate the attitude present in that kindergarten classroom.”
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What I Learned from the Crash
Today the Dow Jones Industrial Average closed at 8,519. Had you invested $100 in the market 10 years ago, you would now have $101.22, exclusive of dividends. Of course it would be presumptuous–and a bit naive–to say that investing in equities as a method of wealth accumulation is a poor choice. Look at Warren Buffett, you might say, and his ’snowball’. This line of reasoning has merit: indeed, Buffett started with hundreds of dollars, not the millions that Rockefeller Jr. used to magnify his family’s wealth. But at that point, a distinction should be made. First, it is not possible to make a fortune in equities through investment unless you are entirely devoted to the task (speculators are not included in this statement; they gamble, and their success follows the associated probability curve). Market inefficiencies exist, but those of us who do not devote our days to studying it are highly unlikely to perceive and to exploit those opportunities.
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