- September 2011
- December 2010
- November 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
Category Archive: Psychology
Subcategories: No categories
There is a wonderful OpEd in the New York Times from David Brooks on Happiness and Success and I highly recommend you read it. Here are some snippets I really liked:
“The daily activities most associated with happiness are sex, socializing after work and having dinner with others. The daily activity most injurious to happiness is commuting. According to one study, joining a group that meets even just once a month produces the same happiness gain as doubling your income. According to another, being married produces a psychic gain equivalent to more than $100,000 a year.”
“The overall impression from this research is that economic and professional success exists on the surface of life, and that they emerge out of interpersonal relationships, which are much deeper and more important.”
Here is the link to the article: Sandra Bullock and Happiness
I liked this new idea on how to motivate employees:
From 1940 to 1980, the average holding period that investors held on to stocks was as high as 10 years to as low as 4 years. Then in the 1980s, the holding period started to fall to as low as 1.5 years in the late 1980s, before a brief bounce to two years in the mid 1990s, and then it started to fall yet again. The average holding period for stocks now is 6 months.
Let me repeat that, in 2009 the average holding period that the average investor held stocks was a mere 6 months. With a time horizon of 6 months you are not an investor, you are a gambler. Because if you are holding a stock for just six months, you are betting not on a company’s fundamentals but on investor psychology and on prevailing market moods and trends.
I’m not here to moralize about this, but to present this as a tremendous opportunity. Investor A.D.D. and impatience is an opportunity of fantastic proportions as investors trade with the market, but not according to individual companies’ fundamentals. Let me give you an example.
I am building a new position in a cash cow of a company with a highly valuable recurring revenue business growing at 40%, with no debt and a lot of cash. In fact, the company is generating so much cash; they aren’t sure what to do with it. When the market started to weaken in mid-January, this company’s stock price suddenly fell 20% in a week on larger than normal volume. The company then released excellent earnings, higher than expected cash generation and increased guidance. The stock immediately recovered its losses and then some. Why was there so much selling before earnings? Investors or should I say “market gamblers” were moving with the market, not the company.
I continue to look to the long term and think there is a tremendous opportunity to arbitrage time and take advantage of the short-term thinking that so many “investors” are afflicted with. Cash doesn’t lie and accumulating a portfolio of cash generating companies at very attractive valuations will win out in the end.
Seth Klarman is one of the greatest investors ever, in my humble opinion. Check out his interview with Harvard Business School:
Seth Klarman Harvard interview
On a rather stressful day, I really enjoyed reading this article on the benefits of walking a dog. Here is a snippet on how walking a dog helped people in an assisted living home:
To the surprise of the researchers, the dog walkers showed a big improvement in fitness, while the human walkers began making excuses to skip the workout. Walking speed among the dog walkers increased by 28 percent, compared with just a 4 percent increase among the human walkers.
“What happened was nothing short of remarkable,” said Rebecca A. Johnson, a nursing professor and director of the Research Center for Human Animal Interaction at the University of Missouri’s College of Veterinary Medicine. “The improvement in walking speed means their confidence in their walking ability had increased and their balance had increased. To have a 28 percent improvement in walking speed is mind boggling.”
“IN TRUTH, men have affairs not for physical reasons but for emotional ones. They cheat not out of a sense of confidence but out of a state of brokenness. Not out of a sense of how desirable they are but out of a sense of what failures they are. And this is especially true of men like Tiger Woods and Bill Clinton who live in a hyper-competitive environments where they realize that they are only special to the extent that they keep on winning. Men like these are particularly broken, living as they do just one failure away from obscurity. They know that their value as human beings rests entirely in other people’s hands. And they live in permanent and painful insecurity. They constantly question their self-worth and they turn to women both to feel desirable and to comfort them from their pain.
Yes, I know. Men like Tiger Woods appear to the public as cool-as-a-cucumber. But beneath the calm veneer is a man who has been trained to believe that his value as a human being rests entirely on a never-ending game of human one-upmanship. Those who have made their names in sports and politics live with unimaginable insecurity. And rather than deal with these insecurities in a healthy way by having deep emotional conversations with their wives about their fears, it is easier to simply paper them over by turning to strangers who make them feel special.”
Read the rest here: Shmuley Boteach on Tiger Woods
Jeff Matthews just posted a lengthy, yet excellent interview with Alice Schroeder, who wrote the book Snowball about Warren Buffett.
I enjoyed this article on how grit leads more to success than talent or intelligence.
This is a very fascinating article in the New York Times on hunches and the brain. Check it out: