P90X Results and What I Learned

So I finally finished my three month commitment to P90x and here's a final picture of my results:

All in all the whole program was amazing and was more than just a weight loss program, it was a total change in lifestyle going forward. Though the physical results I achieved through it are great, what was the most valuable aspect of the program is the mental durability you acquire. I noticed that from Day 1 you aren't just training your body, you are training your mind to a level it hasn't yet achieved. The complete transformation happens throughout the program between mind and body until by the end they match each other in leanness and durability.

I can't tell you how much the program has not only advanced my fitness a hundred fold, but the mental discipline I acquired from it will stay with me forever. I'm fully confident that nothing in the business world can break me down now ever because of the mental durability I now have. I stand by the fact that if you can do this program, you can do anything you put your mind to.

If any of you decide to try the program, let me bestow some words of advice. First of all, buy all the equipment needed. The total investment will probably cost you upwards of $300, but trust me if you want the change its worth it. If you torrent the program or if you just borrow the equipment from someone you have nothing invested in the program and it will make it easier for you to quit. Anytime I felt like not working, I'd remind myself of the money I just wasted and that was a huge motivation to get off my ass.

Second, follow the nutrition plan to the 'T'! If you do not you will be supremely disappointed. If there's one thing I realized from this program is that exercise & nutrition go hand in hand...having one without the other is the equivalent of a boxer going into the ring and using only one hand. Cut out the high glycemic index carbohydrates, refined sugars, and bleached flours.

Third, and I know this is going to be a tough one for a lot of people, is alcohol consumption. I did consume alcohol on the weekends, however, I changed my drinks of choice to bacardi and diet cokes, vodka w/ Fresca, or vodka and Sprite Zero. This way even though I was taking in extra calories from the alcohol, I wasn't having a ton of carbs with it to store those empty calories as fat. Even still, I wonder what my results would've been if I had cut it out completely and I'm starting to taper it down even more because I still want to take it to the next level (six pack baby!).

Fourth, you are going to be in A LOT of pain the first two weeks because you will not be used to working out at this intensity level. Just remember to push through it because the first two are the hardest, especially for Ab Ripper X. I've played every sport known to man up through high school, did seven years of jiu jitsu and mixed martial arts, and am a certified trainer through ACSM and I can still honestly say that this was the hardest training program I've ever done out of everything else.

I do recommend that you invest in some supplements to ease the pain and help with muscle rebuilding including creatine monohydrate, a whey protein powder, casein protein powder for before bedtime, and glutamine (either powder or pill form). If I didn't have these I can't imagine how much more painful the whole program would have been, so make the investment.

Another couple tidbits stick to complex carbohydrates and try to keep them in the morning at breakfast and after your workout. Cut out the cheese and substitute either fat free cheese or Laughing Cow Light spreadables (only 3 grams of fat). And after 8pm, no more carbs!

Anyways if you ever have any questions or just need some advice should you decide to do the program, just send me a message and I'd be glad to help you out.

Using Thanksgiving To Thrust Yourself Forward

First of all Happy Thanksgiving to everyone, if you're reading this I congratulate you on a) not being in a carb induced coma and b) reading on a day of rest.

Thanksgiving is a day when people hang back and relax with family and friends, eat a lot, watch football, and fall asleep. All these things have their place at some point during the day and should be enjoyed thoroughly, but I'd also like to suggest something wholesome and developmental.

I've been looking at the day like this: today we unwind and maybe throw the diet out the window for a day, but its also a great opportunity to reflect and map some stuff out. All the everyday garbage is out of our heads and we can now see the road ahead objectively, and that's a huge advantage that shouldn't go to waste!

To use a crude metaphor, we're both the cast-iron and the metalworker working on it...today's the day to remove yourself from the flame and allow yourself to cool to see what shape has taken form. Make some decisions as to what you want to become and then thrust yourself back into the fire. 

Use today to look at how far you've come and what you've done great these last few months. Similarly, look at what you've done not so great. Start to see how both the good and the bad have contributed to your current quality of life. Are you where you want to be? If not, are you on the right path? How do you know? What indicators have you chosen to let you know at this point?

If these are things you haven't considered in the past, its never to late to start! What to you want to do by, let's say, January? Why do you want to do it? What will you have gained from it? How do you think that will make you feel? What are you willing to do (or not do!) everyday to succeed? How do you know you've achieved it? And most importantly...how will this enhance the quality of life for you forever once you've got it? After all, nothing is worth accomplishing if the effects are only temporary or unsustainable.

These types of questions really help to strip back the layers of bologna when we are trying to make a change, but really aren't committing to it. If anything these types of questions can help realize just how unimportant something is to us! A lot of people have weight loss goals but find their only motivation is to look better. That's just the surface! They never considered how they'd feel about themselves, what they'd learn from it, why its important and how their success will enhance their lives beyond the goal itself.

These types of layer-penetrating questions can help us reach deeper levels of desire for success so that we are completely aligned with our goals for transformation. Wishing the best of holiday weekends to you, your families, and your friends!

Why Small and Micro-Cap Companies Are Better For Your Portfolio

I have MSNBC on in the background and they just mentioned that Cisco (CSCO) may now be undervalued due to its recent drop. A quick earnings power calculation using an 8% cost of capital due to their financing mix shows actually that they're pretty fairly valued in my opinion (plus or minus a dollar) which got me thinking about market prices in general.

A lot of investors, especially value investors, like to purchase companies selling for less than what they think they would be sold for. However, the inherent error in this thinking is that it leads one to believe that the market is pricing companies at how much they are truly worth, when its clear that it is pricing companies as a going concern. What does this mean? It means that the market price is only reflective of the expected future earnings power of the companies assets, not its buyout value.

In other words, let's say I have a unique lemonade machine that makes the greatest lemonade ever and I can make $10 a year with it by opening a lemonade stand. Assuming I have a 10% cost of capital (for a lemonade stand, I know this is ridiculous but just to prove a point!), the earnings power of that lemonade stand would be $100 ($10/.10). This $100 would be the reflected market capitalization if my stand was publicly traded. If however, you came along and offered to buy me out, it really wouldn't make sense for me to sell it to you only for a $100.

But that's what it's worth right? Well yes, but its worth that much assuming nothing changes (as a going concern!). However, if you come in and offer to buy, suddenly the perceived value of my stand increases. As the owner I start to think "this is greatest lemonade stand in the world, they'll make a killing...and what about me? The only thing I know how to do is sell lemonade. Where can I find a stand of equal value once I sell? Nowhere! They better pay up then." So we have a small element of reflexivity coming into play here.

In a way, this happens in all acquisitions, that the very premise of an acquisition being proposed ups the perceived value of the entity from a going concern to a total buyout value. This is why when a potential acquisition is announced, the stock price jumps.When a possible acquisition manifests, suddenly book value and intangible asset value get factored in along with earnings power, which puts a premium on the original market price.

The positive outlook one could take from this then is that technically all public companies are undervalued to what they are really worth. The bad side about this is that "buyout" value will not justifiably manifest unless someone comes along to buy the company (it could manifest from market gyrations, but there's no fundamental basis to support this). With this in mind, what do you think the odds are of someone coming along and buying, say, Exxon-Mobil? ZERO!! Its one of the biggest companies in the world, who would even have the money to do so?

Which leads me to my premise that the individual investor has a better shot at having value realized by investing in smaller companies. Not only because smaller companies have a better chance at being acquired (that's a crapshoot, don't start trying to predict that stuff), but because less market participants are paying attention to them. If 10,000 CFA's are watching CSCO and valuing it accordingly so that the market prices it at around $19, what are the odds that all 10,000 CFA's and all the other market participants are wrong?

In the book The Wisdom of Crowds by James Surowiecki, he makes a point about this using the popular game show "Who Wants To Be A Millionaire." He noted that when someone Phoned a Friend, on average they received a correct answer about 65% of the time (actually seems pretty high to me!). Compare that to the Ask The Audience lifeline, which yielded a correct answer about 91% of the time. What does this tell you about market prices? They are usually right when lots of people are looking at them.

However, the less people looking at a company, the more of chance it could be unfairly valued. Perhaps only 100 CFA's looked at a particular small company, and because their priorities lie in getting through a ton of small caps and micro caps to move onto bigger and better projects, they might have overlooked crucial information. And that is where the individual investor's edge comes in. Those who are willing to do their homework and find value where a small amount of people were too rushed or lazy to look will get the payoff when the fundamentally supported value manifests in the price.

Something to think about...

Our Most Important Attribute

We all know people who aren't really going anywhere or doing anything. We look at them and we think "why don't they just do this?" or "if they only did that, they'd be all set." For some reason, they just can't seem to get ahead and get out of the rut. Alternatively, we know some people who for some reason just seem to be unstoppable, they're heading straight for the sky on a rocketship. What separates these two types of people?

We think well they must have a good attitude, that's why they're so successful and all those people who are stuck in a rut have a bad attitude about things and that's why they are where they are. The problem with this is that we ignore the reflexivity of the situation: that perhaps the person has a bad attitude because he's in a rut, or the person has a good attitude because he's on the up and up.

So where does each of these situations arise from? I like to think that each person's situation is, at the core, a result of one attribute. This attribute is the most important factor in both business and personal relationships and creates good fortune for you through others consistently into the future. That attribute is integrity.

When we say "integrity," we're talking about the definition of ourselves as a person, how reliable we are to others, and how we go about our lives when nobody is looking. Probably the most important component of these is the reliability factor.

When we think back to the past, we all start out perfectly trusting of others and then at some point we got burned. It hurt us so much that we resolve that we can't trust anybody anymore, we'll just get hurt and we're not going to put ourselves in that position again. But our very nature as humans is to want to trust people (that's how we got burned in the first place!), we just have developed this "shell" along the way to protect ourselves.

Instead of thinking "never trust anybody" and concentrating on the symptom, let's focus on the cause and work on that. When we work on ourselves first from the inside, we have the power to change our world on the outside. If we strive every day to work on our integrity...to do what we say we're going to do, to be there for others when they are relying on us, and to live by our own standards, we are putting things into motion on the outside. People over time will begin to see us as someone they can trust and someone who actually gets things done, and in return they will want to be the same back.

Let's look at an example of how vital integrity is. Let's assign a scale to integrity: if we always do what we say we're going to do, we'll say we have 100% integrity. If we are credible most of the time, we'll say we have 80-90% integrity. If we are credible some of the time we'll say we have 60-70% integrity, and so on and so forth all the way down to 0% integrity.

So let's say we are at work and figuratively speaking, we have a 100% integrity (unlikely as unexpected events do occur and nobody's perfect!). If we say we are going to do something by a certain day and we  don't, we have just gone from being credible all of the time to being credible most of the time. Now on the surface that's not too bad, we might say "well nobody's perfect, John. We're still reliable most of the time" and that'd be correct. However, if we look at the scale we've assigned, just from missing that one deadline we've now dropped our credibility 10-20%! That's huge! You tell any investor they just lost 10-20% of their money and they would be fuming. That's because they know that in order to get to their original goal of a proper return, now they will now need to earn back 30-40%! A lot harder to do than just the original 10-20% they needed.

It works the same way in personal relationships. If we show ourselves to be unreliable in any situation, we no longer have to show that we are x reliable, we now need to show that we are 2x reliable. If we let a friend down, we now have to work harder to earn that trust back. Why put the extra workload on ourselves?

The dichotomy of the situation is that in the social world, being unreliable can actually create social value on the surface. Social value in the sense that if we cancel on someone or don't show up, we are inconspicuously communicating "hey I've got options, I'm wanted by people, I'm not always available." However, how long do you think that person is going to put up with that before we just start to look like a jerk?

I remember I used to always be about creating social value. A few years ago I had just started to date this girl, and when I would compliment her, I used always do what's called a takeaway. A takeaway is when you give someone a compliment but you in effect, take it away at the last minute to leave them wanting more. My favorite one I used to use was "don't let that go to your head." So I could say to her "you know, you really know how to hold my attention...but don't let that go to your head." In essence, what this is is a protection mechanism that says in less obvious terms "I think you are this, but don't start taking advantage of me now that you know that because I've got options."

The fact of the matter is that a takeaway works on the surface, it does create social value no matter who you give it to. However, there came a day when I was on the phone with her and I gave her a compliment and did the usual takeaway and I'll never forget what she said to me. She said "you don't need to do that anymore, we're past that now." I was floored, but I learned something valuable. That as relationships begin to deepen, all those little social value mechanisms we use start to lose effectiveness because they now know who we really are.

The point I'm making is this, that if we decide to show who we really are from the beginning, we can create an even bigger impression on someone. That while others may be doing these social value parlor tricks and backflips with us all the time, we remain consistent in our integrity and in our belief of who we are. When the relationship does begin to deepen and the players have to show their cards, your cards are what you have been representing to them all along. This makes such a huge impact on people and inspires a great deal of admiration because they think "wow this person was exactly who I thought they were from the beginning." How often can we think that about the people we meet?

That makes us inspirational because they have just learned something valuable from us through example. And what would you rather people think about you, "hey they are pretty cool" or "wow, they are really an inspiration"?

I think the difference is clear.

Life is Only As Good As The Questions We Ask Ourselves

It hasn't been until now that I've realized the value of a good question. A good question has the power to persuade, direct thought, and change lives. Theories are formed and crushed, sales are made, and relationships are created through asking the right questions. I always knew that questions were how we learned, but I never put together that the questions we ask directly affect the quality of our lives.

If we think about all the great people that have lived throughout time, the very essence of who they are or were is a result of the questions they asked themselves and others. Why was Albert Einstein so much more intelligent than other scientists of his era? Because he asked himself questions that no other scientist bothered to ask. Questions like "if I were traveling at the speed of light and I held up a mirror, would I be able to see my reflection?" He concluded that no, you could not see your reflection, but that's a whole other fascinating discussion! However, this question went on to form the basis for the theory of relativity. The searching for the answers to his own questions made him one of the most brilliant minds to have ever lived and he ended up changing the world forever.

A basic truth of life is that we cannot search for the answers we seek until we first know the correct question to ask. A common question people ask themselves is "what do I want to do with my life." Usually the answer is always the same..."I don't know." That's because that question is too large and it needs to be broken down. Its too large because we haven't analyzed what's important to us. Then and only then will we know how we can do what's most important to us every day to make our lives meaningful.

If we never became better at anything ever again, I can guarantee that if we become very good at asking good penetrating questions, we will never need to be better at anything else. Our lives would be so fulfilled through the enlightenment and knowledge we gain from asking the right questions because it is through asking questions that we become better at anything else.

Also, never underestimate the power of the most simple question in the world: Why? "Why" is such an effective tool for the mind because it forces intellectual penetration. When we ask ourselves "why" about anything, we cannot help but become curious and want to find out, well....why! And don't worry about not being able to find the answers right away, sometimes we have to backtrack to find out how we got somewhere in the first place before we can move forward again. We don't worry about these things and we know the answers will come eventually as long as we persistently and continually make an effort every day to ask a different question.

Hope that helps!

Rehab Hardrock and the Destruction of a Brand

Nightclubs rise, nightclubs fall...just the way of the entertainment industry. And while people are fickle and move on to new things quickly, it doesn't help if your making it easy for them.

I'm planning to go out to Las Vegas in January and have been watching a show on TruTV called Rehab: Party at the Hardrock. I liked watching the show because I love business and its like getting a crash course in everyday operations of a nightclub. Watching how the staff handled things and worked together to reach their fiscal goal was really something unique.

If you've never watched the show, the former general manager (GM), Justin got married and left the show and his position as the GM. When this happened, Matt, the Director of Nightlife at the Hardrock decided to take his spot as the "man in charge" both in the club and on the show. Due to Matt's "Torquemada & the Inquisition" management style, I saw this as a perfect opportunity to discuss both the principles and role of management within a company and why Matt is 100% ineffective as a manager.

Management's role in any business is the same: to lead and direct its employers into one orchestrated effort to make profits. Throughout history, you've had two styles of management: machiavellian and inspirational. Machiavellian management is based on Machiavelli's medieval work "The Prince" in which he says that it is better to rule by fear than by love. Interesting concept, considering Machiavelli by the time of his death was exiled from Italy...

Inspirational leadership works to inspire employee cohesion and morale. This is more of the leadership style that management great Peter Drucker, Steve Jobs, and Jack Welch have used to achieve their success. It is based on the fact that people will do their job better if they love the people, the environment, and the work they are doing. It's sole purpose is to bring out the best in people through communication, incentives, equity, and leadership.

Now that we're briefed on management itself, Rehab's success was based on Justin's leadership (former GM). Justin's management style was strict, yet fair and supportive. The employees worked together, formed friendships, and went above and beyond their call of duty. Rehab's present success is due to its past management action.

Now that Matt's in charge, its a regular occurrence during pre-shift meetings to threaten everybody that they will be fired. How does that style inspire people? Well, it doesn't. We've all had crappy bosses before and if we think back to their management style and how we responded, we pretty much would do just enough so that we wouldn't get fired. Helping other people was just too risky, as if we messed up something helping them, then it was our ass on the line.

The atmosphere this creates is an atmosphere of stress among the employees at Rehab now and the worse part about it is that the employees are pissed off when they deal with the customers who then spread that vibe to other customers. Its a vicious circle, one that starts from the top. There's an old saying that a company in nothing more than the shadow of the one man in charge and it stands true at Rehab.

The worse part about the whole Rehab situation is that most businesses can go on for a long time operating inefficiently simply because the only people who can see it happening is the employees. But they are televising this!!! Every disgusting act of management on Matt's part on how miserable the employees are is filmed and shown on National TV! Talk about destroying a brand! You can't help but feel tension and hatred when you watch the show, which is why I stopped. If you're feeling tense just watching it, how do you think it would feel to be there and have to deal with pissed off bartenders and a very rude staff? Its not their fault, they aren't their behavior, they are a reflection of their leader who is nothing less than inadequate.

In the end it comes down to this whether its a business or a human being, where you are today is a result of your past actions. Where you are tomorrow is a result of today's actions. Rehab's success today is not attributed to Matt's management, its because of Justin's. And I'd be willing to wager that Rehab's success in the future will start to decline to area competition (Wet Republic) unless Matt's management style changes (highly unlikely) or there is a change in management. One thing is for sure, that a great show about a great nightclub business is now nothing more than a celebrity version of Jerry Springer.

Why Do We Laugh? The Function Of Laughter

That was funny...that's why you laughed, right? You sure? I was watching the Roast of David Hasselhoff on Comedy Central, and it got me thinking. What exactly is laughter?! Evolutionarily, it must have some sort of function. And after some research and digging through a lot of crackpot theories, I found that it does.

You can go anywhere in the world, visit any culture, no matter what their language or their value system, they have laughter. There is something very important about this enjoyable but elusive little tendency of ours. Turns out that laughter isn't put there just for our enjoyment. Its actually serves a crucial and very important function in our lives.

Humans are tribal by nature, meaning we have a tendency to herd and form cliques (yes high school cliques are completely natural, sorry to disapoint). But the mechanism we use to form the bonds that build tribes is the very feeling we enjoy the most: laughter. Laughter is a way for our minds to both anchor positive feelings about others and to express those feelings externally. This way others can read our social cues about how we feel about them too.

So I started digging a little more and started to think of things like "Ok, well what makes something funny?" Comedians and researchers all over the country have come up with three theories as to what makes things funny, each having tendencies to contradict each other. So for my own sanity, I decided to come up with a new one that incorporates them all, coupled with an interesting piece of science to back it up.

Laughter is actually nothing more than the end result, its actually whats behind the laughter that is interesting. We have these things in our brains called mirror neurons. They are the neurons that allow us to visualize and empathize with people. They are the very reason why laughter as well as depression is infectious: we see some one laughing and we start laughing, we see someone crying and we get teared up. We as humans, use these neurons to empathize and understand people in order to solidify relationships. And these mirror neurons are the very reason why we laugh too.

Take a stand up comic for example. The reason we laugh is because these mirror neurons allow us to empathize or visualize a situation (or a joke) being described. This empathy then causes a building of tension as you listen and picture him in this situation. And for a brief moment you step into the comic's reality. This reality is meant to directly conflict with normal reality. This cognitive dissonance builds further until we become self-aware again. The moment of self-awareness creates surprise (due to how much tension we realize we now have!) which leads to a release of the tension through laughter. Which leads me to two important principles of humor:

1) Laughter is a mechanism for the release of tension and thus pleasurable feelings, (Think of a massage, that release of tension feels good right?), with the external action itself being a social cue to others as to what we are feeling about them.

2) The two required elements in all humor: tension and surprise.

And in case you try to notice all this happening at once, you probably won't, I tried. It all happens in less than a second!

To prove 2) take this for example. You can't tickle yourself, and when I say that I mean you can't tickle yourself to the extent someone else can. This is because when someone else tickles you, the anticipation of them tickling you builds the necessary tension, which is released by surprise when they actually do it! The mind's mechanism for laughter uses the same two ingredients in all cases.

As far as the social mechanism goes, it makes perfect sense. How many times have you found you've liked a person who never makes you laugh, nor who you've never seen laugh? Probably none. Laughter is a genius and enjoyable way that humans solidify relationships. This also explains forced laughter, which is what people do to bad jokes to show the person "hey i liked it! I like you!"

Its also why women always look for a man who can make them laugh. They instinctively know that laughter forms the bond they need to feel closer to him. Guys, how many times have you had girls laughing at stuff you said that wasn't even that funny? Girls, how many times have you found yourself laughing at everything he says? Social bonding at its finest.

I will point out something else I learned through all this is that humor relies on the individual's tension levels, which thus makes it subjective and thus more of an art than a science. What someone may find funny someone else may not because it failed to either raise or release their tension levels. Therefore there is both a values and an intelligence factor in humor.

Intelligence (intelligence being defined as "awareness") affects humor because in order for us to find something funny, we need to be able to visualize it or empathize with the person. If we can't visualize it, we won't find it funny. When someone says "I don't get it," chances are they failed to visualize or empathize with what was said. And it may not be you, it may be them. If someone lacks the awareness (i.e a calculus joke), its going to be harder for them to empathize with your funny calculus joke. They just "won't get it" because they can't visualize it happening. The more intelligence or global awareness of different experiences someone has, the more likely they will have the necessary empathy to understand the humor.

While intelligence affects empathy ability, values affect tension levels. If you crack a joke about a sensitive subject, you'll send tension levels through the roof without proper release caused by surprise. If you crack a racial joke that ends badly, its because the person on the receiving end's tension flew through the roof, but was not released through surprise. Maybe they weren't surprised because they have a personal experience with that particular perspective of reality that didn't end well for them. This leaves them just tense, and thus, feeling outraged.

Hope you found this interesting, its late and I'm going to bed.