Abandoning Your Presets

This is something I decided this morning I'm going to dedicate myself to. I've found myself all too often using pre-determined frameworks to guide my action, whether it be in business or personal. While frameworks and guidelines are important, there comes a point in any development, professional or personal, in which you must abandon your presets.

Bruce Lee described this as being formless, but only now am I really understanding the depth of it. So often I've found myself consciously determining action, "they said this, now I will counter with this because..." or "I will do this to elicit this response, which will allow me to...". It's too much thought and interrupts flow. That level of planning and thinking is important but it can also hinder creativity and true expression.

I used to see this a lot when I was practicing judo, you learn a new throw and then you look for every opportunity to use it in competition. While mastery of technique and recognition of opportunity for proper application is important, that narrow focus will cloud the recognition of other opportunities that will achieve the same desired result. Maybe instead of waiting for your opponent to be in position to apply that throw, he's already in position for osoto-gari, but you don't see it because you're sitting there waiting for tai-otoshi to show up and thus miss it.

I also used to see it in jazz improvisation a lot, you learn a new lick (maybe some cliche diminished scale lick like at the 2:06 mark here), you can't wait to use it and you look for every opportunity during improvisation, maybe forcing it in there as if to say "look what I learned!" Compare to this to the approach of someone like Michael Brecker, who once said in an interview that when he practices a lick or line, it might be months before the line comes out naturally in his improvisation, and even then it might come out in a completely different form.

Instinct with true expression, versus consciously and arbitrarily forcing a framework. That's the essence of formlessness.

Your Body's Chemistry: Pyruvate

I'm a big proponent of understanding how things work first before I take action to achieve a desired result from it, but if you were like me you were falling asleep in high school biology class...and you flat out just did awful (I got a C). However, maybe if some of that chemistry was applied to everyday life, I actually would've paid attention.

One of the most important things we learn about without realizing it is the Krebs Cycle. This is the cycle that our body's cells use to make energy. Its part of the reason we get hangovers after drinking and also the reason for weight loss in exercise. I want to share a diagram of the cycle to highlight a huge part of it when it comes to weight loss.

Basically, one of the most important things about energy systems is that if you want to increase your output, you need to increase your input. The Kreb Cycle essentially begins with a substance called pyruvate, that through a series of reactions converts into ATP, which is the molecule cells use for energy. So using this basic assumption about energy systems, if you increase your input (pyruvate) you increase your output (energy). This is big because in order to do these reactions in the cycle, your body has to use energy in the form of calories. So if we increase the amount of pyruvate our cells are getting, we thus increase the amount of ATP created and increase the number of calories burned to make it. Calories burned equals weight loss.

There was a study conducted at the University of Pittsburgh School of Medicine that confirmed this principle, however its important to note that subjects were not given a standard dosage of 500mg found in most supplements, the were given a much higher dosage around 6-8g. So with a little digging on the internet, I found this stuff:

http://www.maxbodysupplements.com/product/GF1.html

One of the side effects of upping your pyruvate intake is your sweatpoint happens a lot sooner. Your sweatpoint is the point at which during a workout your body starts to pour with sweat. My experience from taking this stuff so far is that sweatpoint happens a lot sooner. I also feel like I have more energy to get through double and even triple workout sessions if I want. No jitters or energy crash either like from caffeine, and no facial blood rush like you get with nitrogen-based pre-workout supplements. Great stuff, will definitely be buying more. 

The Fame Equation

I like reality TV stars. I don't watch a whole lot of reality TV, however I think it says a lot about human beings socially. As long as time as stretched, people have always associated fame with talent: if you're the best at something then you'll probably be famous. And rightfully so, how many examples can you think of where someone's fame is a result of their talent? Probably thousands, just look at any major singer or movie star.

However, watching reality TV and the resultant stars from it makes you realize that this correlation between talent and fame is not so strong, in fact its flat-out weak. If Fame = Talent, then that expression would explain people like Tom Cruise, Lebron James, or Christina Aguilera, but what about Pauly D, Kim Kardashian, or Paris Hilton? Surely whatever explanation that explains Lebron James's claim to fame should equally be able to explain Kim Kardashian's, because in terms of fame they're pretty much equal. Yet one has a clear monetizeable talent while the other is seemingly just famous for being famous. What gives?

So let's take the Fame = Talent equation and throw it out because it isn't explaining much. We need an equation that not only explains the Tom Cruises and Angelina Jolies, but one that explains the Kim Kardashians, Paris Hiltons, and regrettably, even the John Wilkes Booths and Dzhokhar Tsarnaevs. We need an equation that objectively expresses fame, whether good or bad, in clear simple terms with talent not being an integral part of the equation. So without further ado, I give to you, the Fame Equation:

Simple, yet all encompassing, this equation explains fame ranging from movie stars to dictators, from Real Housewives to real psychopaths. It explains why criminals and killers can achieve levels of fame as high or even higher than a TV star and can potentially help us prevent the frequencies of atrocities such as school shootings. So let's take a look at each component so we can better understand what fame is really comprised of.

Novelty is often thought of in terms of something that is good (i.e. "what a novel idea!," novelty stores, etc.) however in this equation novelty simply means something that diverges from the norm. This can be an specific event, a personality, a talent, an achievement...anything that for one reason or another cannot be classified as "status quo."

Gossip is the resultant talk or word of mouth regarding that particular novelty, this includes the identity of the person as well as the novelty about them, so in essence Gossip really can be broken down into even simpler terms, Gossip = Person's Identity + Novelty.

Bandwidth is quite simply the speed and spread at which something travels. Bandwidth in this equation is affected by things such as media channels, influential people, and communication methods. Gossip is magnified exponentially by the bandwidth in which it travels. Case in point, if gossip were to make a major headline in news outlets, the magnitude of that gossip will have been increased dramatically than it otherwise would have been if it were just to travel from person to person. So in short, a person's fame can be expressed by the magnitude at which something novel about them is talked about.

Understanding this equation can not only help us become potentially more successful in our everyday lives, but also understand how to take preventative measures when it comes to bad fame. To quote Shakespeare, nothing in this world is good or bad, but thinking makes it so. The same goes for fame in this equation: fame is objective, its nothing more than a metric. Its how we interpret that fame that determines whether its good or bad fame. So when we look at something that we'd consider to have "bad fame" such as the notoriety of a shooter or terrorist, we can take action as a society to reduce its power.

Let's take the example of a school shooting. One of the reasons school shootings happen so frequently now is because of the instant fame that is given to the shooter. The appeal of doing such an atrocity is that its quite simply "easy fame" with a simple thought process behind it: do something atrocious, then everybody will know me, then everybody will finally listen.

So if we look at a school shooting through the lens of the fame equation, we can see how this works:

Expressed in the fame equation, the killer becomes famous when he does something atrocious and the resultant discussion of his doing is magnified by it making every major news outlet and talk show.

So how do we mitigate this? Humans nature is to talk to each other, especially when it comes to things of novelty or interest. We are social animals. Do we really need to change our nature just to prevent awful occurrences like school shootings from happening?

The good news is we do not, only the specific content that we talk about. Let's assign some arbitrary values to this particular "famous killer" example and put them into the Fame Equation:

So here we have assigned an arbitrary value of 500,000 to denote a killer's fame after committing an atrocious event, where Novelty of the event equals 5, Gossip equals 10, and Bandwith equals 5. Now that we know the factors that contributed to the killer's fame, can we erase his fame by just not talking about it? It theory yes, because if the Gossip equals 0, zero to power of anything is zero, multiplied by anything is still zero, which means resultant Fame is, well...zero! However, we know that in practice, that would never happen because people will talk regardless.

So if we can't eliminate Fame, perhaps we can make it less significant. Let's remember again that gossip is comprised of a person's identity as well as whatever is novel about them (Gossip = Person's Identity + Novelty). We can't erase the Novelty itself especially if its an event that already occurred, but what if we don't know the person's name? What if we remove their identity from the equation and make them anonymous?

For example purposes, we'll say the Gossip is made up of about half what the person does or did (Novelty), half about the person themselves, such as their background, why they did it, etc. (Person's Identity). So where gossip equaled 10, we'll say the Person's Identity equaled 5 and the Novelty of the event still equals 5. Let's see what happens with a little substitution and when we eliminate the Person's Identity (Person's Identity now equals 0):

Pretty amazing, huh? So just by anonymizing the identity of the person, we cut the fame factor and thus the appeal to commit the atrocity itself by almost 100,000%! This is huge when it comes to taking preventative measures of such atrocities. If law enforcement made it a policy to anonymize the identity of the person who committed the crime, they'd effectively mitigate the exponential power of the media and thus the appeal to even commit such a horrible act in the first place. Could it be done in every case? Probably not, especially if the person is already well-known, however not confirming the identity would still reduce the identity factor and the resulting fame factor by a huge amount.

So good or bad, the fame equation explains a lot about the famous figures in our society. Fame is nothing but a metric, a metric that can be interpreted as either good or bad, significant or insignificant. It's how we use that metric that matters most.

The Market of The Future: Celebrity Stock Exchanges

I must've been tired today, because I just woke up from a nap and I never nap. As I woke up, I reached for my Iphone to check the time and also checked the 'stocks' app...market's down, and will be for awhile. I then check my Mint.com and check my personal finances as I need to go grocery shopping in the next hour. I love Mint, its a like a personal income statement, balance sheet, and cash flow statement.

I then started to think about my entire financial picture: my cashflow, my debt, my net worth, and realized that you can look at your own financial picture the same way you analyze a company's. All the stuff I've read about company's delaying accounts payable to have working capital is nothing more than me delaying my rent until my next paycheck so I have more cash on hand. I then started thinking about my earnings growth potential, how much do I stand to earn over the next 5 years? 3 years? Tough to say, but I've got a couple things in the works that could add a growth factor...wow, I'm like my own personal stock!

To which I started to really get thinking, that for the past hundred years, investors only had the options to invest in asset classes such as stocks, real estate, commodities, options, and hard assets to name a few. The prices of all of these asset classes is determined by what the market (society) deems them to be through the forces of supply and demand. The interesting thing is that if market participants (people) are really what gives all of these asset classes value, why can't I make in investment in the market participants (people!) directly?

If you really think about it, for hundreds of years both individuals and institutions have been able to 'buy' debt in individual people...this is exactly what happens when you take out a mortgage, essentially the bank is purchasing a bond in you personally so that you can raise capital to pursue your endeavor to purchase a house. This transaction gets puts on the liabilities side of your personal balance sheet. Yet we are missing a huge component to the personal balance sheet: Stockholder Equity, its critical in making the balance sheet balance (Liabilities + Stockholder Equity = Assets ). And as it stands right now, there is no market in which a person or institution can purchase equity in another individual person, and my question is why not? Personal debt instruments have been issuable for the hundreds of years, why can't personal equity be?

Think of it: a liquidable market in which you can buy equity in the endeavors of your favorite celebrities. A market where you can purchase equity in someone's future and get a return on that investment just like they are a corporation. Why not? After all when you look at the stock exchange, essentially what you are looking at are the celebrity companies of the investment world. In fact the very first publicly traded company, The Dutch East India Company, was successful in raising equity capital for the first time in history just by their notoriety alone: they were the most famous company at the time and its success served as a model for other corporations to follow.

How could this be done? Well the same way a corporation becomes publicly listed, you would need underwriters to determine the net worth of each individual and list them on an exchange. By starting with celebrities and the availability of real-time online trading, the market would essentially create itself (think of Twitter and Ashton Kutcher). The stock price of each celebrity would rise and fall not only with supply and demand but by their earnings potential. For example, there would be higher demand for stock in Kim Kardashian than Michael J. Fox, not only because she's more famous right now, but because of that her earnings potential would be perceived by the market as higher from endorsements, shows, and other income producing opportunities.

Think of all those gossip magazines out there could then actually be considered investment research, wow!

Eventually this could extend out to people who aren't celebrities, however the trading volume wouldn't be there (low demand). Essentially, family and friends would just be like penny stocks. That being said though, this creates a whole new industry in cheap personal underwriters: get your personal stock valued and listed for just $99.99! Ha!

All this isn't a matter of if, its just a matter of when it will happen, this market could easily sustain itself and because of that it will eventually manifest.

All Humans Are Value Seekers

Kind of broad statement, but it’s simple and it’s true so think about that for a second: All humans are value seekers. For the last few years I’ve kind of been obsessed with the concept of value. Value can mean all sorts of things and doesn’t necessarily have to pertain to money. That being said value as it pertains to money can provide us good direction in defining exactly what value is. Whether we are buying a house for less than what it’s worth, or a stock, or jewelry or whatever, it’s obvious that value plays a big part in our lives.

Then why is it so hard to define what the value of something is exactly? In real estate, how are houses typically valued? Comparables. That’s because value is so elusive that we have to look at things outside of something in order to determine how much it’s actually worth. Kind of crazy when you think about it right? We’re determining how valuable something is not by looking at the thing itself, but by looking at other things. It almost sounds a little insane, but that’s the nature of value, there's an essence of relativity.

Humans by nature are value seekers, meaning that they are constantly in pursuit of things they perceive to be worth in excess of the price paid for them. Why does someone pay $250,000 for a Ferrari? Because the person perceives that the value of that Ferrari ̶ the prestige, the glamour, the stares of hatred from passerbys ̶ is all worth much more than $250,000 because if it wasn’t they’d go buy something else. How many times have you saw something you liked, found out the price of it and said “Nah, that’s not worth it”? That’s this value-seeking concept at work.

As social animals, we tend to gravitate towards people that we perceive to have high value. Unconsciously, the reason why we befriend someone or start a relationship with someone is because we perceive that the value we can extract from that person is worth well in excess of the value we must give to that person in return. When do relationships end? When people feel like they are giving more than they are getting back.

But the biggest takeaway about value is that even though value is real, it’s still only a perception. It’s a perception with justifications, but just a perception nonetheless. Think about how that can work to your advantage in your life or in your career. The value of anything is defined only by our perception of it. How can we guarantee success in business or our career? It’s simple: give more than you ask for in compensation. 

The concept of giving really comes full circle here sociologically, in the fact that a person’s true value is determined exclusively by how much they give versus how much they ask for in return. That’s why 50/50 is a losing proposition in any relationship or business deal, the result is net-zero ̶ no value.

It’s a crazy concept that I’m still wrapping my head around myself, but undeniable at the same time…

Value = Perceived Worth – Price Paid

Why Certain Things Are Meant To Be

So being in sales, you start to really see many things in a different light, things like human behavior, persistence and success. In terms of success, there's a lot of advice out there that persistence is a key ingredient in success, and I believe it very much is. That being said, it is also the key ingredient in annoyance when on the receiving end...

There's all this focus on persistence when it comes to success whether it be in business or love or anything else with a goal attached. But if there's one thing I realized, persistence alone is not just some magic ingredient you throw into the pot and voila, ze soup she ez done! That's a very naive thought process and one that I myself have been guilty of in the past.

Probably the biggest factor in success is timing. Applied to sales you can have the right product, the right attitude, and the right everything, but if the customer cannot buy for a legitimate reason, then no amount of persistence is going to change that, instead you're just going to poison the prospect if you do persist (also guilty, hehe). Apply this to life and I believe this is really enough proof that some things are meant to be, and by necessity, some things are not...at least for right now.

You can look at it spiritually if you want as well, but in terms of logic this supports that belief if you prefer to look at it that way. Just because you have the right ingredients, the right recipe, and the right oven temperature does not guarantee making a great cake anymore than increasing your odds guarantees success. It also takes that extra element of timing. When I did Judo many years ago, a black belt told me ever since becoming a black belt, it's not his throwing technique that he works on, its his timing...why do I throw, not how do I throw.

That being said, I do not endorse sitting on your ass when the going get's tough and saying "oh well I guess its just not meant to be." Timing is not an excuse for surrender, it's a fundamental truth for peace of mind. Whether something is meant to be or not is not for us decide, but a result of the present circumstances. Our job is to persist within reason, with peace of mind in the truth of "if not now, then later."

One Year Investment Update

So one year is sometimes all it takes for an investment to blow out any return you could've possibly imagined. On Monday, made the following sales with a 1 year holding period to lock in long term capital gains tax rate...

United Healthcare   (UNH)
Buy: $26   Sell: $49   ROI: 47%

Wellpoint  (WLP)
Buy: $51   Sell: $76   ROI: 33%

Exxon Mobil   (XOM)
Buy: $58   Sell: $80   ROI: 38%

Energen Corp.   (EGN)
Buy: $50   Sell: $60   ROI: 17%


United Health Care and Wellpoint I bought during the whole Obama Care debacle when there was a lot of uncertainty as to how the bill would affect the healthcare companies. These were sort of no-brainer plays as both companies have the creme de la creme of healthcare services including Blue Cross Blue Shield. Just seemed obvious both were going to come out of all the uncertainty as winners still.


Exxon Mobil techinically was a two year holding period total, since my first position was made in 2009. However, when the BP oil spill hit, the whole damn oil industry got slammed in the market as being evil...that's like your neighbor destroying the sidewalk in front of his house and city hall punishing the whole neighborhood for it. I loaded up on more shares at a lower price when the stock fell off a cliff, which in turned lowered my average cost per share when it came back up. Goes to show you, a stock dropping can actually be a good thing if you've done your homework ;o)


Energen was a value play, I saw it as undervalued and decided to sell off because I wanted to increase cash due to better opportunities that are out there right now.