Tuesday, March 24, 2015

March Method or Madness, Part 2

As we discussed in Part 1 of this post, the annual NCAA men’s basketball tournament is a great way to build office camaraderie and glean new insight into your co-workers’ risk tolerance, competitiveness, decision-making strategies and data crunching skills. Sorry HR, softball team and Christmas party planning committee—you just can’t beat the March Madness office pool for bringing everyone together to have a great time and some friendly trash talking and competition.

I should know. I’m getting my share of it right now.

As NY Times columnist, Neil Irwin
observed, the other day, “The [NCAA] tournament is a fun way to test your predictions in a system that, like financial markets and most forms of sports betting, reward you for taking an against-the-grain pick that proves accurate."

Our take? The tournament seedings—like many financial data services—have a number of “mispricings” and other aberrations you can try to exploit. Big brand names tend to be over-valued and lesser-known growth teams tend to be undervalued. Thanks to March Madness, millions of people in the Northeast will stay up till the wee hours of the night sweating out the final score of the North Dakota State vs. Gonzaga University game.

Personally, I've learned you can also turn to the Las Vegas odds for each game, use the Ratings Percentage Index (RPI), “points per possession,” or “turnover differential” or other advanced metrics. You can also go to the ratings services like
FiveThirtyEight, Jeff Sagarin and Ken Pomeroy – think Morningstar, Fitch and S&P for hoopsters. You can also throw darts at the bracket or go with the trusted brand names like my wife always does--UCLA, Indiana, Michigan State, Kansas and North Carolina. They’re the large cap stalwarts of bracket-dom. They’re perennial returnees to the tourney even if the 2015 squad is not likely to return back to campus with the trophy. My wife uses the “brand name” strategy every year and usually cleans up in our family pool and at her work. I don’t think she even knows which state Butler and Valparaiso are located (hint it’s the same one).

No analysis paralysis for my better half


According to Irwin, March Madness is a lot like investing. It is easy to invest in flashy companies that are widely known and whose products you use. But often the highest-return investments are “value stocks,” companies that are more obscure and less popular. In this metaphor, Butler, Harvard and U.C.L.A. are the Google, Facebook and Apple of the N.C.A.A. tournament. Wichita State and Oklahoma State are the obscure industrial companies that aren’t talked about on the financial pages very often but offer high potential returns.


Personally, I have a crude, but effective model that usually puts me in the top 10 or 15 percent of any pool I enter. I rarely win, but it keeps me in the game till the very end of the tourney. This year, I had a very hectic month leading up to the tourney. I didn’t stick to my discipline and went with my gut rather than my head. BIG MISTAKE.

Villanowhere?

I second guessed myself and selected Villanova to win it all. On the surface, not a bad pick. The Wildcats were one of the top four seeded teams. They boasted a 33-2 record coming into the tournament, had a 17-game winning stream and were champions of the highly competitive Big East Conference.  O.K. That’s the analytical part. But then I let my emotions get in the way of logic because I grew up near the Villanova campus. My folks and extended family still live there. Nova’s head coach, Jay Wright, was a classmate of mine at Bucknell University. All the stars were in alignment.

Unfortunately, Nova went down to a red-hot NC State team 71-68. Season is over. My brackets are “busted” and I’ll have to endure two more weeks or razzing at the office and several more days of getting dissed by my wife and kids at home.

This year, I’ll take my lumps like a man and go back to basics in 2016. No more watching games or getting emotionally attached to any of the teams. Just run the numbers, play the index, check the scores the next morning and pencil in the winners.

Our blog has more, as does the FREE Resources page of our website.

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TAGS: March Madness, office camaraderie, Neil Irwin, Villanova, Jay Wright, busted bracket 

March Madness or Method? Part 1

In many parts of the country, there’s still too much snow on the ground to hear lawn mowers humming or baseball bats cracking. But trust me, spring really is here. I know because the annual NCAA men’s basketball tournament—a.k.a March Madness—is underway. Just don’t expect a highly productive month around the office.

Depending on your point of view, the three-week long hoop-fest is either the biggest office productivity killer of the year, or a fascinating window into human behavior, biases and predictive modeling. March Madness is also pretty good for building camaraderie, even if the HR wonks will complain that it’s an unsanctioned company event, that it’s male- and jock-biased and that it’s basically an illegal gambling operation conducted on company premises, using company time and computers. Again, review the previous sentence about “camaraderie.”

Level playing field

It’s also one of those rare times when Ted from sales, who’s 6-foot-6 and played power forward in college, can get schooled by 5-foot-2 Mary from accounting, who’s never set foot on the hardwood, much less played the game. How? Because she knows how to fill out her brackets.

The format is simple; 64 of the best college basketball teams are invited to play each other in a single-elimination, winner take all tournament. Win and you advance to the next round. Lose and you go home. No best of seven, no do-overs. No bonus points for giving it your best. You could be 34-0 during the regular season, like Kentucky, and have an off night against unheraled Hampton University and that’s it. Season over. See you in November.

In most office pools, you print out the entire tournament “bracket” before the games begin. You predict which team you think will win each matchup and throw a few bucks into the pot. Most folks can fill out their bracket in 10 minutes or less, whether using pencil, pen or an app. If you end up winning the pool, you can make anywhere from 20- to 1,000-times your money back. If you lose, the max downside is usually less than $20, so you don’t even need puts or stop loss orders. Either way, it’s a pretty good ROI for three weeks of fun.

So how hard can it be to win? Everyone has access to the same information--they even give you each team’s won-loss record as well as their seeding (i.e. ranking) in the tournament. Just pick the team with the better record or higher seeding and you’re good to go, You don’t even have to guess the score or the point spread. Just who will win.


So why does Warren Buffet offer a $1 billion cash prize (that’s with a “B”) to anyone who can
pick a perfect bracket and guess the outcome of all 63 games correctly?
Because, it’s almost impossible to predict all the upsets. It’s like trying to pick which early stage startup company with no revenue or earning is going to go public next year. In fact the odds of winning March Madness are worse than the lottery--about 4.3 billion to 1. The odds are beyond stacked against us, but tens of millions of us can’t help ourselves from filling out at least one bracket every March—even if we don’t follow college basketball or never played the game.

Conclusion


In our next post, we’ll tell you about some of the research services, rating agencies and indices you can use to help you along. Hint
: It’s pretty hard to beat the wisdom of the crowd? Any of this sounding familiar?

Our blog has more, as does the FREE Resources page of our website.

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TAGS: March Madness, wisdom of the crowd, brackets, office camaraderie

Monday, March 09, 2015

I Do My Best Thinking in a Tube

I had an MRI the other day. Not sure how the results will turn out, but it was probably the best 30 minutes of thinking I got done last week. With multiple deadline shifts, rescheduled appointments galore and several late season snow/ice storms wreaking havoc here in the Northeast, the "tube" was a welcome respite from the daily grind.

Some people get freaked out in the claustrophobic confines of an MRI machine, but I find it relaxing. There’s something about the rhythmic humming and clanging in the background, with ear plugs and decent music in the headphones that helps me relax and block out all the “real noise” in life. You can’t move. You can’t talk. You can’t even cough, sneeze or scratch your nose. But most importantly, the MRI tube is a very tight space. You wouldn’t be able to reach for your smartphone or tablet if you got bored and somehow managed to smuggle it into the exam room under your gown.

So, you lie there and think…and think some more.

I’ve never had the patience for meditation, deep breathing or yoga (it's like a 90-minute warm-up for a game that never happens). But, the MRI tube literally forces you to block out the world and all the distractions of email, cell phones, meeting reminders, unexpected calls from your spouse or kids and impromptu “pop ins” from a work colleague who’s bored.

Here’s a passage from the
Focus Manifesto blog written by Leo Babauta, author of the book Focus: a simplicity manifesto in the age of distraction--“Never have the distractions been so voluminous, so overwhelming, so intense, so persistent as they are now. Ringing phones are one thing, but email notifications, Twitter and Facebook messages, an array of browser tabs open, and mobile devices that are always on and always beeping are quite another. More and more, we are connected, we are up to our necks in the stream of information, we are in the crossfire of the battle for our attention.”

What to do? Kevin Daum had some good suggestions in a recent Inc. Magazine piece: How to Clear Your Head in 15 Minutes.

Conclusion

We’re not suggesting that you schedule unnecessary medical tests just to clear your head. But, think about all the ways in which you’re distracted during the day—and how much more you could get done (in less time) if you could really find a way to focus.

Try this exercise for a month. Once a week, find a time and a place where you can really think and focus uninterrupted for 20-30 minutes…..Do it at the same time or place every week.

I know several of you have had success with this technique in the swimming pool, the steam room or the sauna. After a month, review your progress and see how many mental blocks you’ve been able to bust through. You might be surprised. We’d love to hear from you about how you did.

Let’s have a great week.
Best, HB


 

Our blog has more, as does the FREE Resources page of our website.

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Friday, February 20, 2015

Do You Want Young Hires Well-Educated, Adaptable or Self-Sufficient?

Pick two out of three

Now is the time of year when many of you may have higher education on my mind. You might be starting to interview soon-to-be graduates of elite colleges or professional schools for your firm. You may have a young person in your life who’s anxiously waiting to hear from the college or grad school of their choice (and you, the financial aid office).

As Frank Bruni
opined last week, “students shouldn’t be blind to the employment landscape. But it’s impossible to put a dollar value on a nimble, adaptable intellect.” He also said this mindset “isn’t the fruit of any specific course of study and may be the best tool for an economy and a job market that change unpredictably.”
Amen.
In fact, you want folks at all levels of your organization capable of changing on a dime and reinventing themselves as your organization “pivots” to adjust to new threats, opportunities and disruptions. That’s probably more important than where they got their diploma, what they majored in and what certifications or licenses they have. Adaptability isn’t something that can be taught, but it’s one of those special intangibles—like selling, leadership, customer support, empathy and insatiable curiosity—that can give you a 10x return on whatever compensation you pay them.
Chandra Chandrasekaran, CEO of Tata Consultancy Services, told Adam Bryant the other day in a NY Times interview, “Learning is the most important thing in your career and without it, you’ll go nowhere. Early in life, people tend to think that learning is the responsibility of their parents and teachers. But then you have to want to learn for yourself.”

Our take? Lifelong learning isn’t the employer’s or government’s responsibility, either. We’ve come across math, chemistry and engineering grads who are incredibly creative, non-linear thinkers. We’ve come across plenty of philosophy and English lit majors who are surprisingly good at the numbers, but also pretty set in their ways with a fairly narrow world view.

Conclusion


Don’t waste time and money on HR hiring best practices, personality tests, self-assessment tests or screening services. You’ll know adaptability when you see it. Instead of
asking candidates what they know….ask them how they figure out what they DON’T know.

You’ll be glad you did.

Our blog has more, as does the FREE Resources page of our website.

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Thursday, February 05, 2015

The Power of Doing Your Own Research Studies

A number of you have been asking about doing your own research reports to cement your firm’s position as a thought leader in your niche.

Having your own branded research report is one of most powerful weapons you can have in your credibility marketing arsenal. After word of mouth referrals, it’s hard to beat the power of “accord to YOU!”

Last week, I co-hosted a webinar about the findings of an annual research report that we conduct for our client
Naylor, LLC and its media arm, Association Adviser. Naylor provides publishing and ad sales services to over 1,100 trade associations across North America and we get over 1,000 association execs each year to take our  comprehensive survey about association communication challenges. An executive summary of the results is released to all the state and national media that follow trade associations. Then a 100-page PDF copy of the results is shared with all Naylor clients in good standing. Others have to pay or do some sort of business with Naylor.

To keep the buzz going, we then host a webinar about our findings.

Although the results are geared toward trade associations, many of you are likely wrestling with similar communication challenges such as information overload, communications clutter and inability to customize messaging to subsets of your audience.


Here’s a free link to the Presentation.
Here are the slide
Slides 
Here is a summary of the Q & A session that followed.

We strongly recommend the post-event Q&A if you’re doing a webinar.
Enjoy. And If you’d like to explore branded research and/or webinars, you know where to find us.

Best, HB

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Sunday, January 25, 2015

Advisors Can Learn from Costa Ricans, Part 2

As we discussed last week, the Happy Planet Index consistently ranks the Central American oasis of Costa Rica No.1 in its tally of countries whose populations are content with their lives. My family visited recently (both resorts and some clearly third-world hamlets not likely to be on your travel agent’s radar).

Suffice it to say, the “Ticos” may not be nearly as wealthy as we are, but they're probably more fulfilled. Research bears that out. Based on a score compiled from the life expectancy, ecological footprint and wellbeing of individuals, the Happy Planet Index aims to show that what modern humans think brings happiness often does not – and perhaps we should pursue it differently.


As Shilo Urban observed, most measures of national progress truly just measure the economy, accounting for production and consumption. Although money can help alleviate sadness, it cannot buy happiness. According to Urban, “Sales of self-help ‘find happiness’ books are soaring in the United States, a country that ranks towards the bottom of the list on the Happy Planet Index. Perhaps it is time to see what a developing Central American country like Costa Rica, can teach us about the pursuit of happiness.”

Why are Costa Ricans so happy? 7 big reasons.

1. Costa Rica has no army. The Costa Rican government pours the money into education and health care. Educated, healthy people are more likely to be happy!

2. Costa Ricans love and protect their environment. Costa Rica is a leader in ecological sustainability.

3. Costa Ricans don’t dwell. A popular philosophy in this country is the idea that no argument or quarrel should last more than three days. Holding grudges, refusing to forgive and staying angry can corrupt a person’s happiness greatly. Learn to let go.

4. Costa Ricans have high life expectancy, 78.5 years. This high life expectancy is thanks no doubt in part to the country’s excellent health care system, which offers high quality care at an affordable rate – about 1/3 to 1/5 of the price of the same care in the United States.

5. Costa Ricans eat healthy and fresh foods with very few preservatives. Costa Ricans eat a fraction of the amount of dairy, red meat, refined sugar and processed foods that Americans do, and they avoid the sour mood swings associated with these products.

6. Costa Ricans enjoy a slower pace of life in a tropical paradise. A slower pace of life offers less stress than what you will find in many places in the U.S.

7. Costa Ricans like to please. Some Costa Ricans can be agreeable to a fault; for example if you ask a local for directions that they don’t know, they might give you the wrong directions because they don’t want to cause a disagreeable situation by saying they can’t help you.

Conclusion

Many of you live and work (a lot) in places like Chicago, Rochester, Winnipeg, Boston, Philly and New York, but you and your clients can still adapt elements of the Pura Vida lifestyle. Enjoy your successes, don’t dwell on your failures or hold grudges for more than 72 hours. And always keep in mind the importance of relationships with family and friends--on social capital over financial capital.

Best, HB

Our blog has more, as does the FREE Resources page of our website.

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TAGS: Costa Rica, Happiness Index, Pura Vida, Shilo Urban, social capital vs financial capital

Monday, January 12, 2015

What We Can Learn from the Costa Ricans

As we discussed last time, our big prediction for 2015 is that we’ll continue to live in an era of extreme volatility. The highs will be higher, the lows will be lower, and there will be more unpredictable days on the horizon than predictable ones. As James Stewart opined in Friday’s New York Times, “volatility will be the new normal.” It’s not all bad. Just volatile. For instance, the equity markets, labor market and fuel prices (for consumers) are in better shape than at any time since the Great Recession. But the global economic slowdown, combined with meager wage growth and a new wave of terrorist gains continues to wreak havoc on the psyches of investors, business decision makers and consumers at large.

We’re not in a position to recommend solutions, only this advice—be ready for everything, stay on the alert constantly and seize opportunities when they arise.

There will be plenty of threats to your practices (and well being) this year--but also plenty of opportunities. Stay sharp and stay hungry. Just don’t assume the bait and lures that work so well today are the ones that necessarily help you land the right fish a few months from now. If you haven’t been fishing successfully for a while, do you know why? Just as important. If you have been reeling ‘em in for the past few years, do you know why you’ve been successful? If you don’t know how to replicate your success then you’re in just as precarious position as those on a losing streak.
 
More importantly, learn to enjoy life no matter what it throws at you—“Pura Vida” as they say in Costa Rica, where my family and I just returned from vacation. I’ve had more than my fair share of aggravation since returning, on top of crappy Northeast weather. But, that’s OK.

The benefits of being away from the daily grind for 8 days, combined with the adrenalin rush of zip-lining through the jungle at 80 miles per hour, surfing on the pacific, ATV’ing waist deep mud and watching a 500 pound Leatherback turtle lay eggs on a moonlit beach at 2 am, will pay dividends throughout the next 3 months of crappy weather, excessive taxes and endless deadlines.


Costa Ricans place a great cultural emphasis on family and friends as Nicholas Kristof once observed as well as a "higher priority on social capital than financial capital.”
Keep that in mind as you help clients plan for their life goals, not to mention yours.

More on that next week.

Let’s have a great 2015. HB

Sunday, December 28, 2014

2015 Prediction? Be ready for anything—and don’t stop getting ready

At a family dinner over the Holidays, my father in law leaned in to me and said, “Hank, you’re a blogger. You have access to a lot of research and smart people. What’s your big prediction for 2015?"

Now my father in law’s going to be 95 in March, but he reads 3 or 4 newspapers cover to cover every day. He constantly analyzes his investments, and is still active in local politics. He’s sharp as a tack and I wasn’t going to get off easily with an off-the-cuff prognostication.

I said, Dad. “I don’t really know.”
“Why not?” he grumbled.

I said, “it seems everything’s just more volatile than it used to be. The good stuff gets better at an increasingly better rate (think stock market, low-oil prices, improving job market) and the bad stuff gets worse at an increasingly depressing rate (depressingly low interest rates for savers, a global economic slowdown, record number of working age people out of the  official workforce, global warming, currency devaluation, Ebola, ISIS, cyber terrorism, etc.).” Even worse, sometimes the good stuff is what causes the bad stuff, I explained.
“Hmm,” he muttered, taking a painfully long pull from of his wine glass. I braced for the worst, hoping that a less-informed family member at the table would jump into the conversation with a suicidal comment that he’d quickly dissect and dismiss with a sardonic chuckle. Most of the time someone pulls through for me, but no such luck on this day. “OK,” he said. “Nice analysis, but what’s your opinion.”

I thought I had just given my opinion, but my father in law come of age during all night bull sessions in college and the corporate and military command and control era. A member of the Depression Era silent generation, he was a Fortune 500 exec, a Navy man and a chemical engineer. Each direct question requires a direct answer in his world view. Ambiguity and the knowledge sharing/link-and-tweet economy is an enigma to him. He assumes anyone with a byline is obligated to have a singular clear-cut opinion about something.

But that’s my point. There are just too many variables in the equation. By the time you have your strategy and game plan together, the playing field has changed. YOU HAVE TO BE READY 24/7/365 to change on a dime. As we’ve mentioned many times before in this blog, the winners are not necessarily the strongest or the fastest, they’re the ones who are the smartest and most agile.
Doesn’t matter if you’re in sports, business, the military, agriculture, the arts or any other human endeavor. You’ve got to be agile. You’ve got to be good at partnering, collaborating and sharing your knowledge. To that end, here are some excellent quick reads on the subject that came across our radar this week….

Justin Wolfers -- From Unemployment to Oil: The Big Unknowns of 2015

Thomas Friedman -- Is Vacation Over?
Paul Krugman --
Tidings of Comfort

Conclusion

As Steve Jobs liked to say, “Stay Hungry, Stay Foolish.”  Let’s have a great 2015. There are going to be some lows and some highs, with lots of roller coaster rides along the way. Let’s enjoy the trip and get after it!

Best, HB and team
Our blog has more, as does the FREE Resources page of our website.

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