Morningstar Interview with Bruce Berkowitz

Truly an inspirational investor, Bruce Berkowitz discusses his new investments.

Best Advice I Ever Got: Thomas S. Murphy

Thomas S. Murphy, Former CEO of Capital Cities/ABC

Always do the right thing and you will have nothing to worry about:
I got two pieces of advice I have always remembered. The first was from my father, Charles E. Murphy, who was a justice of the New York State Supreme Court. It was a point about ethics. He said, "Doing the wrong thing is not worth the loss of one night's good sleep."

Some things in life cannot be controlled. Spend your time on things you can control:
The other came from Benjamin Selekman, a Harvard Business School professor who taught labor relations. The last thing he said, at his last lecture to my class, was, "Here is something to remember for the rest of your life: Don't spend your time on things you can't control. Instead, spend your time thinking about what you can."

Source: Best Advice I Ever Got

Quit Smoking

I have never been a smoker, but here is some motivation to quit for those who are unable to and are trying.

Three Ways to Motivate People

Motivating people is one of the key attributes that makes great leaders. There are three useful ways to motivate people, by command, negotiation, and persuasion.

Command - To direct with certain authority or prerogative.

• Often useless, command is used when neither negotiation or persuasion works as a last result. Command is used in the military and is used to tell people what to do or what not to do. It is a one-sided communication and should be avoided when another method can not be implemented.
  

Negotiation - Mutual discussion or arrangement of the terms of the transaction or agreement.

• More useful than command typically, you usually have to give something to get something in negotiating. Identifying what the other party needs and what you have to offer are the challenges. If you are able to identify these two, people will then try to get what they want while giving up as little as possible themselves.
  

Persuasion - The act of influencing the mind by arguments or reasons offered, or by anything that moves the mind or passions, or inclines the will to a determination.

• The most desired method of motivation, persuasion will usually get a positive result at little cost on your part. Great leaders are typically always great at persuasion and getting others to do what they want and are great listeners. Leaders create ideas and persuade others to enforce them. Gaining respect from others and then using persuasion will enable the people who respect you to want to help you and will have a better attitude then the previous methods.
  
  
• There are four steps to becoming a great persuader and four things to avoid. (from HBS - The Necessary Art of Persuasion)

• Effective persuaders:
1. must establish credibility;
2. frame their goals in a way that identifies common ground with those they intend to persuade;
3. reinforce their positions using vivid language and compelling evidence; and
   
4. connect emotionally with their audience.

• Ineffective persuaders:
1. attempt to make their case with an up-front, hard sell;
2. resist compromise;
3. think the secret of persuasion lies in great arguments; and
4. assume persuasion is a one-shot effort.
   

Definitions are from Dictionary.com.

While each method can be used in most situations, persuasion is the most useful generally, as it results in a positive output and requires very little of the leader. Great leaders press on to persuade people even when they feel it is impossible and resort to commanding or negotiating as little as possible.

Business and Economies

Here is a recent reply to a friend that is an avid Ron Paul supporter and feels that the U.S. economy is going to fail soon due to the large amount of debt that America has amassed. Although I believe him somewhat, I also believe the following:

Business is what keeps economies running and efficient. You have to realize that people in general and people running these companies adapt as they encounter problems. If there are problems, changes occur until they are solved. If a company has problems, it finds ways to fix them. If they aren't fixed they get acquired or go bankrupt. They are then absorbed into other companies or a new company is created that is more efficient than before if there is still value in that particular business. This is good, it takes inefficiency out of the system. Being that we have the most knowledgeable and educated population in the world currently we have a significant advantage here. We will seek out these problems and adapt.

Many US companies are global, therefore generating revenues from many sources of the world, not just here anymore. Smaller US companies may fail due to China's influence, so these companies will eventually go away. Another fact that remains is the assets that these companies hold. They hold real estate, not just in the US but all over the world. They hold short term investments, long term investments, domestic companies, foreign companies, brand names, etc. which are hardly subject to inflation, so their value is tangible and concrete. As populations increase there is a need for more goods and services, so there is always an increasing need for real estate and consumer products and other goods, that will not change.

The fact remains that we are in a global world now. Money exchanges hands across the world at incredible speeds, wealth is transferred almost instantly. Our knowledge base is huge. Americans will continually invest in foreign countries, foreign companies, global companies, build wealth, and cash out. People will adapt to the problems at hand and find a way to fix them.

The secret is to diversify, no-one knows what will happen in the future.

10 Things to Learn this Year

From Guy Kawasaki's blog, How to Change the World:

I’m on the campus of UCSB this week at family camp, and it's inspired me to blog about what students should learn in order to prepare for the real world after graduation. This is an opportune time to broach this subject because the school year is about to begin, and careers can still be affected.

First, take this little test about the state of your understanding of the real world right after you graduated from school.

Here are the top 5 things Guy thinks you should learn this year and my advice under them:

• How to talk to your boss.
• The importance is obvious here. If you are unable to communicate with your boss then you will hardly be recognized when promotion time comes around. Just communicating with your boss will not be sufficient so try quality communication. Quality communication could be not taking up his/her time when he/she is busy by asking for advice from others or working on the task yourself. Quality communication is making your point accurately and quickly, giving him/her status updates, and sending him/her interesting material through email. If you find an interesting article and send it to your boss stating you found the material useful and is applicable to a project you are working on, you will be recognized. Most importantly... do not treat your boss like he/she is better than you. Treat him/her with the utmost respect, but if you are unable to communicate to them because you are terrified then that gets you no where.
  
• How to survive a meeting that’s poorly run.
• Look at the bright side, "is there anything that I can get out of this meeting that I am not seeing?" If the meeting is incredibly boring to you maybe there are some underlying things that you can learn from. Ask yourself "what would I do if I was the presenter right now, or what wouldn't I do?"
• How to run a meeting.
• Prepararion is the largest thing here. Prepare, prepare, and prepare. Take your time when you speak, it is not a marathon. If you see that your audience is bored or not comprehending you, clarify your points and dig deeper. The purpose of you presenting is to teach your audience something. Think of it this way, they are there for you.
  
• How to figure out anything on your own.
• Study. If you don't understand a concept, break it into smaller pieces. What are the pieces that I understand? What are the pieces that I don't understand? Seek out the answers to the ones you don't understand and the puzzle will eventually fit together. Do your due diligence. Google the topic, read books on the topic, and ask your peers and superiors for help.
  
• How to negotiate.
• Negotiation falls into many aspects of life, asking someone to stay late to work, getting a pay increase, a promotion, not being able to go to dinner with your spouse. If you need help on a project or task, you have to negotiate with others into helping you. Start out with the problem or solution, and ask "what do I need to get there?" If you need help for x days from x people, who are you going to ask? Who has time? How am I going to convince this person if they are available? If they aren't available, can I convince them to help by working late? How? You should be asking yourself all of these questions to these scenarios and how you are going to answer them. Preparation again is the key to success in this area. Always remember that you can't willingly get people to do things by forcing them. Think about what they want and how you can help them when they help you. It's a two-sided scenario always and can usually be a win-win result if you put some time into thinking about it.
  

The Fear of Failure

"After a lifetime of making money and observing better men and women than I fall by the wayside, I am convinced that fear of failing in the eyes of the world is the single biggest impediment to amassing wealth. Trust me on this. If you shy away for any reason whatever, then the way is blocked. The gate is shut -- and will remain shut." - Felix Dennis

This is a great quote on how to get rich. Motivation for wealth stems from fear - the fear of failing in the eyes of the world. The eyes of the world could be composed of your family, friends, work associates, people you will meet someday, etc. Until you take the chance to fail, you will never fail, nor will you complete your goal. The goal discussed here is wealth but can be utilized to many other aspects of life (finishing college, being a good parent, getting a certain job, taking care of your family, traveling the world, etc.).

Take a chance at something... anything. If you fail, find out why you failed. Maybe you failed because the idea just wouldn't work, maybe you failed because of lack of effort, branding, knowledge, resources. Whatever the case, fix it or move on to something else you might fail at. Those who succeeded at something always failed along the way.

The Effect of No Alcohol

I'm not a alcoholic by any means, but I don't mind a few drinks when the weekend comes around. Drinking during weekdays has almost vanished since my college days - a step in the right direction.

I have noticed that drinking a few drinks or not at all for a week has promising effects. I have more energy, ambition and drive throughout the week and feel much more rested. Laying in bed the next day with a headache after a long night of drinking doesn't just affect my activities that day but it seems to spill over into the rest of the week. It's good to take a break every once in a while and let your liver rejuvenate too.

If you always seem to have a lack of energy and motivation, try taking care of your body first by eating healthy and exercising. They may give you the small jump-start you need.