Links of the week

Pumping Iron

This is a documentary made on Arnold Schwarzenegger when he was in his late 20s. You may like the guy or not. But you cannot stay indifferent to his determination. This is motivational.

Transformation body in 16 weeks

This is the system I am going to use as of March 1st. I complete my current program to get myself back in shape and then move to the transformation program to get definition.

Couch abs

You don't have time to train? Don't let time nor any other outside agenda dictate what you must do. Find 10 minutes to these exercises every day.

Interesting exercises and sexy

I did not try this so far. So for now its plainly sexy. And there is nothing wrong about it ;-)

Sputnik moment

Last Tuesday January 25th, president Obama addressed the nation with the State of the Union's speech. This was one of the most profound speech I heard so far in my life. And yet, judging by the comments the next day, and the reactions on the markets, the speech were mostly unnoticed.

What is it that he said that is so profound? He said that US faces "...Sputnik moment." That will define whether America leads of follow on the global stage. He went ahead stating that the country "...lags behind..." other countries in academic achievement and Obama said that "...US lead has slipped..." And then he also said "...we are poised for progress..."

Why are those words so important and what does he really mean?

Lets do some basic economics. Look at figure 1 below.

Figure 1

This is a classical output function. The output function goes like this: Y=Af(L,K,H) where Y represent the national output of products and services. L represent labor, K represents capital and H represent training and formation. So output is a function of labor, capital and training.

As you can see the slope of the production function is increasing but less and less. This is what is called the decreasing marginal return. Lets take a simple example to explain this phenomenon. Lets say we want to paint rooms. Now to do so we need at least paint and a paint brush. Thus we need to invest capital (K) in order to get the work done. By investing capital we will get the good tools to do the work. But tools without painters gets us nowhere. We will have to hire people to get the rooms painted. Therefore we add labor (L). Now we're in business. We have a painter with some paint and a paintbrush. The job gets done. What do you think will happen if we add another painter and invest a little more capital? Why yes that's it! We'll get more rooms painted. Now what would happen if the first painter shows his skills to the newbie? He will learn faster and the job will get done faster too. So it doesn't hurt to inject some training (H) into our little exercise. And our output (Y) will increase again.

But what happens if we add more paint brushs than painters? Or if we add more and more painters? There will come a time where all those people will step on each other's foot and then the production will decrease. Even training has its limitation. That is why the output slope is increasing fast at first and then, decreases. But now what? Are we doomed to get to a certain level of production and then stagnate there for eternity?

Lets get back to reality a little. USA's output has increased to a pace of about 2% per year for the last decade or so. Same thing for most of the OECD countries. Why can't America change gear and get more produced? Because America is at point USA1 (see Figure 1). And with all the effort it can pull, it would may be able to advance to point USA2 if it's lucky. Ok so why is it that for the same period China output increased at a pace of something like 6% to 7% per year? Are they better than America? They have better planners or its the population?

None of it. China is able to get from point China1 to point China2 (again see figure 1) in a short period of time because China was behind and is now playing catchup. In other words they had less qualified painters and less paintbrushes and now they are investing more capital and more training to get the job done. But don't worry, when they'll get to USA's level, they will also loose pace and their growth will be much more like USA.

Ok so we are all doomed at one point to anemic growth? And what does this have to do with Obama's speech?

Look at the output function again. What do you see? Yes. You see that A is multiplying all the other factors. But what is A? Well A my friend is technological innovation. Look at Figure 2 now.

Figure 2.

As you can see with technological innovation USA can move from point USA1 to point USA2. So with no more investment in capital, labor and training, USA is able to increase its output by innovation. This is the equivalent in our example of inventing the paint gun. Therefore our painters will be able to paint more rooms in less time. The painted rooms output would increase.

Do you begin to see where Obama's speech is leading? He wants to educate the Americans in order to produce a pool of brains that will, hopefully innovate in their respective fields and ensure that America will keep and edge and its leadership in the world.

Now that you understand Figure 1 and Figure 2, you are able to appreciate what Obama really means when he says "we are poised for progress."

This is why I say that Obama's speech is clever, profound and visionary.

This is a pure move of national strategy. And to me, he took the right turn.

Oh! And by the way. If you don't believe that America is getting behind in education. I suggest you put your hand on the documentary Waiting for Superman. It's very enlightening.

I went to Arnold Schwarzenegger's conference

I wanted to make a post commenting the State of the Union speech, but this will have to wait another day.

Last week my friend Maurizio called a radio station to play at a contest. They were playing three sounds taken from three different Scharzenegger's movies and the contestant had to identify to which movie the sound belong. My friend was third in the row. The two first contestants failed. My friend, did not. So they told him that he was in the finalists list to get the tickets to go see Arnold's conference.

On Wednesday my friend received a call just before he leaves for work. It was the radio station. They were on air and they picked his name as the finalists winner. He then won two tickets for Arnold's conference. My friend's wife didn't want to go (thanks Helene!) So Maurizio called me and asked if I wanted to attend. No kidding!

So I went to the conference yesterday. And I must say that Arnold is quite a speaker and motivator. I knew he would be. Just follow his accomplishment in life is a good cue. But having him right here in front of me was somewhat... enlightening.

He gave the secret of his success which consists in three points:

1. Immigrate to America
2. Work, work and work harder
3. Get married to a Kennedy

This looks like a joke at first but when you look closer, you'll see there is substance in his statement. And Mr. Schwarzenegger was kind enough to give us the message behind the smoke.

First. Immigrate to america is over rated. Unless you live in a place that threathen your life and your family. With the globalization of markets and the Internet, you can very well stay home and make business in America. Not because the Americans don't like immigrants. As the senator stated "Americans love immigrants. People that comes to America and are willing to contribute. What Americans don't like is immigrants that comes with the aim of living off handouts."

Second. Work, work, work... Well isn't this the basis of it all? I remember someone saying, I don't remember who is the owner of the quote unfortunately, the goes like this "I came to realize that, the more I work, the lucker I get." So you have a dream? You have a project? Roll up your sleaves and get to it! Now!

Third. Marry a Kennedy. Now this to me was a pure joke of him. But after saying that, Mr. Schwarzenegger stated that the true secret of is success is to have a dream. Something to aim at, to look forward to and get excited about. The important thing is not how to get there. Just go! Just do it. The important thing is to get there now matter how. The second ingredient is never to take no for an answer. Arnold has been told that he would never make it in America. Nobody would be able to pronounce his name, his accent was too strong... just name it, they had something to say against him. And look what he has accomplished. The third ingredient is work. Never tire to work on your dreams and passions. Stay focus on them. And work your way to it.

So the true takeaway from the conference is that.

1. Have a passion, a dream to fill and go for it no matter how you do it.
2. Never take no for an answer
3. Work, work, work

In your allocution you said that you wanted to give back Mr. Schwarzenegger. Congratulation. For I feel I received a lot from you.

Probabilistic System

Don't underestimate the value of including probability and statistics in your life. You'll have an edge if you calculate your chances of winning while others rely only on their gut feeling. As simple example: A good method to increase the odds of winning while playind dice with your friend is to bet that you are going to throw the dices and get a sum of 7 points.

Why? Because 7 is the number that has the most probabilistic likelihood to appear. For the numbers 2 and 12, there is only one combinaison for each 1+1 and 6+6. For number 3 and 11, there is two possible combinaisons. For 4 or 10, there is three combinaisons. There is four combinaison possible for 5 or 9, six combinaisons for 6 or 8 and there is seven possible combinaisons to get 7. Then there is more chances in getting 7 than any other sum.

In life it is the same thing. Some are obvious choices like avoiding smoking decreases dramatically the likelihood of gettint Cancer. Avoiding fat increases your chances of ramining tin. Without making complicated calculations, we should be aware of those probability and make them work for us. If your are, then you get a better chance to make it better than the others that don't. Then you have an edge over others. Strategically speaking this is good.

Read this article. And get interested in statistics and probabilities. Know and calculate your odds on your undertakings. Now the idea is not to become an over calculating crackpot.

If you don't know where to start, start here.

Knowing where your interests are is certainly a good thing.

Links of the week

Philosopher Kierkegaard

The father of existentialism. This video becomes especially interesting at about 10:10 in the video.

Human all too human - Nietzsche

Listen carefully to his philosophy.

The Fountainhead - Howard Roak's speech

I can never tire to listen to this speech. Start your day with this. It is electrifying.

The Fountainhead - Enright Building Party

This part I can never tire to watch neither. It reminds me of my day to day work: walking among people that don't want to understand anything out of their own beloved beliefs. The Earth is flat and they are happy with that fact. Just don't try to confront their beliefs if you don't want to unleash a storm of opposition. You just have to do as Howard Roak and Dominique does (and Mr. Enright too). Just walk about and mind your own business. Do what you must and don't care what they think.

Unpredictable Strategy

A clever and logical spirit is able to predict most of human strategies. Humans are beasts of analogies and referal points. You just have to observe and then, follow the patern. There is however a way to remain unpredictable: you have to introduce a random mechanism in your decision process. For example, revert to lotterie some of your decisions as of to which way the next attack will take place.

The introduction of a little chaos in your global strategy will not only ensure a surpise effect. It also has the quality of keeping your logical process secret. No body is able to predict a random move dicted by a dice or any other lotterie. This behavior is counterintuitive. But can pay unnexpected rewards. But of course, during wars or important market shares acquisitions fiew generals reverts to the caprice of randomness on the choice of the next move. They think that their intelligence is enough. But a swing of dice once in a while is one of the best way to worry your opponent. He will feel left behing by a logic mechanism that he cannot understand. Disconnected and disoriented, he will start to react by fear or over defensively. Even to the extend of foregetting his first strategy line of conduct to a lesser dominant strategy such as trying to protect himslef from your next blow, not knowing where it is going to come from.

He will become predictable to you.

Case Study - Tod

I will make a cases study serie in which I wish to talk a little about some people that I met and that did stuff I find are worth of mention. Those are people that took steps of initiative to make things happen in their lives and not only wait there until retirement comes, collecting their pay check each week. Like most people I see do.

Today I will talk about a guy I knew when I started working in summer time, when I was a student.

Back then I was working in a factory. I was 18 years old when I met Tod. Tod was a nice looking guy, bodybuilding and he walked and talked with assurance. Speaking five minutes with him and you knew right away that this guy was not a shop zombie and knew where he was going. Tod had quit school early because it was "not for him" he said. Back then I thought that Tod was doomed to remain in the factory for the rest of his life if he didn't go back to school.

How wrong was I! Tod was always willing to do overtime. Lots of it. And back then there was plenty. He said he needed the money. One day I decided to go ahead and ask him why he needed the money for. "To pay off my house" he said to me. "What? You're 20 years old and you want to... pay off your house?" "Yes" He said to me without further explanation.

A few days later I went to see him again. I was puzzled by how he would atchieve his goal of paying off a house so fast at such a young age. I asked him if the over time abuse he was performing had anything to do with that? He told me that this was one solution in the equation. But he had another card in his sleeve. He turned around and presented me his neck. Then he said to me "turn my colar". I did. "Now read the company name on the colar". I was able to read "Todd inc."

"What does it mean?" I asked him.

"It means that my company is the provider of some of of this shop's required clothing."

Now what a clever move! Not only Tod was using all he could from the company, making overtime and all. But he also recognized that the company had a need in clothing suply. He then registered a company, searched clothing warehouses. He tagged his name on the clothing and sold it to the very shop that was hiring him in the first place! Clever!

And by all that Tod was able to payoff his house, in his early 20s.

Tod is a good example of

1. Not putting all your eggs in one bag: most people would have been happy with one job and one pay check and would have done what they could with what they had. Without thinking out of the box. Tod not only collected the show's pay check. But he also started a company to increase his revenues.
2. Ressourcefulness: Tod was able to put his mind together, make the researches required to create a company and provide for a need. He was able to connect a to b (a being the shop needs of clothing and b him being able to fill that need).
3. Thinking out of the box: In the 80s, the idea of being 20 years old, school drop out and buying a house with the objective of paying off the loan in just a few years was at least alien to the current mentality back then.
4. Determination: Tod did what was needed in order to succeed in his project. By abuse of overtime and money generated from his own company he was able to do it. Yes he certainly had missed some fun partys and all back then. But who's laughing last? While Tod's friend are most probably paying off their own houses at this moment, Tod could very well be on some exotic beach right now, with a Pina Colada in the hand and a babe massaging his bodybuilder's shoulders.

The morale of the case study: if you're young. Go out there and make wonders. Just go ahead. There will be tons of people criticizing you. But who cares about them? You have one great advantage. You have the energy and the fast recovery hability of the young. Use it. And if you're older. Well as long as there is air in your lung the game is on. It is not too late to kick yourself in the but, watch less TV and go out there and make wonders too. You too possess an advantage that the young don't: experience. Use it.

Poker wisdom applied

There's a saying in Poker that I take as a golden rule:"If, within a half an hour of playing Poker, you don't know who the patsy is, you are the patsy."

Yesterday I had some stuff to do downtown close to the congress center. After I did my things, I went into the congress center because I knew there was a good Cafe and I wanted to take my time, enjoy a good Latte and do some reading for a while.

I was surprised to see that the Cafe was jammed packed with people. There were obviously a congress going on. I managed to find a place anyway but instead of reading my book. I looked the people around. Trying to assess what they were attending. They seamed very excited and determined...

There's a guy on the next table that had his binder with him from the congress. There I've been able to identify that they were all in a seminar. It was a seminar on "how to get rich and control your life" kinda. I got more curious because ten years ago this was the kind of seminar I would have attended. But now I lost all interest into that kind of stuff. I find them redundant and there is nothing there that I haven't learned in my MBA. (Yes I own a MBA).

With a little research (asking the security guard at the entrance), I've been able to determine that the seminar cost 300$ and there were about 280 people subscribed. Then it doomed on me! 300$ times 280 people makes a gross revenue of 84 000$. For a 3 days seminar!!!

Imagine that you run one seminar per month, your gross revenue for the year are 1 008 000$!

Over a million in gross revenue to tell people how to straighten their lives, make a budget, save money and start a company! WOW! I'm definitively not in the right ball game. I should do this instead.

Then it came to my mind the golden rule of Poker:"If, within a half an hour of playing Poker, you don't know who the patsy is, you are the patsy." The entire process took me less than a half hour to assess. From "what are they all doing here?" to "Wow! I should do this!"

So while leaving the premises, I wondered to myself:"Is it possible that there could be 280 patsies in a room and just one gamer?"

Links of the week

http://www.sebastianmarshall.com/

Very good information on strategy, the art of winning and other business and life tips. One of the founding blog that inspired me to start my own.

Daveramsay.com

Feels its about time you get you finance on track? Tired to feel like a modern era slave? Start here.

The Great Commanders: Alexander the Great

Does he need any comments?

The battle of Alesia: War of Gauls

These battles made Ceasar. It could have broken him. Clever strategies and example of wit.

Nietzsche on hardship

Want to cry on yourself and abandon in the face of rivalry? Listen to this and make this one of the pillar of yourself.

Strategy: Cuban missile crisis vs couple management

I met one of my friend for coffee during the weekend and we had a very interesting conversation about couple management and the Cuban missile crisis. What leads one to the other? Read on. You'll see.

My friend is what we could consider an average nice looking guy. He is doing ok with women, like most of us, but he is not a Calvin Klein model type, like most of us. About two years ago we went out to this club. It was one of those night where you could say "tonight its on". We met a group of girls and there was one girl in the group that was the local incarnation of a brunette Scarlett Johansson. One thing leads to another, he ended up going out with the girl. I always thought that everything was nice and easy while they were together but yesterday my friend told me differently.

It's the classical case of a superb woman going out with an average guy: every guys were hitting on my friend's girlfriend. But on his side, not much women were hitting on him. "There was a clear disadvantage for me". Said my friend.

How so? I asked.

Well, she was more popular than me. And I could sense in her that, even if she never verbally mentioned it, she always took pride in knowing that she could get any guys she wanted if I was not up to her... expectations. And I always was able to sense that, with her unsaid words or non verbal behaviors. So I decided to use the Cuban missile strategy with her.

The Cuban missile strategy? I went, with, I imagine, my most puzzled face ever.

Yeah! Went my friend. See. The United-States repeated acts of aggressions against Cuba to overthrow Fidel Castro's regime. Now it was easy for the USA to do so without fear of retaliation because Cuba was a nation that was opposing no military threat. This is not strange that they don't use the same strategy against North Korea. They oppose a bigger threat: they are a more militarized country, they have the atomic bomb and China support them. That is why nations stay away from North Korea. This was not the same for Cuba.

So in order to make the bullies stop from a stronger opponent, one has to ether develop its own strengths or seek alliance with a stronger bullier. That is what Castro decided to do. He seeked alliance with the Soviet Union and got to an agreement to install Soviet nuclear missiles on Cuban land. With this sort of parity, the United-States would think twice before trying to kick Cuba in the teeth again.

Ok but I still don't see where this leads to your relationship with Martine (the local Scarlett Johansson's name is Martine). I said to my friend.

Well you see. She had a appealing & seduction advantage on me. She could go out and get any guys she wanted. And she knew it. But me? This would require a lot more work.

So?

So I decided to develop my sex appeal, get better in meeting women and attracting them. I wanted to become a pickup artist. To be at par with her.

Now I see where this change of behavior came from and why you wanted me to join the PUA community with you.

Yes. And it worked. I did not do that to cheat on her. I didn't. I did not do that to make her jealous neither. I just wanted her to understand that she did not have the upper end anymore. That I could get mostly any girl I wanted for now on and that if she wanted to keep me, she would have to treat me as well as I treated her. See... parity. Just as Cuba wanted.

And did it work?

Very well! Once she noticed that girls were around me more the territory protection cells kicked in her mind. And she was "fighting" and "competing" to keep me. Now you can say what you want because we are not together anymore. But we managed to keep our couple running for a year and a half never the less.

Moral of the story: International relation politico-military strategy can apply to our little lives. My friend used the Cuban missile strategy to overcome his ex girlfriend advantage on him. And it had more success with him than Castro had with his.

So you want to be a tough guy? Lesson in leadership.

Several year ago I read "Swim with the sharks without being eaten alive" from Harvey Mackay.

It's a very good insightful book and I recommend it. But there is one set of advice he gives in his book that I've been applying for years now. And it serves me well. Here they are, for your consideration:

If you are determined to be a tough guy, wisdom says you better bring these strengths to the fore:

• exceptional intelligence with the ability to ask tough questions from 9:00 A.M. until quitting time, whenever that is
• fair-mindedness (you might call it the ability to hit with either a left jab or a right cross)
• maintenance of extremely high performance standards for yourself
• commitment to keep your guard up continually (and cynically)
• the ability to shed criticism like a duck shedding raindrops

In other words, you must have the mind-set of a drill sergeant. Your troops aren't going to love you necessarily, but they'll respect you - as long as you can prove to them your're tougher than they are and you're willing to drive yourself even harder than you're driving them.

Of couse all this must be used with the right dose at the right time. But no one ever said that being a leader is an easy thing. Nor that it is given to anyone.

The Parkinson law

According to Parkinson law (nothing to do with the disease), the more a company grows, the more it employs overpaid incompetents. Why is that? The researches tends to show that the current people in power want the good of the company. But they also want to remain in place. Highly paid jobs to be in meetings all day make plans that others will implement, travel... do you blame them?

So those executives, consciously or not most of the time, hire people that they are sure they won't become competition. The best way to avoid potential fights against rivals is to hire people that are technocrats and good at what they do. But not good enough to bring themselves (and the company) to the next level. In other words, they hire incompetent people. This is a safe strategy to stay in place. And once hired, the best way to make sure that they won't shake the can is to overpay them. Therefore the fear of loosing a well paid job for the amount of work required of them will prevent any... unwanted behavior.

There is nothing more frightening in a enterprise than a innovative spirit. I am not talking about start ups here. I am talking about huge well established organisations.

And once again I live to tell. I remember going into an interview for a job at such a big company. At one point the guy (who would have been my boss) asks me the classic question "where do you see yourself in three years in the organisation?" I was young, stupid and innexperienced. And I wanted to show how much I was ambitious. So I answered "I wouldn't mind having your job..."

Baaad answer!

I could see the astonishment in the guys' eyes. I didn't get the job. And a few years later, with more experience under my belt in management and more experience on the other side of the table (aka me employing people)... I can tell now that there were not only astonishment in the guys' eyes. There were fear too.

I'll conclude with this quote from Atlas Shrugged:

"Any man who's afraid of hiring the best ability he can find is a cheat who's in a business he doesn't belong. To me - the foolest man on earth, more contemptible than a criminal, is the employer who rejects men for being too good."

- Atlas Shrugged

The moral of the story. Be careful to select your generals (managers, partners, collaborators) well. Make sure you surround yourself with high achieving people who tends to belong with high achieving people themselves.

Physical health as a competitive edge in life strategy

We ear everywhere that it it important to keep a good health to watch what we eat and all. It's all true. But I came to some conclusion at 40 that I could not have foreseen in my 20s.

People my age I see and encounter are mostly all the same: overweight, tired lacking ambitions and energy. When I was in my 20s, all the people around me were fresh, young, full of blood. They were thin with strenght, stamina and energy. People had dreams and ambitions. They were fun people. Now where have they gone? Oh! They're still here! The only thing is that they've lost their polish. Does it have to be that way? Of course not. So why is it? I leave that question open.

What I came to realize is that, beside all the benefits of training and having a good health, since the average people of my age are overweight, lacks energy and stamina, then I'll be better that most people if I train. This statement is true. I live to tell. There is not a week in which I don't receive praise about my body, my shape and my health. "How do you do it?" is the most common question I get. And the answer to that is Nike simple: "Just do it".

My body and health gives me a competitive advantage over most people my age. I get more focus time during the day; I run faster after bus and subways; I get more responses from women. And if I believe the statistics, it is likely that I will outlive most of them.

So you want a competitive edge on people of your generation? Get fit! It's a short term and long term strategy. Not only you will get now the benefit of a healthy body. But in time, you will be better off most of people in your generation.

Take my word for it.

The superstar effect

I told in my previous posts that I focus my energy on making money on my own.

Imagine you brain being a computer's CPU. This means that there is more CPU time that are going to be allocated to my own business endeavor and less to the company I work for. Does this means that I am going to downgrade the quality of my work? Absolutely not. It just means that what ever "think out of the box and make it happen" stuff I could develop for the company, I won't do it.

But how am I able to do it? How am I able to to stick to the minimum required and still please my boss? He even proposed my name for the "employee of the year"! My strategy is simple. I developed what i called the "Superstar effect". I became good at something in the enterprise that no one else, or very few people were able to emulate. Therefore my intrinsic value increased and I was able to be praise while doing less brain work for the company. This brain work (CPU time) not used for the company, I reallocated it to my projects.

You should star to develop the "Superstar effect" for yourself. If you work for someone else, you will become priceless. If you work on your own then the word will spread around and you'll have a competitive advantage.

In effect what I did is simple. I know that most people are Excel and Access illiterate. So I became an expert in those software. An expert to the core: I program it in Visual Basic. Then I developed applications for my department. I automatized reports etc... Now my stuff are all around the department.

So how to develop your own Superstar effect?

1. First read this paper
2. Browse your skills. Find what you are very good at. And see how you can male it contribute to your job. If you have difficulties finding your skills, read this book.
3. Apply your strengths to your job. Develop an expertise or software or what ever that is genuine and unique. If you have a hard time applying your skills, read this book.

Then after a while, you will see that people come to you more and more for advices. At times you will feel like you have a halo around you. But never over estimate yourself. Always work to keep an edge at all time.

Links of the week

Here are my links of the week.

Philosopher's Notes - Abraham Maslow

Hayek vs Keynes

Killer 6 pack abs workout

Fall of the roman empire - The movie

Financial goals: Tactics for 2011 - Commercial Web site

On this one I have, so far, no monetary objectives. I am totally new to this and my main objective will be to start a online store.

Do to so I will use the services of Weebly.com

To make it happen I will use Neville's template for what he did to create House of Rave. I believe that it is a should read to anyone who wants to create a online store. Very detailed information are provided.

So my main objectives for this project are:

On the front end:

a) Be able to browse products, info, details, prices.

b) Be able to select product in shopping cart

c) Process order and payment

On the back-end:

a) Process order and store statistics

b) Order product from wholesalers, providers.

c) Process payments, cost and watch deposits in my bank account.

This shall be up and running for June 1st 2011.

Financial goals: Tactics for 2011 - Stock Market

My second approach to my financial goal this year will be to leverage my knowledge on the stock market.

I will mainly use Tim Sykes' method.

So every night I will look at the day's most active pennystocks. Look at their fundamentals and see which of them are only a smoke show. Then the next morning I will short the sucker and hopefully cash the profit.

I entend to make at least 1 trade per week. And my objective is to make at least 5% profit (after commission fee) on each trade (on average). I will commit an amount of 500$ to 1000$ on this project. If all goes well, the business plan for this tactic should go like this:

Now there is an underlying premisse here that needs to be understood. This model implies that on each trade I will commit 100% of the capital. Financially speaking this is not wise. Therefore I will have to implement a protection mechanism to make sure I don't loose everything. Let's say that at -5% ROI, I pull the plug on the trade and move to the next gig.

The other thing with this is that my broker is very greedy. It charges me 29$ per trade. this means that I need to do 58$ of profit before making a penny for myself. I will have to work in the coming weeks to find myself a good broker that charges way less per trade.

I also recommand that you read Tim Sykes' book. Its full of insights and information.

Financial goals: Tactics for 2011 - Forex

A few post ago I've determined my objectives & strategy. Now lets narrow it down to the actual tactics.

I will use a blend of this strategy and this strategy. My goal is to consistently make 10 pips per day. Here is my business plan the next 30 days of trading:

If you want to learn more about Forex trading follow this link.

Cooperation, Reciprocity and Forgiveness

In 1974, the philosopher and psychologist Anatol Rapaport from the University of Toronto got the idea that the most effective way to behave with others in society is:

1. Cooperation
2. Reciprocity
3. Forgiveness

This means that when someone, or an organisation, tribe, group, etc... encounters other individuals, tribes, groups... it is in their interest to seek an alliance. Seek cooperation. Then after, as reciprocity rules, they must give to others as such as is received. If the other helps, one helps. If the other commit an act of aggression, one must reply with aggression to the same manner and same level one has been experiencing. Then one has to forgive and propose cooperation again.

In 1979, the mathematician and professor of political science Robert Axelrod organized a tournament between autonomous softwares "capable" of human behavior. There were only one constraint each program had to be equipped with a communication routine making possible communication between programs.

Robert Axelrod received fourteen floppy disks (remember that? floppy disks?) containing programs from colleagues of the university interested in the tournament. Each program was proposing its own set of behavior rules. The simplest ones contained two lines of codes. For the more elaborate, a hundred lines. The goal of the game is to get the most points. Some program had the instruction to exploit other programs. To steal the other program's points and quickly change partner. Other programs were trying to handle the game by itself without help. Jealously keeping its point and avoiding rapport with others.

There were instruction such as "if the other is hostile, warn the other then proceed with punishment if its behavior persist" or "cooperate and then betray by surprise".

Each program has been opposed to each other two hundred times. Anatol Rapaport' program, equipped with the CRF (Cooperate, Reciprocity, Forgiveness) unit had beaten all the other programs.

More so, the CRF unit now placed in the middle of all other programs at once, was loosing in the beginning of the game against the more aggressive programs. But with time passing, it became victorious and even contagious! The neighboring programs "seeing" that the CRF was more effective to gain points, were aligning their behavior to the CRF. On the long run, this was the most paying system.

The results of this research shows that kindness alone is worthless. Treachery or living in autarcy is no better. One must not let its own interests go by. So seek for cooperation. Reciprocate according to the other behavior. Then forgive and seek to restore cooperation. That seems to be the best way to behave in society.

Links of the week

Sun Tzu - The Art of War

Hannibal - Rome's worst nightmare

The MED Concept and some unconventional thoughts on corporations

I encountered the MED concept while reading the Four hour body from Tim Ferriss.

In his book he tells about the concept of MED which stands for the Minimum Effective Dose.

Tim uses this concept in bodybuilding. It is the usage of the minimum effort in order to get the maximum result. Anything beyond that is wasteful.

Then a thought occurred to me. The MED concept can be applied to the work world. When you are working for someone else. You are always paid by the hour. Not on the quantity of work you do nor on the quality of work that you do (respecting a standard of course). So why doing more? For you fellow recognition? For a chance to get the corner office? Is that worth it? What do you really want?

I decided that I will escape from the prison of the corporate world in which the slave has to punch on time in the morning, do what ever the boss tell while he's/she's serving his/her time. And all that for what? For a mere biweekly fix. Just enough for you to go along but not enough to escape from your corporation's influence.

The company then is nothing other than a pusher.

My time is mine. And I will use the concept of MED at work: give the company the work its requires up to the level they require. But nothing else or nothing more than that. The time I will save I will put it on my own financial projects.

Corporations likes buzz words so here is one: it is a win win situation. The company gets the work done with the quality required. And I get to win some hours to which I can spend time on my projects.

In fact the only thing the company would be loosing is the zealous work. If you have been working into an organisation for a while you understand what I mean. You always end up earing the boss say the following: "the company needs you... we require total commitment from our employees... we don't look at the hours made here... with hard work you can... " and just what ever crap they trow at us. And you know what? It works! Most of the people and employees I cross believe that crap! (Or may be they don't. But they let the boss speak so they can get the pay check). Do you know why it works? Because that's the only song they've been earing all their life. Therefore they think that this is it. That's the way it is. Period.

The is a massive representation of Plato's Cave Allegory.

Well. It's time to show another path. MED is one representation of it.