I hope you're having a great 2017! Here's a quick video update while we're between seasons of Five Good Questions.
A business development
2 recent books I enjoyed
Plus, a big reveal at the end...
See you soon for Season 4!
Aswath Damodaran holds the Kerschner Family Chair in Finance Education and is Professor of Finance at New York University Stern School of Business. Before coming to Stern, he also lectured in Finance at the University of California, Berkeley. He has been voted "Professor of the Year" by the graduating M.B.A. class five times during his career at NYU and was profiled in Business Week as one of the top 12 U.S. business school professors. Professor Damodaran currently teaches Corporate Finance and Equity Instruments & Markets. His research interests include Information and Prices, Real Estate, and Valuation.
1. Why has access to increased data and computing power ironically made us more dependent on and susceptible to storytelling?
2. What makes numbers so powerful? How do we guard against being fooled by numbers, especially when we’re fooling ourselves?
3. There seems to be competition amongst many firms on who has the most “unbiased” process and is the most quantitatively-driven. What are some potential shortcomings of being so quant focused?
4. Your book is chock full of great insights on some of the biggest business and investing stories over the last few years including, Amazon, Uber, Valeant, Ferrari, GoPro, Yahoo and Vale. To take one interesting example, can you walk us through how both numbers and narrative impacted your valuation of Uber?
5. What’s the one narrative today that’s likely to eventually cause the most financial pain over the next 3-5 years?
Sean Iddings is co-founder of the Intelligent Fanatics Project which helps investors and entrepreneurs see further by standing on the shoulders of organizational and leadership giants. The book series, of the same name co-authored by Ian Cassel, is the introduction into the overall project. Sean is also a member of MicroCapClub and runs Unconventional Capital Wisdom, a registered investment advisor in New York State.
1. What is an “intelligent fanatic,” and why do we want to recognize them as investors? What are some qualities you didn’t like in some of the leaders or their organizations you highlighted in the book? Why?
2. Who was John Patterson and how did he embody an intelligent fanatic?
3. Finding a Jeff Bezos or Warren Buffett after they’re big and famous seems easy. How do we find an intelligent fanatic early enough to invest in them to really see the benefits? Are there markers we can look for a priori to success?
4. A large addressable market with a big runway for growth was a common theme among everyone profiled. The timing also happened to coincide with an epoch of unprecedented economic growth in the US. If you consider that the tide might not be coming in as quickly in the developed world as it once was, are the spectacular results of an intelligent fanatic still replicable?
5.Many of the intelligent fanatics chose a lowest-cost-provider business model to succeed. Is that the most likely way to succeed for them? Or are there others who were able to create differentiated products instead?
Dr. Michael Shermer is the Founding Publisher of Skeptic magazine, a monthly columnist for Scientific American, a regular contributor to Time.com, and Presidential Fellow at Chapman University. His new book is "Skeptic: Viewing the World with a Rational Eye." He is also the author of “The Moral Arc: How Science and Reason Lead Humanity Toward Truth, Justice, and Freedom”, “The Believing Brain: From Ghosts and Gods to Politics and Conspiracies”, “The Mind of the Market”, “Why Darwin Matters: Evolution and the Case Against Intelligent Design”, and “The Science of Good and Evil”. He has been a college professor since 1979, also teaching at Occidental College, Glendale College, and Claremont Graduate University, where he taught a transdisciplinary course for Ph.D. students on Evolution, Economics, and the Brain. As a public intellectual he regularly contributes Opinion Editorials, book reviews, and essays to the Wall Street Journal, the Los Angeles Times, Science, Nature, and other publications.
Dr. Shermer received his B.A. in psychology from Pepperdine University, M.A. in experimental psychology from California State University, Fullerton, and his Ph.D. in the history of science from Claremont Graduate University. He appeared on such shows as The Colbert Report, 20/20, Dateline, Charlie Rose, and Larry King Live. His two TED talks, seen by millions, were voted in the top 100 of the more than 1000 TED talks.
1. How has reasoning and scientific thinking changed the way we view morality and created a more just world?
2. Why do people think that things are bad and getting worse when, in fact, they are good and getting better? That is, why all the doom and gloom pessimism when optimism and gratitude should be the response to all the progress we have realized in our time?
3. There are many reasonable and smart people on both sides of the climate change issue. What are your thoughts these days?
4. There are many products that seem to fall into the “can’t hurt, might help” category. Is there anything wrong with taking advantage of the placebo effect?
5. Are there any investment takeaways from your research and insights?
Dov Baron has been sharing his wisdom and expertise privately and on international stages with professional leaders for more than 30 years. He has interviewed and worked with leaders featured on Oprah, Ellen, CNN, Fox, MSNBC, CBS, Huffington Post, Larry King, New York Times, Washington Post, Forbes, and the Wall Street Journal.
Dov was named by Inc Magazine as one of the Top 100 Leadership Speakers.
His current podcast “Leadership and Loyalty Tips for Executives” is the #1 podcast for Fortune 500 Executives.
In addition to being a speaker, author, and a radio host, Dov Baron is the leading authority on Authentic Leadership and creating a corporate culture that generates fierce loyalty, particularly when dealing with Millennials.
1. Why is loyalty the single most important characteristic of any organization?
2. It’s easy to imagine finding meaning if you work for the Red Cross, Patagonia, or maybe Whole Foods. But if you’re in a more “regular” business, how do you find that all-important meaning for you and your employees? Especially given that surveys find doing meaningful work as highly important to millennials?
3.What’s a Chief Relationship Officer?
4. Vulnerability is a hot topic these days, and everyone agrees that it’s an important part of leadership. But what are some tactics we use to actually be vulnerable, especially if it’s not something we’re predisposed toward?
5. What are the 4 C’s?
Maureen Monte is a leadership and team consultant with over ten years experience in building winning teams. She has a BS & MS in Mechanical Engineering and an MS in Leadership and her client list includes Kellogg, SalesForce, Huntington National Bank, and La-Z-Boy. She is the author of Destination Unstoppable which documents the true story of helping a talented but dysfunctional boys varsity hockey team become state champions - in six weeks. Her process works in the locker room and the board room!
1. How did an elite high school hockey team become the narrative of your story?
2. Why are sports teams such an apt environment for strengths-based work?
3. What’s the secret to good team chemistry? How about outside of the sports world?
4. What’s an abundance mindset and why is it so important to cultivate it? Does our society have a bias toward some strengths?
5. What’s a trust bank?
David Hassell is the founder and CEO of 15Five, the leading web-based employee feedback and alignment solution that is transforming the way employees and managers communicate. Named "The Most Connected Man You Don't Know in Silicon Valley" by Forbes Magazine, David has also been featured in The New York Times, The Wall Street Journal, Inc., Entrepreneur, Wired, Fast Company, and the Financial Post. You can learn more about 15Five and David Hassell at www.15five.com.
1. Children ask upwards of 300 questions per day. As adults we only ask a handful. Why do we change, and are we missing something as adults by asking fewer and less thoughtful questions?
2. You have two “must ask” questions every boss should be asking. What are they, and why are they so effective?
3. What are some tips for managing introverts?
4. What are the best questions to ask to help a remote team succeed?
5. How have you personally used asking better questions to influence the evolution and success of your company, 15 Five?
Jack Vogel, Ph.D., conducts research in empirical asset pricing and behavioral finance, and is a co-author of two books: DIY FINANCIAL ADVISOR: A Simple Solution to Build and Protect Your Wealth and QUANTITATIVE MOMENTUM. His academic background includes experience as an instructor and research assistant at Drexel University in both the Finance and Mathematics departments, as well as a Finance instructor at Villanova University. Dr. Vogel is currently a Managing Member of Alpha Architect, LLC, an SEC-Registered Investment Advisor, where he heads the research department and serves as the Chief Financial Officer and co-CIO. He has a PhD in Finance and a MS in Mathematics from Drexel University, and graduated summa cum laude with a BS in Mathematics and Education from The University of Scranton.
1. Let’s start with some basic definitions that seem to trip people up. What are the differences between “growth” and “momentum” strategies?
2. You argue in your book that value and momentum investing are like cousins, or two sides of the same behavioral coin. So why does the idea of momentum investing remain so repulsive to most value investors? Why the religious zealotry in an industry that prides itself on being hyper-rational?
3. If you’re index fund investor, you’re effectively investing in both value and growth strategies at all times. Why might you be better off with a basket made up of value + momentum instead?
4. There are so many different ways to slice momentum. What criteria did you find that worked to define the quality of momentum and what were some reasons all momentum isn’t created equally? And where does trend following fit in? Is there any timing information in momentum?
5. For a concentrated value investor, can adding momentum be as simple as, if individual Stock A and Stock B are on par, pick the one with the strongest relative strength? Or are you in favor of a more diversified approach?
In this week's Five Good Questions, we're interviewing Erik Kobayashi-Solomon about his book The Intelligent Options Investor.
Erik Kobayashi-Solomon is a 20-year veteran of investment banking, hedge funds, and third-party analysis industry. He is also the co-founder of IOI Investor Services, LLC, a company that helps institutional and individual investors close the gap between their investment responsibility and their skill set. His book, The Intelligent Option Investor, was published by McGraw-Hill as a well-regarded contribution to the value investing community.
1. Many value investors may feel like options are dangerous, I know I did. Why was I wrong to be fearful and how can options be a useful tool for an investor?
2. Assuming your analysis leads you to believe a company is undervalued, why might options be better expression than just buying and holding? What about the element of timing that options introduce?
3. If you don’t believe in the Efficient Market Hypothesis, why should you be especially attracted to options investing?
4. What is delta, and what can it tell us about Mr. Market?
5. What are LEAPS and are they a good first step for a traditional value investor to dip their toe in the options water? How would address the concern that an investor might feel about getting comfortable with the relative trade-offs of premium price vs. tenor and strike price?
Suzanne Heywood is a Managing Director of EXOR. Suzanne grew up sailing around the world on the Schooner Wavewalker (she is currently writing another book, “Wavewalker” about this experience which included getting shipwrecked in the Indian Ocean). After university she started her professional career in the UK Government at the Treasury and then went on to become a Senior Partner at the management consultancy firm McKinsey. Suzanne is also a board member of CNH Industrial and The Economist and Deputy Chairman of the Royal Opera House. She has a MA from Oxford University and PhD from Cambridge University. Suzanne is an expert in organizational design and for many years led work on this topic for McKinsey globally.
1. What are the keys to effective communications with employees during a reorg?
2. Walk us through what a successful reorg looks like.
3. What’s the 20-30-50 rule of thumb?
4. What are the biggest mistakes made during a reorg? Why do reorganisations fail?
5. If you have to let someone go, what are some creative ways to do so in a classy and humane way?
Alex Soojung-Kim Pang is the founder of The Restful Company and a visiting scholar at Stanford. He spent more than a decade as a science and technology forecaster, most recently as a senior consultant at Strategic Business Insights. Alex received a Ph.D. in History and Sociology of Science from the University of Pennsylvania.
Five Good Questions:
1. What’s Wallas’s four-stage model of creativity?
2.What’s the Default Mode Network?
3. Our society idolizes the 80-100 hour work week as a requirement for success. How do you explain the paradox of the most productive and creative people working much less than that? Also, what is this notion of “deep play” that a lot of creative people practice?
4. What was a Bill Gates’s “Think Week” and what can we learn from it?
5. How has your daily, weekly, monthly, and yearly schedule changed based on what you learned writing a book about rest? How has it impacted how you think about work and creativity?
Marko Dimitrijevic is the founder and chairman of Volta Global, a private investment group in venture capital, private equity, real estate, and public markets. Marko Dimitrijevic has more than 35 years investing experience and has founded and managed two investment management companies with over $3 billion in assets. He is the author of Frontier Investor: How to Prosper in the Next Emerging Markets. Marko is a pioneer in conducting on-the-ground due diligence, particularly in frontier markets.
1. Can you give us a feel for how bad the home country bias is, and why it exists?
2. Let’s talk about some execution details. Aside from a passport, how do you research frontier markets? Would an individual’s best bet be country specific ETFs? What are your thoughts about hedging currency risk?
3. Which investment style pairs best with frontier market investing? Deep value, GARP, activist something else?
4. What’s the story of the evolution of Singapore and how does it illustrate the success of frontier market investing? Where’s the next Singapore?
5. Economic progress has typically followed the pattern of farming to manufacturing to service / knowledge economy. Is it possible that the disruption of robots and AI which are already displacing human labor will make it impossible for frontier countries to gain a foothold on the ladder?
Samuel Arbesman is a complexity scientist and Scientist in Residence at Lux Capital. He is also a Senior Fellow of the Silicon Flatirons Center for Law, Technology, and Entrepreneurship at the University of Colorado and a Research Fellow of the Long Now Foundation. In addition to Overcomplicated, he is the author of The Half-Life of Facts.
Five Good Questions:
Martin Ford is a futurist and the founder of a Silicon Valley-based software development firm. He has over 25 years experience in the fields of computer design and software development. He holds a computer engineering degree from the University of Michigan and a graduate business degree from the University of California, Los Angeles. Martin is an expert on the subject of accelerating progress in robotics and artificial intelligence—and what these advances mean for the economy, job market and society of the future.