3 Insightful Concepts from “The One Thing” Book

Multitasking is bad. Prioritize and focus on the one thing that matters the most for achieving your goal.

Always ask yourself the question “what is the one thing I can do today that will make everything else easier or unnecessary”. Focus on that one thing. If you don’t know what that one thing is, then your one thing is to find out.

Don’t focus on being busy; focus on being productive. Allow what matters most to drive your day. If you chase two rabbits, you will not catch either one.

When you try to do two things at once, you either can’t or won’t do either well. If you think multitasking is an effective way to get more done, you’ve got it backward. It’s an effective way to get less done. As Steve Uzzell said, “Multitasking is merely the opportunity to screw up more than one thing at a time.”

Don’t get trapped in the “check off” game. If we believe things don’t matter equally, we must act accordingly. We can’t fall prey to the notion that everything has to be done, that checking things off our list is what success is all about. We can’t be trapped in a game of “check off” that never produces a winner. The truth is that things don’t matter equally and success is found in doing what matters most.

“With research overwhelmingly clear, it seems insane that—knowing how multitasking leads to mistakes, poor choices, and stress—we attempt it anyway Maybe it’s just too tempting. Workers who use computers during the day change windows or check e-mail or other programs nearly 37 times an hour. Being in a distractible setting sets us up to be more distractible. Or maybe it’s the high. Media multitaskers actually experience a thrill with switching—a burst of dopamine—that can be addictive. Without it, they can feel bored. For whatever the reason, the results are unambiguous: multitasking slows us down and makes us slower-witted.”

Distraction undermines results. When you try to do ”. “too much at once, you can end up doing nothing well. Figure out what matters most in the moment and give it your undivided attention.

In order to be able to put the principle of The ONE Thing to work, you can’t buy into the lie that trying to do two things at once is a good idea. Though multitasking is sometimes possible, it’s never possible to do it effectively.”

We make bad decisions when our willpower is low. Learn to manage your willpower. It is a finite, but a replenishable resource.

“Think of willpower like the power bar on your cell phone. Every morning you start out with a full charge. As the day goes on, every time you draw on it you’re using it up. So as your green bar shrinks, so does your resolve, and when it eventually goes red, you’re done. Willpower has a limited battery life but can be recharged with some downtime. It’s a limited but renewable resource. Because you have a limited supply, each act of will creates a win-lose scenario where winning in an immediate situation through willpower makes you more likely to lose later because you have less of it. Make it through a tough day in the trenches, and the lure of late-night snacking can become your diet’s downfall.”

“Everyone accepts that limited resources must be managed, yet we fail to recognize that willpower is one of them. We act as though our supply of willpower were endless. As a result, we don’t consider it a personal resource to be managed, like food or sleep. This repeatedly puts us in a tight spot, for when we need our willpower the most, it may not be there.”

“The studies concluded that willpower is a mental muscle that doesn’t bounce back quickly. If you employ it for one task, there will be less power available for the next unless you refuel. To do our best, we literally have to feed our minds, which gives new credence to the old saw, “food for ”

“So how do you put your willpower to work? You think about it. Pay attention to it. Respect it. You make doing what matters most a priority when your willpower is its highest. In other words, you give it the time of day it deserves.”

Think big. Act bold.

“Think big. Avoid incremental thinking that simply asks, “What do I do next?” This is at best the slow lane to success and, at worst, the off ramp. Ask bigger questions. A good rule of thumb is to double down everywhere in your life. If your goal is ten, ask the question: “How can I reach 20?” Set a goal so far above what you want that you’ll be building a plan that practically guarantees your original goal.

Don’t order from the menu. Apple’s celebrated 1997 “Think Different” ad campaign featured icons like Ali, Dylan, Einstein, Hitchcock, Picasso, Gandhi, and others who “saw things differently” and who went on to transform the world we know. The point was that they didn’t choose from the available options; they imagined outcomes that no one else had. They ignored the menu and ordered their own creations. As the ad reminds us, “People who are crazy enough to think they can change the world are the only ones who do.”

Act bold. Big thoughts go nowhere without bold action. Once you’ve asked a big question, pause to imagine what life looks like with the answer. ”

“You may be asking, “Why focus on a question when what we really crave is an answer?” It’s simple. Answers come from questions, and the quality of any answer is directly determined by the quality of the question. Ask the wrong question, get the wrong answer. Ask the right question, get the right answer. Ask the most powerful question possible, and the answer can be life altering.

Voltaire once wrote, “Judge a man by his questions rather than his answers.”

 

Source: The One Thing by Gary Keller and Jay Papasan

 

 

10 Things I Learned from Steve Jobs about Trading and Life

Less is more, simple is good.

That’s been one of my mantras—focus and simplicity. Simple can be harder than complex; you have to work hard to get your thinking clean to make it simple.

Your first loss is your best loss

Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.

When studying the market and speculating about the future, the past is all we have.

You can’t connect the dots looking forward; you can only connect them looking backward. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

No one gets paid for originality – you get paid for making money. You should be happy to take other people’s good ideas and run with them, as long as you understand exactly why you are in the trade and take full responsibility of the results. If you don’t know why you are in a trade, you won’t know when to exit.

Ultimately, it comes down to taste. It comes down to trying to expose yourself to the best things that humans have done and then try to bring those things into what you’re doing. Picasso had a saying: good artists copy, great artists steal. And we have always been shameless about stealing great ideas, and I think part of what made the Macintosh great was that the people working on it were musicians and poets and artists and zoologists and historians who also happened to be the best computer scientists in the world.

The market is constantly changing. We should anticipate, not blindly react to what just happened.

You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.

There is an opportunity cost in everything we do. If you are going to spend any time trading and reading about the market, you better learn how to trump the market, not to merely achieve an average return. Otherwise, a low-cost index can do that for you.

My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time.

Focus, focus, focus. Every week or every day have a small watchlist of actionable ideas to work with. I like to prune my lists and keep in them primarily stocks with high industry momentum.

I’m as proud of many of the things we haven’t done as the things we have done. Innovation is saying no to a thousand things.

One great risk/reward setup in a currently hot industry is better than 10 mediocre setups from random industries

Quality is more important than quantity. One home run is much better than two doubles.

Love what you do. Otherwise, don’t even bother. Make trading fit your life, not your life fit your trading.

For the past 33 years, I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘No’ for too many days in a row, I know I need to change something.

Don’t give up. There’s always a way.

I’m convinced that about half of what separates successful entrepreneurs from the non-successful ones is pure perseverance.

Don’t be afraid to experiment and try new things until you find the right approach for you. Your relationship with trading should be stimulating and pleasurable.

Getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again. It freed me to enter one of the most creative periods of my life.

The best time to start to learn is always today. It’ll never be perfect. Just start and do something you enjoy and want to become really good at.

Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

How to Become 40% Happier

  1. Happiness does not just make you enjoy life more; it actually affects how successful you are in both your personal life and your professional life.

  2. Regardless of the method used, the overall result was clear—happiness doesn’t just flow from success; it actually causes it.

  3. When people can afford the necessities in life, an increase in income does not result in a significantly happier life. So why should this be the case? Part of the reason is that we all get used to what we have very quickly. Buying a new car or a bigger house provides a short-term feel-good boost, but we quickly become accustomed to it and sink back to our pre-purchase level of joy. As psychologist David Myers once phrased it, “Thanks to our capacity to adapt to ever greater fame and fortune, yesterday’s luxuries can soon become today’s necessities and tomorrow’s relics.”

  4. The bad news is that research shows that about 50 percent of your overall sense of happiness is genetically determined, and so cannot be altered.7 The better news is that another 10 percent is attributable to general circumstances (educational level, income, whether you are married or single, etc.) that are difficult to change. However, the best news is that the remaining 40 percent is derived from your day-to-day behavior and the way you think about yourself and others. With a little knowledge, you can become substantially happier in just a few seconds.

  5. In short, when it comes to an instant fix for everyday happiness, certain types of writing have a surprisingly quick and large impact. Expressing gratitude, thinking about a perfect future, and affectionate writing have been scientifically proven to work—and all they require is a pen, a piece of paper, and a few moments of your time.

  6. The results from both studies clearly indicated that in terms of short- and long-term happiness, buying experiences made people feel better than buying products. Why? Our memory of experiences easily becomes distorted over time (you edit out the terrible trip on the airplane and just remember those blissful moments relaxing on the beach). Our goods, however, tend to lose their appeal by becoming old, worn-out, and outdated. Also, experiences promote one of the most effective happiness-inducing behaviors—spending time with others.

  7. Those who spent a higher percentage of their income on others were far happier than those who spent it on themselves…Ask people whether they will be happier after spending money on themselves or others, and the vast majority will check the “me” box. The science shows that exactly the opposite is true—people become much happier after providing for others rather than themselves. The good news is that you really do not have to divert a huge proportion of your income to charity, friends, family, and colleagues. In fact, the smallest gifts can quickly result in surprisingly large and long-lasting changes in happiness.

  8. People behave in highly predictable ways when they experience certain emotions and thoughts. When they are sad, they cry. When they are happy, they smile. When they agree, they nod their heads. So far, no surprises, but according to an area of research known as “proprioceptive psychology,” the process also works in reverse. Get people to behave in a certain way and you cause them to feel certain emotions and have certain thoughts.

 

Source: Wiseman, Richard (2009-12-15). 59 Seconds: Think a Little, Change a Lot. Knopf Doubleday Publishing Group. Kindle Edition.

 

5 Market Insights from Marty Schwartz

Marty Schwartz is an independent trader, who was a legend in the 1980s. He was featured in the first Market Wizards book. Here’s Jack Schwager’s description of Schwartz:

In nine of the ten four-month trading championships he entered (typically with a starting stake of $400,000), he made more money than all the other contestants combined. His average return in these nine contests was 210 percent—nonannualized! (In the one remaining four-month contest he witnessed a near breakeven result.) In his single entry in a one-year contest, he scored a 781 percent return.

5 notable quotes from Schwager’s interview with Schwartz:

  1. I always take my losses quickly. That is probably the key to my success. You can always put the trade back on, but if you go flat, you see things differently. The pressure you feel when you are in a position that is not working puts you in a catatonic state.

  2. Learn to take losses. The most important thing in making money is not letting your losses get out of hand. Also, don’t increase your position size until you have doubled or tripled your capital. Most people make the mistake of increasing their bets as soon as they start making money. That is a quick way to get wiped out.

  3. Most people would rather lose money than admit they’re wrong. What is the ultimate rationalization of a trader in a losing position? “I’ll get out when I’m even.” Why is getting out even so important? Because it protects the ego. I became a winning trader when I was able to say, “To hell with my ego, making money is more important.”

  4. I always check my charts and the moving averages prior to taking a position. Is the price above or below the moving average? That works better than any tool I have. I try not to go against the moving averages; it is self-destructive. (in his book Pit Bull, Schwartz says that he is using a 10-period exponential moving average).

  5. What was your experience during the week of the October 19, 1987 stock crash?

    I came in long. I have thought about it, and I would do the same thing again. Why? Because on October 16, the market fell 108 points, which, at the time, was the biggest one-day point decline in the history of the stock exchange. It looked climatic to me, and I thought that was a buying opportunity. The only problem was that it was a Friday. Usually a down Friday is followed by a down Monday.

    The high in the S&P on Monday was 269. I liquidated my long position at 267.5. I was real proud of that because it is very hard to pull the trigger on a loser. I just dumped everything. I think I was long 40 contracts coming into that day, and I lost $315,000.

    One of the most suicidal things you can do in trading is to keep adding to a losing position. Had I done that, I could have lost $5 million that day. It was painful, and I was bleeding, but I honored my risk points and bit the bullet.

    I thought about going short, but I said to myself, “Now is not the time to worry about making money; it is the time to worry about keeping what you have made.” Whenever there is a really tough period, I try to play defense, defense, defense. I believe in protecting what you have.

    spy1987-daily

    Source: Schwager, Jack D. (2012-01-09). Market Wizards: Interviews with Top Traders. Wiley. Kindle Edition.

    Related reading: Size Matters

10 Notable Quotes from the Book “Hedge Fund Market Wizards”

  1. All markets look liquid during the bubble (massive uptrend), but it’s the liquidity after the bubble ends that matters.

  2. Markets tend to overdiscount the uncertainty related to identified risks. Conversely, markets tend to underdiscount risks that have not yet been expressly identified. Whenever the market is pointing at something and saying this is a risk to be concerned about, in my experience, most of the time, the risk ends up being not as bad as the market anticipated.

  3. Traders focus almost entirely on where to enter a trade. In reality, the entry size is often more important than the entry price because if the size is too large, a trader will be more likely to exit a good trade on a meaningless adverse price move. The larger the position, the greater the danger that trading decisions will be driven by fear rather than by judgment and experience.

  4. Virtually all traders experience periods when they are out of sync with the markets. When you are in a losing streak, you can’t turn the situation around by trying harder. When trading is going badly, Clark’s advice is to get out of everything and take a holiday. Liquidating positions will allow you to regain objectivity.

  5. Staring at the screen all day is counterproductive. He believes that watching every tick will lead to both selling good positions prematurely and overtrading. He advises traders to find something else (preferably productive) to occupy part of their time to avoid the pitfalls of watching the market too closely.

  6. When markets are trending up strongly, and there is bad news, the bad news counts for nothing. But if there is a break that reminds people what it is like to lose money in equities, then suddenly the buying is not mindless anymore. People start looking at the fundamentals, and in this case, I knew the fundamentals were very ugly indeed.

  7. If you don’t understand why you are in a trade, you won’t understand when it is the right time to sell, which means you will only sell when the price action scares you. Most of the time when price action scares you, it is a buying opportunity, not a sell indicator.

  8. Normally, I let winners run and cut losers. In 2009, however, as a result of the posttraumatic effects of going through the September 2008 to February 2009 period—talking to clients who are going out of business and seeing 50 percent of your fund redeemed is all very wearing—I got into the habit of snatching quick 10 to 15 percent profits in individual positions. Most of these positions then went up another 35 to 40 percent. I consider my pattern of taking quick profits in 2009 a dreadful error that I think came about because I had lost a degree of confidence due to experiencing my first down year in 2008.

  9. As an equity trader, I learned the short-selling lessons relatively early. There is no high for a concept stock. It is always better to be long before they have already moved a lot than to try to figure out where to go short.

  10. Now that you have switched from net long to net short, what would get you long again? – Buying. If all of a sudden stocks stopped going down on bad news that would be a positive sign.

Source: Schwager, Jack D. (2012-04-25). Hedge Fund Market Wizards. John Wiley and Sons. Kindle Edition.