High Output Brainstorming

Gathering your team together for a group discussion and collectively generate new ideas to solve problems that you and your team are currently facing, doesn’t that sounds like a fantastic method to come up with wonderful solutions? The idea of overcoming problems and coming up with ideas together has already existed since the ancient times. Many old wise sayings (e.g. ‘Many hands make light work’ , ”collective wisdom reaps wide benefits”) also stress the importance of discussing opinions and making decisions together. With all of these in mind, brainstorming session seems like the best way to conduct the problem-solving process, and that’s why brainstorming session is the favourite of most of the crowd. However, there’s normally a huge gap between imagination and reality

                       Imagination                                                     

corporate-brainstorming-session

 

 

 

 

 

                        Reality

Meeting boredom

 

 

 

 

 

A picture speaks a thousand words 🙂

The brainstorming session literally turns into a low-efficiency sleeping room whenever it is hosted. Should we just bash brainstorming sessions ever since and think of problems individually rather than collectively? I believe the answer is nope. Although the brainstorming session has many of its shortcomings, I believe it can still remain as a powerful tool for groups to engage problem-solving. Alas! the concept of brainstorming itself is a brilliant and insightful one, no doubts on that. It is the way how typical brainstorming sessions are usually conducted and the details in the entire brainstorming process that makes it horrible. The book Getting To Yes, by Roger Fisher, has given me unique insights on overcoming the brainstorming dilemma and formulating a set of brainstorming procedure and guidelines which can make high output brainstorming possible, as below.

Prior to the brainstorming session:

  • Call the group for a short-and-sweet meeting to brief them about the problem that the group is facing and needs to be discussed in the session (brainstorming objective). This meeting should only take about 10 -15 minutes as it is only a summary of the oncoming brainstorming session.
  • The meeting is adjourned and everyone in the group is required to come up with at least 3 solutions in respect to the problem in the oncoming brainstorming session.

Brainstorming


 1. choose a group member as the brainstorming facilitator

 The role of the facilitator is to: host the meeting, clarify the situation when one of the   group member is making an unclear statement, jot down important ideas on a whiteboard (if there is one) and control the tempo and rhythm of the session

 2. Every group members should then come up with their ideas.

 In the session of the group members listing out their ideas, criticism of ideas are not  allowed until all group members finish proposing their ideas. This helps to shape a  healthy and creative ambience so that group members will be more open and  encouraged to come up with wild ideas (that seems absurd at first thought but actually make sense!).

 3. Stimulation of more ideas and criticism of ideas

 After everyone was done proposing their solutions, the process of criticising ideas can then take place. It is advised for the facilitator to remind all group members that criticism of ideas should be expressed in a polite and not-so-aggresive manner to prevent any unwanted conflicts. When things are heating up, the facilitator should also intervene to keep the situation under control.

 4. Subtraction of ideas

 The weaker ideas will naturally be ousted following rounds of criticism of ideas and discussion

5. Coming up with the best ideas

The best and preferred solution to address the problem is chosen after listing the pros  and cons of each one. One or two best alternatives to the preferred solution will also be taken into consideration.

 

Ta-da! An efficient brainstorming session should be one that is as simpler as it can be, but no simpler. I still have some thoughts and advice regarding the brainstorming session:

  • The brainstorming should be done within a time frame of 90 minutes (according to my experience, long sessions will only make the process duller and productivity will only decrease over time). If the session really can’t be done within 2 hours, try to host another brainstorming session the following day with a refreshed mind

 

  • A semi-circular meeting table is the ideal conference table. Several psychological studies have found that round tables creates an atmosphere of relaxation and add a sense of harmony to the meeting room

CFCC1

  • A sensible incentive system can be tailored in a way that rewards the entire group to encourage group members to come up with better ideas and make better, rational decisions. However, it must be noted that one must be very careful in designing such an incentive system as a poorly-designed incentive system can lead to skewed incentives of group members and mess up the brainstorming session. I will not further elaborate on the details of creating an incentive system here.

 

I hope my insights on brainstorming can help you all who are reading this memo host a much productive brainstorming session and produce high quality works that will benefit the society.

Yang

P.S: I will not be posting any content for the next few months probably until December because of my oncoming trial exam and national exam (which is extremely important to me!). Good luck to all of you in your future too.

Advertisements

Stop checking stock quotes everyday from this moment on

Do you still remember the very first time you bought a stock? I still do. The feelings that were contained within me at that moment I use my father’s trading account to execute my virgin trade was, inexpressible. It was a barometer of emotions which includes sheer excitement, enthusiasm, happiness and, of course, a sense of anxiety, fearing that your first investment will end up in the red. Under such a plethora of emotions, I can’t stand the urge to check the stock prices and stock news on Yahoo Finance everyday. I sat in front of my desktop everyday before the market opens, and stare at the movement of the stock charts. My heart was thumping at the same rate of how fast the stock price was changing. I believe I am not the only one here. Any investor will have a similar experience when they first start know how to trade.

However, it’s not a good news if you still carry this habit with you after years of stock-investing experience. There’s a high probability that you are earning significantly less money than your peers in the stock market. Statistics and researches have shown that investors that monitor company news and stock price everyday tend to make 53% less profit than investors who check the company news and stock price once a month. This fact may come as a shock to some of you, as monitoring stock quotes and company news frequently doesn’t seem to be the culprit of your poor investment performance. Hence, I think it’s worth it to delve deep into the cause-and-effect relationship between the two matter discussed above.

First and foremost, please keep in mind that it’s virtually impossible for you to eliminate your emotions when you are focusing on the stock price every moment. In fact, ‘negative emotions’ like anxiety, greed, and fear will spread like wildfire the more frequently you check your stock quotes, and to put it in another way using Buffett’s quote:

“Fear and greed is the foe of the faddist”

When fear and greed is acting on us, they will crush our analytical reasoning skill and rationality. This is because we have already drained most of our brain power and mental energy while worrying about how the stock price is doing every now and then, we are too exhausted to evaluate the attractiveness of an investment properly with deliberate thinking. Consequently, we substitute System 2 thinking with System 1 thinking to make decisions with intuition rather than logical reasoning. That often leads to very, very bad decisions and eventually poor investment record.

Secondo, most of us are prone to take more action than we used to if we constantly check on company news and stock prices, which will trigger the do-something bias. Short term fluctuations in the stock prices should be a noise that you are supposed to ignore, but you can’t stand the itch to do something when you keep on absorbing new information on the company’s feed and share price. Therefore, you start reacting to every small portfolio fluctuations and churn your portfolio regularly, even though most often the best decision is just to do nothing. On one hand, frequent portfolio rotations violates the principles of Occam’s Razor, which by its logic states that less decisions = less errors. On the other hand, the meagre trading cost incurred in every trade will add up to a significant expense that can’t be ignored as it erodes our investment return.

Alas! Many investors still have the misconception that constantly updating themselves with the latest company news is a key step to make better investment decisions. It’s sad when the true fact is that doing so will only drag you down into the ‘information overload’ quagmire. Quoting you an example, let us take a look at the ‘latest news’ of Disney corporation.

Screen Shot 2017-06-26 at 11.38.33 PM

It’s not that hard to notice that most of the recent news covered are either analyst opinions (which hardly count as an useful information from the company itself) or unimportant little matter that is irrelevant. Failing to discover how inefficient it is, we would have wasted a large amount of time seeking for low-quality information and reinforces us to think with a short-term lens. Garbage in, garbage out. It’s no wonder that we always make poor decisions when we shape our investment thesis on information and inputs that doesn’t have huge influence over the company’s future position in the long run. Poor investment record turns out to be the perfectly reasonable outcome in this scenario.\

I don’t care how you are going to make it and what way are you going use, just stop checking on company news and stock prices every moment if you ever care about succeeding in investing. I’ve been there and done that, so do many others that I’ve witnessed in my life. It’s insidious, and you may not know why are you failing in the stock market until you came across this short memo. I merely hope my advice and perspective can help you pull yourself out from this dreading habit.

I would like to end this note with an amazing quote which I stumbled upon recently.

“The stock market is a device transferring money from the impatient to the patient”  – Warren E Buffett

How to be lucky in your life

Luck is one of the things that can be obtained by literally everyone on this world, yet so many complained about their misfortune in life. In fact, I am actually shocked when I get to know that so many people tend to think that luck was unattainable in life. Today, I am going to share some of my perspectives on luck and how we can substantially improve our luck in life.

SONY DSC

1. Think positively

The first step to have a lucky life is to think positively about things that happen in your life. Think about it, how can we possess luck when all that is stuffed in our mind is negativity? Imagine this scenario: You are fired by the company which you have worked 20 years in it because of an economic recession. Your subordinates which is in many ways less competent than you, just took over your position. You’ve lost your bread and butter overnight, you still have three kids to raise and your mortgage loan to pay. You can choose to lock yourself in the bedroom and complain about your misfortune all day long, or sit down and think of what to do at this moment to overcome this hardship together with your family. One thing that can be certain is that the sticky situation that you are facing isn’t going to change. Instead of complaining like an immature boy, why don’t you position yourself optimistically and view this as an opportunity for you to rethink about who you are and a chance to pursue your dreams? God always leave many doors opened when he shut one of your window.

2. Surround yourself with positive people

Since we want as many positivity as possible in our lives, we should always surround ourself with positive people, people that can make our lives happy (In fact, many studies show that our happiness is directly proportional to luck as we perceived in our lives). There is always a saying, ” Tell me five of your closest friends and I’ll show you what kind of a person you are ”. Negativity is contagious; it can be spread through words and actions in your everyday life bit by bit. Hence, the easiest and time-saving way to improve your luck is to expose yourself to optimistic peers. You may even start to think of how lucky you are to come across those people in your life !

3. Pursue knowledge and observe things

Knowledge is power. Knowledge is also the source of luckiness. Many people may wonder, what does knowledge have to do with luck in our lives? This question can be easily answered by throwing out more questions such as: Is Jeff Bezos lucky to catch on the rapid development of the Internet when he build Amazon? Is Warren Buffett lucky to build his wealth in the stock market when the American stock market is in its golden era? Is Bill Gates lucky because his mother is on the board of director of IBM and this leads Microsoft to get the contract for the operating system, which eventually makes Windows the default operating system of every PC?

The opportunity is there for everyone, Jeff Bezos isn’t the only one to be there when the Internet is growing rapidly and millions of people grow up in the same era as Buffett in the same country. Why only few of the population saw what was coming? Are the rest of them truly unlucky? No, it was because they simply do not contemplate what was happening around them. The depth of their thinking and knowledge render them unable to capitalize on the opportunities that they are given. Every ‘lucky’ guy is ready to act on the chance they are given and that is what makes them ‘lucky’. Knowledge enables them to discover chances around them and gives them the ability to tackle on these life-changing opportunities. There is no way Bill Gates will be offered the operating system contract by IBM if he doesn’t have a sensible business plan and impressive business acumen. The source of his luck comes from his ability and his ability comes form accumulating knowledge and constant learning.

Set you goal to be a little wiser everyday, because that means being a little luckier everyday.

4.  Treat others kindly

One of the by-products of treating other people well is being able to gain more luck in your life. Little pleasant actions such as offering your seat to an old lady in the bus, buying breakfast for homeless and sharing your happiness with your colleagues in your everyday life will establish you as a ‘positive person’ in other people’s mind. Remember the old axiom “If you treat people well, people will treat you well” ? It is highly likely that people around you will go out of their way to support you when you are facing downturns in your life if you be kind to everybody. Their support will make the initially depressing situation less deplorable and unexpectedly turn it into only a small problem for you. Besides, people will be willing to share their knowledge and insights with you, they would’ve also thought of involving you when they come across a rare opportunity that will benefit both of you. This can turn out to be the greatest source of luck in your life.

5. Visualise success

How well do you think you will perform on a date, job interview, or sporting event if your thoughts are filled with reasons you will fail? The odds would not be in your favor. The best athletes see themselves winning a game long before it starts. The best stage actors imagine an audience exploding with laughter and applause before they set foot on stage. If you’re going to a job interview, imagine how thoughtful your responses will be during your drive. If you’re preparing for a date, imagine how classy / handsome / sexy / funny the other person will find you while you get dressed. You must first see success happen before you can make it happen.

I think most of you have probably realised that all these steps above aren’t any big secrets. Everyone knows it and they are not that hard to implement, yet many still fail to realise that luck is already on your side. Being able to carry out day-to-day activities without difficulties, being able to see your parents everyday, being able to read this post comfortably at home.

Having a normal day is perhaps one of the best thing that happen to us 🙂

shsh

Idea generation in investing

I still remember that moment three years ago, when I was still a novice investor reading Berkshire Hathaway’s annual report with full of excitement and enthusiasm, I was clearly amazed by the spectacular returns of Buffett and Munger over the last 50 years in the stock market. Their early investment in well-known companies nowadays such as GEICO, See’s candy and Coca-Cola are investment classics that should be included in the textbooks in business schools. Nevertheless, what I was wondering at that moment was: How did Buffet manage to unearth those hidden treasure when they are still relatively small and was not in the public limelight? Are good investment ideas that easy to stumble upon? Definitely not. After three years of experience in the stock market and accumulation of knowledge, I finally have some answers for the question I’d asked myself three years ago. My idea generation process often takes place in four forms.

1. Screening

Screening softwares and services are provided by various financial data and software companies such as Bloomberg Terminal, Capital IQ and Factset. For individuals that may not want to spend such a hefty amount on financial softwares, there are also many stock screening tools on the web offered by Morningstar and Yahoo Finance. Most importantly, it’s free! Screens enable us to filter stocks based on different metrics such as a minimum Return on Invested Capital, Debt to Equity Ratio and the free cash flow of the company. Stock screening definitely does a great job in helping us to weed out those stocks that don’t meet our requirements and focus on the instruments that are within the user-defined metrics. However, it is not enough to discover great companies that can last for many years merely by picking stocks based on the results of our screening process. We must have the ability to see the big picture from the numbers that are screened. For example, a higher than average debt-to-equity ratio doesn’t implies that the company is a rotten apple. It may indicates that the company needs massive capital to fund its growth and expand market share. It might have a bright future ahead of it, making it the next Google or Amazon. Likewise, a low debt-to-equity ratio doesn’t make a company a ‘quality-guaranteed’ company. On the other hand, investors should have additional filters to really get down to something interesting from a long list of companies that appear on the screen. The filter includes qualities and traits that should exist in a well-managed company such as candid management, healthy cash flow and a healthy amount of debt. There are too many qualities in a company that should be taken into consideration so I will not list them out one by one here. (That would probably cost my entire school holiday!). In short, stock screening is a very useful tool to generate ideas in a short time span but it must be used judiciously, coupled with your own analysis and filters.

2. Other investors

You can get some fantastic ideas from other investors occasionally, ranging from institutional investors such as David Einhorn and David Tepper in investment conferences, to people around you which share the same passion towards investing with you. For me, my friends and pals are still concentrating in their video games and social network. Hence, my only source of investment ideas from people are my father and professional investors that share their ideas. I feel the need and commitment here to make a point that getting ideas from your friends and other people doesn’t mean that you should buy in their idea and just follow their decision without doing any due diligence and thinking. This will only make you invest like a headless chicken and end up in red. What you should do is trying to understand the underlying reason of their decisions, their investment analysis process and think of disconfirming evidence to challenge their view. If after you did your research and analysis to come to a conclusion that the particular company is an attractive one, then congratulations! you earned yourself a great company from other people. However, if you think that the company is overvalued and thus not worth investing, at least you get to improve your thought process and obtain a different perspective from the others. This is a heads-I-win, tail-I-win situation!

3. Look and Observe

I began reading about Peter Lynch and his investment concepts before I really began studying Buffett. His common sense approach stroke me hard and I still think that it is a really great approach to find out interesting ideas that are not known by anyone. Looking and observing at the things that is happening around the world is one of the best investment I could’ve ever made. You will soon start to realise that many of the things around us pretty much contributes to an investment idea. I never like to go the market with my mother because I’ll need to wake up really early. One morning my mother dragged me out of bed and without any other choice, I would need to follow her to the morning market. While my mother was buying eggs, she was complaining about the sky-rocketing egg price recently. Two months later, the largest egg company in Malaysia, Teo Seng announced its earnings, with profit exceeding the consensus by a large margin. Since then, I was always prepared to wake up early and follow my mother to the market. Quoting another example from the book One Up on Wall Street, Peter Lynch has always bought his children Disney films and toys and his children were never tired of watching them over and over again. The rest is history. He still regretted missing this huge opportunity until today. However, the quote ‘Invest in What You Know’ made popular by Peter Lynch is being misunderstood by the public. Some 25 years after his retirement from running Magellan Fund, Mr. Lynch clarifies that he never said, ‘If you go to a mall, see a Starbucks and say it’s good coffee, you should call Fidelity brokerage and buy the stock,’ ”. 

Every investor should keep in mind that however good is the product of the company or however confident your friend seems when he recommend an idea to you, you should conduct enough due diligence and analysis before making your investment in a company. Never let the herd guide your thinking and don’t let their mind make decisions for you. As Mr.Buffet would have put it,

“Don’t think of buying stocks, think of buying businesses”

 

What Every 20 Year Old Should Know

During the filming of #AskGaryVee Show 244, Taylor, a 22 year old fresh out of college, phoned in for advice on how she can build a business. What followed was one of the most important pieces of advice I have recorded and is applicable to almost all my community, but definitely to young people across the world between 20–30 years old.

(I apologize for not being able to embed the entire video here due to the constraints of my free wordpress plan)

maxresdefault

Source: Google Images

This conversation really struck a chord with me. Although maybe some of you have already received similar advice from your parents, I strongly recommend everyone in their teens to just spend 15 minutes and listen to this thought-provoking conversation. The advice offered by Gary Vaynerchuk, one of the most successful serial entrepreneur in the world. Here is a topic from the conversation that I thought were worth bringing out:

Key Takeaway : Action

I believe that most of the teenagers today, at the age of about 20 – 30 years old, will more or less face this problem: Seeing other teenagers enjoying huge success while you are still here, lying on your bed endlessly scrolling through your Instagram. Phew, your entire Sunday was over, and wasted again.

Don’t worry, you are not alone. There are many teenagers out there who are like you and they are also having the same thoughts in mind: Craving for success in their early life, but not knowing where to start from. I have heard of many people saying: “By 26 I am going to make it to the Forbes 30 Under 30 list and become one of the hottest tech entrepreneur in Silicon Valley”, and continue to post videos to their Snapchat story. That is not the way things should be done. This is not the way multi-millions business are built.

I used to be one of you who dream to be a billionaire and go to bed without having produced any ideas or actions everyday. Fortunately, I was struck by a simple thought that changed my life forever when I was 13 year old. One night when I was about to drift into dreamland and start my ‘billionaire dream’ all over again, a voice popped up in my mind, saying: What if you keep dreaming of becoming a billionaire everyday and still hasn’t really done anything at all when you are in your 30s ? It was just a brief idea which came across my mind, but it left a permanent effect on me since that day. I know I definitely must do something.

Thus, i began my journey to find out my interest in life and what am i going to do for the rest of my life to earn me a living (Yes, I am lucky enough to find out my passion for investing at a really young age). The first book I read on investing is The Intelligent Investor, the second is Security Analysis, not knowing what sh*t the author is trying to express (only knowing later that what a brilliant mind Ben Graham was! ). But that is how i get started, and I am grateful I marched out this small step. Today, I’ve already grown a substantial amount of knowledge compared to the 13-year-old me, compounding your knowledge is the fastest way to build your wealth. The more I read, the more I realise how ignorant I am and there are more and more knowledge waiting for me to explored.

Back to the topic, which I believe most of you are eager to ask me now: How do I get started ? How to make my life better from today onwards ?My answer, as always, is to start small. It’s almost impossible for one to lay out a 5 year business plan and start to execute the plan on the following day. Even most of the business titans in the world started small, and eventually grow their business into the behemoth they are today. I have what I called, the ‘Yang pathway’ for those who do not know how to get started and create success in their life.

Yang Pathway:

1. Find out things that you are good at and passionate with

Your life won’t be able if you are going to spend your whole life working on stuff you doesn’t like at all. The best bet to a bright future is to explore things that you will always be willing to thrive in from dusk till dawn.

2. Develop your skills and expertise 

Now that you’ve found your passion and the next thing you are ready to do is to build up your skill set and enhance your knowledge in that particular field.Aim to be the top 1% in the stuff you’re passionate with. To be honest, it’s not going to be easy and it normally take years for someone to achieve mastery in his field. During the process of developing your skills, you may face obstacles and feel that you’ve reach a ‘plateau’. You feel that you can’t keep going anymore, that is the darkest period in your learning phase. But believe me, all you have to do is just climb up every time after you fell. For example, it often take years for a novice investor to develop his investing philosophy and find out which investing style suits him best (especially in such environment when feedback is slow and not concise). That requires not only patience, but great consistency. Having the ‘roly-poly mentality’ is important for you to overcome this hurdle and confront future challenges.

 

Image result for learning curve graph

3. Build a platform to share your knowledge with others / Provide your service to society

Sharing your knowledge and skills with other people is always a joy and also beneficial to yourself because while you’re teaching others what you’ve learnt, you are also reviewing your knowledge at the same time (the Feynman Technique). Say that you are an avid software programmer, and you’ve already mastered multiples programming languages such as Python, Ruby etc. You can develop your own website using your skills and upload lessons or learning tips to the website.

4. Monetise your product

If you manage to grow your website into a community and help users out with the problems they are facing, Congratulations, you are on the right track ! However, a product that can’t bring in any profit still can’t bring you to the place you want to be. This is why the business model is so crucial because it is the key that determines  the success of your product. You can bring in revenue by different business models such as a subscription based business model, freemium and etc. Always review your business model to examine its feasibility and keep your users engaged. Facebook is one of the platform that manage to leverage its enormous user base to bring in lucrative profits. Facebook modularise advertisements by allowing advertisers to target customers directly.

I hope that the ‘Yang Pathway’ can provide all the teens outside a sense of direction in their life and get themselves started. I can’t guarantee it’s useful for everyone but at least it can act as a guide for you when you are lost.

Finally, there’s a quote I think that is worth sharing:

The best investment of all time, is investing in yourself