Wealth Building Strategies
Investors (and consumers) have a tendency to be attracted to that latest thing, they like “what’s new.” That might be fine for purchasing cell phones and flat screen television sets but it is not necessarily the best course of action when it comes to investing choices. Let’s find out why…. CLICK HERE to watch the video
The Evidence-Based Investor Video series is a service provided by Paul Philip and the team at Financial Wealth Builders Securities
“Russell, you’ve been dealing with the markets since the late-1940s. This is a strange question, but what is the most important lesson you’ve learned in all that time?”
I didn’t have to think too long. I told him, “The most important lesson I’ve learned comes from something Freud said. He said, ‘Thinking is rehearsing.’ What Freud meant was that thinking is no substitute for acting. In this world, in investing, in any field, there is no substitute for taking action.”
“Though we travel the world over to find the beautiful, we must carry it with us or we find it not.” – Ralph Waldo Emerson
The world is changing, and changing fast. Periodically our economy experiences a shift, a change or an inflection point, which marks the end of an era and the new beginning one. For instance, the Great Depression in the 1920’s was an economic event but marked a social shift (start of social security in the US), the 1980’s marked the end of the industrial age and the start of the information age, and today we are marking a shift in how we use and sustain the limited resources of our planet.
Recently I had the chance to see sustainability up front and close, by being part of the Globe 2016 conference in Vancouver. The Percy Group jointly held a booth with the Globe Group, and met with business people from around the world. The Globe Series is the largest and longest running conference in North America on the business of sustainability and innovation for the planet.
Sustainability, cleantech, clean energy and the business of the environment are topics I know well, having been in senior executive roles with two of the leading clean technology companies in BC: Ballard Power Systems and Powertech Labs. In addition, over the years I have been involved in numerous initiatives and boards related to sustainability and have always been a strong advocate for businesses to become better stewards of scarce resources
If you are a board director, CEO, executive or business owner, here is what you need to know about sustainability:
Sustainability is here to stay. There is a finite and diminishing amount of natural resources on our planet, while demand is insatiable. Therefore, the pressures to become more responsible stewards of our limited resources will only grow. In addition, demographic changes, driven largely by millennials, will apply significant market pressures for new and better ways to share products, services and resources. Globalization and rising global living standards will also put a strain on finite resources. Finally, sustainability technology and innovation will disrupt existing businesses, and the resultant rising economic pressure will force change upon the entrenched and status quo players
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Sustainability is good for business. Like the early days of the internet, which spread uncertainty through the economy for many businesses, there is confusion and uncertainty among some business leaders, as the trend of sustainability unfolds. I look at it quite simply. Any good business leader should be focused on creatively creating maximum value for customers with minimal resources. The greater the responsiveness to customer demand, the better resources conversion, and ultimately the greater the contribution to sustaining those resources.
Sustainability is important to your customers. Customers have a funny way of being right and expressing it with their wallets. According to a recent survey by Cone Communications, “A record-high 71 percent of Americans consider the environment when they shop, up from 66 percent in 2008”. A recent (2015) Nielsen survey found almost 75% of Millennials (age 18 – 35) are willing to pay extra for sustainable offerings, up from approximately 50% in 2014. If you customers want it, make it a high priority in your strategy and business.
What Can Business Leaders Do?
Sustainability is an opportunity for business, not an obstacle. Forward-thinking business leaders can take many steps to become more competitive, as sustainability becomes increasingly important. Becoming aware of issues relating to sustainability, and then developing and implementing good strategy is a start. Focusing on the effective use of resources in both product design and business operations is very important. Listening clearly to the voice of the customer and incorporating the feedback into new products and services will ensure your business evolves to meet the changing needs of the market.
However, I believe the most important factor for business leaders is to embrace a willingness to change, to adapt, to let go of the tyranny of the status quo, while openly and honestly looking for ways to contribute and add value, so we leave the world not a little better, but a lot better than the way we found it.
By Eamonn Percy
ACTING: A few days ago a young subscriber asked me, “Russell, you’ve been dealing with the markets since the late-1940s. This is a strange question, but what is the most important lesson you’ve learned in all that time?”
I didn’t have to think too long. I told him, “The most important lesson I’ve learned comes from something Freud said. He said, ‘Thinking is rehearsing.’ What Freud meant was that thinking is no substitute for acting. In this world, in investing, in any field, there is no substitute for taking action.”
This brings up another story which illustrates that same theme. J.P. Morgan was “Master of the Universe” back in the 1920’s. Morgan belonged to many exclusive and expensive clubs. One day a young man came up to Morgan and said, “Mr. Morgan, I’m sorry to bother you, but I own some stocks that have been acting poorly, and I’m very anxious about these stocks. In fact worrying about those stocks is starting to ruin my health. Yet, I still like the stocks. It’s a terrible dilemma. What do you think I should do, sir?”
Without hesitating Morgan said, “Young man, sell to the sleeping point.”
The lesson is the same. There’s no substitute for acting. In the business of investing or in the business of life, thinking is not going to do it for you. Thinking is just rehearsing. You must learn to act.
That’s the single most important lesson that I’ve learned in this business.
Again, and I’ve written about this episode before, a very wealthy and successful investor once said to me, “Russell, do you know why stock brokers never become rich in this business?”
I confessed that I didn’t know. He explained, “They don’t get rich because they never believe their own bullshit.”
Again, it’s the same lesson. If you want to make money (or get rich) in a bull market, thinking and talking isn’t going to do it. You’ve got to buy stocks. Brokers never do that. Do you know one broker who has?
A painful lesson. Back in 1991 when we had a perfect opportunity, we could have ended Saddam Hussein’s career, and we could have done it with ease. But those in command, for political reasons, didn’t want to face the adverse publicity of taking additional US casualties. So we stopped short, and Saddam was home free. We were afraid to act. And now we’re dealing with that failure to act with another and messier war.
In my own life many of the mistakes I’ve made have come because I forgot or ignored the “acting lesson”. Thinking is rehearsing, and I was rehearsing instead of acting. Bad marriages, bad investments, lost opportunities, bad business decisions — all made worse because we fail for any number of reasons to act.
The reasons to act are almost always better than the reasons you can think up not to act. If you, my dear subscribers, can understand the meaning of what is expressed in this one sentence, then believe me, you’ve learned a most valuable lesson. It’s a lesson that has saved my life many times. And I mean, literally — it’s a lesson that has saved my life.
About Richard Russell:
Richard wrote for Dow Theory Letters almost every day of his adult life, mailing the letter out faithfully every ten days to three weeks beginning in 1958. In 1991 Dow Theory Letters began publishing online, which allowed Richard to write daily. This he did until about a week before his passing on Saturday, November 21 2015 well into his 90’s . Dow Theory Letters was the longest investment letter in the industry continuously written by the same person.
“Live in the sunshine. Swim in the sea. Drink the wild air.” – Ralph Waldo Emerson The 7 keys to building a culture of innovation to foster innovation are: Make innovation a strategic priority. Ensure you develop and implement a strategic plan to grow your organization, and make innovation a key priority within that plan. Review and update the strategic plan regularly (no less than annually), ensure the organization is aligned with the achievement of the plan and consistently measure your progress against its goals.
Communicate why innovation is a priority. Communicate to all levels of your organization, so employees are aware of your plans, understand their roles, are committed to taking action and can define success. Provide regular and meaningful updates on progress. Be clear and transparent. Create a common language in order to achieve greater organizational cohesion.
Implement a system that enables innovation. For an initiative to become successful, it will need a system to nurture, support and measure it. Pick a system that creates value, and can be scaled as you grow.
Seek Inspiration and Ideas Elsewhere. Get new and fresh ideas from other industries, cultures, companies, people, books, and events. Go well outside your normal routine and circle to create a mind open to new and better opportunities. Status Quo is not your friend.
Lead by example. Take the time to focus on becoming a better leader, so you can model the behaviors you expect of others, particularly during difficult or critical periods. Nothing will make the cultural change more successful than this one act. Be persistent, be authentic and be open minded to opportunity.
Hire, train and build innovative talent. Make the recruitment and retention of key staff that support your innovation strategy a key priority. Help your current staff to develop new skills and find the right way to contribute in a more innovative environment while hiring new staff that can fill the gaps and have the skills and abilities to drive innovation. Be consistently focused on market problems and customer needs.
Fail faster. Encourage more risk-taking and make failing for taking measured risks both acceptable and an opportunity. Find ways to decrease the failure cycle time, which will drive new opportunities from the failures, and move the organization ahead faster.
Don’t innovate for the sake of it, rather use innovation as a core strategy to make your organization agile so it can encourage new ways of thinking, foster new technologies and attract the type of people that will ensure you remain a leader in sustainability.
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