On Walden or Life in the Woods

I recently finished reading Walden; or Life in the Woods by Henry David Thoreau. The backdrop for this literary masterpiece is: “When I wrote the following pages, or rather the bulk of them, 1 lived alone, in the woods, a mile from any neighbor, in a house which I had built myself, on the shore of Walden Pond, in Concord, Massachusetts, and earned my living by the labor of my hands only. I lived there two years and two months. At present I am a sojourner in civilized life again.”

Below are key excerpts from the book that I found particularly insightful:

I think that we may safely trust a good deal more than we do. We may waive just so much care of ourselves as we honestly bestow elsewhere. Nature is as well adapted to our weakness as to our strength. The incessant anxiety and strain of some is a well nigh incurable form of disease. We are made to exaggerate the importance of what work we do; and yet how much is not done by us! or, what if we had been taken sick? How vigilant we are! determined not to live by faith if we can avoid it; all the day long on the alert, at night we unwillingly say our prayers and commit ourselves to uncertainties. So thoroughly and sincerely are we compelled to live, reverencing our life, and denying the possibility of change.

Most of the luxuries, and many of the so called comforts of life, are not only not indispensable, but positive hinderances to the elevation of mankind. With respect to luxuries and comforts, the wisest have ever lived a more simple and meagre life than the poor. The ancient philosophers, Chinese, Hindoo, Persian, and Greek, were a class than which none has been poorer in outward riches, none so rich in inward.

With a little more deliberation in the choice of their pursuits, all men would perhaps become essentially students and observers, for certainly their nature and destiny are interesting to all alike. In accumulating property for ourselves or our posterity, in founding a family or a state, or acquiring fame even, we are mortal; but in dealing with truth we are immortal, and need fear no change nor accident.

I find it wholesome to be alone the greater part of the time. To be in company, even with the best, is soon wearisome and dissipating. I love to be alone. I never found the companion that was so companionable as solitude. We are for the most part more lonely when we go abroad among men than when we stay in our chambers. A man thinking or working is always alone, let him be where he will. Solitude is not measured by the miles of space that intervene between a man and his fellows.

“You who govern public affairs, what need have you to employ punishments? Love virtue, and the people will be virtuous. The virtues of a superior man are like the wind; the virtues of a common man are like the grass; the grass, when the wind passes over it, bends.”

Such is oftenest the young man’s introduction to the forest, and the most original part of himself. He goes thither at first as a hunter and fisher, until at last, if he has the seeds of a better life in him, he distinguishes his proper objects, as a poet or naturalist it may be, and leaves the gun and fish-pole behind.

On a concluding note:

The earth is not a mere fragment of dead history, stratum upon stratum like the leaves of a book, to be studied by geologists and antiquaries chiefly, but living poetry like the leaves of a tree, which precede flowers and fruit, —not a fossil earth, but a living earth; compared with whose great central life all animal and vegetable life is merely parasitic. Its throes will heave our exuviae from their graves. You merely parasitic. Its throes will heave our exuviae from their graves. You can; they will never excite me like the forms which this molten earth flows out into. And not only it, but the institutions upon it, are plastic like clay in the hands of the potter.

On Reign Of Error

I just finished reading the next book on our reading list, within the Houston Nonfiction Book Club that I am part of, Reign of Error – The Hoax of the Privatization Movement and the Danger to America’s Public Schools by Diane Ravitch.

While one might not agree with every argument advanced by the author, your view about the education system will definitely be challenged by this book regardless on your current stance with respect to the public vs. private education debate. This book invoked within me similar feelings of transformation as did Naomi Klein‘s highly recommended, The Shock Doctrine, a few years ago.

The purpose of this book is in essence to answer four questions about education:

First, is American education in crisis? Second, is American education failing and declining? Third, what is the evidence for the reforms now being promoted by the federal government and adopted in many states: Fourth, what should we do to improve our schools and the lives of children?

Diane begins, by setting the background for her work:

In Hollywood films and television documentaries, the battle lines are clearly drawn. Traditional public schools are bad; their supporters are apologists for the unions. Those who advocate for charter schools, virtual schooling, and “school choice” are reformers; their supporters insist they are championing the rights of minorities. They say they are leaders of the civil rights movement of our day. It is a compelling narrative, one that gives us easy villains and ready-made solutions. It appeals to values Americans have traditionally cherished—choice, freedom, optimism, and a latent distrust of government. There is only one problem with this narrative. It is wrong. Public education is not broken. It is not failing or declining. The diagnosis is wrong, and the solutions of the corporate reformers are wrong. Our urban schools are in trouble because of concentrated poverty and racial segregation. But public education as such is not “broken.” Public education is in a crisis only so far as society is and only so far as this new narrative of crisis has destabilized it. The solutions proposed by the self-proclaimed reformers have not worked as promised. They have failed even by their own most highly valued measure, which is test scores. At the same time, the reformers’ solutions have had a destructive impact on education as a whole.

Her premise to advance education is to reverse our current path:

Stop doing the wrong things. Stop promoting competition and choice as answers to the very inequality that was created by competition and choice. Stop the mindless attacks on the education profession. A good society requires both a vibrant private sector and a responsible public sector. We must not permit the public sector to be privatized and eviscerated. In a democracy, important social goals require social collaboration. We must work to establish programs that improve the lives of children and families. To build a strong educational system, we need to build a strong and respected education profession. The federal government and states must develop policies to recruit, support, and retain career educators, both in the classroom and in positions of leadership. If we mean to conquer educational inequity, we must recognize that the root causes of poor academic performance are segregation and poverty, along with inequitably resourced schools. We must act decisively to reduce the causes of inequity. We know what good schools look like, we know what great education consists of. We must bring good schools to every district and neighborhood in our nation. Public education is a basic public responsibility: we must not be persuaded by a false crisis narrative to privatize it. It is time for parents, educators, and other concerned citizens to join together to strengthen our public schools and preserve them for future generations. The future of our democracy depends on it.

The language being used to drive the privatization effort is intentionally misleading:

If the American public understood that reformers want to privatize their public schools and divert their taxes to pay profits to investors, it would be hard to sell the corporate idea of reform. If parents understood that the reformers want to close down their community schools and require them to go shopping for schools, some far from home, that may or may not accept their children, it would be hard to sell the corporate idea of reform. If the American public understood that the very concept of education was being disfigured into a mechanism to apply standardized testing and sort their children into data points on a normal curve, it would be hard to sell the corporate idea of reform. If the American public understood that their children’s teachers will be judged by the same test scores that label their children as worthy or unworthy, it would be hard to sell the corporate idea of reform. If the American public knew how inaccurate and unreliable these methods are, both for children and for teachers, it would be hard to sell the corporate idea of reform. And that is why the reform message must be rebranded to make it palatable to the public.

The movement towards privatization of education is a bi-partisan effort:

Perhaps the most curious development over the three decades from A Nation at Risk to the 2012 report of the Council on Foreign Relations was this: what was originally seen in 1983 as the agenda of the most libertarian Republicans—school choice—had now become the agenda of the establishment, both Republicans and Democrats. Though there was no new evidence to support this agenda and a growing body of evidence against it, the realignment of political forces on the right and the left presented the most serious challenge to the legitimacy and future of public education in our nation’s history.

While there has been an increased focused on more testing and standardization, the quality of education has suffered:

Surely, there is value in structured, disciplined learning, whether in history, literature, mathematics, or science; students need to learn to study and to think; they need the skills and knowledge that are patiently acquired over time. Just as surely, there is value in the activities and projects that encourage innovation. The incessant demand for more testing and standardization advances neither.

Diane then goes on to outline, sixteen claims/fallacies that the reformers have been promoting to advance their privatization agenda, and below I will highlight three of them:

First, the fallacy surrounding high school graduation rates:

CLAIM: The nation has a dropout crisis, and high school graduation rates are falling. REALITY: high school graduation rates are at an all-time high…If college completion is important as an investment in the knowledge and skills of our population (and not just as a credential), then we must encourage and enable students to persist. If we treated education as both an economic good for the ongoing development of our nation and a basic human right, then public higher education would be subsidized by the state and freely available to all who choose to pursue a degree. That’s about as likely to happen as becoming first in the world in degree completion by 2020, but it would move us closer to the latter goal.

Second, the fallacy around the academic challenges in poorer schools are attributable to the ineffectiveness of their teachers:

CLAIM: Poverty is an excuse for ineffective teaching and failing schools. REALITY: Poverty is highly correlated with low academic achievement…The reformers’ belief that fixing schools will fix poverty has no basis in reality, experience, or evidence. It delays the steps necessary to heal our society and help children. And at the same time, it castigates and demoralizes teachers for conditions they did not cause and do not control.

Third, the fallacy that charter schools are the solution to the educational challenges of America:

CLAIM: Charter schools will revolutionize American education by their freedom to innovate and produce dramatically better results.REALITY Charter schools run the gamut from excellent to awful and are, on average, no more innovative or successful than public schools.

Before transitioning from the fallacies, to the solutions, the author reminds us again that poverty is not a problem that education alone can address:

There is no example in which an entire school district eliminated poverty by reforming its schools or by replacing public education with privately managed charters and vouchers. If the root causes of poverty are not addressed, society will remain unchanged. Some poor students will get the chance to go to college, but the vast majority who are impoverished will remain impoverished. The current reform approach is ineffective at eliminating poverty or improving education. It may offer an escape hatch for some poor children, as public schools always have, but it leaves intact the sources of inequality. The current reform approach does not alter the status quo of deep poverty and entrenched inequality…We need broader and deeper thinking. We must decide if we truly want to eliminate poverty and establish equal educational opportunity We must decide if we truly want to build a society with liberty and justice for all. If that is our true purpose, then we need to move on two fronts, changing society and improving schools at the same time.

Diane, then goes on to detail an eleven point action plan, of which I have highlighted six below:

• Provide good prenatal care for every pregnant woman.
• Make high-quality early childhood education available to all children.
• Every school should have a full, balanced. and rich curriculum, including the arts, science, history, literature, civics, geography, foreign languages, mathematics.  and physical education.
• Reduce class sizes to improve student achievement and behavior.
• Insist that teachers, principals, and superintendents be professional educators.
• Devise actionable strategies and specific goals to reduce racial segregation and poverty.

On a concluding note:

Genuine school reform must be built on hope, not fear; on encouragement, not threats; on inspiration, not compulsion; on trust, not carrots and sticks; on belief in the dignity of the human person, not a slavish devotion to data; on support and mutual respect, not a regime of punishment and blame. To be lasting, school reform must rely on collaboration and teamwork among students, parents, teachers, principals and local communities. Despite its faults, the American system of democratically controlled schools has been the mainstay of our communities and the foundation for our nation’s success. We must work together to improve our public schools. We must extend the promise of equal educational opportunity to all the children of our nation. Protecting our public schools against privatization and saving them for future generations of American children is the civil rights issue of our time.

A very highly recommended read.

On Made In Japan

I recently finished reading Made In Japan – Akio Morita and SONY – by Akio Morito with Edwin M. Reingold and Mitsuko Shumomura.

Below are key excerpts from the book that I found particularly insightful:

1- “I have always believed that a trademark is the life of an enterprise and that it must be protected boldly. A trademark and a company name are not just clever gimmicks—they carry responsibility and guarantee the quality of the product. If someone tries to get a free ride on the reputation and i the ability of another who has worked to build up public trust.”

2- “In the beginning, when our track record for success was not established, our competitors would take a very cautious wait-and-see attitude while we marketed and developed a new product. In the early days, we would often have the market to ourselves for a year or more before the other companies would be convinced that the product would be a success. And we made a lot of money, having the market all to ourselves. But as we became more successful and our track record became clearer, the others waited a shorter and shorter time before jumping in. Now we barely get a three-month head start on some products before the others enter the market to compete with us with their own version of the product we innovated. It is flattering in a way, but it is expensive. We have to keep a premium on innovation.”

3- “My point in digressing to tell this story is simple: I do not believe that any amount of market research could have told us that the Sony Walkman sensational hit that would spawn many imitators. And yet this small item has literally changed the music-listening habits of millions of people all around the world.”

4- “It was this kind of innovation that Ibuka had in mind when we wrote a kind of prospectus and philosophical statement for our company in the very beginning: “If it were possible to establish conditions where persons could become united with a firm spirit of teamwork and exercise to their hearts’ desire their technological capacity,” he wrote, “then such an organization could bring untold pleasure and untold benefits.” He was thinking about industrial creativity, something that is done with teamwork to create new and worthwhile products. Machines and computers cannot be creative in themselves, because creativity requires something more than the processing of existing information. It requires human thought, spontaneous intuition, and a lot of courage, and we had plenty of that in our early days and still do.”

5- “My view was that you must first learn the market.. learn how to sell to it, and build up your corporate confidence before you commit yourself. And when you have confidence, you should commit yourself wholeheartedly.”

6- “…no matter how good or successful you are or how clever or crafty, your business and its future are in the hands of the people you hire. To put it a bit more dramatically, the fate of your business is actually in the hands of the youngest recruit on the staff.”

7- “When most Japanese companies talk about cooperation or consensus, it usually means the elimination of individuality. At our company we are challenged to bring our ideas out into the open. If they clash with others, so much the better, because out of it may come something good at a higher level. Many Japanese companies like to use the words cooperation and consensus because they dislike individualistic employees. When I am asked, and sometimes when I am not, I say that a manager who talks too much about cooperation is one who is saying he doesn’t have the ability to utilize excellent individuals and their ideas and put their ideas in harmony. If my company is successful, it is largely because our managers do have that ability.”

8- “Management officers, knowing that the company’s ordinary business is being done by energetic and enthusiastic younger employees, can devote their energy and effort to planning the future of the company. With is in mind, we think it is unwise and unnecessary to define individual responsibility too clearly, because everyone is taught to act like a family member ready to do what is necessary. If something goes wrong it is considered bad taste for management to inquire who made the mistake. That may seem dangerous, if not silly, but it makes sense to us.”

9- “I cannot understand why there is anything good in laying off people. If management takes the risk and responsibility of hiring personnel, then it is management’s ongoing responsibility to keep them employed. The employee does not have the prime responsibility in this decision, so when a recession comes. why should the employee have to suffer for the management decision to hire him? Therefore, in times of boom we are very careful about increasing our personnel. Once we have hired people, we try to make them understand our concept of a fate-sharing body and how if a recession comes the company is willing to sacrifice profit to keep them in the company.”

10- “What you are showing to your employees is not that you are an artist who performs by himself on the high wire, but you are showing them how you are attempting to attract a large number of people to follow you willingly and with enthusiasm to contribute to the success of the company. If you can do that, the bottom line will take  care of itself.”

11- “It may sound curious, but I learned that an enemy of this innovation could be your own sales organization if it has too much power, because very often these organizations discourage innovation. When you make innovative new products, you must re-educate the sales force about them so the salesmen can educate and sell the public. This is expensive; it means investing sufficient money in R&D and new facilities and advertising and promotion. And it also means making some popular and profitable items obsolete, often the items you can make the most profit on because your development costs are paid for and these products have become easy for your salesmen to sell.”

12- “The primary function of management is decision-making and that means professional knowledge of technology and the ability to foresee the future direction or trends of technology. I believe a manager must have a wide range of general knowledge covering his own business field. It also helps to have a special sense, generated by knowledge and experience—a feel for the business that goes beyond the facts and figures—and this intuitiveness is a gift only human beings can have.”

13- “Next to lawyers, I think these people are the most overused and misused businessmen on the scene in the United States and Japan. I use consultants selectively and have found the best ones can do valuable information gathering and market analysis. But their use can be brought to ridiculous extremes, and it has been.”

14- “I think one of the main advantages of the Japanese system of management over the American or the Western system in general is this sense of corporate philosophy. Even if a new executive takes over he cannot change that. In Japan the long-range planning system and the junior management proposal system guarantee that the relationship between top management and junior management remains very close and that over the years they can formulate a specific program of action that the years they can formulate a specific program of action that will maintain the philosophy of the company. It also may explain why in the initial stages progress is very slow in a Japanese company. But once the company communicates its philosophy to all employees, the company has great strength and flexibility.”

15- “My point is that it is unwise merely to do something different and then rest on your laurels. You have to do something to make a business out of a new development, and that requires that you keep updating the product and staying ahead of the market.”

16- “My prediction is that we can enjoy our lives with less energy, less of the old materials, fewer resources, more recycling, and have more of the essentials for a happy and productive life than ever. Some people in the world, especially the Americans, will have  to learn something of the meaning and spirit of mottainai and conserve more. Step by step, year by year, we must all learn how to be more skillful and efficient in using our resources economically. We must recycle more. As to the expanding populations, that will be a challenge to everyone, for they will have to be fed. clothed, and educated. But as the standard of living of a people increases, the population tends to level off, people live a different way, acquire different tastes and preferences, and develop their own technologies for survival.”

17- “I believe there is a bright future ahead for mankind, and that future holds exciting technological advances that will enrich the lives of everybody on the planet. Only by expanding world trade and stimulating more production can we take advantage of the possibilities that lie before us. We in the free world can do great things. We proved it in Japan by changing the image of the words “Made in Japan” from something shoddy to something fine. But for a single nation or a few nations to have accomplished this is not enough. My vision of the future is of an exciting world of superior goods and services, where every nation’s stamp of origin is a symbol of quality, and where all are competing for the consumers’ hard-earned money at fair prices that reflect appropriate rates of exchange. I believe such a world is within our grasp. The challenge is great; success depends only on the strength of our will.”

Regards,

Omar Halabieh

Made In Japan

On The Money Game

I recently finished reading The Money Game by George Goodman (pseudonym Adam Smith).

This is a classic about the stock market and investing. George covers a breadth of topics in that area based on his insider experience. This includes the psychology of the investor (“you”), IT systems and their impact on the investing field, the professional money managers and their role in the Game etc. The concepts are introduced in an accessible, and often humorous style. While the author does not offer direct investing advice, he does expose what he calls “the biases” that exist in the market – that are essential to take into account to be successful together with good judgment.

George is very successful at immersing the reader into the culture, the psychology and way of thinking that dominates the financial markets and its participants. While this book is dated, most of the concepts discussed still apply to the financial industry today. A recommended read for anyone looking to gain more insight into the Stock Market.

Below are excerpts from the book that I found particularly insightful:

1) “If you are a successful Game player, it can be a fascinating, consuming, totally absorbing experience, in fact it has to be. It it is not totally absorbing, you are not likely to be among the most successful, because you are competing with those who do find it absorbing.”

2) “The irony is that this is a money game and money is the way we keep score. But the real object of the Game is not money, it is the playing of the Game itself. For the true players, you could take all the trophies away and substitute plastic beads or whale’s teeth; as long as there is a way to keep score, they will play.”

3) “In short, if you really know what’s going on, you don’t even have to know what’s going on to know what’s going on.”

4) “You must use your emotions in a useful way…Your emotions must support the goal you’re after…You must operate without anxiety.”

5) “The strongest emotions in the marketplace are greed and fear. In rising markets, you can almost feel the greed tide begin…the greed itch begins when you see stocks move that you don’t own.”

6) “If you know that the stock doesn’t know you own it, you are ahead of the game. You are ahead because you can change your mind and your actions without regard to what you did or thought yesterday.”

7) “Who makes the really big money? The inside stockholders of a company do, when the market capitalizes the earnings of that company.”

8) “What you want is the company which is about to do that (compounding earnings) over the next couple of years. And to do that, you not only have to know that the company is doing something right, but what it is doing right, and why these earnings are compounding.”

9) “What I have told you is a set of biases so you can make your own judgement.”

10) “It is an informal thesis of charting that there are roughly four stages of stock movement. These four are: 1) Accumulation: To make a perfect case, let us say the stock has been asleep for a long time, inactively trade. Then the volume picks up and probably so does the price. 2) Mark-up…Now the supply may be a bit thinner, and the stock is more pursued by buyers, so it moves up more steeply. 3) Distribution. The Smart People who bought the stock early are busy selling it to the Dumb People who are buying it late, and the result is more or less a standoff, depending on whose enthusiasm is greater. 4) Panic Liquidation. Everybody gets the hell out, Smart People, Dumb People, “everybody.” Since there is “no one” left to buy, the stock goes down.”

11) “Does this mean that charts can be ignored? Perhaps charts can be a useful tool even without inherent predictive qualities. A chart can give you an instant portrait of the character of a stock, whether it follows a minuet, a waltz, a twist, or the latest rock gyration. The chart can also sometimes tell you whether the character of the dancer seems to have changed.”

12) “The computer is going to sanctify charting. The Chartists are on their way.”

13) “The characteristics of performance are concentration and turnover. By concentration, as I said before, I mean limiting the number of issues. Limiting the number of issues means that attention is focused sharply on them, and the ones that do not perform well virtually beg to be dropped off…Furthermore, you are going to be scouting for the best six ideas, because if you find a really good one it may bump one of your other ones off the list. Turnover means how long you hold the stocks…All that turover has doubled the volume in the last couple of years, and the brokers are getting very rich.”

14) “The further we come along, the more apparent becomes the wisdom of the Master in describing the market as a game of musical chairs. The most brilliant and perceptive analysis you can do may sit there until someone else believes it too, for the object of the game is not to own some stock, like a faithful dog, which you have chosen, but to get to the piece of paper ahead of the crowd. Value is not only inherent in the stock, it has to be value that is appreciated by others…It follows that some sort of sense timing is necessary, and you either develop it, or you don’t.”

15) “The aspiration of the people are a noble thing and no one is against jobs. But it does seem easy to produce them with currency rather than productivity. Central governments soon learn the utility of a deficit. It is convenient to take the views of the economists who followed Keynes and spend money during recessions. There are even problems on that side of the equation, because even with the breadth of statistical reporting and with computer, speed, this kind of economics is still inexact, and the central government can find itself pressing the wrong lever at the wrong time.”

16) “The love of money as a possession – as distinguished from love of money as a means to the enjoyments and realities of life – will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.”

Regards,

Omar Halabieh

The Money Game