Living To Compound Another Day

A single workout won't do much for your health. Reading a few pages won't make you much smarter. Meaningful results are a product of consistency over time. Today's reps are not today's results. True change comes from compounded effort.

Compound interest is a wonder. It's much easier to think linearly so exponential growth can seem magical to us, but it's very real and something we can harness.

As an investor, returns are important (obviously), but what makes them meaningful is time. A single day in the markets is trivial. To benefit from compounding you need to play the long game. Think decades, not days.

Investors fail by making moves that take them out early - before the magic happens. Putting all your eggs in one basket can leave you eggless. Over-leveraging can result in poorly-timed redemptions. Having more stock exposure than you're comfortable with can cause panic-selling during shaky waters.

You want a strategy you can stick with, even if it forgoes higher returns. A strategy with moderate returns that you can endure will outperform one with higher returns that you abandon.

Workouts that enable you show up everyday. Books that keep you coming back for more. Showing up everyday. This leads to meaningful results.

Want to be a successful investor?

Stay in the game.

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The Art of Giving Feedback

Constructive feedback is an awkward affair. You don't want hurt feelings, but recognize the importance of honesty. You've tried the classic "hoping things will get better on its own" and unfortunately it hasn't played out. When giving feedback, here are a few things that I try to keep it mind. Start with empathy. Step into their shoes and understand their story. If you don't know, ask. Be genuinely curious. Feedback is a dynamic affair. Shared communication with a shared goal towards progress. Take the emotion out of it. Focus on the situation, not the person. Focusing on the person adds unnecessary weight to an already emotionally-bloated event. Be specific. Give clear examples. Vague feedback equals dismissed feedback. Doing above won't de-awkward things fully, but it will dampen it and increase the chance of better outcomes.

Today's Special: Humble Pie

You champion a project, fight for an idea, and then...reality sets in. That churning in your stomach isn't butterflies, it's the realization you've missed the mark. Pride will puff up your chest, and kick in the "defend at all costs" instinct. But arguing with the umpire never changed a call. Admitting you're wrong isn't a sign of weakness. It can strengthen your professional standing. In a world obsessed with the illusion of infallibility, the courage to adjust course is a breath of fresh air. It shows you're confident enough to be wrong, and adaptable enough to learn from it. Do your research, think critically, and stand behind your decisions. But when the data whispers (or screams) otherwise, don't be afraid to swallow that slice of humble pie. Be the first to acknowledge. Don't wait for someone to point out your mistake. Be open, take responsibility, and most importantly, focus on what you're going to do to address it. Don't dwell ...

Negative Feedback, Positive Lessons

In the battle against plastic bags, a five-cent tax was shown to be much more successful at deterring usage than a five-cent credit for bringing your own bags. Carrots satisfy but sticks sting, and they sting hard. So we default to the less painful choice of avoiding loss. Loss aversion impacts the way we process information. A 2019 study invited participants to learn through a series of multiple choice questions. Each question only had two options to choose from. Whether guessing correctly or not, they would still learn the right answer. Despite the identical learning opportunity, participants were much more successful at recalling the answers they guessed correctly than those they got wrong. "You're right!" feels good. We savour the moment, analyzing every detail. "You're wrong!" stings. We want to quickly forget, dismiss, and move on. When we succumb to loss aversion, we miss opportunities to learn. Failure is part of the process. We'll experie...

Herman Ye

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