Monthly Archives: December 2004

Books: Fooled by Randomness by Nassim Taleb

Fooled by Randomness by Nassim Taleb

This is the last book I read in 2004. This book was long ago recommended to me by Nicolas Boullet and the initial inspiration for me to read it came from an article I read a few years back on Taleb in the New Yorker by Malcolm Gladwell entitled Blowing Up: How Nassim Taleb turned the inevitability of disaster into an investment strategy.

This a book worth reading. The subject is randomness — and it is a book with a lot of statistics but at the same time is somewhat new agey (though I am sure the author had little intention to do that). Taleb goes over some of the classic randomness problems and discusses them with real-world conclusions. He also goes on rants on some of the people (journalists, other traders, even scientists) who do not see randomness.

Taleb discusses the black swan problem. Even if you are a swan connoisseur and you’ve seen 4000 swans in your life and all of them are white, you still cannot be certain that all swans are white. However, you only need to see one black swan to know that not all swans are white. Therefore, information is not all equal.

Taleb believes (and I agree) that much of success is due to luck … a role of the dice. If you have a 50% of randomly beating the market each year (which seems reasonable) then you have a 3.125% chance of beating the market five years in a row (0.5 to the power of 5). That means if 10,000 traders were just rolling dice when picking stocks in 1999 (and most of them are), then we should expect 313 of them to beat the market for the last five years. Of course, if you invested in any of those 313, you only have a 50% chance of beating the market next year.

Summation: Fooled by Randomness is a great book and a fast read. If you can get by the sometimes over-reaching stories of the author, you will learn a lot.

Books: John Adams

Review: John Adams by David McCullough.

One of my favorite all-time books is McCullough’s Truman. And though the Adams book does not rise to the Truman level, it still ranks as an interesting and thoughtful biography with great insights into the revolutionary war and the U.S. constitution (unfortunately, the book is far less detailed once Adams actually becomes veep and president).

Summation: great book to get lost in. put it on your 2005 list.

Books: Liar’s Poker: Rising Through the Wreckage on Wall Street

trying to quickly review the books i’ve read in 2004 that i haven’t yet included in Summation …

Review: Liar’s Poker: Rising Through the Wreckage on Wall Street by Michael Lewis

An oldie but goodie. i love michael lewis. book details the rise and fall of Salomon Brothers, the red hot bond market of the 1980s, and the life of a lowly analyst.

summation: quick read (i read it on an intl plane trip) but a goodie

Hunter Walk on Baby Names

My friend Hunter Walk was a recent guest blogger on Google’s Blog. He has some Modern advice for parents-to-be when is come to optimizing baby names for modern parents to be.

To dig into this further, check out the Top Five Male Names for Births in 2003 by state (i’ll give you a hint, “Auren” isn’t one of them). You’ll see a lot of Jacobs — they’re everywhere. and you’ll see some cultural changes (like a lot of Joses in Texas and California).

My Rules for Living

As the new year approaches, I find it is helpful to write down one’s rules for living. I have done this for the last few years and find it is help. Published below are some of my (non-personal) rules.   I would also be very interested in hearing your rules — feel free to email them to me.

– don’t waste your talents. If you are blessed, help others.

– if you are reading this, chances are that your life is better than at least 90% of the people on earth. Always remember that. Use your talents and wealth to make the world better for the other 90%.

– always be adamant about learning. Time is not on your side. Listen to books on tape. Read the paper every day. Incorporate learning into your daily routine

– force yourself to read at least 10 pages of a book every day. A real book (with at least 150 pages) — not a periodical.

– go out of your way to help people. Always be the first to proactively volunteer to drive a friend to the airport or help her move. Always try to connect people to one another if they can mutually benefit.

– don’t complain … ever. Don’t sweat the little things …

– don’t hang out with people that complain

– fire people that complain

– never, ever be unethical. Follow the ten commandments to a tee. In the rare case that you tell a lie, make sure you force yourself to feel bad about it.

– always be on time and respect other people’s time

– always have something to read

– fix little problems right away

– always carry a pen

– "the perfect is the enemy of the good". There are things that need to be done right and there are things you need to do right now.

– "one does not discover new lands without consenting to lose sight of the shore for a very long time" – Andre Gide

– "the worst thing you can do for those you love is the things they could do and should do for themselves." – Abraham Lincoln

– "you miss 100% of the shots you don’t take" – Wayne Gretzky

On Ambition

There are many ambitious people in the world — I am going to attempt to categorize them here.

90% of ambitious people are just striving to be popular. They are trying to accumulate better toys then their peers to enhance their popularity — just like 5th grade. You have the fast car, the cool beach house, the hottest pair of jeans — then you are more likely to be popular.

This sounds crude but my guess is that the 90% figure is not far off. Most ambitious people unfortunately are only ambitious because they strive to be in the "in crowd"

Plan verses chaos
Most ambitious people are planners. They have goal (like Bill Clinton: "I want to be President by age 50") and they work backward from that goal. Not all ambitious people reach their goal (as America has only had 43 presidents) but they use the goal as a guideline for advancement and promotion (and often they change their goal with more information).

A small minority of ambitious people live life without a goal. They generally never look more then 6-9 months ahead and only have some broad life objectives (like to make the world a better place). They have a much more chaotic path but are often just as successful as those people with a goal.

Means verses ends
There are ethically ambitious people and people who feel the ends justify the means. Some people who live by an ethical code are ambitious precisely because they want to prove that one can be successful and still follow strict ethical guidelines. Some people see more ethical grey.

Is the Green Party anti-Semitic?

Why is the Green Party so anti-Israel? I understand the issue of Middle East peace is very complicated and there are many articles on all sides of the issue, but what I do not understand is the raw importance those on the left place on Israel/Palestinian issues.

It troubles me.

If you do a Google search on the Green Party ( website, the word "Israel" appears 79 times.

That seems innocent enough. But to put that in context, the word "Medicare" appears just 43 times. In fact, many issues that you would expect the Green Party to care about have a lot less play than Israel. Here are a few:

"Osama" – 14 results

"Iran" – 22 results

"gay marriage" – 24 results

"China" – 25 results

"social security" – 41 results

"minimum wage" – 41 results

"greenhouse" – 41 results

"abortion OR pro-choice OR pro-life" – 42 results

"Medicare" – 43 results

"Afghanistan" – 62 results

"Palestinian OR Palestine" – 78 results

"Israel" – 79 results

"Iraq" – 315 results

Does this make sense? Is Israel really more important to the green party then abortion? Or greenhouse gases (which is essentially why the Green Party was formed)?

The only explanation for the focus on Israel I can conclude is one that borders on anti-Semitism. Why else would the issue of Israel be so much more important to members of the Green Party then social security, gay marriage, or Osama bin Laden?

Books: The Fatal Shore : The epic of Australia’s founding

The Fatal Shore : The epic of Australia’s founding by Robert Hughes

Be prepared for a long book — but a goodie. Fatal Shore details the history of the founding of Australia — and also goes over the geopolitical situation going on at the time in Britain.

George Northrup referred the book to me and I am glad he did. The Australia penal colony is one of those events an American hears about but does not understand. This book gave me a much deeper understanding of one of the most remarkable countries in the world.

Intellectual Sabbaticals: An Entrepreneurial Alternative

This is an article entitle Intellectual Sabbaticals: An Entrepreneurial Alternative that I wrote for EntreWorld (the publication of the Kauffman Foundation).

I have reprinted the article here:

Intellectual Sabbaticals: An Entrepreneurial Alternative

In October 2002, when I sold my third company, BridgePath, I was faced with the decision about what to do next. After five years of working 90-hour weeks to build my enterprise software firm, I knew that I wasn’t ready to jump right back in to another company.

Yet a sabbatical, with its image of unstructured time on the ski slopes or golf course, didn’t appeal either. Like a lot of entrepreneurs, I need to feel productive.

I could have been stuck in a self-imposed limbo save for one factor. I’ve had a deep and long-standing interest in a topic other than entrepreneurship: foreign policy. And I had always envisioned at some point pursuing that dream.

The Case for Structured Time Off

So I used my interest as base to design a different type of sabbatical, which I have come to call an intellectual sabbatical. Rather than being unstructured and open-ended, my time off was highly regimented, with a fixed beginning and end, and designed to set me on a new course.

It’s a formula I’m now ready to recommend to other entrepreneurs, especially those who’ve long nurtured a passion for something other than company building. Of course, in my case, it helped that I was young –- I was 28 when I sold BridgePath. I didn’t have a family to support. And given that I had just sold my company, I had the financial resources to support myself. I was planning on taking three years off.

In constructing my sabbatical, moreover, I had a perspective from which I could draw, plus a goal and a plan. My perspective had been whetted as far back as junior high, when I was the type of teenager who would read biographies of Henry Kissinger. In college, I regretted that requirements for my engineering major kept me from taking public policy courses.

Even as an entrepreneur, with a grueling 24/7 schedule, I found time to join foreign policy organizations and start a few of my own. I also launched a blog, Summation, to have a platform for airing my views on the subject.

Clear Goals, Careful Planning

In pursuing my sabbatical, I wanted first and foremost to earn what I call an unofficial masters degree in foreign policy. My goal was to be able to assist on the world stage. I also wanted to be able to introduce others, specifically business people, to a field they otherwise might not pursue on their own.

Careful planning underscored my time off. I considered myself the CEO of me, and, in fact, friends have joked that I worked harder at that job than I did as CEO of my company. I set daily, weekly, monthly, and quarterly goals.

I determined, for example, that I would read 40 pages a day of policy books, manuscripts, reports, and Web sites. I met weekly with at least 20 people who could enable me to broaden my thinking. I vowed to attend at least one foreign policy conference a month.

As a guest at conferences sponsored by think tanks, the military, and even individuals who held meetings in their homes, I was almost always the resident dummy. I felt honored to be invited. I could see that the contacts I made would lead to new opportunities. I got the chance, for example, to visit all four branches of the military and to spend a week as a U.S. delegate monitoring parliamentary elections in the Republic of Georgia.

Finding Yourself

My sabbatical, which I had thought would continue for three years, actually came to an end within a year, when in 2003, I launched my fourth company, Stonebrick Group.

Just as in an entrepreneurial company, I felt the need to evolve the company of me after it became clear that my learning curve wasn’t as steep as it had been at the beginning. I wondered, given that, whether I could continue to justify the time spent.

In addition, I was learning that, at least in part because of the knowledge I had gained, individuals and companies were interested in retaining me to arrange introductions that would facilitate their business interests. I discovered that I enjoyed that type of work, which is what Stonebrick does. Currently, I have six clients, four of which have interests outside of the United States.

Ultimately, my intellectual sabbatical, because it was structured, limited in time, and designed to help me figure out what I wanted to do, has enabled me to incorporate my passion into my work. I firmly believe that indefinite vacations can become too stressful for entrepreneurs and can lead to skills atrophying.

Sabbaticals, of course, are supposed to provide opportunities to reflect on life and make choices for the future. It’s ironic that structured time off fulfils that mission better than months on the ski slopes, but I believe that it does. So use your down time wisely. By spending your sabbatical in regimented learning, you will be taking the time to learn what you want to do next.