with Auren Hoffman
Month of December, 2002
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Summation Push Auren Hoffman's Summation
Push for December, 2002 This issue: * Auren
sells his company * Nature
vs. Nurture -- A Closer Look * The
Connector: "Spending" your Contacts * Book
Review: Vernon Can Read -- by Vernon Jordan * Reader
Responses: (Greg Cohen, Harry Kirsch, Tim Dick, Dan Rice, Brandon Paine,
Barry Asin) * Friend of
Auren: Andy Choy * Summation
Push Pick Links * Hoffman
Reading List Note: There
are currently over 8500 people subscribed to Summation! -------------------------------- AUREN SELLS
HIS COMPANY On October
11, 2002, Bullhorn Inc. acquired the BridgePath Corporation. -------------------------------- NATURE
VS. NURTURE By Auren Hoffman It is the age-old
philosophical question -- is one's personality determined by their genes or
by their environment and upbringing? Nature versus nurture continues to be a
raging debate (see a recent article from The Observer at http://education.guardian.co.uk/higher/sciences/story/0,12243,797470,00.html).
If you read current science
journals, most argue that nature is winning. An increasing number of
scientists believe that our personalities are hard-wired from conception.
They point to identical twin studies and gene-mapping projects to make their
case. These scientists believe behavior (particularly violent behavior) is
hereditary. Challenging the old assumptions that violent behavior is
"learned" from violent parents, these scientists believe the
parents passed it on in their genes. In fact, it has gotten to
the point where very few reputable scientists support the nurture theory. However, there is not much
evidence, beyond circumstantial evidence, to support either theory. I've been
thinking about this a lot lately and have come to believe that nurture is
actually the dominant force affecting our personalities. I came to support the
"nurture" theory after looking at studies done looking at twins
separated at birth (the same studies that are supposed to prove the
"nature" argument). I came to the following conclusions: 1. Most identical twins
separated at birth lead very different lives from one another. The studies
found some separated twins who lived remarkable similar lives, but the
prevalence of those occurrences was not statistically significant. 2. All twins presumably had
the same environment for the first nine months of their development -- they
were both in their mother's womb. (If the pregnant mother smoked or ate
unnourished foods or the father beat the mother, it would presumably retard
the embryo's development. Conversely, development might be spurred if the
mother ate well and was active.) 3. Much of our environment
is affected by the way others react to our physical presence. People who are
very good looking are treated differently by society than people who are
ugly. Society will even react differently to short and tall people. Presuming
that identical twins are separated at birth, a similar society will react to
their physical presence in the same way. Because I believe a person's
personality is based on their interactions with others, it is not difficult
to see how people that look alike might develop a similar personality. 4. I know many identical
twins that are completely different -- even though they were raised by the same
parents and in the same house! Growing up they were either in different
classes at school or had different influences as far as jobs or people they
met, resulting, often times, in striking personality differences. For some reason, advocates
of the nature theory are deemed as being on the "right" while
nurture advocates are supposed to be on the "left." I'm not sure
why. If you believe in nurture you believe in personal responsibility and
spending time raising your kids -- because you know that the right
environment drastically influences one's personality. My thoughts on this are
always developing and I would love your comments in the meantime ... (What are your
thoughts? Write auren@summation.net) ------------------------------------------------- Send Summation Push to a colleague. ------------------------------------------------- THE CONNECTOR "SPENDING"
YOUR CONTACTS To be a Connector, you need
to make connections between people constantly. To a particular person, your
network of contacts is only as good as the last contact you put them in touch
with. Your contacts are the
opposite of cash. If you spend cash, you lose it –- but if you keep cash
tucked away in the bank, you earn compound interest on it. If you keep a contact
tucked away, it goes stale and you'll lose the ability to call on the person
in the future. But if you "spend" the contact by contacting that
person or putting them in touch with others in your network, you earn massive
interest. The more contacts you have
that know each other, the more you gain because of the amplified network
effect. If you are more than two degrees of separation from someone, then you
are too far to utilize that person. So it is in your best interest to get
your contacts to know as many people as possible. If you know 100 people and
they each know 100 people, even if there is a 30% overlap, you still are now
connected to over 7000 people! That's Metcalf's Law (where the value of a
network grows exponential with every new user on the network) in action. (What are your
thoughts? Write auren@summation.net) --------------------------------
Useless Fact: "Taft was the last
President with facial hair." --------------------------------
BOOK REVIEW: This is a thoroughly
interesting book from an incredibly interesting historical figure. Jordan's
confidence, evidenced at a very young age, shines through in this book. Although this is a quick
and easy read, it has very revealing insights into both the pre- and post-MLK
civil rights movement. Jordan's thoughts are refreshing and his motives are
clear. ----------------------------------------------------- The objective of Summation is to READER RESPONSES AND OPINIONS We received over 100
terrific responses to last month's Summation -- so we apologize for not
printing them all. Some of the responses to the "deflation and real
estate" article will appear in next month's Summation. Regarding last month's
article on "Too Many Emails" (see http://www.summation.net/Push0210.html)
Greg Cohen, remarks:
There is a law of nature,
yet unnamed, that I have observed: the quantity of emails received is
directly proportional to the quantity of emails sent. Therefore, if you wish
to receive less emails, try writing less emails (but
don't give-up writing your monthly push :-) Regarding a recent
article on "Deflation, Real Estate, and Economic Assessment" (see http://www.summation.net/Push0209.html)
Harry Kirsch, writes:
Agree with you on SF real
estate--being a stock market person, this is equivalent to asking what is an
appropriate P/E-?-some industries have low P/e's
while others high--SF and Boston have always had high P/E's , while the midwest and the South have generally had low P/E's--but
all across the board they are up now due to low interest rates--unless you
believe rates will stay low, then you likely believe that P/E's will
drop--(The E in this case being rental income---) if E's don't rise, then P
should fall--watch Boston and SF over the next 6 months. ... and Tim Dick,
CEO of Hawaii Superferries - Hawaii's Interisland
Highway, chimes in:
Deflation is a demon which
has not been successfully or recently fought. The most powerful macro economic tool, interest rates, doesn't work once
they reach zero. The last time we had
deflation was the Depression. Government interest rates in Japan have been
zero for some years. Ours are at 1.75% so you can see why the Fed doesn't
want to use up the remaining scope (to zero) before we have to pay people to
take $$. In today's world, once
enough factories become albatrosses and close, (to whit today's factory
capacity utilization data) costs will ultimately go up so that inflation in
certain sectors (e.g. computers) will occur. The problem is these sectors are
essentially (elective) capital investment items even for corporations in
no-growth situations. This problem is compounded by the fact that most
consumables, from tomatoes (Mexico) to TP (Canada) to oil (Saudi) to cheap
toys for the kids (China) are cheaper made outside our borders. I guess all I'm saying is I
believe you're right - we are already in a deflationary spiral, and my
concern is that we don't have either experience or good tools to get out of
it. If cash is king in such a situation, gold (despite its dwindling real
utility) is the emperor. On the speculative front, I
believe personally that the deflationary danger is part of the reason the
Fed. has become nearly as bad as WorldCom in
restating quarterly growth numbers downwards two to three quarters post
release. It has hoped that in the short run, its semi-positive PR can drive
consumer and stock market confidence and pick the economy up. Failing that,
it restates the #s lower two to three quarters later. ... and Dan Rice,
Vice President at Bernstein Investment Research and Management, writes: My opinion is that the loss
of stock options' values in this area will drag down average income
significantly in the coming years- where in other cities people were less
dependent in the past on options as part of their income. People have been
bailing out of the stock market in the area and dumping into
"safety" of real estate (because we all know that it only goes
up....) which has caused real estate to continue to go up here. As the
economy improves nationally interest rates will rise. Due to rising interest
rates, new home buyers will not be able to afford as much house in this
region - and the demand will drop off. Those people who bought at
high prices in '98/'99 and then re-mortgaged to take some appreciation out of
the house so that they could afford their monthly payments while they looked
for a new "tech job that paid what they were making" will begin to
hit cash flow crunch. People will begin to sell houses and pricing will drop
in the region. There will be dropping prices, lowering demand, and people
that can't afford the houses they live in. It will take a couple of years for
the end of the Internet/tech bubble to iron itself out here in the Bay Area-
but we were the height of the bubble- and now we're going to be the tail of
the whip on the downside. ... and Brandon Paine
adds: Give your analysis to any
real estate "expert" or economist and they'll give you a thousand
technical reasons why real estate is a lag indicator, how San Francisco lacks
price elasticity, and why real estate in general is a great investment because
we have "shifted" long term aggregate demand. Whatever. Economics
has no more predictive capability than political science. We're dealing with
people, people's emotions, and people's money. The three together are deeply
paradoxical. Walter Wriston summed it up pretty
well in Wired: "If I a guy's feeling pretty
good about things he'll buy his friend a beer. If not, he'll put that money
in his pocket..." My wholly unscientific assessment is that most people
realized it's a scary world, the chances of a big score are over for now, and
they want something safe and tangible. Just look at numbers being put up by
companies such as Pottery Barn, Crate & Barrel, and even Blockbuster.
People are greedy for homes and home life. What is it that Buffet says?
"Be scared when others are greedy and greedy when others are
scared." Maybe it's time to buy stocks... Regarding a recent
article on being a Jewish Republican (see http://www.summation.net/Push0209.html)
Barry Asin, VP of Marketing at Adecco, clues
us into Moses Maimonides, 12th century Jewish scholar, who says: (Write Auren your
thoughts. Write auren@summation.net) -------------------------------- Send Summation Push to a colleague. -------------------------------- FRIEND OF AUREN (FOA) Andy Choy Andy has been a close
friend of mine ever since I ran into him during my junior year of college at
Berkeley in Statistics 135 class (Andy graduated UC Berkeley with a bachelors
in Statistics). After graduation from
Berkeley, Andy went to McKinsey and then to Virgin Cola followed by Virco Manufacturing Company (AMEX: VIR) where he is today
running strategic initiatives. Last June, Andy got his MBA from the Stanford
Graduate School of Business. He currently lives in Los Angeles. A few observations about
Andy: * He's infamous for his
financial models. Even when he was just 19 years old he was building complex
financial models in Excel. * He loves brain teasers.
I've never met anyone better at solving them. * He watches a LOT of
television and movies. See past profiled Friends
of Auren at: http://www.summation.net/friends.html
--------------------------------
THIS WEEK'S SUMMATION PUSH
PICK LINKS TO MAKE YOU THINK: * Copyright This! (http://www.december.com/cmc/mag/1997/nov/last.html)
-- still one of the best articles ever written.
About copyrighting one's DNA. By my former partner, Scott Bonds. * More about Maimonides (http://www.panix.com/~jjbaker/rambam.html)
– from Barry Asin. * RSVP for the Party of the
Decade (http://evite.citysearch.com/GGParty@eudoramail.com/2011Party)
-- taking place on Nov 11, 2011. *How to sell via e-mail
(from the book "21st Century Selling") (http://www.summation.net/emailselling.html)
*What am I reading? The
Hoffman Reading List (http://www.summation.net/reading.html)
NOTE: You may reprint in
full or in part (for free) with permission from the author. Auren Hoffman's bio can
be found at: http://www.summation.net/hoffman.html ------------------------------------ Comments: E-mail: auren@summation.net
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