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. So I'm now the Executive Vice President at Bullhorn. Bullhorn is based in Boston and sells front-office software to staffing and recruiting firms. I will continue to be based in San Francisco. More at: http://www.bullhorn.com
-------------------------------- 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."
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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 was the college job interview master! (Andy and I even wrote a few articles about it in 1998 -- see http://www.pangaea.net/IGN/HOFF0198.HTM and http://imprint.uwaterloo.ca/issues/112197/1News/news02.shtml).
* He watches a LOT of television and movies.
See past profiled Friends of Auren at: http://www.summation.net/friends.html
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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.
* Iraq eVite (http://www.defectiveyeti.com/iraqevite/) -- the U.S. is inviting its neighbors to play.
* Auren's Ryze page (http://www.ryze.org/view.php?who=auren) -- worth viewing.
* 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: Auren Hoffman works for Bullhorn Corporation but the opinions expressed herein are solely those of Mr. Hoffman.
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
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