Let’s Be Careful Out There

The private reaction I received to last week’s post on career opportunities was quite overwhelming.  I expected to get a few calls asking for similar consultations from people I know trying to decide between this or that gig, and I did, but the breadth of emotion I received in reaction to the first paragraph — the seemingly unmovable 9% national unemployment factor — reinforced for me just how far this epidemic has reached.  A few years ago, I remember hearing about how many of my college classmates could not afford to attend our 25th reunion.  That was eye-opening and unsettling.  This is much worse.

Look around you.  The impact is everywhere.  People need jobs.  People need opportunity.  People need leadership.  People need purpose.  They are wondering if anyone is listening.  I don’t mean running for office, I mean listening.  Caring.  Responding.  It is hard to see much evidence that any response is on par with the outcry.

For the past few years since the recession began, it would seem many people have been suffering if not in silence, then at least maintaining a difficult quiet.  Of late that pain has become manifest in anger.  The anger we are seeing expressed by Occupy Wall Street is one form of reaction, but there are others all around us.  If you are not personally impacted, just listen to the dialogue around you.  Listen, really listen.  You may be surprised at what you hear, and who is saying it.

Compassion is a noble reflection that we celebrate usually in the final few months of each year during the annual holiday season.  Regardless of our various faiths, public messages of Peace on Earth become evident in everything from retail sales displays to city street decorations.  Then shortly after the Rose Bowl, we take down all the signs with all those slogans and catch phrases and get back to normalcy with the new year.  Can we afford to do that this year, with all of the requests for outreach we are hearing from friends and acquaintances?  I wonder if this time maybe it’s different.

Each holiday season I look forward to a touring rock band known as Trans-Siberian Orchestra that puts on a theatrical spectacle with a tremendous amount of meaning captured for me best in the following few lines from a song called Old City Bar:

If you want to arrange it
This world you can change it
If we could somehow make this
Christmas thing last
By helping a neighbor
Or even a stranger
And to know who needs help
You need only just ask

I usually post these lyrics around the holidays, but I thought I’d get an early start so the sentiment does not get lost in the year-end noise.  We need compassion now and year round.  Some people are going to ask you for help.  Others are not going to feel as comfortable asking, so maybe you can offer it without the ask.  As I discovered in the response to my post last week, sometimes it’s as easy as being a good listener to someone who has lost hope, having chased down every opportunity they can and not found work.  For others you can make a phone call or two, or help edit their resume, or simply remind them that they are good at what they do and these are extraordinary times.  Just returning a phone call can be a very big deal.  The point is that your compassion will go a long way right now, further and deeper than you can comprehend.  Remember Pay It Forward?  It’s always a good time as Steve Jobs would say to make a brand deposit.  Now is an especially good time, never better.  Someday you too will need a withdrawal.

There’s one more thing on my mind this week besides reminding us all to be compassionate, to help where we can, and to not let the message of the holidays flicker out when the crowds leave the Rose Bowl.  There remains a good deal of misunderstanding on all sides of the equation as to whom we can blame for our problems, the catastrophic impact of hyperbole and invective, how simplistic notions of corrective strategies can be naive, and whether justice is a shared ideal that can be broadly and fairly enacted.  When you combine the complexity of all that anxiety with the pain and anger that seems to be spiraling, you have a very bad brew.  The potential for rotten things to happen — events that cannot be reversed, stalemates that cannot be reconciled, words that cannot be taken back, violence that will be regretted — becomes a turbine gaining momentum, suddenly with its own inertia.

Certainly we all want change for the better, regardless of whether we agree on the definition of better.  What we can agree on is certain definitions of harm — physical harm to individuals, extended harm to the economy, permanent harm to our democracy.  Business enterprise is not all wrong, investment is what drives opportunity; there are no jobs without investment, and there will be no investment without risk and return, that is the backbone of free enterprise and prosperity.  A nonviolent protest against unfairness is not wrong, there is a message in the expression of pain and anger we need to hear; every one of us plays a role in this economy as a consumer, that voice cannot be taken away, and that voice says people want to work.  Real trouble begins when an impasse cannot be bridged because too many people decide that it cannot be bridged.  The path through that impasse is ours to negotiate, one at a time, with each other.  It is the very compassion of one person helping one person that gets the wheels moving again.  We don’t have to wait for a grand proclamation of resolution to express humility.  To not do so is to let a fire burn that we needn’t allow consume all that we have built together.

People always wonder if they can make a difference, if any individual can make a difference.  The answer is yes, one individual can make a difference to another individual, and that can become a movement.  The opposite choice is to allow the stalemate to divide us.  That seems like a dangerous choice.

On the groundbreaking 1980s TV series Hill Street Blues, a police drama set in an extremely troubled and decayed metropolis, the avuncular Sgt. Phil Esterhaus (played until his own premature passing by Michael Conrad) would conclude roll call each week with the words, “Let’s Be Careful Out There.”  I think for the foreseeable future that is very good advice.

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In The Long Run

No Pay Out Is Assured, But Some Reflect History
by Ken Goldstein
Fifth in a Series of Ten

One of the hardest yet most pragmatic lessons I have had to learn and re-learn over time is the fundamental difference between speculating and investing. I have found in both finance and career choices, there is a considered role in my life for each. For my own digestion, I have boiled it down to this:

Speculation is a bet, a gamble, a short-term play where intuition plays a key role. If you win, you party; if you lose, you shrug it off. It can be fun and exciting, but it should never be meant to put what you most care about at risk.

Investment is an allocation of resources, capital or otherwise, a long-term play where logic plays the key role. If you win, you most likely got an outcome you wanted; if you lose, you refine and recommit to your strategy, then try again. It is hard work and often gruelingly repetitive, but it is the least emotional consistent path to success and independence.

Casino gambling, lottery tickets, buying individual equities on a friendly (but never insider) tip, quitting your job in a snit because you believe you are better than the job you have and are unquestionably in high demand — these are examples of speculation. You do these things — if at all — when you are in a safety zone, when you can sustain the outcomes without ruining your life or family’s security.

Higher education, buying a fairly priced home to inhabit with a reasonable mortgage, allocating your savings or retirement across a fully diversified set of passively traded asset classes, finding a mentor and sticking with a tough job while charting your career arc — these are examples of investing. You do these things as opportunity allows, ignoring the distractions and noise of the latest media ramblings or get rich quick schemes, to build your net worth and reputation day by day.

Does that mean you should never speculate? Of course not, but only when you can afford to completely lose whatever you have at stake. Risk and reward are not good or bad, they are real functions that warrant each other. If high reward did not accompany high risk, there would be no reason for either. Both when you invest and you speculate, reward is your compensation for the risk you are willing to take. That’s why a CD pays so little interest, because the risk of losing your capital is almost non-existent.  Meanwhile, the latest IPO could see a company double or triple in value in hours, because just as quickly it could be worth half or less of the capital that purchased shares.

There are many individuals, funds, and companies that are well positioned to take extraordinary risk, they might not even consider their choices to be speculation because they allocate resources without ever betting the farm. For most individuals, these risks are simply too extraordinary, but if you do choose to take them, understand what you are doing and why you are doing it.

Likewise in getting an education and building a career path, know what you are doing.  You don’t have to presume the investment path is slow and steady, it can be suddenly meteoric.  But for most of us, those “overnight successes” arrive after many extraordinary hard years of work, focus, and even sacrifice.  I remember David Seidler, the screenwriter of The King’s Speech, saying on the Academy Awards as he received his Oscar at 70 years old this year, “My father always said to me I would be a late bloomer.”  My sense is that award gave him great pride, but what gave him even greater pride was the quality of the work he had created, because of his own life choice to invest his precious time in developing his talent.  That to me screams investment, just like a 401k plan that bounced back if you stayed allocated in the market through the recession.  Others may win the Academy Award on the only screenplay they ever wrote, or quadruple their money on secondary market exchanges; I wish them nothing but well if they do, and hope they have a day job if they don’t.

Work hard, play hard; fully comprehend the difference between long-term and short-term.  We’ll get to the notion of luck in a later post!