From "Value Investing: From Graham to Buffett and Beyond" - Greenwald, Kahn, Sonkin, Van Biema.

Investment Universe

government/federal debt

state and municipal bonds, bank savings, CDs, commodities, partnership in an enterprise, derivatives, mutual funds, stock, corporate bond, real estate. Spinoff warrants, preferred shares,

convertibles

Many funds cannot invest in small companies, so shares in smaller companies are cheaper.

Spin-offs are a wonderful opportunity for investors who are not constrained by questions of corporate size.

The end of the year is a good time to pick up stocks that window-dressing managers have tossed out to avoid listing in the year-end report.

If the industry is in serious decline, then the asset values of the company should be based on what they will bring in liquidation.

On the other hand, if the industry is stable or growing, then the assets in use will need to be reproduced as they wear out. These assets should be valued at their reproduction cost.

Inventory valuation : for a manufacturing firm, the more commodity-like the inventory, the less the discount necessary to sell it.

The would be competitor will have to spend heavily on research, advertising or customer relation in order to reproduce what we call hidden assets.

We need to add some multiple of selling, general and administrative expenses in most cases between 1-3 year's worth to reproduction cost of the assets

Its good to specialize in complex companies that nauseate most investors.

It is a truth universally acknowledged that all sensible people abhor commodity businesses.

For the incumbent to have a competitive advantage, it must have access to customers that a potential entrant cannot match.

If the cost of searching for an alternative to an existing supplier is high, then new entrants have a difficult time attracting customers who are not actually dissatisfied with their current arrangements. e.g. residential insurance market.

High switching costs are the most common cause of customer captivity. e.g. when one company provides software systems for payroll, benefits, HR etc.

Captive customers are the source of competitive advantages :

By raising switching costs (adding features/services)

Consumer franchises that are sustainable over decades must have a competitive advantage in recruiting new customers as well as retaining existing ones.

To sum up, the value of the franchise is very important in modern value investing. A franchise only exists where a firm benefits from barriers to entry that keep out potential competitors or insure that if they choose to enter, they will operate at a competitive disadvantage relative to the incumbents.

Brands are identifiable product images that exist in the minds of consumers and affect their behavior in ways beneficial to the company that owns the brand.

The history of the luxury car market suggests that this kind of mediated pricing power does not create a significant barrier to entry by itself that would protect Daimler from the ravages of competition.

Why not? As long as competitors have equal access to the means for creating a premium image-advertising, endorsements, PR, high quality, innovative technology, luxurious dealerships, extraordinary after-sales and high prices-at costs equivalent to that of Daimler, they will enter this profitable market. The Mercedes-Benz brand does not maintain itself ; it needs to be replenished with fresh advertising and image-burnishing expenses. This drives up costs for Daimler making it more costly and consequently less profitable for Daimler to maintain the brand. The brand may be an essential element of the perceived value of the product but does not construct barriers to entry.

The aspects of consumer behavior that do create franchise value are : HABIT, SEARCH COSTS, SWITCHING COSTS. - as leading to customer captivity. Also value of brands us greatly enhanced by economies of scale. e.g. Intel Inside is weak brand but when accompanied by economies of scale, even a weak brand becomes an essential part of a powerful franchise.

We estimate that the cash most businesses need to run their operations amounts to 1% of sales.

Continue from Part III. (Value Investing in Practice)

From "The Element" Ken Robinson

• When people are in the zone, they align naturally with a way of thinking that works best for them. There is a level of effortlessness and you simply don't feel time the same way. Everything comes more easily.
• One of the strongest signs of being in the zone is a sense of freedom and authenticity. When we are doing something that we love and are naturally good at, we are much more likely to feel centered in our true sense of self - to be who we truly feel we are.
• Doing the thing you love is no guarantee that you'll be in the zone every time. Sometimes the mood isn't right, the time is wrong and ideas just don't flow. "When its not going well, I put it away and try again tomorrow or the next day. What I don't do is watch other people's work that may make me feel worse".
• My definition of creativity is : "the process of having original ideas that have value". Imagination can be entirely internal. You couldn't be creative unless you actually did something.
• When they are very young, kids aren't particularly worried about being wrong. They'll just have a go at it and see how things turn out. What is true is that if you're not prepared to be wrong, you'll never come up with anything original.

My fave iphone quotes

* If I only had an hour to shop down a tree, I would spend the first 45 minutes sharpening my axe.

* Quarrel not at all. No man resolved to make the most of himself can spare time for personal contention. - Abraham Lincoln

* I have learned not to worry about love but to honor its coming with all my heart. Alize Walker

* Well done is better than well said

* Let no one who loves be called unhappy. for even love unreturned has its rainbow

* Respect a man, he will do more

* How much time he saves who does not look to see what his neighbor says or does or thinks -Marcus Aurelius

* What other people think about me is not my business

*

*

* Try not to become a man of success, but rather try to become a man of value

* The pursuit of knowledge for its own sake, an almost fanatical love of justice, and the desire for personal independence - these are the features of Jewish tradition that make me thank my stars that I belong to it - Einstein

There is a certain majesty in simplicity which is far above all the quaintness of wit. - Alex pope

* Action may not always bring happiness, but there is no happiness without action. -Disraeli

* Cleanliness and order are not matters of instinct, they are matters of education and like most great things, you must cultivate a taste for them. Disraeli

* Sir. I say that justice is truth in action. Disraeli

Friendship is born when one person says to another : "What! You too? I thought I was the only one" CS Lewis

He approaches nearest to gods who knows how to be silent, even though he is in the right. Cato the Elder

* A big man is one who makes us feel bigger when we are with him.

* The ancient Greek definition of happiness was the full use of your powers along the lines

of excellence.

* Never express yourself more clearly than you are able to think.

* Nothing in the affairs of men is worthy of great anxiety.

*

* An artist cannot do anything slovenly. Jane Austen

I love the deep quiet in which I live and grow against the world and harvest what they cannot take from me by fire or sword. Goethe

Just trust yourself and you will then know how to live. Goethe.

Where can I find a man governed by reason instead of habits and urges - Gibran

A purpose of human life, is to love whoever is around to be loved. Kurt Vonnegut

* When it is not necessary to make a decision, it is necessary not to make a decision. Lord Falkland.

* No man enjoys the true taste of life, but he who is ready and willing to quit it. Seneca

No one is safe from slander. The best way us to pay no attention to it, but live in innocence and let the world talk. Moliere.

The whole point of being alive is to evolve into the complete person you were intended to be. Oprah

A chief event in which we have encountered a mind that startles us. Ralph Waldo Emerson.

* We generate our own environment. We get exactly what we deserve. How can we rest the life we've created for ourselves? Who's to blame, who's to credit but us? Who can change it anytime we wish, but us? Richard Bach, One

* To be what we are, and to become what we are capable of becoming is the only end of life. RL Stevenson.

* Be silent as to services you have rendered, but speak of favours you have received. Seneca

The good befriend themselves - Sophocles

Friends are those rare people who ask how you are and then wait for the answer.

* Men judge us by the success of our efforts. God looks at the efforts themselves.

* There is only one way to happiness and that is to cease worrying about things which

are beyond the power of our will.

* The real service a friend can really render is to keep up your curage by holding up to

you a mirror is which you can see a noble image of yourself.

• “He that rises late must trot all day.“ – Benjamin Franklin

• “Is what I’m doing or about to do getting us closer to our objective?“ – Robert Townsend
• “What comes first, the compass or the clock? Before one can truly manage time (the clock), it is important to know where you are going, what your priorities and goals are, in which direction you are headed (the compass). Where you are headed is more important than how fast you are going. Rather than always focusing on what’s urgent, learn to focus on what is really important – Unknown
• “We realize our dilemma goes deeper than shortage of time; it is basically a problem of priorities. We confess, we have left undone those things that ought to have done; and we have done those things which we ought not to have done.“ – Charles E. Hummel
• “Review our priorities, ask the question; what’s the best use of our time right now?“ – Alan Lakein

• “To save time is to lengthen life.“ – Unknown
• “Until we can manage time, we can manage nothing else.“ – Peter F. Drucker
• 
  
• “If you spend too much time thinking about a thing, you’ll never get it done.“ – Bruce Lee
• ““To think too long about doing a thing often becomes its undoing.“ – Eva Young
  “Never leave ’till tomorrow which you can do today.“ – Benjamin Franklin
  “Better three hours too soon, than one minute too late.“ – William Shakespeare
  “Don’t wait. The time will never be just right.“ – Napolean Hill
  “Make measurable progress in reasonable time.“ – Jim Rohn
  
  “The less one has to do, the less time one finds to do it in.“ – Lord Chesterfield
  “So much of our time is spent in preparation, so much in routine, and so much in retrospect, that the amount of each person’s genius is confined to a very few hours.“ – Ralph Waldo Emerson
  “Don’t watch the clock; do what it does. Keep going.“ – Samuel Levenson
  “One always has time enough, if one will apply it well.“ – Johann Wolfgang Von Goethe
  “Take care of the minutes and the hours will take care of themselves.“ – Lord Chesterfield
  “Determine never to be idle. No person will have occasion to complain of the want of time who never loses any. It is wonderful how much can be done if we are always doing.“ – Thomas Jefferson
  “Well arranged time is the surest mark of a well arranged mind. – Pitman
  “A wise person does at once, what a fool does at last. Both do the same thing; only at different times.“ – Baltasar Gracian
  “Time spent in getting even would be better spent in getting ahead.“ – Unknown

From "the double comfort safari club" Mccall Smith

He paused. It was necessary, he felt, to order the mind when one was about to think something profound.

That was the way the world was; it was composed of a few almost perfect people (ourselves); then there were a good many people who generally did their best but were not all that perfect (our friends and colleagues); and finally there wetre a few other nasty ones. The last group was, thankfully, very small

Spaniards want to rechristen Paul the octopus as Pablo
Indo-Asian News Service
Potchefstroom

The Spanish team has fallen in love with Paul the octopus after it predicted that Spain will beat the Netherlands in the World Cup final.
All of Paul's predictions have been true in this World Cup, bestowing international fame on the 'psychic' sea creature.
Spain's defensive midfielder Sergio Busquets said Friday that the Spaniards are in love with the octopus and and out of gratitude they want to re-christen it Pablo.
"We guess it is a Spanish octopus. We are in love with it and want to name it Pablo," said Busquets.
Paul will be hoping to keep a perfect record for South Africa 2010, having correctly predicted four Germany victories and two losses in the tournament. Paul, at the Oberhausen Sea Life aquarium in Germany, is now hated by the Germans after predicting Spain's victory over Germany in the semifinal.

Paul first shot into limelight during the 2008 European Championship during which his five out of six games involving Germany were proved correct. But in this World Cup Paul has made international headlines.
So much so that Spanish Prime Minister Jose Luis Rodriguez Zapatero is worried about the safety of "El Pulpo Paul," as he's known in Spain, and has offered Paul protection after its semifinal predictions were proved right.

Mr. Klarman is president of the Baupost Group, an investment firm in Boston that manages $22 billion. His three private partnerships have returned an annual average of around 19% since inception in 1983—and nearly 17% annually over the past decade, as stocks went nowhere.

But the professorial Mr. Klarman speaks in public about as often as the Himalayan yeti. He made an exception last Tuesday, when I interviewed him in front of a standing-room-only crowd of 1,600 financial analysts at the CFA Institute annual meeting in Boston. He then made another exception, speaking with me over the phone later to clarify points that he feared had been misconstrued.

Mr. Klarman specializes in buying securities that nauseate other investors. As the credit crisis exploded, he put more than a third of his assets into high-yield bonds and mortgage-related securities.

Some members of the audience gasped audibly when Mr. Klarman said, "The government is now in the business of giving bad advice." Later, he got more specific: "By holding interest rates at zero, the government is basically tricking the population into going long on just about every kind of security except cash, at the price of almost certainly not getting an adequate return for the risks they are running. People can't stand earning 0% on their money, so the government is forcing everyone in the investing public to speculate."

"We didn't get the value out of this crisis that we should have," Mr. Klarman told the audience. "For our parents or grandparents, it was awful to have had a Great Depression. But it was in some ways helpful to carry a Depression mentality throughout their later lives, because it meant they were thrifty with their money and prudent in their investment decisions." He added: "All we got out of this crisis was a Really Bad Couple of Weeks mentality."

You could have heard a pin drop as Mr. Klarman proclaimed, "I am more worried about the world, more broadly, than I ever have been in my career." That's because you can make good investing decisions and still end up with bad results if you reap your profits in currencies that do not hold their purchasing power, he explained.

"Will money be worth anything," asked Mr. Klarman, "if governments keep intervening anytime there's a crisis to prop things up?"

To protect against that "tail risk," said Mr. Klarman, Baupost is buying "way out-of-the-money puts on bonds"—options that have no value unless Treasury bonds plummet. "It's cheap disaster insurance for five years out," he said.

Later, I asked Mr. Klarman what he would suggest for smaller investors who share his worries.

"All the obvious hedges"—commodities and foreign currencies, for example—"are already extremely expensive," he warned.

Especially gold. "Near its all-time high, it's a very hard moment to recommend gold," said Mr. Klarman.

Mr. Klarman pointed out that his own ideas "on bottom-up opportunities in undervalued securities are more likely to be accurate than my top-down views on what's going to happen in the world at large."

And, said Mr. Klarman, one of the best ways to protect against a decline in purchasing power is to buy whatever is "out of favor, loathed and despised." So forget about gold or other trendy hedges. Instead, wait patiently for markets—European stocks, perhaps—to get so cheap that they turn most investors' stomachs. Then you can pounce. As Mr. Klarman put it, "Sometimes, when you can't figure out a good defense, the best thing to do is to go on offense."

Jason Zweig at mailto:intelligentinvestor@wsj.com;

Get a good read on the market: Pick up a book

By Andrew Feinberg
Sunday, June 13, 2010; G03

The best investors read all the time. As Berkshire Hathaway vice chairman Charlie Munger has said in assessing the success of his sidekick, Warren Buffett: "If you want to be an outlier in achievement, just sit on your ass and read most of your life."

Billionaire hedge-fund manager Bill Ackman loves to read, too, according to "Confidence Game," a fine new book about his ultimately correct bet against the shares of bond insurer MBIA. In the book, one of his best friends describes a week spent at a beach house with Ackman and his family: "Bill did what he always did on vacation" -- he read financial statements.

Why it helps. You don't have to be a compulsive consumer of 10-Ks to improve your investment performance (although the more you know about the stocks you own, the better you should do).

In my view, reading offers investors three distinct benefits. First, it crowds out the TV noise. The folks on CNBC's Fast Money may be smart, but their Whac-A-Mole approach always makes you feel as if you should be doing something -- anything -- to make a quick buck. Not a good attitude for a successful long-term investor. Second, reading helps you develop all the qualities that go into successful investing. Third, reading can give you specific investment ideas. But don't become a voracious reader to finance a Caribbean spree. You read not to make a quick killing but to learn more about the investing process and the world around you.

So where do you start? My must-read list includes wonderful books by Benjamin Graham ("The Intelligent Investor"), Seth Klarman (the hard-to-get "Margin of Safety"), Joel Greenblatt ("You Can Be a Stock Market Genius") and Philip Fisher ("Common Stocks" and "Uncommon Profits"). Michael Lewis's new book, "The Big Short," offers a terrific peek into the minds of some smart, iconoclastic investors.

But books aren't enough. You need to understand the present, too. By far the best investment publication available today, for both the astuteness of its stock picks and the depth of its study of the investment process, is the Value Investor Insight newsletter (www.valueinvestorinsight.com; $349 a year for 12 issues). I devour my monthly copy as soon as it arrives.

The next essential read is the monthly letter from Howard Marks, chairman of Oaktree Capital Management (http://www.oaktreecapital.com). Marks is a more philosophical version of Buffett, a great investor who always makes you think. In a recent missive, Marks observed that stock-market bulls were, in effect, betting that Congress would be able to cut spending. He was dubious that our elected leaders would succeed. I also find valuable the monthly comments of Bill Gross (http://www.pimco.com), the quarterly letters of Jeremy Grantham (http://www.gmo.com) and the daily commentary on RealMoney Silver (http://www.thestreet.com; $900 a year).

Most of the time, reading leads to contemplation, which keeps you from acting. That's a good thing. Most investors are too active for their own good. Having a solid background in investing history and, in particular, in value investing (the approach that works best over time) can be especially helpful at market extremes. If I had read less, I would not have been so quick to sell technology in early 2000, near the peak of the bubble, or dive into bank stocks at the market lows in March 2009.

- Kiplinger's Personal Finance

Lao Tzu quotes

• A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.
• A scholar who cherishes the love of comfort is not fit to be deemed a scholar.
• An ant on the move does more than a dozing ox.
• Be Content with what you have; rejoice in the way things are. When you realize there is nothing lacking, the whole world belongs to you.
• Being deeply loved by someone gives you strength, while loving someone deeply gives you courage.
• By letting it go it all gets done. The world is won by those who let it go. But when you try and try. The world is beyond the winning.
• Do the difficult things while they are easy and do the great things while they are small. A journey of a thousand miles must begin with a single step.
• He who obtains has little. He who scatters has much.
• He who talks more is sooner exhausted.
• Health is the greatest possession. Contentment is the greatest treasure. Confidence is the greatest friend. Non-being is the greatest joy.
• I have just three things to teach: simplicity, patience, compassion. These three are your greatest treasures.
• If you realize that all things change, there is nothing you will try to hold on to.
• If you would take, you must first give, this is the beginning of intelligence.
• In dwelling, live close to the ground. In thinking, keep to the simple. In conflict, be fair and generous. In governing, don't try to control. In work, do what you enjoy. In family life, be completely present.
• It is better to do one's own duty, however defective it may be, than to follow the duty of another, however well one may perform it. He who does his duty as his own nature reveals it, never sins.
• Kindness in words creates confidence. Kindness in thinking creates profoundness. Kindness in giving creates love.
• Manifest plainness, embrace simplicity, reduce selfishness, have few desires.
• Nature does not hurry, yet everything is accomplished.
• Respond intelligently even to unintelligent treatment.
• Silence is a source of great strength.
• The Way of the sage is to act but not to compete.
• To the mind that is still, the whole universe surrenders.
• Violence, even well intentioned, always rebounds upon oneself.
• When I let go of what I am, I become what I might be.
• When right conduct is lost, expedience appears. Expediency is the mere shadow of right and truth; it is the beginning of disorder.
• When you are content to be simply yourself and don't compare or compete, everybody will respect you.

Marie Curie

• There are sadistic scientists who hurry to hunt down errors instead of establishing the truth.

Albert Einstein

• Nothing is more destructive of respect for the government and the law of the land than passing laws which cannot be enforced.
• Once we accept our limits, we go beyond them.
• The true sign of intelligence is not knowledge but imagination.
• If you can't explain it simply, you don't understand it well enough.
• Life is like riding a bicycle. To keep your balance you must keep moving.

Benjamin Disraeli

• Justice is truth in action.

JH again

"... We need to build a sense of responsibility, a sense of pride.
We need to be ashamed to check in careless changes.
Careful code needs lots of thinking, lots of tinkering with the fix,
doing a few things with it that are a bit on the periphery,
just to make sure. Don't commit until you are comfortable with it,
until the little nagging doubts are gone.
The pressure to chalk up the next commit suppresses all that quality
time you could spend with your code.
The result is loose ends, one fix/two breaks, etc."

The Loneliest Job" Nancy Gibbs - Time Jan 25 2010.

Eisenhower recalled how as a general, before D-Day, he had to decide whether to send two paratroop divisions into a sector where 9 out of 10 would probably be slaughtered. He eventually decided the troops were essential to the mission and said, "I felt that only once in a lifetime could a problem of that sort weigh as heavily on a man's mind and heart". Then he became President and found a comparable burden :

"when one man must conscientiously, deliberately, prayerfully scrutinize every argument, every proposal, every prediction, every alternative, every probable outcome of his action, and then-all alone-make his decision. "

Graham-Style Formula
Benjamin Graham was known for his thorough financial analysis of companies, but he also experimented with many simple rules of thumb. Here is a valuation formula adapted from The Intelligent Investor:
P/E = 8.5 + 2G where P/E is the fair P/E ratio, and G is the earnings growth rate.
The idea is that you get a formula that's simple enough to use in the privacy of your own skull, without needing a computer or calculator.
There is a drawback with this formula: as written, it gives answers that are on the high side. But the good news is that with some modifications, this style formula can give you a very fair estimate of the real answer. It's almost as simple as the PEG ratio, and much more accurate.
This calculator lets you check the accuracy of the formula. (It's initialized with a more conservative version of the formula than what's given above.)

Keep it Simple and Sane (Barb Rogers) I skipped a lot of this, and just skimmed through since I felt I already do all these, but the author writes well hence had picked it up. While skimming, saw these two that capture the essence of the book and I agree wholeheartedly with both.

• If others can't see past your outsides, its because they are living with their own heaviness and limitations, and the best thing you can do is to leave them to their business and hope someday they will find some understanding.
• What does "free to be" mean? For me, it means living in the moment, exactly as Iam, doing the best that I can do, and always striving forward. It means accepting that Iam not perfect, I will never be perfect, but I don't have to be. Its about leaving other people, and a God of my understanding to their business and taking care of mine. It is not my job to change the world or anyone in it, but to live in the truth of who Iam, what I can, where and when I can, and leave the rest to a power greater than I.

SOWING AND REAPING/LAW OF RECIPROCITY

• "The universe is completely balanced and in perfect order. You will always be compensated for everything that you do." -- Brian Tracy
• "Work joyfully and peacefully, knowing that right thoughts and right efforts will inevitably bring about right results." -- James Allen
• "We are spinning our own fates, good or evil, and never to be undone. Every smallest stroke of virtue or of vice leaves its never so little scar." -- William James

• "How little praise warms out of a man the good that is in him, as the sneer of contempt which he feels is unjust, chills the ardor to excel." Edward G Bulwer-Lytton
• "There is no such thing as luck. It's a fancy name for being always at our duty, and so sure to be ready when good time comes." Edward G Bulwer-Lytton
• "Happiness and virtue rest upon each other; the best are not only the happiest, but the happiest are usually the best." Edward G Bulwer-Lytton
• "Dignity does not consist in possessing honors, but in deserving them." Aristotle
• "The energy of the mind is the essence of life." Aristotle
• "We are what we repeatedly do. Excellence, then, is not an act, but a habit." Aristotle
• "I confess I have the same fears for our South American brethren; the qualifications for self-government in society are not innate. They are the result of habit and long training, and for these they will require time and probably much suffering." Thomas Jefferson

Just got bumped up to 4.0 today. Thrilled to bits.

How we Decide

From "How we Decide" - Jonah Lehrer

• 
  
• Loss Aversion : In human decision making, losses loom larger than gains. The pain of a loss was approximately twice as potent as the pleasure generated by a gain.


• Loss aversion is part of a larger psychological phenomenon known as negativity bias, which means that for the human mind, bad is stronger than good. This is why in marital interactions, it generally takes at least five kind comments to compensate for one critical comment. The only way to avoid loss aversion is to know about it.


• How do we regulate our emotions? The answer is surprisingly simple: by thinking about them. An individual can try to figure out why he's feeling the what he's feeling.
• 
  
• Could eat one marshmallow right away or if the child was willing to wait a few minutes, could eat two. Practically all decided to wait. The marshmallow was a test of self-control. The emotional brain is always tempted by rewarding stimuli. The ability to wait was because patient children were better at using reason to control their impulses. They covered their eyes, managed to shift attention somewhere else, looked for something else to play with and not fixate on the sweet treat. This skill also allowed these kids to spend more time on their homework.
• 
  
• People with frontal-lobe ;lesions can never solve puzzles. When problem-solving, the first brain areas activated were those involved in executive control, such as the prefrontal cortex and anterior cingulate cortex. The brain was banishing irrelevant thoughts so that the task-dependent cells could properly focus. Insight required a clean slate. Most of the possibilities your brain comes up with aren't going to be useful, but then when the right answer suddenly appeared, there was an immediate realization that the puzzle had been solved. This act of recognition is performed by the prefrontal cortex.


• If the mind were infinitely powerful, information would be an unqualified good. The biological reality of the brain however is that it is severely bounded. the conscious brain can only handle about seven pieces of data at any one moment.


• Too much data can intimidate the prefrontal cortex, that's when bad decisions are made.


• Experiment with some people given a 7-digit number and others given a 3-digit number, they were offered a choice between a chocolate cake slice or a fruit bowl. The 7-digit people normally chose the cake.


• Distracting the brain with a challenging memory task made a person much more likely to give in to temptation and choose cake. the subjects' self-control was overwhelmed by the extra 5 digits.


• The effort required to memorize seven digits drew cognitive resources away from that part of the brain that normally controls emotional urges.


• A mind trying to remember lots of information is less able to exert control over its impulses.


• A slight drop is blood sugar levels can also inhibit self-control, since the frontal lobes require lots of energy in order to function.


• Students were made to watch a mentally taxing movie while ignoring the rolling text at the bottom of the screen and then some were then offered lemonade with sugar, others were given lemonade with Splenda. After giving time for the glucose to enter the brain (abt 15 mins), the students were asked to pick apartments. The students without the sugar relied on intuition and instinct rather than reason since their rational brains were just too exhausted to think.


• This research can also help explain why we are cranky when we're hungry and tired: The brain is less able to suppress the negative emotions sparked by small annoyances.


• A bad mood is really just a rundown prefrontal cortex.


• The brain relies on mental accounting since it has such limited processing abilities. These thinking problems come from the fact that we have slow, erratic CPU and the fact that we're busy. Since the prefrontal cortex can only handle seven things at the same time, its constantly trying to chunk stuff together to make the complexity of life more manageable. Instead of thinking about each M&M, we think in scoops.


• The fragility of the prefrontal cortex means that we all have to be extremely vigilant about not paying attention to unnecessary information.


• We live in a culture that's awash in information. The human brain was not designed to deal with such a surfeit of data. Being exposed to extra news was distracting.
• .
• On complicated decisions, its probably a mistake to reflect on all the options, as this inundates the prefrontal cortex with too much data.
• Use your conscious mind to acquire all the information you need for making a decision. But don't try to analyze the information with your conscious mind. Instead, go on holiday while your unconscious mind digests it. Whatever your intuition then tells you is almost certainly going to be the best choice.
• Anyone who is making difficult decisions can benefit from a more emotional thought process.As long as someone has sufficient experience in that domain-he's taken the time to train his dopamine neurons- then he shouldn't spend too much time consciously contemplating the alternatives.
• It is the easy problems that are best suited to the conscious brain. These simple decisions won't overwhelm the prefrontal cortex.
• Complex problems, on the other hand, require the processing of the emotional brain, the supercomputer of the mind. This doesn't mean you can just blink and know what to do- even the unconscious takes a little time to process the information-but it does suggest that there's a better way to make difficult decisions.

Strawberry jam: 

Consumers first picked their favorite Jam based on taste. Matched Consumer Reports reviews. 

Then I asked to explain why they prefer a particular Jam, which forced them to analyze their first impressions. All this extra analysis warped their jam judgment. 

Thinking Too much about the strawberry jam causes us to focus on all sorts of variables that actually don't matter. Instead of just listening to instinctive preferences - Best jam is associated with the most positive feelings- our rational brain search for reasons to prefer one jam over another. 

Repeated that. And with posters. 

5 posters- if subjects were divided into two groups. First was the non thinking group - instructed to Simply rate each poster on a scale from 1 to 10. The second group were given question that ask them why they liked or disliked each of the five posters. 

The members of the non-thinking group were much more satisfied with their choice of posters. SelfAnalysis resulted in less self-awareness. 

Fragility of the prefrontal cortex means that we all have to be extremely Vigilant about not paying attention to unnecessary information. When the prefrontal cortex is overwhelmed a person can no longer make sense of the situation. correlation is confused with causation. 

People in good mood are significantly better at solving hard problems that require insight then people who are cranky and depressed. The prefrontal cortex isn't preoccupied with managing emotional life, which means they're free to solve the problem at hand. 

Reason and feeling are both essential tools., each is best suited for specific tasks. Simple problems require reason on the other hand for important decisions about complex items use your emotions. It might sound ridiculous, make scientific sense: think Less about those items that you care a lot about. Don't be afraid to let your emotions choose. 

How can anyone identify the simple problems that are best suited for reason? Can the decision be accurately summarized in numerical terms? 

2 Simple tricks to help ensure that you never let certainty interfere with your judgment: First always entertain competing hypotheses. When you force yourself to interpret the facts through a different but uncomfortable lens you often discover your beliefs rest on a rather shaky Foundation. Be your own devil advocate. 

Second, continually remind yourself of what you don't know. Unknown unknowns. 

Classic again. JH

This thing has gone round and round even in the SMS, before SEOS.
All the ideas have come again and again.
I think the only way it's going to get fixed is to stay out of the way and let a few people that are majorly impacted to go ahead and just do it. Then the rest of us will follow.
Otherwise it will just never happen.
BGP will go with the flow, absorb any changes that may happen.

iWise bookmarks from iphone

• "A mind always employed is always happy. This is the true secret, the grand recipe, for felicity." Thomas Jefferson
• "When angry, count ten before you speak; if very angry, a hundred." Thomas Jefferson
• "Our greatest happiness does not depend on the condition of life in which chance has placed us, but is always the result of a good conscience, good health, occupation, and freedom in all just pursuits." Thomas Jefferson
• "I confess I have the same fears for our South American brethren; the qualifications for self-government in society are not innate. They are the result of habit and long training, and for these they will require time and probably much suffering." Thomas Jefferson
• ""Determine never to be idle. No person will have occasion to complain of the want of time who never loses any. It is wonderful how much may be done if we are always doing." Thomas Jefferson
• "Happiness is not being pained in body or troubled in mind." Thomas Jefferson
• "Never put off till tomorrow what you can do today." Thomas Jefferson
• "Honesty is the first chapter in the book of wisdom." Thomas Jefferson
• "I'm a great believer in luck, and I find the harder I work, the more I have of it." Thomas Jefferson
• "There is a natural aristocracy among men. The grounds of this are virtue and talents." Thomas Jefferson
• "Let us have faith that right makes might, and in that faith let us dare to do our duty as we understand it." Abraham Lincoln
• "Faithfulness and sincerity are the highest things." Confucius
• "The man of virtue makes the difficulty to be overcome his first business, and success only a subsequent consideration." Confucius
• "To be wronged is nothing unless you continue to remember it." Confucius
• "Follow your instincts. That's where true wisdom manifests itself." Oprah Winfrey
• "That guy just cut right in front of me. But I'm not going to let it bother me. No. I'm on my way to work and I decided it doesn't matter who wants to cut in front of my lane today. I'm not going to let it bother me one bit. Once I get to work, find myself a parking space, if somebody wants to jump ahead of me and take it, I'm going to let them." Oprah Winfrey
• "Well done is better than well said." Benjamin Franklin
• "Our critics are our friends; they show us our faults." Benjamin Franklin
• "Rather go to bed with out dinner than to rise in debt." Benjamin Franklin
• "A penny saved is a penny earned." Benjamin Franklin
• "Necessity never made a good bargain." Benjamin Franklin
• "Take time for all things; great haste makes great waste." Benjamin Franklin
• "Whatever is begun in anger, ends in shame." Benjamin Franklin
• "Sloth makes all things difficult, but industry, all things easy. He that rises late must trot all day, and shall scarce overtake his business at night, while laziness travels so slowly that poverty soon overtakes him." Benjamin Franklin
• "Would you persuade, speak of interest, not of reason." Benjamin Franklin
• "Would you live with ease, do what you ought, and not what you please." Benjamin Franklin
• "I find my greatest pleasure, and so my reward, in the work that precedes what the world calls success." Thomas A Edison
• "Insults are the arguments employed by those who are in the wrong." Jean Jacques Rousseau
• "The true measure of a man is how he treats someone who can do him absolutely no good." Samuel Johnson
• "The only tyrant I accept in this world is the still voice within." Mahatma Gandhi
• "It is the quality of our work which will please God and not the quantity." Mahatma Gandhi
• ""Quarrel not at all. No man resolved to make the most of himself can spare time for personal contention. Still less can he afford to take all the consequences, including the vitiating of his temper and loss of self control. Yield larger things to which you can show no more than equal right; and yield lesser ones, though clearly your own. Better give your path to a dog than be bitten by him in contesting for the right. Even killing the dog would not cure the bite." Abraham Lincoln
• "We should be too big to take offense and too noble to give it." Abraham Lincoln
• "Let reverence for the laws be breathed by every American mother to the lisping babe that prattles on her lap. Let it be taught in schools, in seminaries, and in colleges. Let it be written in primers, spelling books, and in almanacs. Let it be preached from the pulpit, proclaimed in legislative halls, and enforced in the courts of justice. And, in short, let it become the political religion of the nation." Abraham Lincoln
• "Lets have faith that right makes might and in that faith let us, to the end, dare to do our duty as we understand it." Abraham Lincoln
• "Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough." Abraham Lincoln

Priceless!

Topic Comment: (Topic level)
Comment: I've seen this review go back and forth for weeks for silly editorial comments about spacing, bla bla. This is not progress that shareholders pay you for.
Enough already with the editorials.
Please stick to actual bugs you find or shut up.


Sorry about the language. Here it is again in better language:
Readability is good, but maintainability is paramount. Haggling over small syntactic issues is unreasonable.

Did it make the slightest difference that she published the Philosophical Review? She put the thought out of her mind, it was simply wrong as undermining doubts so often are.