Sometimes, all you need to do is look at things from a different perspective.
Nov 11, 2020
105 Stashed Ideas
Long-term thinking is more challenging than most people imagine. It is then also more lucrative than many people think.
The long run consists of a collection of short runs that you have to put up with: recessions, bear markets, meltdowns and surprises. Instead of assuming long-term thinkers don't have to deal with nonsense, the question is how you can endure all the short uphills.
Many companies use the insights of financial managers and external consultants to manage their risk. A one-size-fits-all solution is not yet in existence when it comes to risk management.
These companies usually use derivatives like forwards, options, swaps and futures to offset their risk, but without a clear set of risk-management goals, the use of derivatives can increase the risk substantially.
Our emotions are obsessed with the present moment because it’s difficult to look past our immediate fears and anxieties. And this prevents good decision-making.
The sweet spot in decision-making is to find the short-term failures that enable huge long-term successes to happen in the first place.
When we look at situations, we prefer to look for what is distinct. Instead, we should pay attention to the similarities.
The four words "this time is different" makes us incorrectly think that differences are more valuable than similarities. When your reasoning and plans are based on the differences, you are probably speculating.
The triple constraint theory tells us that every project operates within the boundaries set by three constraints:
These constraints are inter-connected. If you change something about one of them, the other two will be impacted as well. A manager has to find the best combination of these three constraints.
A personal touch is a nice trick to create an impactful conclusion.
The readers will identify and would feel a connection with the personal story humanizing the subject at hand.
We tend to pay attention to the present at the expense of the future. Our present self will eat an extra piece of cake, or skip a training session, or procrastinate and leave our future self to deal with the consequences. This is known as temporal discounting.
While in-the-moment decisions don't feel like a big deal, they add up over time.