What can Santa teach us about innovation?

I'm sure you remember the feeling. That unparalleled heart break. The disappointment. The force of reality's hand when it smacked you in the face and told you that Santa didn't exist. If you were like me, you probably cried until your eyes dried. You probably even had a tough time looking at your parents for at LEAST a couple of days.

Now rewind this moment to a year earlier.

If I walked up to you and told you that Santa Claus didn't exist would you believe me? Probably not. You would tell me something along the lines of "Nuh-uh my mom said he does. Plus, who do you think eats the cookies, stupid? My dad?!? No way he does!"

In this moment of our lives our parents build conventions that we guide our entire belief system on. To us, they are the equivalent of human Google's since they know everything. It isn't until later that we realize their faults.

What's the moral of the story?

What you think is true, probably isn't. What you think is right, is probably wrong. And what you think is for the best, is probably doing more damage than you can imagine. Thus if we want to be true innovators and create paradigm shifts against convention, we must be willing to accept that our life experiences may not provide us with a true representation of what is 'best.' Unfortunately this is easier said than done as embracing uncertainty is against our human nature. Similar to how you wouldn't have believed me when I told you Santa wasn't real.

Now, I write this without mentioning the 'professional' workplace as I've come to learn that it is not 'professionally' acceptable in most places to walk into your boss's office and prove him/her wrong. Plus, I don't want to have your firing on my conscience. So remember, this is just my unqualified opinion.....

My Problem with the NBA Lockout...

I have to admit, I’m a pretty cool guy. Soooooo cool that I’ll give you the privilege of buying me a house so I can throw my INSANE parties with all the top celebrities and because you bought me the house you’re now invited as well. But I there’s rules you have to play with. Once you buy me this house, I can do as I choose. I can throw parties, or not, and that’s completely up to me.

You in?

Probably not.

You see I’m a firm believer that business owners should have the right to do whatever they want to do with their business as long as they 1) obey laws and 2) pay taxes. But when they take a bite of the forbidden fruit and accept public funding those rules change. At that point they have an obligation greater than themselves. And this is where my problem with the NBA Lockout starts.

Owners (some not all) wanted tax payers to pay for new arenas, and they did. But now they are in the middle of a labor dispute and have chosen to completely disregard the hand that fed them.  In any other business context, I wouldn’t be at odds with decision. But the NBA isn’t any other business. Those owners that accepted public funding have to understand that they have a moral economic responsibility to the municipalities that help fund their place of business.

They made their bed and now is their time to sleep in it.

But this is just my unqualified opinion…..

How will Millenials Change the Way Companies are Managed?

The moment man created a vehicle called a business to increase his personal net worth, he understood that the Management of this vehicle's people/resources would is critical. Hundreds of years later, the manners in which companies are managed have changed but the interest in finding effective methods remains in high demand. This is why if you go to any bookstore and you will find entire sections dedicated to the topic of 'management,' as a matter of fact, management even has its own genre.

From Carnegie to Drucker and from Scott to Gladwell, the underlying message rarely differs. As a matter of fact, each author's respective messages are quite congruent to one another, and that is "to effectively manage people you have to understand how they function."  Thus as society's general mindset evolves as each generation passes, the methods of how to manage them will evolve as well. Which begs the question; "How will companies manage its employees' once Millenials like myself start to dominate the workforce?"

Photo was obtained from http://www.flowtown.com/blog/who-are-the-millennials

I predict that The Google approach to managing employees will be even more dominant in the market place then it is now.  That is ‘provide an employee with an environment that induces and rewards high performances, but also maintains accountability for production.’ In addition, although the prototypical corporate ladder will still exist, the interaction/compensation between the different layers will differ as drastically as we value work life balance just as much, if not more than our career advancement. This will lead to many superbly qualified employees choosing to stay in their job roles instead of advancing to the next level. However, as they are 'high performers' companies will find ways to still maximize their potential without requiring the prototypical promotion.

But this is just my unqualified opinion…..

My Promise to Myself.

Some say that people really learn to grow up during their college years. Personally, I think that’s a bunch crap. College is intended to be fun and class is what you do in your spare time.  Yeah, you have to deal with commitments, priorities, all your teachers intentionally scheduling all exams on the same week, and outside sources of stress (I.E. family issues, personal issues, having to find out where the best party is at, etc.). However during those years, the structure of the environment hinders your ability to be tested on a personal note as your exams ALWAYS have a right answer, and unfortunately most of the greatest issues we deal with in life have none..........I had to this the hard way.

 I would be lying if I told you my transition immediately following college was easy. I was forced to change the routine I had perfected and was forced to bid my farewell to the carefree, easy-going life I once had. No longer was I able to spend countless hours at the gym, or just hanging out with friends.

As the supply of my free time was now scarce, I had millions of reasons as to why it's okay for me to not spend time at the gym and work out. However, somewhere in between my 14 hour work days that consisted of me sitting at a desk, and the endless supply of brownies, M&M’s, Snickers, cupcakes, Skittles, Starburst and cookies that exist in audit rooms, I realized I had to change my ways. If not, the consequences could be damaging to my personal health. This is when I made the following promise to myself:

“I don’t care how many hours I work the day before, or how scarce time truly Is, nothing is going to stop me from waking up every day and going to the gym. I may not be able to spend multiple hours anymore, so that means I have to go as hard as possible for the 45 minutes to an hour I do have.”

Prior to making this promise to myself I was NEVER a morning person. However as I never knew what time I’m going to get home, but did know what time I was going to be waking up, morning workouts were the only option to build consistency.

The results of this promise have been great.  I feel better physically than I ever have before, although I still sit behind a desk up to 12-13 hours a day on many occasions.  And I encourage you to do the same. We all have priorities, we all have time constraints and we all can make a million excuses. However, the beautiful thing about personal fitness is that no one else can do it for you. You just have to get up and do it. And I promise you that with time the 'forced' feeling you get will diminish and your routine will become a habit.

Lastly, this is NOT a promise that I made to please other people and I hope it's the same for you. Instead this was just my reaction after I was confronted with a problem that had no ‘right’ answer and this is something I didn’t have to deal with in college.

But this is just my unqualified opinion….

My Ongoing Battle with Professionalism

I have to admit that I am having a tough time coming to grasp with the fact that the way I act at work has to differ from the way I act outside of it. Sure, I shouldn't talk to my clients/customers the same way I talk to my friends, but that's probably because they won't understand a single word I tell them.  But does this mean that I shouldn't talk to them as regular people, and should only address them as professionals? Or should I refrain from being my happy-go-lucky self as some people may think such a positive outlook is annoying?

My response?...... The hell with it.

So what if some people are annoyed by the fact that Wednesday's are my favorite day of the week and that I wake up every morning with the energy of a freaking rocket? That's who I am. It's in my DNA. Don't blame me. Blame genetics.

But it is this exact type of thinking that's caused me to feel like I'm the professional version

 of

Zack Morris from Bayside High. Which makes it only natural for the  Principal Belding's of the world to have a love/hate relationship with my way of being. They hate that I tend to be a little too eclectic for their liking, yet they love watching me build relationships with colleagues, clients, and yes even the cleaning people.

Yes, I'm that guy; the fun but productive type. The type who actually believes it is possible to do your job without having to be miserable and hating life. Quite frankly, I think the happier you are, the more productive you are. But for some odd reason the same world that applauds Steve Jobs' innovativeness and unconventional actions chooses to penalize those who don't follow ALL of the unwritten rules of business.

Please make sure that your fingers are crossed properly, that you have proper posture, that you use the right fork when you eat, and NEVER and I mean NEEVVEEERR put salt on your food before you taste it. Those things just wreak of unprofessionalism. 

 Personally, I think most people love the innovator........when they don't have to deal with them. However, when that person is active in their lives and is questioning the way things are being done, most of the time, they are penalized for it. Those in charge resort to the “how-can-you-question-my-methods-when-I've-been-doing-this-for-20-plus-years” argument.

Please note that although I look up to, and value, those who have credible experiences, I do believe that the moment someone reserves to a function of time (which also happens to be the ONE thing in this world we can't control) as their sole argument to demonstrate their superiority, they have failed. And this is where my battle with professionalism starts.

I'm expected to act a certain way, to talk a certain way, hell, even to think a certain way. To be professional, I must act in a way that is within the unwritten rules of business. However, fortunately, or unfortunately, I'm stubborn and think this is a bunch of horse shhhhhhhh...oes. Horse shoes, you dirty mind (I'm trying to stop cursing as it is not considered professional to do so).

You see I try to live by a certain model and that is that I rather be considered unprofessional and genuine, than be thought of as professional but full of shit.  Oopps. I cursed.... I told you I'm still a work in progress.  

But this is just my unqualified opinion.....

The Lesson Learned in Amazon's Dip.

Yesterday Amazon disappointed its investors with their quarterly earnings report, and their Q4 projections, which caused its share price tanked to 225.89, a 12% loss of value. Essentially that report drove investors to believe that the company's value (Market Cap) needed to have a downward adjustment of a whopping $12.4B.

It is a given that volatility is deeply embedded in the composition of the equity markets. Similar to how you must cope with the fact that the sun is going to rise tomorrow morning whether you like it or not (For those who don't live in the Arctic Circle of course), you must be able to accept that in the short-term the value of your investment is going to fluctuate. However, what can be learned from Amazon's recent 12% drop? What exactly can we do as small investors to minimize such risk absent of using options as a hedge?

The valuable lesson is this; the general consensus regarding Amazon is that it's a high growth stock. However, this belief has been 'priced' into the stock price, which explains why it was/is trading greater than 100 times earnings.

Now, although price per share is the ultimately the driving variable of how much we profit/lose, P/E (Price Earnings) can help us form determine how 'patient' investors will be with their investment. And level of tolerance/patient can dramatize a stock's volatility. Thus with Amazon, its P/E indicates that the market will overreact to any of its missteps, or anything positive (:cough cough: Kindle Fire).

Please be mindful that such behaviour is not only present in financial markets, for instance, the general public is quick to label a top overall pick a bust, but will allow later round selections to develop over time. Two different worlds, but the same mentality and this where someone is drafted (plus the amount of money that is paid to them of course) indicates what is IMMEDIATELY expected of them.  Thus in the short term any of the player's accomplishments, or mistakes, will be taken out of context because so much is at risk and with risk comes the distortion of common sense.

But this is just my unqualified opinion....

Don't Lose Yourself in Details That Don't Matter

Imagine that you suddenly you get the urge to go fishing. However, you don't want to catch just a couple of small fish and call it a day. You want to go for the home run, the big thrill, the big whammy, the type of fish that puts up a fight you remember for a lifetime, but before you set off on your mission you suddenly realize you don't have a boat nor a rod that can reel in this fish the size of a small whale. So you go to Bass Pro Shops and buy yourself the Contender you've always wanted......yes that one. The one with ALL the bells and whistles; state of the art fish finder included.

As for the rod and reel, you realize you need one that can haul in the world's biggest fish because EVERYBODY knows that nothing is worse than losing the big one.

Okay that's it, NOW you're ready.

The next morning you wake up at the crack of dawn, because you know what they say 'the early bird gets the worm' but in this case you'll be catching the fish.

You stop by your favourite bait shop on your way to put that awesome boat of yours in the water and next thing you know that beautiful Contender is in the water and you can't be any happier. While the wind is hitting you in the face and that amazing smell of the sea is running through you knows you realize that today is your lucky day, and you just know it.

You spend the entire day out at sea, but unfortunately you come home only with a couple of small fish, exactly what you didn't want. Therefore, you're practically in the same position you were before. Except that now you're a couple grand in the hole and this happened because you spent more time focusing on things you 'wanted' rather than things you 'needed' which unfortunately happens to us in all aspects of our lives........... including in business.

To avoid our own personal recklessness, we must train ourselves to disallow our personal subjections from contorting reality and causing our needs and wants to become of equal value; especially, if we wish to be in complete control of our personal and financial well-being. However seeing past details is often tough as it is difficult to define what exactly constitutes a meaningless detail from those that do, but only you can answer that question.

Next time you are in a situation that may require critical self-analysis ask yourself "How exactly does this particular action I'm about to partake in impact my life/business and do I have to do it?" The answer to that question should reveal it all. And remember, personal and financial success isn't about having the right boat, or the right reel, instead it about knowing the right spots to fish, the right bait to use, and the right time to day to fish. The boat is just a way for us to pat ourselves in the back just in case we fail. Cause hell, you may not have caught the fish but at least you got a brand new Contender you can enjoy...........until your payments are due.

But that is just my unqualified opinion..........

Are Some Accounting Methods PED’s in the Game of Financial Reporting?

What would you think if a coach went bet against his own team? Do you believe he should be vilified, or should he be applauded for capitalizing on an opportunity to make some extra money? Well history has taught us that this is the ultimate sin in sports, but what if it was a company, instead of a coach, who was betting against itself? Should they be applauded for capitalizing this opportunity in the wonderful world of financial instruments? If not, then why should they be allowed to report “gains” if they don’t represent anything of true economic substance?

Recently, many of the major banks reported “earnings” exceeding most analyst expectations. However
the market responded negatively to the news. For example, Citi’s stock opened at 28.40 on Oct 17^th and

closed at 27.93, a 1.65% drop, on THE SAME DAY it beat analyst’ EPS expectations by $0.51. The driving force behind the decrease was that investors thought those earnings lacked “true substance”, since net income was inflated by gains pertaining to their credit default swaps AGAINST THEIR OWN DEBT!

Yes, you did not misread that. Citi, like most banks, bet AGAINST themselves and since they ended up being right, they were able to record a “gain” when they adjusted this bet to fair value. No, this is not financial reporting fraud, or a malicious attempt to mislead investors. Banks were forced to report this gain if they wanted to be in accordance with GAAP thanks to FAS 157.

The purpose of this post is not to discuss the mechanics of fair value accounting, or to discuss the exact reasons why banks were allowed to benefit from CVA's (credit valuation adjustments). Instead the purpose is to question the value of accounting in the role of financial reporting.

Accounting is supposed to provide useful information to the users of the financial statements, not mislead them. When the market reacts negatively to a company’s reported “earnings” that were in no way in violation of GAAP, this objective is not being met. Why do investors have to “unwrap” financial gains to arrive at a company’s true economic gain?

Just like many people argue regarding Barry Bonds, the only thing missing next to the banks earnings report was an “asterisk."

But this is just my unqualified opinion….*

A Valuable Lesson in Interviewing

My junior year in college I thought I had it all figured out. I was a 4.0 student who was also involved on campus.  In all honestly, at that point in time of my life finding a job was the least of my worries, thus when I was able lock an on-campus interview with a Big Four accounting firm I thought I already had it in the bag In my mind, no one deserved that job more than I did, and I'll be damned if anyone wanted it more than I did. 'Making it' was my destiny thus nothing could stop me now. However, just when I thought I had it in the books...........reality struck when I sat down in the interview waiting room.

There I was. A young, completely ignorant kid sitting next to a guy with a Bachelor's in Finance AND Economics, and was working on his Master's in Accounting. The man had dark hair slicked all the way back. If I didn't know any better, I would've thought this man was a young Gordon Gecko.

To make things worse, I didn't own a suit so I was sitting there suit-less with NO tie AND I had an exam immediately following the interview so instead of chatting it up with the recruiters, I was studying. I would be lying to you if I tell you that I didn't contemplate just walking out and running to my momma. Hell, I was completely and utterly embarrassed. How can I, a young kid with no experience, even be allowed to breathe the same air that this incredibly educated man next to me was breathing? Quite frankly, I was convinced Bank of America was secretly charging me for this privilege, but when I checked my bank account it was just the other ridiculous fees they charged.

Just when I started to pack my books up to walk out, the recruiter called my name and it was my turn. I then took a look at my watch and noticed that THEY WERE RUNNING 15 MINUTES LATE! Now, am I not only going to continue to be unemployed, but I'm going to fail an exam as my professor refuses to allow students to enter an exam late. This was quickly turning into one crappy day.

I had to do SOMETHING and it was at this time I went with the 'I-got-nothing-to-lose' approach. I decided before I even walked in that since I have absolutely NO CHANCE of getting this job, I rather be on-time to my exam instead. So I told my interviewer prior to sitting down that, I was going to have to head out early as I had a test to attend. To my surprise he didn't slap me, and was quite receptive. I figured this was cause the earlier I left his presence the better since he had young Mr. Gecko in the on-deck circle coming up to bat after me.

Then the usual interview took place. I tried to be the best me I could be. I didn't lie. I didn't try to make myself out to be anyone I wasn't. I told the interviewer I had little to no experience and that I had never really been in professional environment before. I even told him that my parents were immigrants and they weren't professionals either. I tried to find common ground and engage in small talk, but just as he got going telling me all about himself I looked at my watch and I had 5 minutes until my class started, so I stopped him mid-sentence and told him I had to go. I shook his hand and I went on my way figuring that I will never hear from them again. To my surprise, a couple weeks later I answer my phone and it was them. They wanted to bring me in for their office interviews.

Now I'm certainly not suggesting you to try what I did when you have your next interview, but I think there is a valuable lessoned to be learned from my experience. And that is qualifications/experience are important, however your soft skills can overcome short comings in those areas. For some reason, the interviewer saw something in me that he didn't see in Young Gecko.  Therefore, next time you have an interview to attend please keep in mind the following:

·         The human element is the most powerful weapon in your arsenal to win that job. You can have the IQ of Einstein but if you have the social skills of a doorknob chances are it's going to be tough for you to get the gig. Especially if the job entails client service.

·         When you're interviewing don't forget the importance of the relationship you are building with the person whose interviewing you (A big plus if you already built a relationship prior to the interview). Thus, find common ground to talk about. It's been my experience that the best interviews rarely discuss the actual job at hand. 

·         Give the interviewer a chance to answer any question you may have. Well I take that back, not 'any' question. In an interview there is such thing as a dumb question, therefore give the interviewer a chance to answer any 'good' question you may have. Then carefully listen to the response you get.

·         Be confident when you're walking into that interview room and don't worry about what you can't offer, instead focus on what you can.

But then again, this is just my unqualified opinion.....

Why Blog My Unqualified Opinion?

As a Big Four auditor I tend to be confined to the same place for extended periods of time and unfortunately this doesn’t go well with my personality (I tend to be on the slightly over-active side of the spectrum). Quite frankly, I was once the kid who got lost from his parents in Disney World because I wanted to find Mickey Mouse myself. As well as the kid who decided to jump off the 2nd floor after watching Superman. Ironically enough, that was also the day I learned about the law of gravity.  I was also the kid who thought he was old enough to drive a jet-ski at the age of 10, but learned I wasn't quite ready.........a fence and a totalled jet-ski later.

Now, although a couple of years have passed from those days, I think very few things have changed that don't come with time. I'm still the same free-flowing, independent person with a wandering mind. I just so happen to work in an environment that is the complete opposite of how I would describe myself......except for the independent part Mr. SEC. I'm always 'independent in fact AND appearance.'

However because I spend many-a-days sitting in a cube/conference room for 10 plus hours, I often find myself analyzing all types of macro and micro issues. This is where this blog fits. Through this medium, I will do my best of funnelling my wandering mind for your amusement/entertainment. I will be addressing all topics relative to me in the world of business, fitness, self improvement, etc, with the sole intention of adding value to your life.

As such, I hope you enjoy My Unqualified Opinion.