Pitfalls of vicarious learning – Some of life is to be lived and experienced

By: Heero Yuy

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Emotions are fundamental motivators for production. Salsa singer and writer Marc Anthony once said in an interview that he writes music whether he is happy or depressed. Likewise, this post originates from anger but invokes thought that has some resounding truth.

Once upon a time I had a conversation with two wise sages. They were trying very hard to impose their seniority and experience in the Corporate world to justify their valuation of my worth to Corporate america. As wise as these sages may be, they were not experienced in human resources, finance, or career coaching or counseling. As we moved from the abstract of their thesis to full bodies of arguments where I interrupted and asked a few questions. You see, in my world, the world of experience in the military, we did different things and those things also had different functions and values. I asked the following question:

  • Did you ever land a helicopter on a moving ship pitching and rolling with adverse winds, foggy conditions, and cloudy skies with low visibility?
  • Have you ever dove under the water to simulate the attacking force trying to defeat and disable a ship?
  • Lead men into combat scenarios and man damage control stations to be able to fight fires to save the lives of everyone at work?
  • Have the lives of other men and women placed in your hands whom entrusted their safety and well being to your ever watchful eyes and clear guidance to land a helicopter in adverse conditions as mentioned above?
  • Star gazed in the middle of the Ocean under a clear sky with zero light pollution except that of the ship you are on?
  • Saw the golden sunrise and the ocean turn orange under the purple sky with sunset everyday?
  • Fish for Tuna at the fantail of the ship on a low speed cruise?
  • Etc

To all these questions were of course met with a resounding response of “No.” To this I say “You of little experience regardless of your own perceived wisdom.” Everyone reading this vicariously considered in their imaginations what those experiences above might have felt like and then a luck few were with me through those experiences know FROM their OWN experience how that FEELS like themselves. The experiences of the two sages were undoubtedly valid for their own perception of the Corporate world. They do not possess the aptitude, without experiencing it themselves, to fully valuate the entirety of my experience based on their vicarious understandings. I know from experience, they know from a story produced by experience. Life on the Oceans is a poetic and surreal experience that, if survived, can greatly broaden the spectrum of emotional and intellectual capacity of a human being beyond measure (at least much more so than a regular 9-5 office/monitor/keyboard+mouse routine). We lived on the limit.

Can you truly learn and understand everything from reading alone?

My previous article on Experiences talks about reading and learning from others. While this establishes a good baseline to form experiences of your own while avoiding a lot of pitfalls that were previously identified, it does not excuse a person from living and experiences things for themselves! Experimental vs theoretical science and reality is the ultimate litmus test (proof is in the pudding).

For if anything is written, it had to have been experienced or done first by someone in order to start the learning process.*

*Note: Assuming that the knowledge is genuine and not meant to deceive or mislead the audience.

Think about the statement above for a moment. Someone had to have taught Lao Tzu in order for him to teach others. That someone learned it from someone who did it themselves to be able to teach it in the first place. Therefore, all wisdom originates from an original experience or a group of experiences. Experience are the bricks used by philosopher’s mortar to conceptualize their theories.

No matter how wise a person may seem to be, we are all limited by time and our respective limited experiences. Since time doesn’t work for us but against, no one person can be infinitely wise. Our only hope is that the collective whole can in time grow to be ever more wise so as to avoid the pitfalls of the past treading into the intrepid unknown and hopeful future.

Market Making – Salesman and the Modern World

By: Heero Yuy

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The other name that we best know for Market Makers is “Middle Man.” Someone steps in the middle to broker (make the deal happen) any particular business transaction of a service or product. Market Making is the business of these Market Makers or “Middle Man” in attempts to provide that product or service to other individuals.

A real estate agent/broker for instance makes a market for those who are looking to buy or sell a home. They do this for a set percentage (%) of the value of the Real Estate being sold and this commission is charged to the seller of the home to be split between the two respective agents (buyer and seller agents).

i.e. A 6% commission split down the middle (3%/3% for buyer/seller agent) for a house sold at $400,000 comes out to a payday of $12,000 for each realtor. On a house that’s worth $2.4 million the same 6% commission for a 3%/3% split would come out to be about $72,000 for EACH realtor!

Key take away from the above example is that the higher dollar item you buy or sell, the larger the commission. Obviously, there is a higher chance of selling more houses at $400,000 vs houses at $2.4 million. Relative success of the Market Makers depend on the volume of goods they sell at a respectable price point and the commission structure for doing the business.

In the stock market the Market Maker buys stock from clients who are looking to sell and then sells stock to clients who are looking to buy. Much of this is done by machines these days but the bid-ask spread is how a stockbroker makes a living. The difference between the buy and sell price is the commission that the stockbroker makes on top of the flat commission fee charged for a buy or sell transaction OR they have a commission per share structure. This topic is explored in many popular culture movies such as:

Bankers are simply buyers (Hedge Funds, Private Equity, Venture Capital) and sellers (Investment Banking – think IPO) of business and institutions and it’s credit and debts. For further reading on market making in the stock market please reference Max Dama on Automated Trading. Max works as a low latency algorithmic trader now at Headlands Technologies in Chicago. His piece on automated trading elegantly explains all markets and leads the reader through the history of markets from ancient Bazaars to the modern day algorithmic battlefields of Wall Street.

In inventory control they talk about market making in terms of turnover rates and throughput rates in a manufacturing or warehousing setting. All the pieces that makes the market can be machines (conveyor systems, forklifts, etc) or human operators that puts items into boxes for shipments. In the military it is about: How many rounds can you get down range, how many hits on target, and how fast can you take down the enemy force? Our entire economy depends on this life-cycle of brokering different products or services to different markets at the right price for a fee. Market Makers are essentially salesman. Apple sells phones, Tesla sells cars, celebrities through the canvas of film sell dreams.

Let’s follow that last analogy of being a salesman. Sales has a negative connotation in society because we think about used car dealers or door to door sales man when we hear the word salesman. However, people who sell enterprise software ($200k+ salary), medical devices ($150k+), high-end car ($150-300k), real estate agents ($100k+), and commercial machinery ($100k+) are also considered salesman. What other individuals can be counted in this category of salesman?

Most of us are lead to believe that we have to go to college in order to make a decent wage, then get a Masters (MBA, MS, etc), Doctorate (PhD), become a Doctor (MD) or Lawyer (JD) in order to become successful and revered in life. The product here are the varying levels of degrees/education, the pushers (advertisers and promoters) being journalists that review and rank the relative prestige of these schools, teachers who tell (sell) students this idea as the true path to financial well-being, parents who promote the ideologies of the teacher and journalist as it is well known to them, financial institutions and Federal government handing out money with interest (Student loans) to make this market happen, and then the individual student being shuffled through this assembly line(s) on his or her way to worldly success.

How important we are is gauged by our relative success in how we navigate through this multi-layered market making process and what value society assigns us for our efforts ($/hr, salary/year, etc). Teacher sells ideas and dreams, journalists sell schools and products or services related to the school finding and admissions process, financial institutions and the Government sells student loans (debt), and we as individuals buy it all up with the hope of paying off all the principal, fees, and interest associated with taking this (long) position in the educational process. The (monopolistic) market is made.

We can find salesman or Market Makers in all walks of life using the above vantage point. The priests sell salvation thru religious texts, the rapper sells music, the mechanic sells services, airlines sell tickets for individuals on travel, Sporting events sells entertainment, Social-media sells clout and social acceptance, the news and media sells fear, etc. This can ONLY happen if there is some significant financial upside for the Market Makers. If there were none then we would go back to a non-Capitalistic society that involves clubbing people on the head to eat their lunch (sarcasm).

“Anything worth doing is worth doing for a buck” – Gordon Gekko, Wall Street (1987) 

This post explains broadly the process of Market Making and Market Makers. It is crucial to understand this concept as you read future posts so that you can track who is the winner and loser of each transaction (trade) and how much risk each party takes on for doing (brokering) the deal. Knowing the background information on how markets are made will allow you to make better decisions, financially and otherwise, so that you know how to come out on top more times than getting the short-end of the stick! (Positive expected returns or Alpha)

Direction – The Lighthouse in a dark and foggy night

By: Heero Yuy

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I thought it appropriate to start the first blog post with direction because without it we may be lost forever navigating in the vast oceans of life. Emphasis should be placed on direction and not solution(s) because life is ever evolving for the players, environment, or game itself. In mainstream media articles can be found written by gurus purporting “# Steps used by Successful People” or “XYZ Effective Ways of dealing with ABC.”

The issue with the general consumption of these articles is that the reader is lead to believe that all will be well after they’ve successfully implemented the prescribed plan of action and life will be peachy living it happily ever after. For many of us we know this is not true because the article is written in such a way to have renewed subscription for readership, mainly to generate ad revenue and/or sell products and services of the respective gurus, so as to lead the audience to chase endlessly for the carrot or the next carrot that will solve all their problems. It never will.

What if life was never meant to be “fixed” and we live constantly in a continuous battle daily with wars waged internally in our minds between positive and negative thoughts and externally through physical exertion or conflicts with outside forces? If this were true, then any solution we throw at the problem of life is simply a band-aid solution to an everlasting problem that is essentially unsolvable. For any one or groups of guru to prescribe a possible solution to an unsolvable problem would make them a genius or a pauper with no fan base. Life is hard and people have been trying to figure it out for thousands of years with limited success. How do I know this? Because men such as Voltaire and Leibniz came upon an idea of the “best of all possible worlds.” We aren’t in it because our society is still imperfect after all these iterations so therefore we really haven’t figured it out.

Direction is fundamentally different than solution(s) but has also possess similar qualities. Google Maps can provide you a list of directions with steps telling you when to turn and where to go in an orderly fashion. Google Maps can also re-direct you if you go off-course to go back onto the path of least time expended to get to your final destination. In this case, Google does the solution or thinking for you to get you back on course with a new set of directions. Solutions would be like using print-out directions from MapQuest (for those of us who still know what that is). A guru like MapQuest would tell you how to get from point A to point B with a set of instructions and wish you the best of luck. If for some reason you go off course in the days before Google Maps, TomTom, Garmin, or any other GPS tracking system you better hope you have a printed map of your current area. Claiming to be a solution without the appropriate thought process or heuristics to dynamically adjust course is driving blind. You will quickly get lost and eventually ask the locals for direction.

The poem “Invictus” by Henley below best describes the purpose of this site and the view on direction for life. This excerpt from Invictus best describes gaining that direction for life:

“I am the master of my fate,
I am the captain of my soul.”

Source: Invictus by William Ernest Henley (Poem)

I don’t have all the answers and my life is just as messed up as anyone else’s if not worse. Haha! Yes, I just laughed at that statement because laughter is a great medicine for a lot of ailments of the heart, mind, and soul. So, life isn’t perfect and there isn’t a pot of gold at the end of the rainbow if the rainbow exists in the first place. We won’t ever get that carrot at the end of the stick but are still told to run the race because that’s all we know. Anyone competent can wax philosophies about how messed up our world is and at the end still come away empty handed as if to shake ones fist and scream at the cloud filled night and stormy seas for not revealing the shining celestial salvation when your ship is rocked about in rough waters.

So what? With a strong sense that you are still the master of your own fate and captain of your own soul, as long as the ship weathers the storm you live to fight and navigate another day. That’s the beauty of having a sense of direction (vision, purpose, goals).

I’m here to share knowledge, stories, and wisdom so that others may also find their own sense of direction and sail to their respective peaceful shores. We collectively are lighthouses for each others lives in the journey of life. Through sharing experiences by storytelling we can act as guides to each other in the darkest of nights.

“Give a man a fish, and you feed him for a day.
Teach a man to fish, and you feed him for a lifetime.”