The Prospecting Professor

Teddy Roosevelt on Leadership

It was on this day in 1906 that Teddy Roosevelt became the first ever American president to leave the country while in office. He went to view the construction site of the Panama Canal.

Before Roosevelt, it was assumed that a President of the United States couldn't oversee the country effectively if he traveled abroad. Today, this assumption seems hopelessly quaint. Bill Clinton, the most peripatetic of our Presidents, made 133 trips to foreign countries while in office. George H.W. Bush, made 60.

Roosevelt had unusually keen leadership qualities. In the first place, he believed that his leadership abilities were learned and developed. Moreover, his leadership was always compelling and active.

During his journey to Panama aboard the U.S.S. Louisiana, caught up on his reading...he had brought a plethora of reading material, including works by Tacitus and Milton (Much more interesting than grabbing a People magazine at the airport kiosk!). The captain of the ship even let him steer at one point. When they arrived at Panama, Roosevelt was so impressed by the jungle and the tropical wildlife, that he scrambled through the countryside. The chief engineer said, "I have blisters on both feet and am worn out. Scaling a hill with Roosevelt is like taking a fort by storm."

When the Presidential entourage arrived at the canal construction site, Roosevelt espied the 95-ton steam shove...a new invention. He ordered the train stopped...hiked through the mud to see the steam shovel up close...spent a half an hour asking questions about it's operation...and took a turn at the controls. The photograph of the President at the controls became one of the most popular images of Roosevelt....and helped sell the American public on the wisdom of the Panama project.

Financial advisors can make important connections with investors through Active Curiosity in the lives of their prospects and clients. For example, there is no better way to connect with a business-owner or entrepreneur than to visit them at their place of business...and to pro-actively ask them about the enterprise that they have built, or run. Insert an astute question or two...and off you go.

Quotes by Teddy Roosevelt:

• "Use simple, down-to-earth stories to communicate complex issues."
• "Do what you can, with what you have, where you are."
• "Keep your eyes on the stars, and your feet on the ground."

The Psychology of Happiness

One year ago, James Montier, global equity strategist for Dresdner Kleinwort Wasserstein, made waves with his report, "The Psychology of Happiness". His ten recommendations were:

1. Don't equate happiness with money.
2. Exercise regularly.
3. Have sex...with someone you love.
4. Devote time and effort to close relationships.
5. Pause for reflection.
6. Seek work that engages your skills.
7. Give your body the sleep it needs.
8. Don't pursue happiness for its own sake. Enjoy the moment.
9. Take control of your life. Set achievable goals.
10. Remember to follow all of the rules.

This last week, he continued his 'happiness' theme with the following report to Dresdner Kleinwort Wasserstein clients. His central observation was to cite a mass of evidence that suggesting that spending resources on experiences, e.g. walking the Machu Picchu trail in Peru, seemed to make people happier than spending on material possessions.

"Materialistic pursuits are not a path to sustainable happiness. A mass of evidence shows people who have more materialistic goals are less happy than those who focus on intrinsic aims such as relationships or personal growth. Spending on experiences rather than possessions seems to make people happier."

Moreover, materialistic goals may even cause dissatisfaction with life and mental disorders, such as paranoia.

Some caveats to this observations. 1) Basic needs must be met, which require a certain threshold of assets and income. 2) Some of the experiences that he refers to require money, i.e. legal tender.

Still, it is nice to hear a prominent equity strategist dispense information that might be regarded as heretical...within the financial and investment world.

Tired of Prospecting? Think of Sisyphus

Today is the birth anniversary of Albert Camus, the French existentialist. In 1943, Camus published his extended essay, The Myth of Sisyphus. "see link"

Sisyphus was a character in Greek mythology who upset the gods with his hatred of death, passion for life, and scorn of the gods. As punishment, Sisyphus was sentenced to be blinded and to perpetually roll a giant boulder up a mountain to a peak...only to have it inevitably roll back down the mountain into the valley.

Camus uses this Greek myth to develop the idea of the "absurd man", the man who is perpetually conscious of the ultimate futility of life. In his essay, Camus has Sisyphus experience freedom for the one brief moment when he has stopped pushing the boulder...before he has to start back up the mountain again.

"I leave Sisyphus at the foot of the mountain! One always finds one's burden again. But Sisyphus teaches the higher fidelity that negates the gods and raises rocks. He too concludes that all is well. The universe henceforth without a master seems to him neither sterile nor futile. Each atom of that stone, each mineral flake of that night-filled mountain, in itself forms a world. the struggle itself towards the heights is enough to fill a man's heart. One must imagine Sisyphus happy."

Camus presented Sisyphus' ceaseless and pointless toil as a metaphor for modern lives spent working at futile jobs in offices and factories. Some find this allegory comforting, since it makes them feel that they are not alone...and can draw a parallel between their life and the life of a character from ancient myth.

In sales, prospecting can seem like a Sisyphean struggle. Don't you feel better when you can compare your toil to the grinding labor of a tragic Greek hero?

A Sorta, Kinda Unique Value Proposition

For grammarians, the word "unique" is an absolute term. The definition of "unique" is: one of a kind, without equal, or unparalleled. "Unique" is a term that cannot be modified by an adverb of degree, comparative adverb, etc. Consequently, the phrases, "rather unique", "quite unique", "more unique" are incorrect and meaningless.

With 664,000 financial advisors registered with the NASD...it has become increasingly difficult for advisors to position themselves with a "UNIQUE VALUE PROPOSITION" that is truly "unique". At the same time, it is imperative that financial advisors highlight those aspects of their practice, or themselves...that are singular and distinctive.

What's the solution?

One answer may be to abandon all pretense of arriving at a "Unique Value Proposition" in the strictest sense. However, advisors should strive to find those characteristics of their practice that are valued and perceived to be different and/or distinctive. Think of it as developing a Perceived Unique Value Proposition. To the extent that investors perceive that what you offer is singular  and one-of-a-kind...it's true (at least in their heads.) Moreover, if the advisor believes that what they deliver is unique...and says it often enough...it is so.

The other truism is that every advisor is unique in the sense that they bring a specific: value-system, background, experiential history, etc. to their clients. When crafting a Unique Value Proposition, advisors should also think about developing an "audio logo" that is memorable and tells the unique story that is who they are.

For example, if you have been in the business for 25 years...SAY IT...don't hide it. If you have a prior career in a specific industry that is interesting and/or relevant...by all means mention this too.

Finally, the tenor, tempo and tone of a Unique Value Proposition is as important as the words itself. If the words slip off your tongue with practiced confidence and verve, you are more than 80% there.

Invest Like a Senator

In the 10/31/05 issue of the New Yorker, author James Surowiecki discusses the investment habits of U.S. Senators. After discussing the current travails of Senate Majority Leader Bill Frist, who is now under probe by the SEC, Surowiecki refers to an interesting study published last year, that investigates the investment results of U.S. Senators. "see article"

The study was undertaken by Alan Ziobrowski, a professor at Georgia State University. He found that during the boom years of 1993-1998, a majority of the U.S. Senators were trading stocks, and beating the S&P 500 by 1200 basis points.

Since this was the first-ever systematic study of politicians as investors, it begs the question..."Are politicians really that smart?" Or are some of the Senators trading on "non-public material information?"

However, before drawing too many conclusions from the study, one should look closer at the particulars of the study itself. During the years in question, 62 Senators disclosed some 6,000 stock trades. Nearly 50% of the trades were reported by just four lawmakers: Claiborne Pell of Rhode Island, John Warner of Virginia, John Danforth of Missouri, and Barbara Boxer of California. Said another way, these four Senators accounted for 3000 of the trades in the study...which would mean that they made, on average, 150 trades per year in the five years in question. John Warner and Barbara Boxer are still in the Senate. John Danforth and Claiborne Pell have since left.

I wonder if these Senators were trading stocks with a "substantial informational advantage?"  I also wonder if their trading patterns have slowed down somewhat...given the realities of the markets today?

Elephant Hunting

  Last night, at the gym, I was working out on one of those old Nordic Track contraptions...(which I happen to like much better than the fancy, newer, Elipticals.) From my vantage point, I had a clear view of the basketball courts, and was able to see the folks shooting hoops. Given that I had nothing better to do than sweat, I passed the time by critiquing their various shooting styles and mechanics.

One gentleman fascinated me. I would guess that he was in his early 60s...and was in good physical shape. However, he had the funkiest looking shot...sort of a two-handed set shot that he flung from back behind his ear.

What really got me was how he warmed up. He didn't. He strolled onto the court, ball in hand...and let loose a shot from about 35 feet. The shot clanged off the rim. His next shot was even farther out...maybe close to 40 feet. This one didn't even catch iron...it caromed off the backboard. From this point on, his various shots were from 35-45 feet out...few of which had a prayer of actually going through the net. In fact, after fifteen minutes of shooting...he had yet to make a basket. He seemed to be having fun though. I think that he enjoyed seeing  the arc of the ball as it made it's way to the general vicinity of his target.

As a contrast, I remember the warm-up habits of Jerry West, who remains one of the best, all-time shooters in the history of basketball.Whenever he practiced his shooting, (which was often), he would begin 2-3 feet away from the basket. He would focus on the mechanics of his shot: arm placement, knee bend, wrist action, etc. As he became comfortable and confident, he would gradually move farther out.

As I watched the gentleman in the gym shoot, I began to think about some of the newer financial advisor trainees who I have worked with over the years. Without question, the advisors who make it difficult for themselves, are the ones who charge into the business with big-game" on their minds...and do not take the time to gather the early, smaller successes. In sales, confidence is everything. There is a lot to be said for the advisor who starts out deliberately, and concentrates on garnering one or two "wins" early in the game. From these small "wins", the advisor can move farther afield, and hunt the bigger game...maybe even an elephant or two.

Of course, one always wants to have a "dream", as well as stretch goals. Yet not to the exclusion of the important "little things."