How to apply JEFF BEZOS DAY 1 Technology to your INVESTMENTS / LIFE / RELATIONSHIPS?
April 19, 17
How to apply JEFF BEZOS DAY 1
Technology to your INVESTMENTS / LIFE / RELATIONSHIPS?
Greetings from Hitesh! Warren
Buffett once said that the advantage of being RICH and SUCCESSFUL is people
will pay attentions to what you say. Same applies to the 3rd RICHEST
Guy of the WORLD Mr.JEFF BEZOS. JEFF was at 5th place with USD 45
bln networth in 2016 and he has moved to 3rd place with USD 72 bln,
gain of 60% in a year!! Now let us understand his DAY 1 technology.
What is the meaning of DAY 1?
Just take a deep breath, be with
peace and remember your first day in your SCHOOL / COLLEGE / The day when your
BELOEVED said yes / the day when you got your FIRST JOB / The day you got
MARRIED / The say you got your FIRST KID / The day you bought your first CAR /
HOME or OFFICE.
The common link in all the events
was the EXCITEMENT / HOPE / HAPPINESS Mixed with FEAR of unknown. In short, you
were at your TOP energy level with 100% attention in the PRESENT moment. If you
can recall – you would not have thought about PAST (as this was the first
experience) and you would not be worried about FUTURE as you were 100% HOPEFULL
for BETTER TIMES AHEAD. AM I RIGHT?
JEFF keeps his office always on
the DAY 1. He manages as if it is his FIRST DAY. The other way to deal with
this was STEVE JOB’s approach – consider each day as the LAST DAY of your LIFE. Both are talking about the SAME thing in
their UNIQUE style.
Now let us see what JEFF does to be ALWAYS on DAY
1?
In his annual letter JEFF says
following “Here’s a starter pack of essentials for Day
1 defense: customer obsession, a skeptical view of proxies, the eager adoption
of external trends, and high-velocity decision making.”
He talks about 4 factors and we
will deal with each of them from INVESTMENT PERSPECTIVE.
CUSTOMER OBSESSION:-
What JEFF says “There are many ways to center a business.
You can be competitor focused, you can be product focused, you can be
technology focused, you can be business model focused, and there are more. But
in my view, obsessive customer focus is by far the most protective of Day 1
vitality”.
There ware many ways to manage your
investments. You can look at FIIs / you can look at DIIs / you can look at
NARENDRA MODI / you can look at TRUMP / you can look at TRADING / you can look
at FUTURES and OPTIONS / there can be many other ways also. But the best way
according to me is to LOOK at the INVESTMENT as your BUSINESS and LOOK at the
BUSINESS of the COMPANY you wish to invest in DETAILS.
FII / DII / Fellow investors / MODI or TRUMP
are not going to give you money. The business of the company is going to give
money to you. If your company is doing good business / maintaining its growth
year after year - you have nothing to
worry for the other factors. Just stay invested.
A
skeptical view of proxies:-
Most investors come to the market looking at
their FELLOW Investors – he has made tons of money, so I can also make tons of
money. Some do not enter the market looking at other people’s losses. This is called PROXY.
JEFF says “A common example is process as proxy. Good process serves you so you
can serve customers. But if you’re not watchful, the process can become the
thing.”
What he says is once you installed the
PROCESS – you need not relax. You need to be watchful and alert about the
process going correct or not.
PROXY is the major culprit for the NORMAL life
of most of the people.
Let me share a beautiful example of PROXY –
there are people who believe in GOD and there are people who believe there is
NO GOD. 99.999999% of the GUYS in both the LOT have not taken troubles to FIND
that there is GOD or there is NO GOD. They are using their RELIGIOUS BOOKS /
SAINTS as the PROXY for their BELIEF. They have NO PERSONAL EXPERIENCE of the
TRUTH.
I follow the likes of BUFFETT and JEFF – I am
in search of the TRUTH. I am not in a HURRY to conclude. This calls for ALERTNESS
all the time. I remain in PRESENT due to these THOUGHTS. When I am in PRESENT –
MIRACLES happen with me each day.
The
eager adoption of external trends:-
Jeff says “The outside world can push you into Day 2 if you won’t or can’t
embrace powerful trends quickly. If you fight them, you’re probably fighting
the future. Embrace them and you have a tailwind.
These big trends are not that
hard to spot (they get talked and written about a lot), but they can be
strangely hard for large organizations to embrace.”
For investors this is one of the major
factor as he has to deal with WORLD Events (Say Trump VISA policies) / Country
Specific Events (say Demonetisation) / Industry Specific Situations ( China
Dumping) / Economy related issue. All these are going to affect you – whether
you like them or not. Smart investors CALIBRATE their investments along with
the events. They are fast in booking losses when it is small. There is no point
in complaining about the events happening. All you need to do is to EMBRACE
them fast.
High-velocity
decision making:-
Jeff sys “Day 2 companies make high-quality decisions, but they make
high-quality decisions slowly. To keep the energy and dynamism of Day 1, you
have to somehow make high-quality, high-velocity decisions”.
Most guys says – I will think / I will ask
my wife / ask my Brother in law / ask my CA / will discuss in the family. They
are “day 2” kind of people. Their progress is always SLOW.
How
to take decisions?
JEFF says “Most decisions should probably be
made with somewhere around 70% of the information you wish you had. If you wait
for 90%, in most cases, you’re probably being slow. Plus, either way, you need
to be good at
quickly recognizing and correcting bad decisions. If you’re good at correcting, being wrong
may be less costly than you think, whereas being slow is going to be expensive
for sure.”
He makes three important points.
1. Make decision with 70% information. Do not
wait till all the details are confirmed to you.
2. If you feel you are WRONG – just keep stop
loss and get out.
3.
Being wrong will cost
you little loss (as said above) but by missing the opportunities you are
incurring lifetime loss. For my regular readers – I have been predicting BULL
market from 5th Dec.., 2008 onwards. Those who followed me made tons
of money along with me. Time and again I have made a BOLD call based on 70% of
the information. In October 2016, before DEMONETISATION happened I said I see
Market making a NEW HIGH by MARCH 2017. It happened. Sensex touched 30000. Most
guys were waiting, waiting and they are still waiting for the right time.
Another Point JEFF says “Third, use the
phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on
a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but
will
you gamble with me on it? Disagree and commit?” By the time you’re at this
point, no one can know the
answer for sure, and you’ll probably get a quick
yes.
There is nothing like SURE SHOT or
GUARNATEED things in life and market. All you have to take a fast decision,
watch whether it is working or not and if not change it with little loss. I
have privilege of working with the shrewdest of the HNIs and Big investors in
India. They all are quick in taking decisions and equally quick to book the
loss if they go wrong, without any regrets or blame. They follow DISAGREE and
COMMITT philosophy. Many times when I say I don’t suggest investment in so and
so company – they would say – let us try
and as your team to keep a watch. This approach is very suitable for making big
money at the fastest pace.
Jeff
also makes another beautiful point “recognize true misalignment issues early and
escalate them immediately.
Sometimes teams have different
objectives and fundamentally different views.
They are not aligned.”
Time and again I see various portfolios of
my clients. They buy shares of 100% opposite industries – one is moving up and
other is moving down with the net results that portfolio is not giving any
returns.
Another misalignment is that in a small
portfolio of just Rs.5 lakh, I have seen 50 or more companies. This kind of guy
never makes big money. They always blame their luck or feel jealous for other’s
success. They are simply not ready to align with the market.
What
NEXT?
All of the above steps are SIMPLE. This is
the beauty of all great guys. They keep it simple. I am following all the steps
and I am always feeling DAY 1 when I am in the market.
If you want to master the art of investments
or make tons of money – just inquire with us. We can give you customized
solutions.
Have a GREAT LEARNING.
Live With
Passion…Invest With Passion.
Hitesh Parikh.
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