26 December 2008


Our photo this week is Team MonGo 2008 -- you'll see that Monica bought the family matching pajamas.  Check out the sleeves on Lex!

Today is my 40th birthday and I managed to hold my hair this far... that seemed so important to me when I was in my teens and twenties... while my priorities 20 years ago were normal, they weren't exactly ideal.  

Lesson #1: having a high capacity to work overcomes a lot of personal shortcomings.

Probably the deepest thing that I think about (now) is my mortality.  Being a planner, I ask myself if I have the balance right between the short term (being true to myself) and the long term (preparing for the chance that I might live into my 80s). 

I am sipping on a large latte, the SuperMan mug was given to me prior to Ironman Hawaii 2000, by Luke Wimbush (much more of a super-dude than yours truly).  There are a lot of good memories associated with this mug as well as my pal, Luke.  

Lesson #2: it is only with the benefit of time, that we gain context on the people that, ultimately, bring goodness into our lives.

It took me 30 years to begin the process of figuring out my personal values and a decade after that until I was able to coherently write them down.

I derive tremendous meaning from my current life situation and have a high degree of personal freedom.  Looking back, what are the habits/decisions that had the greatest impact on my current situation?
  • Spend less than I make;
  • Tell the truth;
  • Train daily; and 
  • Control my desires (sugar, alcohol, food, leverage, wealth).
Interestingly, all of the above have periodically imposed short terms costs on me.  They are extremely simple to explain but challenging to implement.

What skills do I enjoy using where I receive positive feedback?
  • Teaching;
  • Writing; 
  • Strategic planning; and
  • Financial, legal and forensic analysis.
So... how best to create incentives for me to stick with my values; maintain my successful habits; and utilize my strengths?

First, I am going to launch a site that shares these items, more about that next week.

Second, I am going to explore pulling the last decade into a coherent philosophy and see if there is a book that can be created from what I have learned so far, sort of a how-to-manual for my daughter.

You get a finite number of years on this planet – make the most of all of them, no matter what is going on around you. - Brad Feld
2009 is going to be a challenging year for many of our friends and family.  The media is, and will be, bombarding us with adverse stories to distract us from the areas that add meaning to our lives and loved ones.

Lesson #3: back your winners.

Take time to consider if you have alignment between what brings you meaning and where you spend your time.

Make time (weekly) to do simple things that recharge your spirit and make you feel good.

Thank you Monsy for making this a very special Christmas.  

I love you, babe.


19 December 2008

Getting It Wrong

This week I am going to share some ideas that will, hopefully, save you from a large financial loss at some stage in your life. Over the course of your life people will steal from, mislead and generally attempt to swindle you -- if you hit 50 and think that this has never happened to you then you might not have been paying attention!  

Skill-based, achievable, wealth creation stems from two principles:
  • Spend less than you earn; and
  • Protect existing capital.
If you do those two points consistently then your net worth will rise over time.  Sounds easy but it is seldom done effectively.  There are always temptations to cut corners.

Due diligence is time consuming and not much fun -- as such, when I was the new guy at my firm, I got to do quite a bit of leg work checking out potential companies/management teams.  

After a couple quick announcements, I will explain what I learned...


Tucson and Boulder Training Camps - - we are happy to announce that both of these camp will qualify for USA Triathlon coaching education credit.  Each camp will earn 10 CEUs (the max possible from a single event).  Contact me for more info on Tucson (April) and Boulder (July).  Boulder's dates have been shifted to a Wed-Sun format to better serve working athletes.

Endurance Corner Coaching -- I will be launching an on-line coaching platform in early 2009.  Cost is $25 per week, with discounts if you sign up for a year.  Key differentiator is direct daily access to me, and the EC team.  Specific details in my January 2nd blog.


Why do research?
Sophisticated investors research companies/management team to reduce losses, not increase gains. 

Promoters do an excellent job of explaining how you are going to make a fortune investing with them. What people rarely do is point out the ways that you can lose money as well as items in their backgrounds that make them high risk business partners.

When you think about the scale of the Madoff scheme ($50 Billion) what comes to mind?  For me, the crime is not the main issue.  What concerns me is the implication for the global economy in 2009.

In 2005, I read Fooled by Randomness and had an epiphany reading Taleb's chapter on Black Swans.  At that time, by way of a personal guarantee, I had over 100% of my assets exposed to a single entity.  The business was run by a trusted friend but my financial health couldn't withstand a Black Swan, so I sold down my exposure.

The lesson we are reminded of with Madoff is that we can all get it wrong.  How does Madoff happen?  Ponzi schemes happen when we allow personal greed and social pressures to cause us to ignore basic investment principles.

Diversification makes the most sense to protect from the unexpected, not to enhance returns.  Right now, I have a 60% exposure to a single bank.  Over the next year, I will be reducing that exposure -- not because I don't trust the bank, rather because the impact of getting it wrong would be too painful.

In terms of the unexpected, fraud is probably #1.  Fraud hits you in multiple ways -- loss of money; loss of time; and risk of reputation.

While it's tempting to focus on financial losses, the money is normally gone by the time you figure out that you've been ripped off.  Pursuing business crime makes sense (and is essential) to help protect future victims, rather than recover assets for existing victims.

I suspect that business crime is going to explode in 2009 -- not because more of it is happening... rather... it will become apparent as the Great Unwinding continues.

Things you can do to limit your exposure to business crime:

Ask questions -- we have an inbuilt inhibition to ask questions in rising markets and public forums (this is one area where I support anonymous posting).  Fraudsters will take advantage of this shared trait -- read Influence, it will save you money.

This Word file link is a mild form of private equity questionnaire but covers the main issues that have cost me money over the years.  If you are using Safari/Mac then click here for an HTML version.

Be willing to walk -- if you get a bad reference then walk from the deal.  Even with this policy, you will make mistakes but you'll make less of them (and that will make you money in the long run).  By paying attention to red flags before investing you will save time, money and protect your reputation.  

From a portfolio point of view, it is a lot more important (and easier) to dump your Enrons, than find your Microsofts.

Get inside -- if you are investing 10%+ of your net worth in a project, or company, then get inside so that you have superior information.  If you can't get inside then don't invest.  VC and Private Equity firms have known this "secret" for years.  

The two main sources of private equity return are leverage and superior information.  Trouble is, as an asset class, the insiders scoop the excess return for themselves.  As well, even the insiders don't know which deals/funds are going to be winners.  They use the same rules -- check up-front & limit losses.  To that the professionals add: maximize financial engineering and access superior information.

Speak to the auditors -- again, sounds simple but it doesn't get done enough.  When you speak with the auditors -- do it independently, without management and speak with the accountant that did the work (not the partner in charge).  

Questions to ask:
  1. Tell me one thing that you found that concerned you.
  2. What was your materiality threshold?
  3. Did you tie all invoices to bank statements for everything above your threshold?
  4. What connected party transactions did you discover?
  5. Did you reconcile large payments to contractual documentation?
  6. Did you reconcile large payments to an approved budget?
  7. What is the approval/payment procedure for large transactions?
  8. Which transactions were paid outside of the normal approval/payment procedures?
Question #1 is a good way to form questions -- people are extremely reluctant to give negative feedback.  So you ask them directly, but for "only one" point.  That opens them up and gets the conversation going.

Write your notes of that meeting up and send them to the partner in charge of the account -- for their file and your own.  The partner will likely come back an tell you that answering all this information was outside of the scope of their work.  Insist on having the work done -- again, it will save you money over the long run.  

If management get upset then assume they have something to hide (it will save you money in the long run...).

The Gipper summed it up best.  Trust but verify.

Maybe Obama will come up with some energizing slogans for what is going to be a very challenging new year.

Back next week,

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12 December 2008

Facing Winter - Thoughts on Travel

This week I am going to share some ideas on how my winter has been going.  

Travel -- is the largest item in my business budget as well as a major expenditure in my personal budget.  More than the financial cost, travel has a large hidden cost in terms of use of time and fatigue.  If you choose a life where you move around a lot then it makes it much more challenging to achieve in areas that benefit from stability (relationships; athletic training... for example).  In seeing the risk to relationships/training, I set my travel up in blocks and brought my girlfriend (now wife) with me as much as possible.  While effective, this greatly increased the overall cost to the family.

Travel isn't all bad.  A ten-day business trip removes a lot of distractions and long flights are excellent for extended periods of uninterrupted time.  Both editions of Going Long had their final proofs reviewed on a long haul flight.

By the way, like you, I am waiting for the 2nd edition.  My best guess is early 2009 -- I will let you know when the book is available.  As an aside, if you subscribe to our new web coaching platform (details to be released in my first blog of 2009) then I'll send you a signed copy of the 2nd Edition. 

Given that we had nine months notice of Lex's arrival, we made a decision not to travel this winter.  At the time, we made the call on relationship grounds (big changes requiring extra stability).  As events turned out, it proved to be a smart financial decision.

The consumer-driven aspect of triathlon tells us that we need to race, and travel, a lot.  That is an expensive way to live and most of that travel expenditure does little to improve our fitness, or quality of life.  Does anyone really enjoy shlepping a bike through several airports, cramming it into rental car and sleeping in a strange bed?  Wears me out.  It's amazing that the ITU crew can go so fast!

I challenge this belief system with my athletes and recommend that they mix: long endurance day trips with local racing.  For their travel: we aim to split 50% to training vacations and 50% towards their families.  

If you find that you need a vacation to "rest", rather than "achieve", then consider your daily schedule.  While being over-scheduled, I have been productive.  However, I struggle to be effective when over-scheduled.  As well, I lose any ability to guide a strategic long term vision for my life.  Even when I am relaxed and thinking clearly, there are a lot of biases, filters, influencers and general media noise that I need to counter to head in a meaningful direction. 

The solution?

Once I pulled the plug on my seasonal migration, a lot of new options opened up for me.  The options were there all along, I simply couldn't see them.

In order to create a change in our lives, the first step is to stop doing what we want to change.  Fear of change can prevent us from taking the actions required to improve our lives.

In my case, my fear of winter, fear of loss of race fitness, fear of shoveling snow... whatever the cause... because I refused to experience winter, I never learned what winter might have to offer me.  

If you want to rapidly improve your fitness then the double-summer athletic season is a proven tool.  However, one needs to consider the costs of that choice (or any frequent choice for that matter).  Maximizing fitness, doesn't necessarily maximize my life experience.

When I spent a couple of months in LA.  Many locals told me that they couldn't leave SoCal because they would not be able to handle the weather anywhere else.  Weather=benefit.  Traffic/Air Quality/Crowds=cost.  It works for them, it didn't work for me.

When I look at my triathlon history, I see that I am more of an adventurer, than a racer.  The highlights of my TriJourney have been a few truly crazy trips that we dreamed up.  Exploring seems to bring me a lot more satisfaction than winning.  With that in mind, I have started exploring a few of the local areas.  

You might need to click on the photo to blow it up -- left is June (thanks to MvA); right is last Tuesday.  I even saw a mountain lion when I snowshoed another couple of miles towards the Divide.  Seeing as my ski poles where my only means of self-defense, I turned around at that stage; Lex missed that trip...

Next up is a series of recon trips probing the Divide.  I want to figure out a relatively safe way to get over to Winter Park/Fraser from this side.  So far, I think that staging from the Guinn Mountain Hut appears to offer the best route.  I'm going to check out Guinn Mountain for my "long day" next week.



14 November 2008

Reflections on Savings and Investment

This week we return to a more financial-oriented letter. Now that the US election is out of the way, it seems like the bad news has started rolling again. The bad news can seem relentless at times and, following my trip around the world, appears to be happening in the US, Europe as well as Asia.

With the mood (near universally) negative, I've been trying to figure out my long term strategy for savings and investment. As I mentioned a few weeks back, I'm currently projecting a cash flow deficit for 2009. I suspect that I'm not alone in being in that position! Frankly, being able to absorb an unexpected set back is why I've been conservative over the last twenty years. I have been reminding myself that the world isn't ending but human psychology can be tough to counter.

I have also been reminded myself of a few other aspects of investing (at least in my, rather unsophisticated, world).

Ability to forecast -- I have ZERO confidence in my ability to make accurate short-, or medium-, term forecasts and I don't trust my memory about historical forecasting. When it comes to past predictions, I suspect that I tend to forget my errors and remember my successes. Incidentally, this is a large part of the value that an investor/athlete can get from reviewing written logs of past decisions/training.

Timing -- Something about my nature makes me so conservative that I miss a lot of opportunities (not necessarily a bad thing). A friend once made the comment to me that if he'd listened to me then he never would have started his business -- perhaps an exaggeration, but a fair point that I have spent a lot of my life pointing out potential pitfalls to people. Interestingly, the triathlon equivalent of this is that an athlete never really knows when they are going to be in top condition -- so, if you're trying to make a living, then when conditions are right, you need to be willing to go for it. In other words, it's pretty tough to predict opportunity 1, 2 or 4 years out.

So what I have been researching is:
  • What assets do I want to buy, and hold, for the long term.
  • Separate from their current price, what is a reasonable assessment of their long term value.
Once I figure out #1 and #2, I plan on buying every time price gets below value. It sounds simple but is surprisingly difficult -- right now I am struggling to find an asset where I have 25-year confidence on existence, let alone value.

As the above chart shows, I don't think that there is a large rush. You can find the article about the chart HERE. When one is in cash, reading about capitulation is strangely entertaining, another aspect of human nature.


Global Property Outlook
I had some questions about my views on global property, not just the US. Unfortunately, my research over the last three months doesn't point to any good news. This spring, prices were holding in the prime sector throughout the world. As we near the end of the year, my estimate is that prime properties (UK/HK) have fallen 20-25% in local current terms (in FIVE months). Market participants are not prepared to admit that publicly at this stage but if you actually want to realize cash then market clearing prices are 20-35% off the peak.

The vultures ARE the market. Owner occupiers have, largely, stopped buying.

So my entry pricing advice for non-US buyers would be similar to what I laid out to US readers. Make sure that you have a margin of safety in your entry price and remember that there is very little opportunity cost to renting, versus buying (these days there is an implied option value in waiting).

Take your time and remember that returns from property investment are always overstated because people fail to accurately reflect their holding costs.

That said, a leveraged property investment (where a high quality yield covers a fixed interest expense) can be a good inflation hedge. Still, like most, my recent property investments are impairing my appetite for further exposure. My aversion is why I continue to investigate opportunities.


The Cost of Time
How does an investor, parent or employer, quantify the true cost of a poor decision?

While a bad investment costs you money. The most costly losses stem from the aspect that never hits your bank account.

What do I mean?

The #1 cost of a poor decision is the time lost sorting out the situation.

Specifically, not having the time to focus on the highest return areas of your portfolio, or life. We make a far greater return from backing our stars, and investing in our strengths, than getting bogged down with losers and weaknesses. High performers have an innate ability to combine passion with inherent ability.

I have recommended this Drucker article before but it is even more important in the current climate -- when we share a tendency to obsess on negative news, sunk costs and weak investment positions.

In challenging times:
  1. consider each dollar (and minute of your time) to be a new investment;
  2. move to limit liabilities and cut-off drains on finite resources (time, energy, capital);
  3. ensure full disclosure to, and honest communication with, all parties; and
  4. make time to identify your highest yielding opportunities.
The four points above are REALLY hard to implement consistently. Why?
  • We tend to overvalue existing positions
  • We tend to overestimate the impact that we can have on a situation
  • We are VERY likely to be part of the problem, rather than the solution
  • Problems rarely turn themselves around in a global recession, with massive liquidity headwinds
So I have started an internal review considering my personal return on how I am using my time and how I have budgeted to use my cash flow over the next year. Looking even further out, I want to figure out my desired life/portfolio 15-25 years out.

Monica loves it when we talk 2033 strategic goals, our lead photo this week shows her coping with more pressing concerns...

To wrap up, I will share the best question I have been asked over the last two weeks...
How much is enough and how will you know?

Back next week,

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31 October 2008

Family Finances & Bear Market Psychology

Investment strategy is the topic for this week. I am not going to tell you what I think you should do. Rather, I am going to share ideas about how I approach my family's investment strategy and outline some observations from the last few weeks. An interesting article where the author does offer some "to do's".


Two quick announcements.

Fit Pregnancy -- many thanks to everyone that wrote in. It's been an adjustment -- more for Monica than me. The "fun" part of being Dad is watching my wife morph into an FHM model. The challenging bit is that our daughter seems to be in a pattern of melting down around dinner time. Our photo this week shows me heading out on a walk to chill her out.

Real World Marathoning -- this week finance, next week running. If you have questions about marathon training then insert a comment this week and I will try to address next week.


Wall Street Compensation
For those of you that wonder what sort of money the folks at the top of Wall Street make -- you'll enjoy the video inside this LINK. If, like me, you pay taxes in America, then you're now paying to keep these guys in business. If you want more detail then this Bloomberg article gives specifics -- wonder how an auto worker feels about this use of taxpayer money?

There's got to be a better way. Watching from the outside, revolutions happen when the elites stray too far from the needs of the people. I sense there's going to be tremendous backlash as the economy absorbs the impact of the Great Unwinding. People will be upset and looking for the federal government to take action -- and -- we are likely to have a Congress in the mood to do just that. It is not going to be pretty.

I suspect that every rich person in America is pulling forward income and capital gains. Tax revenues are going off a cliff in 2009/2010. No matter who wins the election, we're all going to be paying a lot more in taxes. Take it from a Canadian... no free lunch!


The Great Unwinding
My main concern these days is wondering if the last 20 years were all driven by leverage. Have I lived my entire investment career with a massive tailwind of ever increasing liquidity? Have I fooled myself by seeing knowledge/experience where reality was a global ponzi scheme?

When I look through my best deals -- leverage, and ownership, plays a central role. In fact, even when the gains were "value" driven -- the fact that I was working at a Private Equity fund was a direct result of a huge increase in global liquidity.

If it was 'just leverage' then we are nowhere near the end of the Great Unwinding -- the snap back from two decades of easy money is going to be severe. Our governments are seeking to replace the capital that has been lost in the system. Perhaps the hole is too big? How does the Fed go lower than 1%?

How much further can we lever up consumers, companies, countries? I don't think very much.


The Psychology of Portfolio Tracking
How often do you track returns?

It makes a big psychological difference in times of stress (such as October 2008). Here is a data set of portfolio returns:
  • 10 yr = 17.5%;
  • 5 yr = 6.2%;
  • 3 yr = 0.0%;
  • 1 yr = -65.0%.
All of these numbers come from the same portfolio, my own. I would have saved myself a ton of energy if I'd been asleep for the last three years! I worked hard for that zero percent return, wonder if I worked smart?

Still, I'm the lucky one - I know people that will be totally wiped out in 2009.

When I compare the family's balance sheet to various equity benchmarks, I can see why folks that have been playing the market have been a bit blue. 1/3/5 year returns are negative (depending on the hour you check!) and 10 year returns are pretty flat. A decade of getting nothing. No wonder Michael Moore calls the stock market "a rich man's game".

Here is where human psychology comes into play. Three years ago, I was concerned over the risk profile of my portfolio, so I sold nearly all of my high risk exposure down. I rolled a fraction of my high risk exposure into a new venture -- which promptly shot up to a paper value of 15x cost, then tanked.

When I talk with people concerned over the current value of their 401Ks... we ask each other... did we really "have" our peak portfolio values? Were you really going to sell a few months ago when it topped out? If not then why does it hurt so bad?!

For me, the 'return' was never there. I wasn't able to take that value off the table, or hedge it, or lock-in any of the gain -- believe me, I tried. Even sold assets at a massive discounts to shift out of risky exposure.

Even when I calmly think it through, I experience a real (and irrational) sense of loss from the movement off the peak. I'm up at midnight trying to write it out of my head so I can get back to sleep...

We are all feeling shell shocked right now. At some stage, we are going to have to pull the trigger and make some investments. Just not sure in what, or when!


Timing and Asset Classes
Friends, and columnists, are starting to tell me how cheap valuations appear. Speaking from experience, when companies look really cheap, then you had better start checking if the earnings are really there. With the Federal Funds rate at 1%, people wanting to sell you companies priced at 15% yields on current earnings... that should tell you something about the earnings.

When to buy? I see savvy friends (and people like Buffett) buying in the current market (looks awesome on a two week basis). However, I know that being wrong will hurt more than being right. that's the emotional side.

The analytic side runs like this -- where I like to invest (other than core capital) is projects where I am able to increase my return through an employment, or consulting, relationship with the company. Generally, I look for a 20% return achieved through a mixture of current income and long term capital gain.

If you've ben prudent then you can take (a measure of) solace from the fact that we are all in the same boat and you've likely been hit less than others. I've also rationalised to myself that a major economic downturn is a good time to have kids -- perhaps the ultimate in being countercyclical.

When people tell me that I risk missing the boat, I just don't see it. Even if I timed the market perfectly over the last ten years, I would have been better in cash.

That combines with my sense that the Great Unwinding as a lot further to run and a concern over the deflationary effect due to simultaneous global asset bubble implosion.

Besides being right wouldn't change my life that much and being wrong would blow my daughter's college fund.


A Good Bet
If I was a young couple, or family, then I continue to believe that there will be good investment opportunities this winter in the housing market. I strongly suspect that we will see a very soft property market in early February. Figure out what makes sense now. As we approach the bottom, you will have a psychological headwind against investing.

In figuring out what type of property might make sense -- review the buy:rent equation. That should be starting to get attractive in many markets. In some places you can pick up houses for less than construction value (and possibly get the foreclosed lender to give you a mortgage).

Here is what I'd look for -- you aren't likely to be able to get everything but it will give you ideas on how to evaluate your potential purchase:
  • 50% reduction from peak pricing in 2006/2007
  • 10% under replacement value
  • mortgage payments no more than 80% of your current rental cost
  • if buying a foreclosed property then negotiate a price reduction that is a multiple of any defects you uncover with your survey
Unexpected unemployment is a possibility for many of us -- consider your income security. It probably makes sense to consider a smaller property than you may have aspired to a few years ago.


Looking Forward
All-in-all, remember that there is still a lot of good out there. It is so easy to get caught up in the negative noise being pumped out by the media. I have friends that don't own shares that are tracking the Dow hourly.

Turn it off... it's not doing you any good!

While far from a blessing, a difficult economic environment certainly makes life more simple. The core items that make Monica, and me, happy are low cost.

As for my own portfolio, I'm not really sure what to do and I can't afford to be wrong. So I'm going to take the Asian solution... wait.

Back next week,

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10 October 2008

Personal Freedom

A good friend sent me a link to an interview with Andrew Bacevich.  The interview provides interesting points of view on patriotism, foreign policy, projection of power and the central values of American society.  It takes an hour to get through and it was a useful way to spend a Sunday morning. 

The interview is, nominally, with reference to Bacevich's book, The Limits of Power. The author is described as a conservative historian but many of his points are often made (far less effectively) by my liberal friends.  The link was sent to me by a veteran who said that he watched with tears in his eyes because someone had finally put into words what he had felt for years.

An example is his position on "not war" as opposed to peace -- my quote, not his.  It's the first time, I have heard someone talk about the Iraq war in a more nuanced point of view.  Generally, we are presented with binary choices (in/out; win/lose; victory/defeat).  Bacevich goes deeper and examines the impact of a full commitment in one area which limits our ability to commit in other areas.  

As an investor, I look at the opportunity cost of a position.  As a historian, Bacevich does the same thing with respect to the projection of power and the allocation of national capital.  Like many strengths, wealth/force/power/fitness may be most useful when applied sparingly.

Inside the interview you will find one person's explanation of Imperialism.  As a Canadian, I haven't given much thought to Imperialism, we are a proud, but realistic nation up there.  

Bacevich's advice to the US Leadership... step back from worrying about who's right or wrong -- consider whether our current approach is serving our long term goals... it's something that I try to do in my own life.  He's basically challenging us to consider where we are fooling ourselves.

His view on an effective approach to terrorism made sense to me -- certainly in terms of return on investment as well as allocation of effort.  The very human tendency towards revenge, striking out when fearful and consistency bias -- it is interesting to consider these traits impact our view on what is appropriate action.

Bill Moyers interviewing style is a little different than Bill O'Reilly... but it's still good television.  :-)  Fox news hasn't managed to get through my media filter but I did read a transcript of the Barney Frank interview this past week.  Don't think I am missing much.


What's all this have to do with personal freedom.  Well, when I listened to the interview, I was left with the question... "what the heck can I do?"  How can the action of one guy, still waiting for his Green Card, have an impact on the larger world.  Well... I could write an article that is read by a few thousand citizen-athletes and get you thinking about the same issues...

Actually, that wasn't quite the first thought I had.  I am increasingly concerned that 2009 will see me violate my first rule of personal finance -- never spend more than I earn.  All my forecasts are pointing towards deficit spending and action is required (now) to avoid difficulties (later).

A government might be able to tolerate deficit spending (after all, it's not their money, it's yours and mine) but I know that, personally, if I run large deficits then I am going to have a very difficult time in my 50s and 60s.  I also know that it part of the human condition is to blame external sources for the reality of our current life situation.  It's far too easy to sit around blaming somebody else for where we find ourselves.

Bacevich kept coming back to the difference between what is peripherally essential and what is centrally essential.  Moyers asked him what he meant (more than once) and Bacevich would only say that he felt the preamble to the Constitution said it best.  Not being an expert in US civics, I had to look it up...
We the people of the United States, in order to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessing of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
The people that wrote that were pretty smart and the history professor managed to get me to read a good chunk of the constitution -- if he's your teacher at Boston University then you are lucky student.

Domestic harmony; personal security; common welfare and personal freedom for ourselves and our kids.  That's a great starting point for what's essential.  

When I read the preamble, initially, I wondered why it is in my interest to work towards the common welfare?  The reason is that revolutions happen when a society loses sight of the needs of its people.  I suspect that many of my friends (and fellow citizens) are going to be seriously upset when they experience the impact of global deleveraging and realize that they can't borrow themselves out of trouble.  

What to do?  In order to protect what is centrally essential in my life, I need to consider what I can change at the periphery.  Frequent readers will know that I place a great value on my personal freedoms -- freedom of occupation; freedom of location and freedom of time.  

When I really think about it, freedom of location is more expensive than essential.  So I'm going to boot that from 2009.  Besides, extensive travel isn't a very effective use of natural resources and there is no shortage of things to explore locally.

I've also been brainstorming a series of "what ifs" and considering my options to generate income (and return on investment).  To help create new opportunities, I also need to reduce time spent on low return areas.  I will write more about that as my ideas come together.


I'm going to end on a positive note as I think it is important for us to remember that markets don't decline forever and, notwithstanding a buzz saw rolling through our economies, life remains good.  My cats don't care about the performance of my personal portfolio -- their purring appears independent of my mark-to-market NAV.

September is the best month of the year in Boulder (or my hometown of Vancouver, for that matter).  Cool evenings, plenty of sunshine.  Here in the Front Range we start to get the beauty of fall without the chill of early winter.  I have been taking advantage of the weather to bag a few local peaks.

The game that I've been playing is that I can only climb a mountain if I can make it 100% human powered from my front door.  I've managed Mt Sanitas (6,863 ft) and Bear Peak (8,461 ft).  The photo above is the view to Boulder from Bear Peak.  Combining the letters of the last two weeks, I am focusing my fitness on what is essential -- old school endurance trumps race performance.

While September is the best time of year, October is my favorite month.  Most years, I am tired in September and that impacts my mood.  I have probably had the least number of Zeros (days without training) in September 2008 than any previous year.  

As an interesting aside, Monica has not had a single zero in her pregnancy.  I am negotiating blogging rights to the story of her Fit Pregnancy -- I learned a lot from watching her.

Back to October... the combination of raking leaves and Halloween makes for a fun time.  Leaves and trick-or-treaters fall into my area of family responsibilities.

A three dollar pumpkin and a few bucks worth of candy is all it takes to make a bunch of kids happy.

Central, versus peripheral, essentials.

Back next week,


20 September 2008

Financial Security and Capital Allocation

Financial security and capital allocation are the topics for this week's letter. I have been wanting to write about these for some time. What a background in the capital markets -- a very rough week for people.

I am extremely busy on the business front.  As you can imagine, we face a very challenging time in UK Property.  If you are waiting for an email reply then I will get to you, just need some more time. Each day, I have had to parcel my energy, prioritize tasks and schedule recovery.

OK -- a couple of announcements...

***I turned on comments so that so we can interact. Take it easy on me. You'll find that moderation is 'on' so I need to review before they go live.

Endurance Corner Radio has podcasts from Joe Friel and Chris McDonald. Send feedback to D.J. J.D., who is leading our effort.  Joe is talking about his background (very interesting) and training. Chris explains how we can break Chris Lieto's course record at IM-Moo by using IM-Loo as part of our taper -- its easy if you just follow his point-by-point instruction for race week...

***Joe is going to be speaking at our Boulder Triathlon Camp next July. The camp is open to all levels/distances and will have a mix of hands-on instruction, training and discussions. Cost is $1,250 -- drop me a line for more details.  We've got some great speakers lined up.


Who knew the markets would melt down? Personally, I don't blame the short sellers. They are only acting on what insiders and smart researchers have been telling us for months... our financial system needs to be recapitalized. Massive global deleverage is tough. In my own ventures, it is the main cause of the difficult situation faced by friends and clients. 

What lessons can we learn?


Acquisition of capital is different than borrowing debt. Because debt comes from third party sources, we need to be wary of the tendency to view it as 'free' money. When I work with individuals, or companies, that run into trouble, it is often a crisis created by borrowing to the maximum extent permitted. Permitted under law, permitted under debt agreements, permitted by running X creditcards. An appropriate amount of leverage is well, well below the maximum that can be borrowed.

To me, capital in its most simple form is cash and liquid assets. Before we talk about how to allocate, let's consider how to acquire:

1 -- spend less than you make
2 -- pay yourself first

Physically, I have been overweight before. When I was heavy, I would often wish that I could wave a wand and "be thin". If I could just get a chance to start all over then everything would be alright. I would tell myself that I wouldn't make the same mistakes again.

Finances are a lot like that. When we have no capital, we can spend a lot of time wishing that we had capital.

Physical fitness is just like financial health. Until we take actions, and create habits, that change the direction we are heading... we will keep heading the same direction. We have to make the change.

The two tips that I shared above come from
The Richest Man in Babylon -- a good read on the topic of personal finances. I like that book because it doesn't make things too complicated.

3 -- Protect core capital.

What is core capital?  Put simply, it is capital that you cannot afford to lose.  Having no assets at 65 years old is a far different situation than being wiped out in your 20s.

At 40 years old, my view on core capital is ten years living expenses.  While the income from that capital doesn't come close to covering my living expenses, it does give me years to adjust when faced with an unexpected setback.  Across a full career in business, we can be certain that we will face multiple setbacks.  After the past 14 days, the importance of core capital has become very apparent. 

How do I protect core capital?

4 -- Be wary of leverage.

My core capital is completely unleveraged.  While this reduces my return, it greatly reduces the risk profile on my portfolio.

I go even further in that I don't care about my investment return on core capital, I care about safety.

Within my business projects, I am willing to use leverage but, these days, only with capital that is above my core capital.  Why am I so conservative?

5 -- You only need to achieve financial security once.

By following the basic principles in my book recommendation you can give yourself an excellent chance to achieve financial security over your lifetime.

Sure we are exposed to Black Swans but you can stack the deck in your favor if you educate yourself and stick to the basics.

It is surprisingly difficult to stick to the basics.  We let our guard down, we cut corners, we are less careful.  We need to be constantly vigilant!


For capital allocation, my first consideration is
where I will be living in the future.

This is important to make sure that I have assets (and currencies) that will balance my future liabilities.  While I don't trade currencies, I consider purchasing power parity when deciding about large investments which match, or don't match, future plans.

I don't have a lot of sophistication in my review -- I look at things such as daily living costs, relative prices of accommodation, interest rates.

When I think about property purchases, I am very specific -- seeking good value, in a specific neighborhood, of an appealing city.  I define value back to my long term currency.  For me, that means converting back to USD, the US is my likely home.

The cities that I really like are: Edinburgh (GBP); Paris (EUR); San Francisco (USD); Hong Kong (quasi-USD).  I don't have any exposure to those markets presently but I keep an eye on them.

Currencies that I like are USD (matched to long term liabilities); CHF/EUR (long term stability).  Some people like Singapore dollars but you only need to look at a map to see that there is real political risk in the neighborhood.  In terms of Asian exposure, my preference would be a moderate yielding real property investment in Hong Kong.


When I was starting out, I thought that it would be nice to "be rich" -- whatever that means.  Along my journey, I have realized that wealth is neither the goal, not the benefit of financial security.

The two main benefits are ethical reinforcement and personal freedom.  If the pursuit of wealth forces you to compromise your values, or ties you to unpleasant situations... then one really needs to consider if that is a benefit at all.

Following the events of this past week, a very relevant consideration.


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05 September 2008

2008 Review, Part Two

This week’s letter is about taking the time to consider the long term implications of our current choices as well as offering some insight into how I approach my personal planning.

The photo above has me thinking about some additional adjustments to my TT position - I will be tinkering this winter!


If you haven’t been to the Alternative Perspectives page in a while then you might enjoy two articles from Coach Kevin Purcell. The most recent was a thought provoker for me and very enjoyable.

2009 Boulder Camp – I am very happy to confirm Joe Friel and Bobby McGee as guest coaches at our Summer Triathlon Camp. Joe and Bobby have been instrumental in my athletic career and share more than fifty years of collective coaching experience.

As a reminder, the camp will run from July 20 to 25, 2009. By letting you handle your accommodation and morning meals, we have been able to set the cost at a very affordable $1,250. This camp is open to all abilities, all-distances and will have a balanced focus between skills development, triathlon training and athlete education. To confirm a slot, please drop me an email.

Two book recommendations for you: FIASCO is a great read about structured products and investment banking – it fits with my observations from a career inside the financial services industry.

Website Optimization is a good read for anyone that runs a web driven business, or brand. The book made me realize how little I know -- lots of easy ways to improve the reach of my writing. I read the book with pen, paper and a high speed internet connection. I approached the read like a "workbook" taking notes and making changes to my website outline.


I was walking around Edinburgh this week and noticed that it is impossible to see a credit crunch. The buildings don’t know who owns them, or the prices that we place on them. That realization settled me down at the start of a very busy week. The UK faces challenging economic times.

My trip to Scotland confirmed suspicions on the state of my personal NAV. Long time readers may remember that I sold my UK property exposure in 2005/2006 and used a portion of the proceeds to help establish a Scottish residential property developer. While the development business is stable, the market outlook for sector is weak.

I’ve seen a big reduction in the upside component of my personal portfolio and a stack of paper profits went up in smoke. My marked-to-market net worth went down significatly in 2008. No wonder investment banks are looking for a way to avoid reporting the true market value of their illiquid securities. It was a (very) good thing that I am not personally leveraged -- I would be toast if I was a hedge fund.

Interestingly, prime residential rents are way up in Scotland. We have seen a 50% increase in our portfolio yields over the last three years and, I suspect, there are more rental increases to come. The upward yield shift gives comfort to our bankers (in a time when they aren’t hearing a whole lot of good news).

We haven’t seen any evidence of forced selling by developers. This could change if the main lenders take a hard line but, to date, all the key participants seem content to sit-it-out until market conditions improve.

Times like this are potentially volatile because if everyone is doing nothing then there is substantial downside risk if assets (at the margin) are forced through the market. Prices always move at the margin and, in a thin market, the actions of a few can impact the balance sheets of the many.


The Tri Biz
While there isn’t much that I can (or want to) do with my personal balance sheet, I have taken a hard look at my personal profit and loss account.

Over the last three years, my largest single expense category has been “triathlon”. In 2005, I downsized my sources of triathlon revenue to create space for a big increase in my financial consulting business. The net cost of doing that was probably on the order of $100,000. I suspect that is a much smaller cost than many athletes bear when they downsize work commitments to focus on qualifying for World Champs. A single year off as a doctor, investment banker or CEO can cost a multiple of my figure.

I’m fond of saying that the easiest way to increase net income is to reduce personal expenditure. I remind myself of this because the consumption treadmill is a seductive trap, constantly marketed to us through the media.

In my annual review, I look at my expenses (current, projected, core and surplus) as well as my revenues (current, projected, downside, potential). I would encourage you to do the same.

Why? Because we always underestimate the large effect that small changes have over the time lines of our lives.

$33K per annum, for seventeen years, at 4% is $782,000.

By taking action to eliminate my net triathlon cost (today), I can finance my unborn daughter’s college education (tomorrow). Of course, all this is contingent on not spending the money elsewhere, or being miserable with the change. We can take cost control too far.

For me, starting a business helps spending discipline. My accountant tells me that the IRS will "help" further by disallowing losses if we lose money for three consecutive years. As well, I have considered bringing in a financial partner to create social, and profit, pressure. There are a lot of benefits to 100% ownership (see Raising the Bar) but I also benefit from having obligations to people I respect.

My game plan for personal expenditure control:

***Focus on the training camps that I am hosting Tucson (April); Epic France (June); and Boulder (July). Last year, I attended nine training camps and only one made a positive contribution to Gordo Incorporated.

***Consolidate the best of my writings into a single location for you (the reader) to access easily. The best marketing lesson from my triathlon experience is “give away good information for free”. Helping people is fun and creates massive goodwill. I have a stack of content spread between five websites. My content is underutilized and tough to access.

***Place my library within a website where I will be able to combine: (a) my coaching skills; (b) my writing skills; and (c) my enjoyment of helping people learn from athletics.

My financial consulting business has (effectively) total concentration with a single client. I am a big believer in the value of concentration (and the illusion of diversification). However, small things matter over long timeframes… one, or two, additional relationships will make a difference.

The benefit of my business model is it fits with my desire to main freedom of location and schedule. Commitments given to clients limit my freedom of occupation (somewhat), but I love working and there is a fair exchange.

An up-coming letter will discuss (in detail) my current personal portfolio strategy. While my outlook hasn’t changed, my portfolio structure changed (due to those paper profits evaporating).


The Truly Precious
Because time is far more precious than money, I also do a time inventory. I have become provicient at considering my happiness return per hour. Still, it takes constant pruning to maintain a high quality life.

There are clear requirements to a long term focus on elite athletics. These requirements have associated costs that can increase over time.

Financial – outlined above.

Structural – to run well in triathlon, I need to maintain a high level of annual run volume. Having spent most of 2007 walking around my house in fluffy slippers (to comfort bruised feet), I know that the required level of volume is wearing my feet out.

Emotional – I don’t know about you… but I am not a whole lot of fun from three to eleven weeks out from a key competition. I used to get around this by living alone in the spare room of a fellow endurance athlete, or hibernating upstairs at my house in Christchurch. The IronMonk-gig worked for athletic performance but lacked in terms of emotional well-being. I have increasingly found that I can’t be the husband I want be while spending 20 weeks a year on the knife edge of human endurance.

Monica is so completely loyal that she’d back me for another five years of relentless focus. She respects me too much to offer the soft option of backing off to please-the-wife. I didn’t truly understand the brilliance of doing that for your husband until this year. If you are married to somebody like me, it is the best way to ensure peace of mind in your man. I’ve got a couple buddies that have managed the freedom but haven’t (yet) found their peace. Don’t think that I’ve necessarily found any!

Addicts come up with all sorts of ways to justify their actions. Generally, I am only able to fool myself for five to fifteen years at a given vocation. Increasingly, I find better and better things to focus on. Fatherhood represents another opportunity for self-knowledge.

I have been truly fortunate to have the opportunity to spend much of the last decade living as an elite athlete. It has been a tremendous experience and worth all the overtraining, financial costs and other occupational hazards. I rarely regret the past, even my mistakes and “hard times”.

One of the main hazards of objective decision making is caused by a combination of consistency bias, overvaluing what we own and overweighing sunk costs. “I have given up too much to change course” is a common thought pattern that can skew clear judgment. There are also tremendous social pressures that we place on each other to remain consistent in approach. We have an in-built bias against “flip-floppers”. This is a bit odd in a world where most of our key decisions are made against a background of incomplete, and changing, information.

I have always enjoyed “doing what it takes” and, I suspect, that most obsessed folks are excellent at getting the job done. Seeing this trait, could be why Monica likes me to have a project. Too much idle time leaves me short on endorphins.

It’s an interesting time for me. With my sport, increasing costs are reducing my enjoyment from doing what it takes. Frankly, I’d rather be a world class person than a world class athlete. I am fortunate to have been exposed to role models that manage to do both.

Since 2004, I hoped that winning Ironman Canada would give me a fairy tale ending. Just like Monica, Life doesn’t appear to have offered me an easy way out.

Back next week,

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28 August 2008

2008 Year In Review, Part One, Athletics

This week's photo was taken while I was competing in the speedo division of Ironman Canada 2008. I am going to write up my race report for the Planet-X website. Additionally, my pals at XTri.Com have published a recent Q&A.

Long time readers will know that I like to spend September reflecting on how things went over the last year. This year, I am a bit ahead of schedule and will share some ideas that I have been considering throughout August.


Why Compete?
It may surprise you to learn that I don't really enjoy the "competing" part of athletic competition. While it is fun to win, how many of us are consistently dominating? Not me. Even when I win (or my clients win), I have concerns that the pleasure that I experience is just my ego being inflated. Humility does not come naturally to me and requires constant vigilance.

For short course racing, John Hellemans says that if you feel like quitting then you are going the correct effort. He is a multiple agegroup world champion and Olympic coach, so I remember his words. For much of this summer, I had that sensation in training -- I noted those feelings and reminded myself that, for Ironman, they were a clear indication that I was on edge and needed to be careful. I counted down my sessions, and the days, until Ironman Canada.

So why compete?

I have been getting slower for my last three years of Ironman racing. Similar to dying... we all know that slowing down is coming but it is a bit of a surprise when it actually arrives!

Why compete? Many valuable experiences are not pleasurable. The main personal benefits that I receive from racing all seem to come with "coping". We are all going to get knocked around a bit in life. Racing gives us a safe environment to train our coping skills. More specifically:

Coping with Public Success and Failure -- IMC 2007 was a public failure of a clearly stated goal. The failure caused me a lot of personal pain. However, trying our absolute best then failing... is liberating once we get past the pain. I am, mostly, free from concern over public performances. When I faced challenges in 2008, I looked inward... how do I want to respond to this decision, not... what will others think of this decision.

Pain results when Expectations (not performance) diverge from Results. Crisis comes from our expectations -- an athlete preferring to quit, rather than face the reality of their performance. Quiting stifles personal growth and, speaking from experience, it is far better to fail than quit. Getting across the finish line creates closure -- a DNF (that doesn't involve an ambulance ride) often remains an open wound.

Learning to cope with success is also challenging. People that like us for no reason aren't much different than people that hate us for no reason. It takes considerable self-esteem to remain ethically centered in the face of consistent positive feedback (social, financial, athletic...).

Dealing with a Lack of Control -- Control and stability are illusions, just ask any 68-minute Ironman swimmer! Racing drives that home to me, again, in a safe environment. Learning to manage our emotions, and decisions, while under extreme duress is a HIGHLY valuable skill that we take back into our daily lives.

Reaching Beyond Ourselves -- I have never made the lead swim pack in an international level triathlon. But... I don't rule it out! Racing provides us with an environment where we can achieve things that we thought were impossible. I've had a couple of disappointing Ironman races but... if I do happen to RIP one in the future... wouldn't it be great. Athletics have consistently shown me that I am capable of much more than I can imagine.

For me, the lessons of competition revolve primarily around self-awareness and self-control. Which leads nicely to...


Race Status, Elite versus Amateur
While I was counting down the days to Ironman Canada, I was also counting down the end of my elite career. There are elements of elite ironman training (high run mileage and risk of immuno-destruction) that don't fit with my personal plan for the next 30 years. On reflection, I also wanted to experience the (hoax) joy of winning without having to cope with the extreme duress and health risks that come from elite level training.

To explain my current thinking, I need to set the stage with a couple of stories...

A -- I have a few good friends that are former military officers. I have always been drawn to "something" that all good officers share -- the calling to be an exemplar. Charlie Munger uses the term with respect to CEOs but it applies to any person in a position of leadership (teachers, parents, coaches...). An exemplar is a leader that consistently holds themselves to a higher standard than their students.

B -- Within my own athletic career, the highlights aren't the times that I won races. The real highlights came when I performed close to the level of a great athlete (Tom Evans, Steve Larsen, Peter Reid). Not so often with Peter and not any more with Tom & Steve... but I hope you get my point... it is extremely motivating to have the opportunity to race alongside athletes that played a role in our entering sport in the first place.

C -- The quickest way to learn that external success is an illusion is to "win". Even then, "victory" is a powerful drug and highly addictive. There are many ways to keep score. In athletics, we use a clock. In other fields, they may count mistresses, dollars, clients, page views, sales transactions... external success can become a trap.

A long introduction to say that I have decided to race elite for another year. Slowing down with style will make me a better man, at a minimum a more humble man!

Racing beside Simon Lessing, and the traveling Aussies, at Boulder Peak 2009 should provide me with a solid stress management opportunity. As well, there are athletes out there that will enjoy taking me down. Why deny them that pleasure? Scott jokes that our Epic Camp clients enjoy taking down "the Ultraman".

Outside of Worlds, I'm not quite slow enough to make it a fair fight in the agegroup ranks (it could get a lot more fair during an up-coming break). In business, I have tried to be willing to sacrifice success to remain true to my values. So, you guys in the 40-44 next year will be safe from me... but I will be benchmarking against you. When you track me, remember that I have a 10 meter draft zone and, likely, had to swim alone, often without a wetsuit!

The Canadian federation makes it a bit challenging for non-resident nationals to receive their elite cards. As a result, I am going to seek a US Elite Card (once my Green Card comes through). To my friends north of the border, know that I love Canada and am a proud Canuck.

Next week, I will publish Part Two. That letter will cover the intersection of Business, Athletics and my Personal Plan. I have things sorted for my 40s but have discovered a few areas that need to be addressed to prepare for my 50s and 60s.

I play a long game.

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08 August 2008

Add It Up

Our photo this week is Team Bennett (Greg & Laura).

As I type this, Laura is heading to Beijing in order to represent the US in the Olympics (pretty cool). I have been fortunate to get to know the Bennetts over the last little while.

When I compare Laura to myself, what stands out is her true attitude. By "true attitude" I mean the way she is. She is not working on having a positive attitude -- she "is" positive in a very peaceful sense.

Over the last eight years, I have made a consistent, conscious effort to reprogram a habit of relentless positivity. I also work on seeking to view situations from the opposite perspective. My attitude is a habit, Laura's attitude is a trait. Give me another 20 years and I might get there!

When I was working with Dave Scott in 2004, I was amazed at his grasp of the competitive dynamic of Ironman racing. Dave's toughness and physical skills are legendary but, I think, what really gave him an edge was understanding the competitive dynamic of a race and knowing how to "win".

The only person that I've met with a similar level understanding of mixing terrain, skills and tactics is Greg Bennett (the other "GB"). Seeing as I am an older, long course guy... (i.e. no threat!) ...Greg speaks freely around me. Like listening to Molina, I kick back and soak up the knowledge. Every single time I sit down with Greg, I learn something new. What's unique to Greg is his capacity to create, then execute, a winning strategy. There are a lot of strategic coaches out there but they rarely have the physical goods to deliver their own plans. He's formulating, visualizing, then executing his own victories.

With a bit of luck, we will be able to schedule the Bennetts as part of our evening speakers series at our Boulder Camp next July.


Toby (from Art of Tri) has offered a 20% discount to all gBlog readers. What you do is enter the discount code at check-out. The code is GORDO-99 and the website is HERE. Monica and I like the hoodies.

One of Art of Tri's taglines is "One Passion...Endless Training". That can mean a lot of different things. Five years ago, I might have interpreted that as making sure that I met my daily target of Five-A-Day.

Five hours of training, rather than five servings of fruits and veggies!

More and more, "Endless Training" is about maximizing my athletic enjoyment across a lifetime. Taking care of my body and making sure that I'm still able to do interesting things into my 60s and 70s.

The first time I rode up the Tourmalet (pictured below), there were two guys well into their 60s (perhaps 70s) grinding their way towards the summit. Totally soaked in sweat -- suffering in silence. Frankly, they looked a lot like Montgomery, Newsom and me -- just older!

I want to be those guys. I want to be on the Tourmalet in 2030 (hopefully with Molina.

Endless Training.


Add It Up
Most of the discussion about endurance sports is prescriptive in nature. Athletes create goals and ask friends/experts/coaches to comment on what-it-takes. Coaches opine about optimal protocols required for "success". Success being defined in terms of beating all-comers, personal bests or qualifying for World Champs.

Rarely do we invert the question.

Instead of stating "What it takes", I start by asking my clients "What have you got?"

In order to figure that out you need to Add It Up and I like a time inventory/log to get a hold on that. Consider in a week, time spent...

Personal Admin
House Maintenance

Don't waste time scheduling your perfect week -- rather, observe, and log, what you are really doing. You will learn a lot.

There are no sacrifices required for success, merely choices. Most people will resist the above exercise because they don't want to be faced with the information that would result.

One of the choices I make is to sub-contract as many non-core items as possible. Paradoxically, I also retain a number of items that might appear to be low value added:

***Cooking red meat
***Trash, recycling and pet poop
***(Moderately) heavy lifting -- I need assistance for the truly heavy
***Rose garden watering

I could probably sub-contract these items but I find them relaxing and happen to be very good with pet poop.

My point is we can only "create time" by reducing our commitments. In my podcast with Chris McDonald, his advice to the aspiring athlete was "sell everything". Extreme simplicity is another way to reduce commitments -- if you don't have a house, car, consulting practice, spouse, job, garden, pet... then there is nothing to spend time on. Remember that elimination of many of these items will have a negative impact on our ability to have a life with meaning.

OK... once you've added-it-up. Reflect on the following levels of endurance commitment...

Nine hours of training per week -- at this level, you will be able to achieve personal health and enjoy the wellbeing that comes from endorphin release. Remember that the greatest benefit you receive from an active lifestyle comes from the first hour in your daily routine. At this level, you are unlikely to maximize your potential as an "athlete" and a lot of people are curious about how far they can go.

Fifteen hours of training per week -- at this level of long term commitment, you have a very good shot at achieving the bulk of your athletic potential. I think that it represents an achievable target for an athlete that wants to make endurance sport a fundamental aspect of their life.

Now the kicker... endurance sport attracts a lot of extreme people, such as myself. After a taste of early success... we convince ourselves that "achieving the bulk of our personal potential" is selling ourselves short. So we target...

Twenty-One hours of training per week -- if you want to squeeze the last few percentages (and we are talking small percentages) from your performance then you're looking at a 1,000 hour annual commitment for an extended period of your athletic development.

Thing is... even if you can handle it physically (many can't)... as you shift ever upward on the endurance commitment scale... you will notice that, eventually, you also need to annually commit an extra 700 hours of sleep and spend an extra 350 hours on athletic admin (massage, stretching, changing, showering, travel).

For many, what was once an enjoyable 450 hour annual commitment, gradually becomes an all-encompassing obsession sucking upwards of 2,000 hours a year.

So in addition to adding up your available time, also consider what level of athletic commitment makes the most sense in terms of the life that you are seeking to create for yourself.

Ten years
1,550 hours per year
$15 per hour (say, $25 less 40% in taxes/costs)
5% return on savings
= $292,000

Sit on that nest egg for 20 years at 5%
= $775,000

Choose wisely,

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12 July 2008

Athletic Inversion & Living The Dream

October 2008 marks the 20th anniversary of Scott Molina's victory at the Hawaii Ironman. Part of Scott's motivation for returning is the desire to get-it-right in terms of preparation, and race day performance. If an athlete as successful as Scott feels that he hasn't quite got it right -- after 30 (!) years of racing -- then there must be structural limitations in the human condition.


One of the key things that Charlie Munger repeats in his Almanack is the advice to "always invert". I have been reading that advice for three years but only recently started to grasp the meaning. I think what he is trying to tell me...

...to improve your chances of being successful, make sure you figure out what can kill you.

Munger believes that a solid track record of success can be created by sticking to what you know, working hard and limiting your poor choices. Inversion is a method of bringing potentially poor choices, or situations, to the front of your mind.

The books that I recommended in the last few weeks do a great job when it comes to applying this advice in the real world. However, I spent yesterday considering what derails athletic success.

According to Daniels, the two key aspects of athletic success are inherent ability and motivation.

However, our ability to achieve athletic success is a mixture of what we choose to do and what we choose to avoid. Nothing impacts choices as directly as your peer group -- choose associates wisely.

Across an athletic lifetime, there are ample opportunities for self-sabotage. World Champions (like Molina) have interesting stories about personal triumphs. They have hilarious stories about their mistakes. Unknowingly, I have been studying oral autobiographies of great champions/investors/coaches over the last eighteen years.


How we defeat ourselves in racing

The image above is a histogram of an ironman-distance power file. Don't get too caught up in the details, the picture helps me explain a couple of concepts for endurance success.

The Dead Zone -- the dead zone starts at the average wattage (and heart rate) for a Half Ironman race where you ran well. What is "running well"? I like to define it as within 7% of a fresh half marathon split. Within my own racing, I can come within 5%.

Why do I call it the dead zone? Because if you spend too much time above your average Half IM power (or heart rate)... your hopes of a decent marathon will DIE. The more time you spend there, the greater the likelihood of marathon difficulties.

We shouldn't blame the molecular structure of our nutritional choices, the issue lies with our selected race effort.

In racing, the #1 thing that can kill you is choosing a race pace that exceeds: (a) your fitness; or (b) your capacity to fuel to the finish line.

The likelihood of a superior performance increases the more easily you start the day. Consider:

Swim -- once you are swimming an easy to steady effort, you will find that you need to massively increase effort for a tiny increase in pace. You won't believe the scale of this relationship until you actually try it for yourself. In fact, a number of athletes strongly resist learning this knowledge.

As the saying goes...
...you can bring athletes to the lake but you can't make them negative split with a heart rate monitor attached...

The test workout is 5x800 meters (each one faster than the one before) -- best done open water or in a 50-meter pool. Check your average/max HR per lap against your pace per lap. Compare your workout average pace/HR with the average pace/HR for the final two laps.

Bike -- providing you choose humble gearing (a BIG assumption), you have the option to moderate and totally control your effort. If a former World Ironman Champion like Scott Molina can ride with a 30/27 then you should be able to suck-it-up and be realistic about your gearing needs.

Run -- if you blow on the run then the time penalty is MASSIVE, the cost of a marathon meltdown is disproportionately high. At Ultraman, I have pulled back 10-minutes per MILE, off athletes that run into trouble.

Does your prior race record show that you have the experience, fitness and competence to "race" to what you think is the limit of your fitness? I put "race" in quotes because very few people ever race an Ironman.

So what is a realistic effort for you to aim for on the bike? Here is a test workout... 3x40 mile loops, no long climbs, no drafting, with less than 90 seconds of stopping between each loop. Do each loop faster than the one before -- if you pull that off (and aren't wrecked) then Lap 2 is a good guideline. If you can't descend the laps, or if you are totally worked at the end, then even your slowest lap is too fast.

Download your data from this workout and look at your actual heart rate and power profiles. That is your benchmark for IM -- given that you are swimming 2.4 miles and running a marathon as well... you are likely to need to step _down_ from that actual training data. Similar to the swim test set... you will feel a lot of mental resistance when faced with this information. Many don't want to know.

No doubt some of you think that I am nuts to recommend a 200KM race simulation ride -- does your prior racing track record show that you have the knowledge to determine appropriate pacing?

I did a series of race simulation rides in 2001 -- they were extremely tough and the lessons are still with me! For some reason, lessons learned alone, in training, tend to stick with me longer than repeated errors made in the heat of competition.

A word on averages, fast triathlon cycling is about learning to optimize your speed on the LOWEST possible wattage. An athlete that can go the same speed as you on 80-90% of your power has a huge advantage once the run begins. We all tend to focus on the big numbers, however, the athletes that are most impressive are the ones that go quick on low power. Learning how they do that can give you and edge -- some ideas... aerodynamics, fast in the slow bits, avoiding spikes, bike skills, relaxed at high speed.

Even armed with the above knowledge, it is near impossible to apply it when stressed and surrounded by people making poor decisions. Socially, it is far safer to fail conventionally than 'risk' success in an unconventional manner. I have numerous podium finishes that result from (what others call) cycling 'weakness'.


Q. What is the #1 killer of athletic success in training?
A. Fatigue.

I have been working with athletes for ten years now and the greatest challenge that we face is managing fatigue. Athletes that successfully manage fatigue are more consistent with their training (and happier) thereby increasing their ultimate athletic success.

Here are some tips for improving how you manage fatigue.

Chasing Fitness -- Chasing fitness happens when you sit down and calculate the "fitness" required to meet an athletic goal. You then train at your goal fitness level, rather than your current fitness level. We do this in a lot of different ways -- solo athletes, do this by chasing Personal Bests in workouts; group training athletes, do this by seeking to "win" workouts with "faster" athletes.

My experience is the best training partners are slightly weaker physically, stronger mentally and very fun to be around. You then let the group dynamics lift your fitness.

As for the effect on your training partner... remember that most of your competition isn't consciously seeking their personal best, they are controlled by moment-to-moment emotions.

Chasing Averages -- I've nuked myself a few times with this approach, most recently last week. Here is how it works... you sit down with a recent lab test, or race result. The data is "real" so you have confidence that it will provide a reasonable benchmark to what you should do. You then pull out the exercise physiology textbooks and calculate the precise intensity that you should hold for the workout. Then, for an unexplained reason, you add 5-10% to the intensity and 10-20% to the duration! Fortunately, I cracked fairly early in that workout!

Another word on why averages are misleading. Have another look at the chart above. The average of that ride was 253w. About 6% of that ride was less than 100w but less than 2% of the ride was greater than 400w. With heart rates/power/pace, there are always more very low values than very high values. The longer, and more variable, the workout the greater this effect. As well, my brain always seems to "normalize high". If you ask me to guess the average power of an effort that I just completed (when I watched the screen a lot), I am nearly always 5-10% too high.

What does this mean?

A - If your goal effort is 180-190w then you'll probably average ~175w if you execute correctly.

B - If you set your powermeter on "average watts" and try to hit a number then the majority of your ride will be well over that number and you'll fail to notice (highly costly) power spikes.

No Man's Land Training -- A fit athlete will have the capacity to train every session a little bit "too hard". Taking the three main physiological markers, AeT/LT/FT, the mid points between each of these, should be avoided, with particular attention being paid to the mid-point between AeT and LT. There is a big increase in recovery requirement (and hardly any training benefit) from training slightly over these points, as opposed to slightly under. See the attachment from last week for more info.

NOTE -- intensity moderation is easier to apply to others than ourselves! Having a coach review workout files (post fact) can help you stay sane.

The final three points are sleep, life stress and nutrition (including drug/alcohol use). These are huge in terms of their impact on the amount of fatigue we carry around in our lives.

Sleep -- an extra hour of sleep, every night.

Life Stress -- consciously choosing to do less, in order to achieve more.

Nutrition -- eat real food.

The more simple you can make your life, the greater the chance that you will be able to execute successfully.


Living The Dream
Q. My description of a dream job would be: one that involved endurance sports, is active, flexible, challenging, and has a good potential for return on my investment of time and money. Very, very, very difficult to find something that meets those requirements, I think. I've contemplated becoming a race director, opening a gym/training facility for endurance athletes, going to school for ex. science, or getting a job with a company in the industry. All have their appeal. But its a huge set of steps between considering these possibilities while still in school and taking the plunge and leaving a steady job and income to try some venture of my own devising.

I've been reading your blog for a while and you seem pretty qualified to answer my question, which I am getting to. I've asked enough questions to realize that asking "how do I get that dream job" has just as many answers as there are people to answer; that is, everyone has a different story, and while they do help, they won't help me figure out my own plan. So my question is this: what is the most important skill/trait I can cultivate now and while working in engineering to help prepare me for the kind of profession I am contemplating?
Because of the high value we place on personal freedom, jobs with large degrees of freedom, rarely come with a high return on capital (human or financial). That said, when I look at the things that are most important to me (freedom, fitness, health, nature, love), these items do not cost much to acquire. They did, however, require years of preparation in terms of planning, positioning and effort.

The opportunity to build personal capital in your 20s is valuable. However, when I look back, even more valuable was: (a) being surrounded by a group of highly intelligent people that enhanced my desire to work; (b) the acquisition of a wide range of skills and the opportunity to apply these skills in a range of situations; (c) instruction (by example) of the level of commitment/effort/perseverance required to achieve challenging goals.

When I look for people to associate with, I ask myself, "does this person have a track record of achievement backed by work ethic and strong personal values?" Spending your 20s focused on the creation of that sort of person would be time very well spent.

More specifically for your goal, my advice is to focus on building your expert credentials, as perceived by your target market. Share your knowledge freely as it has little value if hoarded. The market will let you know if your experience has value and relevance.

Sharing your experiences, also improves your communication skills. In the field you are considering, effective communication is important.

Within your expert credentials, three things to consider:

Image -- always present yourself the way you wish to be seen by your target market. Be aware that most people will quickly see through a lack of authenticity. Remember that what takes decades to build can be pulled down very quickly. Respond slowly, and thoughtfully, in environments you don't control (such as other people's internet forums).

Within my own life, I have found it much easier to eliminate choices that don't fit my desired image than create something that doesn't exist. If you chip away at the items that don't fit then you will find that, over time, you end up with a "self" that is in pretty good shape. Over the last few years, I have taken a hard look at the aspects of my life that run counter to honesty, kindness and health. I work daily at the elimination of small things that are inconsistent with these values.

Put yourself in the right peer group, learn to enjoy the satisfaction of a job well done and gain control over the little things that are inconsistent with the person you want to become.

Perception -- there is the way we see ourselves, and the way others see us. From a business point of view, an understanding of how others see us is very useful. What aspects of your story resonate with your target client base? What special, or interesting, knowledge do you have to share? Sharing genuine experiences of an interesting life is probably the most popular form of soft-marketing you can do. We share a love of interesting stories.

Knowledge -- do you know what you don't know? Do you know what you need to know? Do you have multiple approaches available to help your clients? At the beginning of our athletic journey we know so little. Start by figuring out how the different approaches work, and don't work, for you. Work with the best people you have access to. Solidify your knowledge by sharing, and teaching, it.

Most of us get into trouble when we stray into areas where our knowledge is limited. Even as you achieve expert status (whatever that means) resist the urge to opine on all range of subjects. Focus on sharing experience in the areas where you have specific, and relevant knowledge. One of the nice things about being part of a smart team is that you have the ability to bring in support when clients ask questions outside of your core competency.

The ability to ask for help is a sign of strength, not weakness. One needs to be self-confident to admit one's limitations.

If you put yourself "out there" then there will be people waiting to sling arrows, or anonymous comments, at you. By sticking to what you know, it will make it easier to handle it when people seek to bring you down. Remember that our critics exist to criticize, no matter what they say, they have little interest in helping us.

While you are building the above be aware that the more successful you become the greater you are at risk for being hurt by various forms of cognitive bias. One of the reasons that I study under different teachers is to keep my "toolbox" filled with more than one approach for each problem.

Many experts become so immersed in their own dogma that they lose their intellectual freedom. I have had some very intelligent people agree with me in private, but note that they can't change their opinion because of the weight of their past public record. We share an irrational bias against people that change their opinion. Always give yourself the freedom to change your mind in light of new information.

I didn't answer your question directly because people that create world-class financial returns from triathlon are more scarce than World Champion triathletes. However, there are many examples of people that create an enviable lifestyle in our sport, and I believe you will find that much more rewarding than outsize financial returns.

Hope this helps,

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25 June 2008

Lifelong Athletics

The picture above is from 2004 -- that is Tom Evans without the shirt. Tom had a great race that day and, an even better day, last weekend when he won (with style) in Idaho. Now that Peter is flying float planes, Tom has to be the fastest Canadian Ironman. Outstanding for a married guy with a full-time job. When I have a tough day, or start to doubt myself, I think about Tom. He is a big inspiration to me.


A book recommendation for you that I have been enjoying is Seeking Wisdom, From Darwin to Munger. When I have read Charlie Munger's writing, he often talks about his checklists -- trouble is, I couldn't find them anywhere. Until I bought this book -- they are a great appendix that the author assembled.

This week I am going to share ideas on a reader question.

If you have a moment can you address training as a way to maintain a lifetime of fitness and how to manage your training with a long term view? I ask because for myself partly but mostly for my father who is 63 and a fit runner. After watching me at the Eagleman 70.3 he has decided to switch from marathons/ casual cycling to triathlon (I am supportive and think the focused cross training is likely more sustainable as he gets older). Do you have any recommendations for older athletes? Are younger athletes able to maintain their fitness as they age or does the volume over the years result in overuse injuries that surface later in life?

I wrote a blog on The Aging Athlete last November. That is a good starting point.

Long time readers will notice that my advice appears consistent across sex, age, experience and and goals. That is a conscious decision -- my experience is that consistent application of the Four Pillars applies very well across populations. For training protocol, I think that we should all research the lessons of Arthur Lydiard and translate to our sport, ability level and athletic age.

NOTE -- Lydiard is well known for his 100-mile per week base phase, I like to translate that into time for triathletes -- in Lydiard's population a 100-mile run week was about 11-12 hours of training. For sustainable results, keep those hours in your head, sticking with a hard distance target can be counterproductive.

Every athlete, that seeks long term success, should remember the essential nature of non-training factors. Put another way, new athletes can appear to "get away"with poor nutrition, never stretching, muscle imbalances, and weak recovery strategies. If you want to perform across ten, twenty, fifty years then these risk factors become key personal limiters.

A phased approach can work well. Phases within each week, month, year, four year cycle and decade. Consider the weak points in your current athletic inventory. What can derail you? Greatly improve these "consistency risk factors" in your transition period and early season. Then... maintain across your season. It takes far less energy to maintain a level of strength/flexibility/nutrition/immune function than it does to improve, or heal, when it goes off track.

As an example, even today, I feel that I continue to benefit from strength training done over a decade ago, yoga done eight years ago and two years of aerobic overload (2003/2004).

There are only a few (usually Olympic level) coaches that have the vision to nurture talent across a 6-12 year time horizon. Most people go-for-broke in 6-18 months and only the biomechanically gifted freaks survive.

Our reader closes with a great point -- lifetime volume and wearing out. Hardly anyone (other than former elite marathoners and ironman champions) discusses this with me. I suppose it is human nature to avoid focusing on the fact that we wear-out and die.

Listen to my interview with Dr. John Hellemans.

John is very good at respecting an individual's 'right' to make their own mistakes. However, he has been telling me for YEARS that the high level pursuit of ultradistance sports is unhealthy because of the training load IMers place on our bodies. I never had a real position on his point until this year (he's right). It's a lot like death -- it simply doesn't make sense until someone young, close to us, dies. Even then, our brains aren't wired to focus on our own mortality.

My buddy, Jeff (Dr. J) Shilt explains it this way... think of yourself as a car. You can use the best fuel, have a perfect service record and drive carefully. Still, no matter what you do, things will wear out eventually. 1200 hour training years don't exactly fit with "careful driving"!

Coming back to Hellemans, he is one of the best 50-somethings in the world at standard distance triathlon (8 world AG titles, I think). He's been in triathlon since it was founded and is still ripping today. He shoots for 12-15 hours per week of training load and that enables him to be a highly competitive and happy guy.

Tom Evans is my role-model for Ironman and John Hellemans is my role-model for life.

So in terms of life long athletics -- thinking through my own experience as well as my training partners left in the sport and long gone...

You can likely hit it pretty solid through to 25 years old. Athletically young athletes can also be very aggressive for 1, or 2, years when they are under 40. I have seen many athletes jumpstart their endurance by taking a sabbatical from work to focus on their cycling. However, hitting-it-hard for more than 18 months tends to fry athletes at all levels and compromises long-term consistency.

Remember that long term consistency is the best indicator of being able to approach our ultimate athletic performance. Far more than protocol, consistency is the universal characteristic that appears at the top.

High performing endurance athletes that come from non-impact sports (swimming, cycling) need to be VERY VERY careful when they start running. If you strap an elite swimming engine to a novice runner body then you nearly always ruin the athlete -- don't fall into the trap of fooling yourself with exceptions. There is a TON of silent evidence.

So my advice... if you have potential for triathlon then you will know within two years from starting the sport. Folks with high athletic potential improve very rapidly. With that rapid improvement comes the temptation for more, and more, and more... a good coach is valuable to protect you from the natural enthusiasm that comes from success. Know your coach's limiters and remember that we tend to be attracted to people that share our biases.

For whatever reason, we seem to think that there is more merit in ruining our bodies if we happen to be be "good" -- my rapid, and continuous, improvement hindered my capacity for an objective review of my athletic path. It wasn't until I approached my athletic peak, for a second time, that I was able to consider what the heck I was doing. Like so many things, most of us keep rolling until something breaks. Even then, how often do we chase the illusive "high" of past experience.

Once you have been doing endurance sport seriously for five years, and certainly by ten, you will have a clear idea of your potential, what you enjoy and (if you pause to think) should be able to figure out the "why" behind your participation. At that stage, it is worth considering how you are going to maximize your "athletic why" across the rest of your lifetime. If you read this blog weekly then you'll know that I've been mulling my "why" for a few years... ...and I am still training!

Off to the Rockies with Molina. Back online after the 4th of July.

Chose wisely,

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22 June 2008

The Back 40

The first principle is that you must not fool yourself, and you are the easiest person to fool.
-- Richard Feynman


Our picture this week is Scott Molina (looking buff at 48) competing in the Epic Italy, 4.5K uphill race. For me, his expression sums it up. Note that he is holding excellent form despite being totally worked. True running technique is what you are left with when you're wrecked. Here's a shot of Johno's run form... hills are a great way to improve running economy...

Scott is in town on Friday and, starting Saturday, we'll be hitting the Rockies for a week of altitude training. I was up on Magnolia Road this morning for a little high altitude prep. It will be interesting to see how Scott copes -- hopefully, he will have some of the Stelvio left in his bloodstream.

I'd show you a picture of my running form but... it left a bit to be desired when put alongside my fellow Epic coaches! We'll finish with a veranda shot at the Hotel des Alpes in Cortina. An outstanding hotel based in the heart of the Dolomites. A great base for the bulk of your vacation in the Italian Alps.

That is Randy from New York with Scott/me. I get a big kick out of hanging with guys from the East Coast. They live in a different world and that helps me maintain perspective.


Back to the quote that started this piece off. If a man as clever as Feynman says that he needs to be careful about fooling himself then, I figure, there are a number of areas in my own life where I am currently fooling myself. So the last two weeks have been spent investigating how I am fooling myself.

Use of Capital -- I need to exercise consistent fiscal discipline across all areas of my life.

Athletic Achievement -- athletic triumphs are most satisfying when novel and unexpected. Across a lifetime, one may find greater satisfaction from success in a variety of fields. The joy of beginner's mind is exceedingly tough to maintain as one becomes more and more experienced (in reality, more and more biased!) in a field.

Athletics and Satisfaction -- satisfaction comes from living in harmony with my body and the sensations of personal health. These feelings are most prevalent when I am training for a competition. However, I think that I am linking competition to the feelings rather than seeing the link between lifestyle and personal satisfaction.

Relative Achievement and Competition -- the most peaceful moments of my adult life have been moving in harmony with nature, not defeating strangers in athletic combat.

Benefits of Financial Wealth -- the two greatest benefits of financial wealth are independence and freedom. Using our wealth for its most obvious use (goods and services) reduces it ability to provide us with what truly matters.

All of the above feed into my personal values and ethics that I have built up over the last ten years.

Successful Marriage based on kindness and respect
Peaceful Listening
Retreats with Nature
Wake-up Early
Ethical Life with Meaning
To explore and share new experiences
To read good books and learn
To write and teach
Temperate weather with ample sunshine
Maintain expense/income balance

The title of this article refers to years 40 to 80 of my life. My goal with my current review is to establish a frame of reference against which I can make decisions of varying duration and expected outcome.

I thought that I was going to have to re-write "everything" then discovered that my values were fairly well documented within my existing business plan.

I will finish this week with a shot of my nephew sporting the GordoWorld team colors at a local swim meet...

I've got a few spare jerseys in the basement -- if your kids are interested then drop me a line with your address. [Update -- they all went in 24 hours]

Still thinking,

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08 June 2008

Poor Charlie's Almanack

I am going to change gears from the tri-writing of the last few weeks and write about some personal and financial ideas.

Before we get into that a few announcements.

Boulder Summer Training Weekends -- we have a couple of slots left in each of our July and August camps. Full details here -- The weekends are a mixture of training as well as a chance to sit down talk with the EC coaching crew.

Epic Camp Italy -- starts this coming weekend. You can follow the action on the Epic Camp website. Scott and Johno have come up with a very challenging route. Should be entertaining and I am glad that I've taken my preparations seriously. Unfortunately, Mike Montgomery won't be able to join us so it looks like Molina is the man-to-beat for the campers with Pink Jersey aspirations. I have made a promise to myself that I won't tack on a single bike kilometer so that probably rules me out of the overall competition.

PodCast -- I did an interview with Mark Byerley, a fellow Canadian based in Waterloo. You'll find MP3 and WMA versions HERE.


Alan wrote a fun piece about his thoughts on athletic performance. I enjoyed it and can relate to a lot of what is in there. Thoughts that flowed...

In life, participation trumps performance -- however, successful performance helps maintain participation.

If it really is all about participation then playing the "performance game" can be a good way to keep going. If tweaking, experimenting and fine tuning keeps you heading out the door then its all good!

I need to maintain an open mind about the sources of other people's motivation. Motivational tools that work are important.

I have a lot of respect for 'scientists' (and coaches) that front up and get out there. There is so much about sports performance that we don't understand. If we get all the MSc's/PhD's out there then we're bound to learn some more!

AC wrote about heading towards the end of the first half of his life. That caught my eye as I have started preparing my 40-year plan that will take me to 80 years old!

I have been reading Poor Charlie's Almanack a great read and a reminder about several keys to successful living, and investing.

The best tip (so far) is to approach your lifetime investing as if you have a twenty punch card. Each time you make an investment, it costs you one punch. Consider a 40-year investment career with twenty key decisions. That really appeals.

The implication of this approach (for me) is that we want to think very carefully about each investment and be highly selective. When we bet, make a substantial investment, with a margin-for-safety built into the price and ensure capital preservation.

This is great advice -- thinking back, my investment track record is dominated by the performance of my five largest investments. Get rid of those five deals and my personal track record would be below average. I have never been diversified and have had poor returns from my limited stock picking. I would be ahead if I removed all my small investments // every one that I ever made. As a portfolio, they had a poor return and sitting on cash would have been superior. I appear to lack discipline when I am not committing a substantial portion of my net worth.

Munger is a fan of Ben Franklin (see section on Virtue in the link) and points out that Franklin reduced his commitment to business when he was 42 so that he could focus on his writing, science and other interests. Thinking about Franklin triggered the decision to consider the second half of my own life. The key questions that I have been pondering:

What are my values?
Where do my greatest skills lie?
What can be achieved when these combine?

I recommend the Almanack to you. I have the Second Edition and it looks like they just revised with a Third Edition.

Not sure about internet connectivity in Italy -- if I can get on-line (and have the energy) then I'll update from Epic Italy. Otherwise, I'll be back the week of June 16th.


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10 May 2008

Planning and Being Hard

This week, I will shift gears from property investing and discuss two topics that preoccupy the minds of athletes -- The Plan and Being Hard. My thoughts will be slated towards athletics but the concepts apply just as strongly in our daily lives.

Before we roll into the letter, I was back in the Grand Canyon last Tuesday. This time I was running solo and applying the lessons from my first trip. It is amazing how quickly the body can adapt to stress. While I wasn't much faster on the round trip -- the damage that the run did to my body was a fraction of the first time. This time four weeks ago, I could barely walk and my legs were absolutely trashed. With respect to Ironman marathoning, durability is an essential fitness component that is near impossible to measure quantitatively. My average heart rate for the "run" was 117 bpm and it is one of the toughest sessions that I will do all year.

Alan's latest blog piece provides a window into my lab-fitness and a discussion of performance limiters. Something that JD pointed out at the April camp was that each of the Endurance Corner coaches has a different take on the same topic. That is part of what makes us a good team, and also a source of creative friction.

When I test myself I remember the following:

***Testing is three dimensional, performance is four dimensional. The test measures my ability to perform a specific task over a period of time. Performance, in sport and life, requires the ability to execute over multiple years. Life is about coping with the unexpected. By definition, our capacity to manage change cannot be measured in a controlled environment

***X-Factor // At our April camp, Robbie Ventura gave an excellent talk on fast time-trialling. The bottom line of his talk (for me) is some athletes go fast on race day for a range of "little things" that they are able to put together. Robbie calls these little things the X-Factors of racing. Successful people have the capacity to execute a series of little things, consistently, over time. For me, this skill is habit based. Our X-Factor capacity cannot be measured in the lab.

If you review my bike chart over on AC's blog then remember that it is the result of more than 20,000 hours of endurance exercise. We get a lot of question about how athletes can make changes to improve their charts in 6-8 weeks.
In your training do not be in a hurry, for it takes a minimum of ten years to master the basics and advance to the first rung. Never think of yourself as an all-knowing, perfected master; you must continue to train daily with your friends and students and progress together in the Art of Peace.
-- Morihei Ueshiba
I have been fortunate to study under a few masters of triathlon -- even they admit that their main skill is guessing better than average.


I play a good "long game" -- by that, I mean my performance over multi-year time horizon is strong. As a result, people are interested in the specifics of my plan.

The power of my plan lies in the general, not the specific. Here's what I mean -- when I get it right (and I make a ton of mistakes)...

***A simple plan that I can remember and execute every day

***Periods of specific overload that address key limiters

***Scheduled recovery, and downtime, before I need it

***No one session, day, week, month compromises the period that follows

***Finish strong

***Enjoyable, relaxing and satisfying

The above factors lead to outstanding execution over the long term. That, in turn, leads to performance.

99% of the noise in our heads (mine is no different) is a distraction from the above, makes very little positive impact on performance and reduces energy available for recovery.

Which brings me to...


Being Hard
Most people are surprised when I tell them that I am (nearly) completely soft. My close friends laugh when I say that I am 99% negotiable and 1% firm. I accept that the world could appear differently looking out, than looking in!

Given the impossible task of seeking to control the world around us AND our limited willpower, influence, energy... I tend to focus my true efforts on a very, very, very limited set of circumstances. I figure that I can be "hard" for a couple of hours per week, MAX. If I am "hard" more often then my overall performance will, ultimately, be compromised.

One of my past mentors taught me that we live with a six-shooter and no extra ammo. If we are thinking of using a "bullet" then we'd better make sure that it is a key point. That analogy has stuck with me and 95% (or more) of my training builds me up (mentally, physically). I only do a little bit that breaks me down.

I could be a little soft from a sport performance point-of-view // and // that is likely why HTFU gets my attention. However, after thinking about it for over a month, I don't know a single long term high achiever that is "hard".

In racking my brain, I only considered people that I knew. There are hard personalities that we hear about but I suspect that they are fabrications.

The toughest competitors that I know are soft in real life (though they try to hide it in public). Our fears and emotional weak points are powerful motivators when channeled towards performance.

When you reach a point where you can't handle any more... relax and soften up.

RASU -- maybe I'll get some hats printed up...

Cheers from New Mexico,

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17 April 2008

Looking Forward

The shot above was taken in my CactusManSuit (courtesy of Jonas Colting). I was enjoying a triple soy latte in Tuba City, Arizona before heading out for a VERY crisp ride across the Navajo Nation. As you may tell from my half-smile, my motivation wasn't at an all-time high. It was two days after my canyon run and we learned that you don't need to be able to walk to ride well.

I'm going to write about two topics this week: some quick thoughts on success; and ideas on "my demographic".


I'm fond of asking myself (and my clients) questions. When I hit a road block, plateau or suffer a set-back, I ask myself "can I increase my effort to overcome this roadblock". For most of my life, the answer had been "yes" and I cut out other interests to be able to increase my personal effort on the task.

Alan has some guidelines that he uses in his coaching -- they run something like... never reduce... never trade... never compromise... // I'll let him write the whole story. They work quite well for people that are operating below their maximum capacity.

However, the majority of my clients are seeking to operate beyond their maximum capacity. I know that most my personal trouble come from over-estimating what I can handle.

Some examples that we bump into a lot in our sport:
***Excessive training load
***Persistent nutritional deficits (quality, quantity, timing)
***Lack of consistent sleep

Those are the three most common that I've experienced in my own training. As I mentioned a few weeks ago, I find it useful to ask myself the opposite to see if I am missing something:

***Could my body sustain more training load?
***Would I be more successful by eating less?
***Should I reduce my sleep?

Of course, when we are trapped in self-sabotaging patterns, it often takes a crisis (or seriously crappy race) to get us to look fresh at our approach. When we reach the point that more is clearly insane... then we might be ready to try less.

One final thought on success -- a friend noted to me the other day... "I did everything that I was asked". I smiled at the time.

Not everyone understands the difference between success and compliance. Success isn't about doing the minimum.


Below is a snap of me cradling a mixing bowl of oatmeal and scrambled eggs. Here's a stat that you probably didn't know -- I tend to eat 28-35 whole eggs per week when training big. I also eat a lot of olive oil, nuts, avocados, fish, chicken and beef. My main nutritional "weakness" is mayonnaise! Interestingly my hdl/ldl ratio is about 1:1 (96/100 to be exact).

Alan thinks that I should try to eat "even more gordo" -- so I may place myself on the Colting Plan, eat even more good fats and maximize my real food intake. It can be challenging to do that when daily calorie demands go sky high.

I don't count calories, grams of macro nutrients or seek to optimize any ratios. What I do is eat for fuel and seek to limit ANY loss of lean body mass (EVER).

This brings me to...

My Demographic
I was looking at the agegroup breakdown at Ironman Arizona and realized that I appear to have found a sport where my demographic represents the "average client". By far, the largest grouping of athletes was men 35 to 50 years old. When I read the popular (triathlon) press, this demographic doesn't seem to be all that represented -- unless they are buying the swimsuit issues...

I thought that I'd lay out some key concepts for the 35+ guys to remember // things are going to change from what you remember in your 20s. Take it from me, or Scott Molina... or Dave Scott... or Mark Allen... ...the needs of the speedy veteran athlete are very different than what you may read in the magazines.

#1 priority is Training Consistency // you gotta be training to hold on to what you got and "holding on" has to be a key motivator of men in my demographic. Those eyeball searing workouts that you think you ought to do... if they result in an injury then you are likely to lose fitness, and lean body mass, that will be very tough to regain.

Once you are over 50, the cost of injuries is even greater.

#2 priority is Keepin' What You Got // whether you use hills, big gears, paddles or Gold's Gym -- covet your strength. It insulates you from injury, keeps you healthy and improves your mood. I also suspect that heavy weights buoy naturally declining hormonal levels (as does a limited amount of high intensity cardio).

Jeff Cutteback is a name that you might have heard -- if you are in "My Demographic" then you should do some research on Jeff. He's been speedy for a long while and just finished 15th overall at IM Arizona (nipping Molina's record in the 45-49). Jeff's is 49, going to Kona and I suspect that he has a birthday between now and October... go get 'em Jeff!

As I start to feel the impact of multiple 1,200 hour training years (mainly on my feet), I have begun to consider how best to use my remaining lifetime mileage.

There is a school of thought that says "keep the hammer down and hope medical science stays in front of me". However, like most of "My Demographic", I started triathlon to lose a bit of weight and challenge myself. The whole "being fast" thing happened as an accident. Back in 1999, I was merely looking for a daylight finish.

With my pals I talk about the divergence between elite athletic performance and personal health. As I age, I start to wonder about the divergence between optimizing speed at 40 years old and maximizing athletic enjoyment across the next thirty years.

I like my feet, my knees and my hips -- it would sure be nice to hang on to the Original Equipment for as long as possible!

Whether it is at the bottom, or the top, of the range... "My Demographic" is where we will each see our maximum athletic potential decline.

...and that could be why we are all out there trying to prove something to ourselves!

Just trying to figure out what.


Off to our second Tucson Training Camp in the morning. Should be a great week of training with old, and new, friends. We have a solid group of amateur athletes; our superb support crew and an outstanding ten-day forecast from weather.com.

See you out there,

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25 February 2008

My Southern Retreat

I have been off-the-grid for the last two weeks and staying up at Snow Farm in New Zealand. I am happy to report that the world didn't end and I wasn't fired by my clients. In fact, everything seems exactly the same as when I left the world of connectivity. Makes me wonder how long I could pull the plug before something material happened. I bet one month.

Aside from the President, I can't think of many occupations where we have to be in constant contact. In fact, there are a few (banker, accountant, CFO, CEO) where best practice forces you to leave for two weeks in a row. A two week holiday reduces our ability to perpetrate a fraud on our employers.

This piece is a recollection of thoughts that I had across the retreat, when the stimuli of constant outside influences was removed.

The first thing that I noticed was my mind calmed very quickly. Within 24-hours I was grateful that I had made the fortnight's commitment to stay off-line. Monica offered to clean my email server but I was worried that she might see something and mention it to me. So we waited. The grand total of spam, and real, messages was 8,500 when I 'mailwashed' the server last Thursday. If you are waiting for a reply then I'll need a bit more time... I'm making good progress, should be back to you by the 1st of March.

The next thing that I noticed was my sleep improved in all areas. The speed that I fell asleep was faster, the number of times that I woke up during the night was reduced and my ability to wake up (refreshed) before my alarm increased. All this while living at altitude and undertaking challenging training with elite short course athletes.

Pretty much everything improved. So I wonder... does technology and the media serve us? Or do we serve it?


When I stop writing, I miss the release, and learning. Even on retreat, I kept my writing going. You will find my complete Snow Farm Daily Diary below, all 14 pages of it. Worth a read if you are interested in athletic performance -- we had excellent speakers.

So I miss writing but I don't miss TV, movies, newspapers, email... one of my goals for the next 12 months will be to do a better job at restricting my input (even more) and see if I can outsource a few more of the items that clutter my mind.

What about clients? Over the last three years, I have been shifting to a model that is based on high value interaction with my clients. I noticed that I am most effective when I work shoulder-to-shoulder with clients -- our Tucson Camps are an experiment with "doing more" of that work.

I am effective remotely but that sort of work doesn't appear to build me up. Instead, it clutters my inbox with low-value chatter than doesn't address the key issues facing the client. Email can be useful but, overall, it is low value communication.

To get to the core of performance requires trust -- and trust requires spending time with people. Another paradox is that a large impact, need not require a large amount of time. Spending a few days with John Hellemans reminded me of that. More than anyone I've met, his life is an example of the impact one man's high standards can have on the world around him. PodCast Here -- sound is mixed in terms of quality.

We were talking about Tibet and John noted that it was difficult for one man to make a difference. I shared an observation that one man can make a huge difference and that his work in NZ has made a massive difference in the lives of thousands of people. He started triathlon at the same age as I did (30). John's life shows what combining passion, talent and work ethic over 25 years can achieve -- a lot!

Up there at Snow Farm, I asked myself a few questions:
  • What am I good at?
  • What do I enjoy doing?
  • Where do I spend my time?
I do a decent job at spending my time at things that I am both good at, and enjoy doing. However, I have identified a few items where I am spending time, not enjoying it and not being particularly effective. I also sense that I've placed a few of my team members in situations where they aren't particularly good and aren't enjoying it. There could be a way to make those around me more effective. I'll need to ask them when we are together.


So that's the Big Picture items that came into my head. Here are a few detailed items from the specific of the camp, and my time with Hellemans.

Choices -- most of us will reach a point in our lives when performance deteriorates, or ceases to improve. At that stage, we have a choice to make: Quit, Change or Hang On. Most people Quit or grind themselves into the ground by Hanging On. Only the select few learn to manage themselves through continuous change.

Tightness -- tight muscles are weak muscles. Rehabilitate your personal weak spots by trigger point release, muscle activation and strengthening. If the muscles are small then they need small exercises, done gently.

Authenticity -- I read a book by the title of this bullet point. Perhaps that is the attraction of the South Island. It's weather, wind, people and topography are deeply authentic. Not always comfortable, but real and full of power.

Kiwi Real Estate -- With gross yields at 3% and mortgage finance at 10%, I'm bearish on the Kiwi property market. I don't see the room for yields to come up and I see speculative buying in many markets. However, given interest rates, the liquidity position of the local economy looks like it will stay buoyant (unlike most other markets). My personal rent-or-buy decision would be rent.

Wanaka vs. Queenstown -- Comparing these two towns, I can see why the internationals like QT but Wanaka has better weather, more sunlight and cheaper housing. Long term, I expect Wanaka to outperform.

PPP -- In US dollar terms, New Zealand real estate is 400% more expensive than seven years ago (22% p.a.). Petrol has shown a similar increase and food is up 17% p.a. in USD terms. New Zealand isn't expensive but it is not cheap any more. For what the visitor gets, it offers fair value. The days of US$110,000, five bedroom houses are long gone!

My final realization was that New Zealand is one of the few things in the world that I miss when it is not in my life. Monica was the first person that I ever placed on that list. Now I have two things.

By "New Zealand", I mean Molina, Hellemans, the wind, the mountains, the weather and the people.
  • Molina because he is a bit nuts, accepts himself and gets on with his life.
  • Hellemans because he is successful by putting others ahead of himself (keep hope alive).
  • The wind because it is so ridiculous that you just have to laugh.
  • The mountains because of their beauty.
  • The weather because you can get snow, hail, heat, cold, rain and wind... all in 24 hours.
  • The people because they work their butts off and have realistic expectations -- they are also loyal and friendly.
You Kiwis have a good thing going down there.

Hope to be back soon,


In case you are wondering, Marty and Ben are in a Kiwi Ice Bath in the photo. Chillin' at 5300 feet...

Word File of My SnowFarm Daily Diary

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19 January 2008

Self Awareness and Facilitation

Our photo this week is Monica’s Buddy Andrea (MBA). MBA has an M.B.A. from Harvard. She came over to Australia to visit us and I have been receiving free personal consulting.

When we discussed my piece on Start-Ups, Andrea noted that hardly anyone takes the first step of creating self-awareness. At HBS, they had an entire course on the subject. Most of us can’t go to Harvard but we can review the article and consider its best points.

Here goes!

Drucker’s article notes that it is extremely tough for us to figure out ‘where we belong’. He suggests that we should start by noting where we don’t belong as well as the situations that don’t suit our strengths.

He counsels that we enhance our strengths while working to eliminate our bad habits (rather than our weaknesses). There is much greater return from supporting top performers than “fixing” mediocre players.

Focus on being polite, trim the bad habits and place ourselves in situations where we can use our strengths.

He points out that we all have intellectual arrogance that limits our success. I spent two hours thinking about the areas where I am intellectually arrogant. I really had to think. I am far from perfect but everyone else’s limiters came to me first!

Probably my #1 arrogance is advisers that have never “done it” – I place a huge emphasis on learning-by-doing. When I see a man promoting himself as “the world’s greatest” adviser on a subject that he has never personally experienced, I have to work (very hard) to give any credibility to his experience. That’s a shame because some of these advisers have spent countless years studying the best performers. They probably know a thing, or two!

To know, but not to do, is not to know.

I surround myself with do’ers. There is an important role for the academics – those of us that have “done” are biased by our experience – combine us with people that are biased by their textbooks and we might breakthrough together.

If you look closely at the Endurance Corner consulting team then you will see my efforts at diversity. Still, we are a bit young and too male. We are working on it.

In my youth, my greatest limiter was a core belief that tact was a sign of weakness. In my 20s, all that mattered was performance. Now, if you are a high performer then you can get away with that for a while. However, we pay a high price in terms of ultimate success and effectiveness. I was fortunate that my first boss was a lot like me and found my flaws entertaining.


Values – we tend to think of values and ethics as being crystal clear – black/white or right/wrong. Drucker makes the point that, in life, we can find ourselves in a situation where conflicting values are both “right”. I will give you an example with a list of my business values.

This is what Gordo Incorporated stands for:

  • Low leverage
  • Full disclosure
  • Focused, specialized personal excellence
  • Clear instructions
  • Return on capital employed focus
  • Long term achievement trumps short term gains

Consider the opposite of the above points – Snazzy Company Limited values:

  • Maximum leverage
  • Necessary disclosure
  • General, personal excellence
  • Accepts that life is imperfect with changing information
  • Growth focus
  • Consistent short term gains

In one job, I would be happy – in the other… a disaster. It is important for me to remember that the other company isn’t a “bad” company, just different.

Armed with your strengths and personal values you can decide if an opportunity makes sense for you. Before signing on, use your self-awareness to lay out what is required for you to succeed.


The other interesting part of the article is a description of the different ways that people communicate, learn and work. It probably won’t surprise you to learn that I work/learn by writing. At McGill, my class notes were the Gold Standard. The “listeners” used to photocopy them for subsequent review.

I have had two successful business relationships with extreme examples of listeners/talkers. Until I figured these guys out, I used to bang my head because they “never read what I write”. The way to crack the code is to call them on the telephone – I used to call these guys from 30 feet away!

If you are working with people with a different style then acknowledge it. We are paid to be effective, not right. Andrea's tip here is to remember that, more than changing your style, respect and adapt to the styles of our co-workers.

More in the article – with great examples.


Feedback analysis – Drucker’s feedback tips are HIGHLY valuable. Each time you make a key decision – write down what you think is going to happen and revisit it 9-12 months later. I have eight years of personal business plans and learn a lot from them.

Some things that I noticed:

  • When I get nervous about a situation there is usually a reason
  • My goals are challenging, I (mostly) achieve them but rarely exceed by a large margin
  • Other people are better at judging character than me
  • I need people with excellent people skills around me
  • I would benefit from pausing after my greatest successes
  • Painful personal feedback from the people closest to me is normally correct – I listen but, typically, at least two years after I am told. This could indicate that I am stubborn…
  • I could be far more effective by taking a greater personal interest in the people around me.

There is much more in the article. It’s only ten pages. A small investment of time to get an edge on ourselves!


Phew, running long again! I will be short on facilitation.

The best thing that Andrea pointed out to me was that in any situation there is the person acting and the person facilitating.

As an adviser, many clients come to me for the professional OK to continue with their bad habits. At one level they want success but, at another level, they want acceptance/love and the OK to keep rolling just as they are. So we start by acknowledging what is working and good in their lives.

Without a basis of trust, we can get fired when we refuse to facilitate. When we fail to surround these difficult conversations with manners and tact, they often fall on deaf ears. With my inner circle, I often have to wait a year, or more, for an opening to share feedback. As a bonus, waiting saves me when a rush-to-action is inappropriate.

My second thought was to consider the people, and firms, that I facilitate. Whether we like it or not, our actions have a multitude of direct/indirect impacts. Questions that I considered:

  • Do the companies that I support back the best people?
  • Do the websites that I visit share my values?
  • Would I be friends with a person that had a personality like my favorite sites?
  • Do the blogs that I read bring out my best emotions? Do they lift me up?
  • With the people/firms that don’t share my ethics, how are they linked to me? Am I facilitating them?
  • Would direct action strengthen, or weaken, my adversaries?

Andrea’s final tip was “Stay on message and stay positive” – with that in mind, I won’t share my answers. One of the things that I am working on is my need to “be right” all the time.

Until next week,


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11 January 2008

Financial Start-Ups

Our photo this week is from our first Epic Camp in January 2003. Many speedy people in that shot -- some of them didn't even know it at the time!

Endurance Corner is accepting applications for 2 to 4 month internships. For more details contact mat at endurancecorner dot com. Prior experience is useful but not necessary.

Endurance Corner is looking for an MD, PA or Nurse Practitioner for its medical consultancy practice. The position would, initially, be part-time and ideal for a parent looking to re-enter the workforce. Please contact gordon at endurancecorner dot com if interested.

Endurance Corner is based in Boulder, CO.

We start this week with some feedback from Europe.
D.D. Observes:
A couple of things that come to mind regarding your recent piece on "motivation":

Interesting how "achievers" are usually - not always - driven by primarily selfish goals. No judging here, just observing.

CAREFUL! I know a lot of people who place themselves amongst (relative) "losers" just to look good. Those guys ARE NOT the top achievers. "You are as good as the expectations of your peer group." At least in the long run. IMHO
Selfish Goals -- I am not so sure that high achievers in 'self-less' vocations are more purely motivated than high achievers that work for themselves. As well, there may be a lot of selfish people that don't achieve -- it may not be a defining characteristic.

Peer Group -- this is a very good observation and why I advised 'periods' of out-performance. My podcast with Chris McDonald was interesting in this regard. Chris moves between towns where he is 'normal' and a 'star'. He stays in Boulder until he can't handle it anymore then heads back to Aussie and pounds his mates. Like I tell Mat, Fast in Indiana isn't always fast.

One last point, most people are not working towards maximizing their personal achievement. Their daily choices and actions are inconsistent with achievement -- the true goal is something else.

We can have very fulfilling lives while being clueless. I have enjoyed my periods of unconscious incompetence! High achievers are some of the most tortured people I know.

Alan wrote an outstanding article on what limits achievement. Understanding the process he outlines is a requirement for breakthrough performance.

And now... this week's letter.

I received an interesting email. If this letter triggers any ideas then please send them in. This topic is one of my favorites and I have been considering a few start-up opportunities myself.
A.R. writes:
I come from an entrepreneurial background and started with my current mentor and boss in real estate development XX years ago. With the current market and industry conditions my mentor has decided that 2008 will be a very safe year where we will not be looking to acquire or develop any more properties but just finish out the few condo conversions that we are doing and manage the apartment buildings currently in the portfolio...

I will be in the position to either find a new job in RE development or take the plunge (sooner than expected) of going on my own.

As I do some job searches I find positions that are interesting but that would be developing, raising capital, or acquiring properties for another organization and my thought is why do that for another company when I could be doing that on my own. The thought of going on my own excites me and what I want to do, however I only have about a 2 months capital reserve currently in the bank without liquidating anything and so I would be looking at going into some sort of debt.

If I go to another company I feel like it will be demoralizing and that I will not have the passion and work ethic that I would if I was on my own; however it would give me more time to gain experience and save more equity for a better time to go solo. I do have a couple projects that would provide a strong foundation if I go solo- raising capital for a distressed homebuilders fund, multiple client kitchen/bath renovations, development of 10-20 single family lots that a partner of mine owns which we are planning to develop, and 1 or 2 other opportunities but will not bring in cash flow for at least a few months. I also feel that I would miss out on these opportunities if I join another company as in that case I will not be able to commit the necessary time for these independent projects.

When I receive these emails, I get a little bit nervous because I fear that you might actually take my advice! So the first thing to remember is that there are no 'right' or 'wrong' answers. Odds are, you are going to be just fine going down any path.

That said, "trust your heart" can prove to be expensive when leverage is involved.

I would spend time on your Personal Plan before shifting to your Start-Up Business Plan (which you should write out in full and share with a respected adviser). Our society has romantic ideas about entrepreneurship that are far removed from the reality of owning your own business.

The first thing to do is read The E-Myth. That book helped me understand the roles required for entrepreneurial success as well as what often kills a business. Step back from the 'franchise' discussion and consider the broad strategic issues of simply achieving your business goals. Remember that a business exists to serve the aims of its owner. Do you know your aims?

That will help you frame the second thing... Do you know what you are good at? (Drucker summary and full article as well as more resources) Then consider if you enjoy doing what you are good at.

My Answer: I work as a consultant because I am good at project management, financial analysis, deal execution and strategic planning. My best skill is taking all of those components and expressing them in a clear written plan that is attractive to key decision makers. I spent the 90's doing that 50-80 hours per week.

Working solely on work was slowly killing me. I completely lost touch with my physical self (weak nutrition, no fitness, plenty of booze) and was disconnected to my spiritual side (never close to nature).

The solution was a position where I can alternate very intense periods of effort with recharging phases. However, this means that (absent change) I cannot be the CEO of a new company.

If you are talking about setting up a business then you are looking at a sustained, full-time total commitment. It is no different than what I write about elite athletics. The best CEOs that I know have tiny off-seasons and build their lives completely around the success of their businesses. World champion obsession.


In Private Equity, we break the business into three pieces: Deals; People; and Money.

Deals -- do you have access to attractive investment opportunities? Many markets are characterized by a magic circle of established players that have access to proprietary deal flow. The property market is characterized by incomplete information and many conflicts of interest. Good deals often succeed by using superior information. How good is your information?

People -- do you have the skills to capitalize on the investment opportunities? I was fortunate to have been taught by one of the best Private Equity teams in the world. Even today, I haven't met a group of people that comes close to the team that trained me. I was the lowest paid person (in the building!) when I joined but it was one of the happiest and fulfilling periods of my life. Being part of a winning team can be more fun than struggling in your own business.

Money -- do you have access to capital? On what terms? How do those terms compare to your competition? Established players have a big advantage here -- it is tough to be the new guy.

With the investment business that I co-founded, it took us five years before we were successful raising institutional equity -- we relied on individual equity. Over that five year period, I was cash flow negative every single year. All the while, we were ahead of our business plan.


Further thoughts to consider...

For more than a decade, investors would have had to do something stupid not to make a great return on any property investment. A sustained bull run leaves all players convinced of their deal selection 'skill'. We can't help but be influenced by this bias. As markets revert to the mean, most of us will find out that asset inflation, rather than investment smarts, drove our returns.

Do you know how to manage the capital that you have? Look at your personal track record with your own capital -- a two month personal reserve seems small at your age (but is not uncommon). People with the skills to be long term managers of funds demonstrate those skills (first) with their own capital. A great story from Asia...

Investment Banker Pitching Rich Local Man:
'So Mr. Lee, I think that this fund is an excellent opportunity for you.'

Mr. Lee to IB:
'Tell me, how much are you worth?'

IB: 'I'm worth over a million dollars.'

Mr. Lee: 'I'm worth over a hundred million. Why don't you give me your money and I'll see if I can do better for you.'
The best investors take care of their own money -- and -- treat their investors' money as if it was their own.

Market Timing -- most the reports that I am reading these days are talking about property inventory being clogged through to early 2009. These are huge generalizations and you need to consider your local situation. It is very tough for a small scale developer to make money in a flat market. Our early development deals only made money from asset appreciation -- frankly, we probably lost money on the development while we learned the ropes. Even today, we aren't experts. What we do is team up with experts and align our financial interests. There are a lot of ways to be ripped off in construction.

Against the current market background, building personal capital; broadening your skills base and studying under a smart investor -- could be time well-spent.

Family Capital -- if you can't raise start-up capital from sophisticated third parties then my advice would be don't do the deal. People will cite exceptions to this rule -- they exist but are exceedingly rare. If the market won't back you then there is information in their refusal. We have always been able to get our best ventures funded.

Missing Out -- Don't worry about that. This market will get cheaper, inventory will build and deal flow will increase. Your worst case scenario is that pricing will stay the same. Always be willing to lose a deal.

Cash Flow -- Make sure your can hold for at least a three years. One of my strategic goals for this year is to arrange funding through 2012 for my main client. Being able to hold through the bottom of the cycle is fundamental for long term returns.

Liquidating -- Twice in my career I have "sold everything" to invest in a new venture. It was good discipline to consider the new 'position' relative to my existing holding.

If you decide to go for a position with an existing team then consider people that are strongest in your weakest area -- when we go into business, we often partner with people that we've worked with before.

Hope this helps,

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04 January 2008

Beyond Achievement

We have a family tradition of buying pajamas for Christmas. This year, I modified it by purchasing Monica a red bikini. However, my editorial board has instituted a new policy regarding bikini photos --"Clavicle Up". I managed to get this one past my publisher, it is one of my favorites.

Alternative Perspectives has an new piece by Clas on Damage Control. The photo he sent is a keeper. Bike skills work, Swedish Style.


What are you going to do after you win IMC?
-- Monica, October 2007

In the Northern Hemisphere the mixture of long nights, weak December nutrition and overall holiday stress can leave us with the need to “take action”. Armed with a burning desire “to do something” we often sit down and write out our New Year’s Resolutions.

I consider my life on a quarterly basis. Monica, jokes that if she doesn’t like my personal plan then she only needs to wait a week and we will have another one. She’s quite patient and doesn’t voice objections until it looks like I might actually do something.

This week’s letter isn’t about the right action to take – I’ll leave that to you. What I am going to do is share my experience on what has driven me towards the actions that I have taken in the past.

Scott wrote a great piece about how he motivates himself. This letter is about what is motivating me.

Did you get the distinction there?

There are tricks, tactics, habits and strategies that we can employ to do the work necessary to achieve our goals. That’s Molina’s piece.

There is the psychological profile that underlies the selection of our goals in the first place. That’s this piece.

Some common goals:

  • Lose X pounds by Y date
  • Walk X minutes Y times per week
  • Save $X per Y
  • Qualify for X
  • Break X hours for Y event
  • Get my NAV to $X

Various goals of mine:

  • Finish an Ironman
  • Train at least 25 hours per week as many weeks as possible
  • Win Keauhou Kona Triathlon, Ultraman Hawaii, IM Canada or IM New Zealand
  • Qualify for Ironman Hawaii
  • Swim the English Channel or Rottnest Channel.
  • Swim sub-6 400 IM or sub-20 1500 LCM free
  • Swim, bike, run across America
  • Reach one person, one thousand people, or one million people
  • NAV equal to five/ten/twenty years of personal expenses (indexed/not indexed)
  • Own a house/flat/cottage anywhere, in Boulder, in New Zealand, in San Francisco, in Arizona, in the mountains, in Noosa, in Paris or in Scotland
  • Raise $5 million, $50 million, $250 million, or $1 billion for a client
  • Write a book about Ironman Training, Personal Excellence or my life
  • Climb Mt Kilimanjaro, Denali, Mt Cook, Mont Blanc, Mt Tasman, Cho Oyu, Mt Vinson or Aconcagua
  • Run the Leadville 100, Run Boulder to Vail, Run the Hong Kong Trailwalker
  • Sail to France, to Antigua or around the World

Goals are items that we are actively working towards – everything else is dreams or personal legends.

When we combine moderate talent with extreme work ethic then we will achieve results in most areas. If we stumble into a field where we have some real aptitude then results can be amazing -- especially with the tailwind of favorable conditions (and a bit of luck).

Do you notice a theme across my list?


One of the greatest motivators in my life has been the pursuit of “things other people don't do”.

My friend, Kevin Purcell, once marveled at my ability to leave a goal after I achieve it. Finish one job and move along to my next task. It was an honest complement on non-attachment. However, I was deeply attached to my true motivator – self-affirmation through relative performance.

If you share this trait then be wary of placing yourself in a position where you are surrounded by people that are superior achievers of your goals. For personal satisfaction, you will need to spend time in an environment where you are able to exhibit relative out-performance.

“In a team, it is important for everyone to get a chance to be strong”. That’s a tip from Scott Molina – a guy that seems to get along with just about everyone.

“Envy, not greed, makes the world go ‘round”. That one is Warren Buffet, a man with a lot of first hand experience on what motivates people.


Six years ago I can remember feeling the absolute healthiest of my life. I have memories of lying in bed and enjoying breath after breath of cool, calm air. I had completed 12 weeks of intensive yoga and freed many restrictions.

This “health” memory came to me in early December when I realized that I was, once again, lying in bed felling very good. For the first time in six years I was free of soreness and deep fatigue. There are two constants in the life of an elite athlete – fatigue and soreness. Learning to cope with this fact is a large part of the mental game of ultra endurance sport.

In December 2001, a sport psychologist asked me “why do you want to do triathlon”? I answered without doubt, “because it is what I was born to do”.

What I meant was triathlon is work and I was born to work – therefore – I was born for triathlon.

That is the second great motivating force in my life. Some people have a high capacity to complete/absorb/enjoy work. When you mix excellent process management skills, moderate talent and inherent work ethic – you get results.

The purest form of motivation is an enjoyment of work. People, situations, habits and choices that impair our work ethic are extremely hazardous to a life with meaning.

The back-story is that having got my health back, I am not sure if I want to spend another year really tired and sore!


Remember five years ago and consider the events that stand out in your mind.

When I think back to 2002 the key aspects are:

  • Totally frying myself in an attempt to win KKT
  • Taking two months off as a result of being grossly overtrained
  • Co-founding a property investment company
  • Training four weeks for IMC then repeating my time from the previous year
  • Winning Ultraman Hawaii

Which of these are “good” and which are “bad”? That depends on your point of view.

Every item in that list is a requirement to get to the end, winning Ultraman Hawaii. At the time, winning Ultraman was a great event for me. As a result of winning in 2002, I went back in 2003… …and nearly died.

Not so great!

But then again… the forced rest may have been the difference between success and failure in 2004.


Pulling it all together…

  • In setting goals, consider the motivating factors behind your list.
  • If you are motivated by relative performance then schedule periods where you can shine.
  • For goals that require sustained effort over time: focus on areas that you deeply enjoy; and remove people/attitudes/perceptions/habits that are barriers to the work necessary to achieve.

If you are fortunate enough to experience high level achievement then your vocation will likely become your identity. I have experienced this in a few fields. Examples:

  • Scott Tinley was Triathlon -- solid article
  • Tom Dolan was Swimming -- that guy could train
  • Key founders are their businesses -- remember this when you negotiate
  • Great champions are their sports
  • World-class achievers are their goals
  • Addicts are their habits

If a recession, divorce, injury, or the passage of time removes an expression of identity then it is painful. Alternative interests are personal insurance policies, even Lance had his foundation.

The Tinley interview discusses a champion coming to terms with his sport. My personal experience is life-transitions (divorce, illness, injury, career change) force me to come to terms with myself. Specifically, I am forced to cope with the death of an identity.

Die a few times and it becomes easier to cope.


What lies beyond achievement?


Peace has a lot of different names and levels of experience. Some other names... The Zone, Flow, Exhaustion, Satisfaction, The Pump, Whole Body Experience, Zen, Endorphins, Open, Harmony, Relaxation, Well Being, Health...

The chemical signature of achievement feels a lot like peace.

Rather than sloth, peace is my counterbalance to work. The quest for peace driving my 'pure' motivation. Seems a bit crazy to spend one's life chasing peace... I don't know. If that's what is really driving me then it takes a lot of the burden off -- the list above is daunting.

I have often confused silence (or nothing) with peace. Many of my self-destructive habits/patterns stem from this confusion. Anger, fear, intoxication -- the far side of each of these feel close to peace, but isn't. I suspect that Big Pharma uses this pathway to create a perception of well being in its users. I lump all these 'nothings' into the category of False Gods -- the list changes over time -- perhaps because the truest addiction is to that peaceful vibe.

Artists, comedians, writers, CEOs, investment bankers, endurance athletes -- peace is where we get to. Part of the process of "getting there" is the drive to "get it out" of us. At times our gifts can feel like curses.

That's enough for today. Running a bit long!


Here’s my January 2008 list:

  • Successful marriage based on kindness and respect
  • Peaceful Listening
  • Retreats with Nature
  • Wake-up Early
  • Ethical life with meaning

Where is the relative achievement? Could be lurking in #5, not sure.

To know others, intelligence
To know yourself, wisdom
-- Lao Tsu

Effective communication is about getting a person to listen (first) then think (second). Monica is a very effective communicator.

Still searching,


28 November 2007

Responsibility & Legacy

Alternative Perspectives is back with Part One of a two part series on over training.


The media forms an essential counterbalance to those in power, certainly those in government. However, judging from my inbox, the reporting on the riots in Paris is probably being over-done (globally). We have been enjoying the symphony, the Louvre Museum and the Eiffel Tower. The trouble is confined to the periphery.

That said... we did bump into a lawyer's strike yesterday at Place Vendome -- completely shut the neighborhood down! The French do appear to enjoy a good strike. Notwithstanding a little labour unrest, France is a fantastic place and we truly enjoyed ourselves.

As I hit the "publish" button on this piece, we're off to the airport to begin our journey to Hong Kong and onward to Australia. Next week I will be writing you from Noosa, Queensland.


Two weeks ago, I sorted out my will. At its essence, I see a will as being about motivation. A reflection of how I motivate myself; how I seek to motivate those around me; and the impact that I will have on the motivation of future generations.

When I think back over my adult life, the person that I would have been most worried about inheriting capital is "myself". The shakiness of my personal motivation from 17 to 32, was hidden from everyone other than myself -- I have managed to get quite a bit done over the years but it easily could have gone far, far differently. A benevolent chunk of cash at just the 'right' time could have had seriously 'wrong' consequences.

Further, knowing that I wasn't solely reliant on my own resources would have reduced my desire, and need, to take care of myself.

Our ability to responsibly allocate capital is a direct result of our experience with learning how to accumulate it. It is challenging to teach prudent financial management to people that have never had to manage finances.


A Valuable Legacy
I've been considering:
***What drives personal ethics?
***What drives self-worth?
***What drives the achievement of a life with meaning?

Ethics, self-worth and a life with meaning -- if I had to choose three things to wish for my kids then those are a good starting point. None of these points require a trust fund.

The most powerful success factors in my life have come from education, social networks and life experiences. A legacy with meaning is one that shares the lessons of my life.

What does this have to do with motivation?

***Achievement is linked to maximizing our capacity to work, then working.

***Self-worth is linked to favorable outcomes from work done ethically.

***Wealth is linked to favorable financial outcomes from capital invested wisely. True wealth is a function of personal freedom, not merely financial assets.

***Happiness correlates reasonably well to personal freedom -- especially, when that freedom is used for ethical work.

I haven't seen a direct correlation between wealth and personal ethics. Going further -- unearned wealth severely challenges both personal ethics and our sense of self-worth. I often ask myself what I did to deserve such a wonderful life and have tendencies to make my life more difficult (for no appreciable reason).

In our society, wealth provides a shield from being confronted by the effects of weak personal ethics. The frequency that we make poor choices is linked to our ability to tolerate poor outcomes. An example relevant to my early career, getting drunk and being unproductive at the office fails to be an option if our lack of productivity gets us fired. Inherent ability masks a lot of counterproductive behavior -- as Scott Molina notes... "you can justify an awful lot when you are winning".

Most of us will do the minimum to achieve our personal goals -- it is for this reason that challenging goals prove so useful for many of us.

My legacy?

Here's what I'm working towards:
***A clear example of the benefits of consistent ethical work over time;
***a useful library; and
***the authorship of one very useful book.

Off to the Southern Hemisphere,

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19 October 2007

Lab Work, Career Beginnings and Entitlement

I was in Kona last week and the artist of the above print (Mike Field) took me out on his sailing canoe. Heck of a good time.

A Reader Asked...
...my question to you is what one book (or if that is too tough) what several books have had the most impact on your beliefs, thoughts, views, etc. I feel like I am in a significant transition point in my life where I have achieved a lot but still feel like I’m not sure where I’m heading

I Replied...
The book -- that's easy for me -- The Artist's Way by Julia Cameron -- I read the book (and did the program) the first summer that I spent in Boulder (2000).

Seven years later, every single thing that I wrote on my Top Ten list had come true. I thought that some of the items were a bit of a long shot as well. The interesting thing about that book (and the program) is that it is a tool to unlock whatever is lurking inside of us. It's a powerful program -- it seemed pretty goofy at the start but seeing it through changed my life.

FWIW, I would have described my life in 2000 EXACTLY as you laid out in your question.

Lab Work
We have been playing in the lab this past week. I did four tests (bike lactate step with fuel; max aerobic run; resting metabolic rate; and a brick where I held AeT wattage for 80 minutes). So far, no ground breaking insights and I appear to be pretty normal.

Running the fuel test in tandem with the lactate test is very interesting (to me at least). In some athletes we are seeing material divergence between their lactate profile (AeT/FT) and their met-cart profile (AeT/VT1/FT). Often times the lactate test indicates that the athlete ought to be training more intensely than the fuel test. The fuel test has given us an insight into why using top end performance to determine endurance training zones is prone to error. We'd kill Alan if we used a 20 min max effort test to set his endurance zones on the bike -- he can really rip when there's plenty of glycogen available. I'm sure that he'll write more after we arm him with a bit more data. For what it's worth, this is where in-the-field experience is invaluable -- the testing provided us with a metabolic reason for him being so whipped all the time.

Given that nearly every athlete wants to know the pace/power/intensity at which their fat burning is maximized we're putting together a progressive test to determine that point for recreational athletes. My sister-in-law runs daily on her treadmill so she's the perfect candidate to test our protocol. In an up-coming letter I will share ideas on burning more fat, and storing less.

Visiting various labs and speaking with a range of PhDs, it is surprising to us that every lab (and just about every sports scientist) has a unique protocol for VO2 max testing. We've arrived at our own consensus and will be running it past a few personal contacts. A few more weeks and we will publish where we ended up. Seems that there is a fair amount of "art" in the testing science.

Drop mat "at" endurancecorner.com a line if you are interested in some testing.


Career Beginnings
I read pmarca's blog from time-to-time and came across an interesting piece on where to work. Thinking back to my own path, it is excellent advice.

I stumbled into Private Equity in 1990 -- I was hand-trained by a founder of the British venture capital industry (Jon Moulton). I think that Jon would say that the article I linked up is reasonable -- the amount of cash that flows into all segments of the finance industry is unbelievable. Many of the players within the game believe that they actually deserve it, others stay quiet and earn their money below the radar. Jon comes out and says what many of us have been thinking for years.

Jon plays a game at which he is a world-class player -- it's fun to do things when you are better than most your competition. I think that he's the only person in the world that's built two leading private equity firms from scratch. He makes a lot of money but could make even more if he felt like pushing things. His business serves his desire to work with great people and play the game -- financially, he's had more than he needed for the last twenty years.

He knows a lot lot about money and I hope that he sits down and writes out his thoughts one day -- that's a book I'd love to help write. We have access to Warren Buffet's annual reports but there's a ton of great stuff that's scattered amongst the memories of Jon's employees, partners and managers.

Here's a bit on how I met him... against the advice of the senior partner that interviewed me, Jon decided to hire me straight out of university. These days, nobody really gets that chance -- the industry players are, for the most part, established players and it is VERY tough to get a seat at the golden table.

Back in 1990, I was cheap, graduated with first-class honors (Econ/Finance) and Jon knew my Dad. The first two points were a key part of his buying decision -- Jon likes to hire smart people. He figures that if you can score well at a good school then you should be "useful for something". Knowing my Dad limited his downside because he could recoup his investment via satire.

From the early days, I was fortunate in that he found most of my flaws entertaining (there were many). Jon likes to be entertained. His wit is so fast that it took me six months until I was able to understand what he was saying. His partners used to translate for me and, even today, I probably miss many of his jokes. He's operating at a pretty high level.

My starting pay was less than the cleaners and my desk was the only one in the firm that Jon could see from his own. That made for interesting times as he would lean forward and shout "Byrn! Heel!" when he had a task for me. I'd drop everything and come running. Whenever I was given a task by Jon, I'd work non-stop until it was done. One management team nicknamed me "the rottweiler", I had a lot to learn about people skills.

Jon's done more for diversity in the financial services industry than any other person I've met in my career -- I'm surprised that no one ever talks about that. Hand ups, rather than handouts. To see this, you would need to look to the man's actions rather than his words -- Jon would probably tell you that he only hires the best people and doesn't give a stuff about backgrounds. That's true but doesn't explain the texture of most of his competitors.

I worked in London at a time when capital under management was benefiting from rapid portfolio growth and a shift in asset allocation. We knew that the industry fundamentals were good but we failed to grasp just how fast our world was changing. We were lucky to have some very bright Harvard MBAs on the team that provided strategic background -- Jon was at his best adding value to the firm by doing good deals, rather than strategic oversight.

The American players were the Big Boys (with their private jets and stretch limos) but we held our own in terms of net returns. The concepts of portfolio management and net returns were in their infancy. I was one of the first people to build a full-fledged model of a private equity fund, Jon's idea, not mine! Because our returns were great, we were in a position to educate our investors without risking our P&L, rare in financial services!

Another great idea Jon had was to calculate the equity IRR from doing a buy-out of the FTSE index and rolling all interest (after dividends) for five years. He loved it when my calculation (looking back five years) showed an equity IRR of 30% per annum. This was 1992 and the parallels to today's hedge fund industry are clear -- making money from leverage rather than sound investment judgment.

I worked internationally, first in London then in Hong Kong. When I'd plateaued in terms of personal development, I headed out on my own and have been involved in founding start-ups since then (property investment, property development, consulting, human performance, tourism).

Operations aren't my forte. As you might guess from reading my stuff -- what I do best is take a range of ideas; assemble them in the language of finance; and structure a deal/company so that good people get involved in supporting the plan. I do the easy bit -- the people that execute daily do the tough stuff.

As I emphasize to Alan and Mat, make the most of your learning opportunities. Boulder, 2007, human performance, alongside an experienced coach/investor/athlete. I didn't realize how unique my situation was until years after working for Jon.

Similar to my piece on the future of the coaching industry; I have a piece in my head on the future of Human Performance consulting. I'll write that up because there is an opportunity to create a world-class business in Boulder and I need help with the day-to-day.


Health Warning
I'm being pretty direct below and when I re-read it... I sound a little negative on "living the dream". I suppose that is because most of the elites that I meet are a bit clueless on what they are heading for as well as the long term implications of their decisions. Still, poverty isn't fatal and athletics is a lot of fun.

My decision to seek to maximize my athletic potential in 2000 was an outstanding life decision -- in a sense, I saved my life. However, the financial benefits that one forgoes in following an athletic path are material. Nobody (coaches, athletes, race directors) goes into triathlon for the money.

If you think that you are too "poor" to afford health insurance then I recommend that you reconsider. I have many friends in our sport that have sustained medical bills in excess of $10,000 within the last five years. The highest that I know about is more than $100,000. If something happens to you then it's going to be pretty major -- a high deductible insurance policy costs very little relative to the financial impact of most cycling accidents (Alan/Mat pay ~$150 per month for a PPO plan that includes dental).

Taking $2,500 or $5,000 on the chin is nothing compared to a six figure bill landing in your lap. For my family, I self-insure the small to moderate stuff with a gold standard plan that backs me up for anything major.

When deciding what constitutes major; consider it as a percentage of your personal Net Asset Value.


Entitlement In Sports

A listener observed:

It continues to amaze me how difficult it is to be a pro triathlete and the sacrifices you have to make. Perhaps in the future you could discuss what needs to change in our sport in order for elites to make a fair wage?

So many ideas come to my head when I read the above observation. Please know that I am speaking generally rather than replying directly to you. Your question touches on the fundamental issue that many people have with entitlement.

What do we truly deserve? Start here for ideas on that!

Fair wages – elite athletes are volunteers and no one has an inherent ‘right’ to train all day in the sun // I recommend a trip through rural China and India for anyone that believes otherwise. Elites are free at any time to get themselves a job in the traditional workforce – most “pros” in all sports have at least a part-time “real” job.

We all are susceptible to a feeling of entitlement in our lives – I feel it in myself. An early dose of random misfortune can often be a blessing.

The national associations (like New Zealand) that make it “hard” on their elites are doing them (and their taxpayers) a favour. If an athlete’s prospects are poor then we certainly don’t want to make it easier for them to hang on – a trip back to the traditional workforce can be educational and do wonders to motivate those on the edge.

If you want to make a living as a world-class athlete then you’d better be a world-class athlete. Most elites aren’t world-class, they are proficient and hard working.

Making It – you don’t “make it” as an elite triathlete – with a few 1-in-1,000 exceptions you make a bit of money for a few years then you retire (often with a beat up body and a smoked immune system). Winning a few races isn’t like making partner in a law firm – you will be heading back into the workforce (probably with short notice and before you want).

For most elites (and fast AGers), fast racing is great marketing, rather than income earning. The athletic "class" that make the greatest return from their racing are the “athlete coaches” that place consistently in their divisions. They represent achievable success in their local markets and share their experience with increasing life satisfaction from racing. As a "class", elite triathletes make nothing. My lifetime prize money is equivalent to two months current expenses (maybe less, I'm probably overestimating).

If the goal is to make a decent living then channeling the energy spent on athletic excellence into just about any other field will result in superior financial returns.

However, it is the challenges that make the pay-off so rewarding – whether competing for money, a Kona slot or simply to finish. Most of us would do it for free – actually most of us pay to do it!

Rewards – as a society, we place a tremendous value on physical beauty and athletic power. We have been conditioned for our entire lives than a lean, fit body is the ultimate achievement. As I age, I take comfort in having a better body in my 30s than I did in my 20s. I expect that the “reward” that many elites receive stems from the way we perceive an elite athlete.

Change – I’m not sure than anything needs to change in the sport of triathlon. If the athletes were to organize themselves and take charge of race promotion then they might be able to capture a larger share of the sport’s revenues. However, I see this as unlikely for a few reasons:

***lack of skills // as a class, elites are great athletes, not great businessfolk. The federations and race organizations have a massive edge and strong financial incentives to maintain the status quo. As a practical point, even if an athlete had the skills – why does it make sense to put a lot of effort into helping a group of second tier pros make more money? Pretty low return for your personal charity investment and, I expect, that you would get a lot more bang for your buck in other fields.

As an aside, my personal experience with Bradventures, NA Sports and HFP Racing is that they get money to athletes that support their company vision and add value to their businesses. Graham Fraser has done a tremendous amount for elites (as well as others) but we don’t hear a lot about it. He’s probably learned that critics exist to criticize.

Many young pros focus on explaining why they should be given money – a far better proposition is to demonstrate how you can add value to the company by being an ambassador of their brand mission. I had ten years of investment experience when I came to triathlon and it took me years to figure this out. One thing I did figure out was that using my skills to beg for free bike shorts was a low return activity.

***the events are bigger than the athletes // There are very few athletes that can benefit a race director by their presence.

Life Lessons – the lessons that we learn with a personal quest for our maximum potential are highly valuable and the training is a lot of fun. At some stage of our lives, I think that everyone should spend a couple of years trying to be their absolute best at something. The lessons are independent of outcome.

Remember that sport (and a meaningful life) is challenging – that’s the point!

As Ms Rand noted... China, Russia and others have tried a system that tried to be fair to everyone -- it had all the wrong incentives.

More next week,


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15 October 2007

Network Effects

Here's a shot of the Coffees of Hawaii sailing canoe in Kona. We were dealing out hot/cold espresso as well as water/sports drink during Ironman Hawaii race week. I'll be sharing more thoughts on Kona in the next few weeks.

Before this week's letter. A few bits and pieces...

A.R. Asked...
Sorry to bother you – a while ago (2 weeks?) – you interjected a short comment about what to look for in an ideal woman ( you mentioned something about high self esteem and a few other things? ). I am going through some decision making currently with regards to the opposite sex and I was hoping to find that bit of wisdom you imparted but I can’t seem to find it – do you remember what the few important things that you listed as important were?
Get yourself a copy of "Too Soon Old, Too Late Smart" -- there is a chapter on this exact subject. Gordon explains it much better than me.

For the cyclists that are looking for more information on training with power -- I recently read the Allen/Coggan book on Training with Power. There was a lot of interesting information and tips in there. If you apply their tips then remember that the physiologically optimal plan is the one that you can consistently apply across a number of seasons. Most athletes have a bias towards overwork and there is no better way to fatigue yourself (mentally/physically) than chasing watts in your training.

I've been giving some thoughts to my presentations for the November 2nd/3rd clinic on the Business of Coaching. We are going to be sharing the tools that I use to help coaches increase their revenues, and satisfaction, from coaching.

Finally...the City of Boulder is soliciting input for Valmont Park facilities. Please fill out the on-line comment form. In question 3 you might consider casting your vote for a 50M x 25M pool with separate dive tank and spectator seating. You can access the form HERE.

In the spirit of Aloha, Alternative Perspectives is a piece by Kevin Purcell -- Kona Blue. Only Kevin knows what it truly took to follow his vision of Hawaii.

Alan's blog has a piece on VO2 Max testing for Ironman athletes -- I expect that we'll learn a tremendous amount over the next few years. I used to be highly skeptical on the benefits. Now I am lining up -- Alan should have my 2008 benchmark results written up by the end of November. I need a few weeks to get moving again -- right now, I sense that the testing would be poor idea.


Network Effects

A friend was recently talking me through the cascade of impacts that occurred following the rape of a young lady. The disruptions to her family, the cost of starting the wheels of our justice system as well as the support that it will take the lady to heal from the experience. Overall, a huge level of disruption, pain and expense resulting from a single action.

It got me thinking...
...about the compound effects of a series of kind actions over an extended period of time
...about my own participation in the transmission of negative, and positive, acts
...about my personal responsibility for how I choose to think and act

Small actions of kindness -- opportunities for bold strokes of greatness in my life are rare. However, hook all of us up to an internet connection, support each other and, perhaps, one of us could do something truly special. Even more powerful would be getting thousands of people to undertake a series of small acts.

One of my habits is to pick up five pieces of trash every day. I don't hit it every day and I probably average 20 pieces of trash per week. Now 20 pieces of trash doesn't seem like much but last week Monica started picking up trash too. Strange hobby to share with your wife, eh?

So my 20 pieces could be up to 30, or 40, by the end of the year. If even five people reading this note decide to pick-up as well then we'd be well on our way to making a material impact on things.

This isn't about litter -- it is about accessing our collective power to shape the world around us.

Our role as a transmitters. In my inner circle, I tend to be the most adverse to traditional media. As part of my Personal Review this past September, I decided to chop some more media sources from my list of approved outlets (good-bye CNN.com).

We are impacted by every person, thought, action, image, sound and mood that comes into contact with us. It is tough enough for me to keep my head straight without all the consumption; faux-righteousness; violence; false imagery; etc... pumped out by the bulk of the media.

I can't always see the damage that is being done to me (and you) by the media. Our continued participation is what sustains these vehicles -- your eyes (and therefore your mind) is what they are seeking. Inactive participation isn't possible -- your anonymity isn't a factor for a force that, ultimately, seeks to control the masses.

What I can clearly see is that nearly all print, television and internet content fails to move me towards my goals. The "dead time" insight is easier to sell to myself then facing the reality that a website is poisoning my character (though listening to many of you talk about how certain forums make you feel it should be pretty obvious -- to your spouse, if not to you personally).

To achieve our goals we need to limit our time spent on achieving nothing. I've found that it is far better to "do nothing" than spend my time on junk food for the mind. I achieve a lot more insights when unplugged.

Once I have an insight that I may be holding myself back, it becomes increasingly difficult for me to sustain my current path. It's the main reason behind my incremental progress with my nutrition. I see the true impact of "treats" in my life. Binging loses (most of) its fun when I deeply understand its impact. There is no true satisfaction in being slack.

Those of you that read Mat's blog will see his take on this shortly. He gave me a preview and asked me if it made sense. I told him that he came pretty close to describing every September of mine from 2001 to 2006 -- and probably -- a few bonus months in between.

Small actions count,

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09 October 2007

Regret and Personal Power

Mat and I spent a couple of hours sorting through email and admin yesterday. I'm currently on my way back to Boulder for a night before heading to Kona in the morning. In Hawaii, I'll be working with Albert and the rest of the Coffees of Hawaii team. If you see me then come on up and say 'hi'.

The piece below was written in early September. It is more about how I feel than what I plan on doing. Mark and Brant didn't have any magic advice but the retreat (and the two weeks completely off-line that followed) provided the space for me to consider a bunch of different things. As the physiological peak from the summer waned, the magnitude of the last year's mental commitment became more clear. I'm still pretty tired!

I'll share more over the next little while. I also have a list of topics (not all about me!) that I'll be writing up.

Mat told me that the Planet-X site doesn't have my Power PodCast live any more. Give us a couple of days and you will be able to access Endurance Corner Radio by clicking -- HERE.

Also -- you'll be able to download my PowerPoint presentation (on Power) by clicking -- HERE. Should only take a couple of days for us to get live.


A man who has a vision is not able to use the power of it until after he has performed the vision on Earth for the people to see.

-- Black Elk

The above quote is from a book called Black Elks Speaks. It’s an interesting story about an Indian Shaman who lived through a turbulent time in American history. There is quite a bit going on in the book and, I’m guessing, that I will see something if I continue to read the book as I age.

Sitting here, at 38, and considering the lessons of the old man’s story. There are a few things that stand out…

***Within his circle he was a famous and powerful healer. Across his life he was able to help a great many of his people. However, as an old man, what he most regretted was his failure to do his best to follow a powerful vision that he had as a youth.

The parallel of this in my life is clear. The September that was filled with the most regret was 2005, when I didn’t race Ironman Canada. We receive far more personal peace from action than than not trying at all.

***Within his tradition, the power of visions/dreams can be diluted by sharing them widely. When Black Elk told his story to the author, it was the first time in his life that he shared his complete vision. Even then, there were elements that he wasn’t able to put into words and remained his alone.

Here I think my lesson could be to temper my desire to constantly, and publicly, prove my ability to achieve my goals. I’ll need to ask Mark and Brant about their thoughts here.

What I'm getting at here is immediately publishing my "best stuff" (spiritual/physical). Mark mentioned that I might want to absorb them for a bit before sending them along.

As a first hand account of “how the West was lost” – the book made for informative reading.


Throughout my life, I have had callings, often ignored, to go on a solo retreat in nature.

The last one that I did started on September 11th, 2001 – a personal retreat in Olympic National Park. That retreat had FAR too much exercise for immediately after an Ironman but was a great experience for me. The solitude on Day One had me hearing voices in my head that didn’t settle for hours. I thought that I was losing my mind!

Aside from Peaceful Listening, a goal for 2008 is to complete a series of retreats close to nature. I haven’t decided if these are going to be formal, informal, solo or group. Brant and Mark have a fair amount of experience here so I’ll ask them for guidance.

The recurring drive to get close to nature needs to be heeded. It is a big part of what led me into endurance sports.


So what’s next? Well, I’ve sorted out my goals of learning to listen and retreats.

Athletically, I’m not really sure. There are some things that I can improve. I have no idea whether I will enjoy, or be able to sustain, the work required to achieve them.

Will I head back to Penticton in August? I have no idea right now.

No regrets,


PS -- If you are looking for an interesting read on investment theory (much shorter than Rubin's book) then CLICK HERE. Thanks to JS for sending along to me. Interestingly, EV is one of the lessons that was hammered into me by the McGill finance faculty. It's also why I've sold out of successful (highly leveraged) investments -- I wasn't willing to live with the slight probability of a highly negative outcome. Borrowing from Taleb, even if you are playing Russian Roulette with a gun with 10,000 chambers -- losing remains a highly unattractive outcome.


20 September 2007

Year End Review 2007

Shortly, I will be on the road to Santa Cruz. I am looking forward to the weekend with Brant and Mark. Questions, fears and a persistent desire to spend time alone in nature. I don't expect anything fancy from the guys but their calming presence is useful for clear thinking.

This is an interesting period for me because I have huge energy, both mental and physical, but... I sure get tired if I try to 'train'! On the mental side, I am ready for short bursts of activity (like blogging) but am struggling with getting much sustained work done, such as the second edition of my book.

Before this week's letter, a reminder that I'll be speaking at a USA-Triathlon Clinic, in Colorado Springs. First weekend of November. If you want to learn practical tools for making a living from sport (running, cycling, swimming, triathlon) then this is the clinic for you. The speakers have helped build many successful coaching business and will be sharing how they go about it.

Also, if you watch Mat's blog then he'll link up an interview that we did with Chris McDonald, Ironman Kentucky champion. Look there on Monday. The interview is great. Thanks to Chris and Marilyn for dropping by the studio.

Key things that I was reminded of:

***athletes that are going to do well at elite IM get to the top of the AG ranks quickly. There is a very rapid early performance progression -- then you have to start "training". Chris, Clas and I -- it took each of us two years to get into low 9-hour shape (mid-9s for me). Clearly some athletes have an edge getting down to that point (Kona Qualifier shape).

***for the men especially, a massive capacity to absorb (not merely do) work is a universal requirement. Chris' 2006 season is not for the faint hearted! Nearly all the top guys have done some large, sustained volume at some stage. Chris is unique in that he hasn't (yet) faced deep overtraining.

***there is value in taking yourself far, far beyond your comfort zone -- the pathway from which performance flows isn't clear to me -- mental and well as physical, perhaps

***expect extreme financial despair and hardship along the athletic path -- you are making a decision that will result in a permanent reduction in your financial stability // folks in their early 20s are not equipped to think this through to their 40s, 50s and beyond

***you will face bleak periods where you want to quit; you're also likely have some great days

***even as an Ironman Champion, your athletics (alone) will have you living below the poverty line. You'd better really enjoy training and actively/immediately develop alternative income sources.

It's worth a listen -- remember that Chris "made it" farther than most of us will achieve in our athletic careers. He is an 'outlier' and your mileage will vary -- the average elite retires broke (but fit and with a nice tan) when they can no longer cope with the financial stress.

Head to the Planet-X website on Monday. They should have an MP3 and PowerPoint presentation that I did on Training/Racing with Power. I went into a lot more depth than the IronmanTalk podcast. Many thanks to Mat/Alan/Brian/Rebecca for their help in creating this for you.


Since I left Hong Kong at the end of 2000, I’ve operated on a year that runs October to September. Most years, Ironman Canada sits as the center of my athletic universe and, at times, the center of my total universe. As a result, September is a time for reflection and planning.

When I fail to achieve a goal (such as winning Ironman Canada), there is a temptation to radically change things. Reading my writing from the first few days after IMC I can see this pattern. However, before one considers what didn’t work, it is worth considering what did work. So I have spent some time thinking about the following:

***What worked this year?

***What changes might enable things to work even better next year?

***What held me back this year?

***What changes are required for continued personal growth?

***Did I give my previous plan every chance to succeed?

***What do I enjoy doing?

Notwithstanding all that, there are deeper considerations to be made prior to tackling the issue of athletic success. To bring these issues into focus I’ve asked myself:

***What did I achieve in the last year? Specifically, what are the items that will have a long term beneficial impact on my life?

***If the next twelve months were similar to the last twelve months then would I be OK with that?

***What items need my focus to make personal progress over the next twelve months? More specifically, how do I want to focus my personal development activities over the next year?

Given my high level of effectiveness and satisfaction, there are a lot of things working in my life. In seeking to improve performance on a single day (August 24, 2008) – I don’t want to impair the quality of the other 364 days of my year.


I’m going to share my thoughts on the answers to the questions but, within this article, “my thoughts” are the least important aspect. Why? Because they are merely my answers.

I’d encourage you to seek, then ask, the right questions of yourself.

In my consultancy practice, my clients receive the greatest value when I ask the right questions -- not when I give the most forceful answers.

I need to constantly remind myself of the above point because giving answers soothes the ego. Of course, the uncertainty of the outcome of our own questions is what makes life fun.


My greatest success this year was making one lady feel loved. I was helped by the fact that she has a kind disposition, patience and high self-esteem (guys, look for these traits in a wife). I’ve greatly leveraged my ability to achieve by strengthening the person closest to me.

Once you have the right people around you, spend your time strengthening them and assisting with the achievement of their goals -- your efforts for others will multiply when they come back to you.

JK asked about learning to say "no" to folks. For me, success is about getting people around us to say "yes" to our goals, rather than telling them "no" to their desires.

How do we do that? #1 -- we focus our time on the highest return items for those in our inner circle. #2 -- we communicate our personal mission clearly and simply. #3 -- by supporting those close to us and communicating our goals // we give them a stake in our mission. Finally, we hold ourselves to the absolute highest standards possible -- we must be working harder (and happier) than anyone in our circle. If we want to lead then we must hold ourselves to a higher standard than our team.

Personal Health
Coming back to my own review. In terms of long term personal health, shelving the drinking worked well for me. Slate ran excerpts from the Bush biography, Dead Certain. The President’s views on drinking rang true. I miss certain aspects but I really enjoy the clarity of thought that comes with the absence of hangovers. I was surprised at how easy it was to stop -- I get cravings from time-to-time but a non-alcoholic beer seems to settle that down.

With two years of consistent training completed since my last overtraining bout, my physical confidence has increased. My fearless (and somewhat futile) bike ride in Penticton was a real breakthrough for me.

Mental Skills
The area where Brant most helped me was the confidence to see the goodness in my life. Like most of my best teachers, I’m not sure if he set-out to teach that lesson. However, he was the catalyst for a change in attitude.

There is irony in how following what makes me happy has such a positive impact on the world around me. The way we live could be more important than the specifics of how we live.

Living how we want with a closed heart -- selfish?

Living how we want with an open heart -- inspirational?

Our conditioning often tells us that in order to do “good” we need to deny ourselves. I deny nothing of my dreams, or spirit, and there are clear and persistent messengers that encourage me to follow my heart.

Personal Growth
There are a lot of areas that hold me back so, for 2008, I’m going to choose the one where the benefit to me is far larger than the effort required to change. Peaceful Listening. My personal development goal for 2008 is to make a habit of peaceful listening. To me, that means listening with a still heart. I will practice with a still heart – perhaps I can progress to an open heart for 2009!

Goal Setting
Did I give my plan a chance? Absolutely. However, if I am honest then there are aspects of the plan where I operated below my capacity. It could take me a few years get it right. Am I willing to put in the time? Is my inner circle willing (and able) to support me?

I was talking to Clas and he asked me if I thought that I had put too much emphasis on Ironman Canada race day. I had to think about it. The reality of my life is that I focus on most of my days. I have goals for nearly every day of my year. I’m to the point where I assess myself based on the time that I manage to get out of bed each morning. It’s weird but I love jet-lag because I’m out of bed by 3am local time!

When I miss my private goals, or when I don’t live up to my personal standards of excellence, it “hurts” at some level. The pain isn’t too bad because I have the next goal and, by and large, I meet my commitments to myself. The difference with Ironman Canada race day is that my goals are stated publicly and missing them is apparent to all.

What I see now is the tremendous amount of good that results regardless of my public performance on that day. Perhaps that will free my mind from the concern about letting down the people that are closest to me. Missing a swim workout in February certainly doesn’t generate the same level of goodwill!

Avoid regret for a man that has the freedom to follow his dreams, and does. Feel empathy for those who live under the illusion that they are trapped in prisons, and don’t.


PS -- Alternative Perspectives next Monday will have Dr. J's piece on doping. For perspective, the annual cost of proving that I am clean is equal to my gross prize money from my best year of racing (2004). This year my gross prize money was about $2,000. You don't get rich from any aspect of triathlon (coaching, writing, racing). In fact, you have to be very good at all three to survive on sport alone.


09 September 2007


Presently, I’ve moved on from the Canadian Rockies and am a bit jet-lagged in Edinburgh, Scotland. Before we get into this week’s letter, a few quick announcements:

Power Talk – I’ll be speaking on training/racing with power at a September 19th meeting of the Boulder Triathlon Club. 7pm at the Senior Center beside the East Boulder Rec Center.

The Business Aspects of Coaching
– November 2nd & 3rd in Colorado Springs – registration is now open. The clinic is a chance to learn more about managing your coaching business as well as tips for personal financial planning. USAT have arranged housing/meals through the Olympic Training Centre so the cost is very reasonable.

Tucson Training Camps – March 22nd to 30th & April 19th to 27th – please contact “mat” “@” endurancecorner.com to reserve your spot. If you have any questions on suitability or the actual camp program then drop me a line.

We’re going to have catering/support/sag at the standard of the camps I do with Scott/Johno. Eight days, all-inclusive, $2,250 per camp (we cover everything but your travel to/from Tucson). Sign up for both camps and we will arrange physiological testing and review your training program as part of the package. The camps are going to be a lot of fun and I’m looking forward to them.

Alternative Perspectives has a neat article by my friend Terry Kerrigan. He's writing about Power Reserve.

Mat's blog talks about the role of expectations in performance -- it's extremely rare for a new athlete to have the humility to accept their actual bike fitness. I'm willing to bet that you've had similar thoughts in your racing -- I certainly have. What makes Mat's race unique is that he didn't bow to what he thought he had to do -- he simply did his best. A good lesson for all of us.

I'm back on top of my email -- if you've been waiting a while for an reply and it doesn't come through then please follow-up. There was considerable back-log on the server and some messages may have gone missing.


Whether I achieve, or fail to achieve, my goals – there is always a huge “sigh” at the end of a long build towards any event (fundraising, competition, deal completion, business sale, graduation, new product development).

Transition points are challenging as I am at my best when working towards a tough goal. Outcome doesn’t have as large an impact as the process of sustained personal excellence towards a task. Once the smoke clears, there’s always the sensation of “well, what next”? I’ll come to that in Part Three.

Three things that I’ve been mulling in my head:

First, in evaluating the merits of a decision, I want to consider how I did based on the information that I had at the time, rather than the outcome. It’s possible to make good decisions and have sub-optimal outcomes. Likewise, we can have superior outcomes that are purely due to chance. A great discussion of this point is in Robert Rubin’s book about his time as Clinton’s Treasury Secretary.

Second, I failed to achieve my goal and am currently in nine-hour Ironman shape. It is tempting to “adjust” outcomes by rationalizing external/internal variables. That is bogus. Beware of the trap of fooling yourself with post-experience rationalizations – people close to us will often support rationalizations in an attempt to soothe our egos.

In order to learn from any experience, we need to see the raw reality of our performance. When I blow it, I need to know it. It is the fastest way to learn and improve.

In my last post, I talked about “life best” fitness – sitting here today – I don’t think so! Fitness has physical, mental and spiritual dimensions. I may have optimized certain elements of my physiology but I failed to optimize my _performance_ on the day. The clearest indicator of fitness is performance.

Finally, although I didn’t see it at the time, the race was “lost” in the first hour of the competition. In 2005, I had a similar experience (Cam beat me by 20+ minutes that day). If you are going to lose then you might as well learn something.

Swim Pacing – the swim start was super fast and that surprised me. Why? Perhaps, I created a perception that I was one of the people that you “had to beat” to do well. Perhaps, I wanted the field to race on “my terms”.

I made a choice to swim “easy”. This was a poor decision – why did I do that? I was well trained (physically) to solo at max aerobic effort – I’d been doing weekly open water swims for the entire summer. However, I ended up cruising a large chunk of the swim leg. Why? I went “easy” because I wanted the swim to be “easy”. This was a failure of mental preparation and a poor decision based on the information at the time.

Bike Pacing – coming out of the water, I gave up nearly seven minutes to Mr. Doe. I told myself that was OK, I’d simply had a “flat tire” during the swim. Early in the bike, I found myself riding with Yastrebov/Marcotte/Curry. This encouraged me as the guys are experienced, excellent athletes. My early ride felt like a repeat of 2004 (except the elite draft zone was three meters longer and those are three VERY material meters). I told myself to relax and let the lads pace me back into the race.

Sounds great, eh?

Reality proved a little different! The boys were laying serious hurt on me. We ripped the front half of the course. Even factoring in the tailwind, the first fifty miles of the bike represented the fastest riding that I’ve done in THREE years.

If we are looking to optimize race performance then we need to operate under our maximum capacity for most of the day. So why did I make this decision? I was seeking to maximize race position – maximize, not optimize.

I started racing an hour late _and_ two hours early. If you know the Ironman Canada course then you’ll understand the paradox.

Not only did I ride super strong, but I rode off the front of the lads around Mile 80 – Kieran (in first) was 15 minutes up-the-road but Johno (in second) was close. The first hundred miles was the most intense Century Ride that I’ve done in the last five years. The breakthrough ride that I’d dreamed about was happening. However, it may have proved more effective to place it in July!

Over the last two years, my coaches have recommended that I try to blow myself up on the bike (B- and C-priority races). The irony of doing it during my AAA-priority race makes me smile, and certainly doesn’t make me unique.

The results of my bike pacing happen to nearly everyone in the field. People asked me what “went wrong”? Nothing went wrong; my race outcome was perfectly normal. The fact that it took me so long to wreck myself shows that I was in decent physical shape.

The critical piece of information that was missing was my _actual_ bike fitness, relative to the guys I was riding alongside. I made an internal decision (pacing) based on external variables (the lads). However, I had zero 2007 experience racing with those guys, and then, decided to go off the front of them.

Having ‘blown it’ with my first decision of the day, I don’t have any regrets with trying a new race strategy. The huge serving of Marathon Humility was informative. I was conscious enough on the run to see that my experience was directly my creation – “why, oh why, did I do this to myself”. I was entertained by my self-created suffering. Hopefully, I won’t make this form of entertainment a habit!

Out on the bike, I failed to drink enough water but was saved from disaster by the excellent running conditions. A bit of dehydration may have led to increased complications on the run. The choice to drink less was a very poor one because it makes it much tougher for me to assess the magnitude of my cycling over-exuberance. Still, even if I knew _exactly_ the degree that I blew it on the bike; I will be a different athlete next time.

Whether, or not, there will be a next time is the subject of Part Three. In Part Two, I’ll share thoughts on how the past year went for me. I am in the process of reviewing, then updating, my Personal Plan for the next year.

One final thought, a couple of the lads emailed that they hope to race me on a better day. Last weekend’s race was my absolute best effort and represented total dedication at my end. I brought my A-game to Penticton and the guys in front of me beat me while I tried my best.

In our lives, we rarely give ourselves the chance to give our absolute best towards any endeavor. My wife, my clients and my team put a tremendous amount of energy into my race preparations. Daily, I reap the benefits of this focus on excellence.

The toughest part of the entire day was (my perception of) failing to deliver to my crew. As Mark warned, when the race gets tough, the surface fears (failure, fatigue) melt away to the reality of our subconscious fears. I didn’t realize how much I loved Monica until the only disappointment that I felt was not delivering on her dedication to my goal. That is an interesting piece of self-knowledge.

Under duress, I failed to consider that the reward we receive for loving is more love, rather than more performance. If you can relate then you are a very lucky person. If I sound a bit flakey then that is OK too. I only started to understand recently.


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10 August 2007

True Limiters

The photo this week is a snap from this morning's lab testing. That's Mat working on my most recent lab test (we have lab coats but he seems more comfortable in a Jack Daniels t-shirt). We are at the very early stages and it's been a lot of fun for all the team.

Alan is going to write up some thoughts on Lactate Testing -- he's at two pages already -- you'll find the article over on his blog in a few days. He's got all our data so it might be interesting for you to review.


I've made a few adjustments to my gear for IM Canada.

I've always wondered what difference it would make to have the _absolute_ best equipment available to me on race day. The good people at Planet-X offered to pimp my TT bike so I can transfer extra watts through to to the road. That's very much appreciated!

On race wheels, I'm likely to run the set of Xentis-TTs. Given that I thought a 23 was a 27 on my hill TT and they accelerate faster than a disc -- I figure that they will be the most efficient wheel set for me. The IMC bike course involves plenty of pace changes so I'll trade a bit of high-velocity straight-ahead aero to reduce power spikes on pace changes.

Probably the biggest change is that I'll not run a powermeter this year -- no post-ride data for you. I thought quite a bit about this decision and it feels right for me. With eight years on power, I'll use the Force (and my heart rate monitor) to guide me.

I'm keen for pace feedback on the run but haven't made a final decision on whether to run an HRM. My physiological testing has confirmed my 'feel' at various paces and I've raced that marathon course plenty of times -- the key components of (my) running fast in Penticton are pace, rather than effort based.

My buddy Chris McDonald set me up with some compression socks -- they don't match my speedo but you might see them on the run. My fashion choices amuse me and a bit of internal amusement can come in handy towards the end of the race. This might mean that I don't run my second choice socks... too bad as they _really_ entertain me.

Guess I can wear them to the pro meeting...


Poker Pacing

Within our training group this summer, one guy has managed to lift his run performance much more than the rest of us -- Jeff Shilt. I asked Dr. J to share his approach for getting the most out of his run sessions and he wrote this week's Alternative Perspectives for us. This is a practical explanation of Lydiard's advice to always "come-back-faster-than-you-went-out" when running.

Jeff (gleefully) pulls large handfuls of time out of the more 'spirited' Lads in the back halves of his run and swim workouts. I believe that there is a material physiological benefit to training this way. Jeff has deeply ingrained a mind-body connection of always finishing strong.

Under stress, (I expect that) he will revert to the pattern of backing off early and finishing very strong. Many athletes think that they will be able to "race different than training". Under stress, you are very likely to revert to your most deeply held memories and patterns. This is why athletes that love high intensity training are at a disadvantage in ultra-distance racing -- they have little practical knowledge of the difference between easy/steady/mod-hard... to them... it is all "slow".


Getting into Coaching

Mike Ricci, Mat and I cut our first podcast this week. Hopefully, I won't put you to sleep because I need to be more animated! We started recording 15 mins after a decent swim workout -- guess I was a bit flat. We'll need a bit of time to get it live -- this is all new for us.

I'll try to do better for you when we cut the "Going Pro" piece -- please email me questions that you have. I'll see if my buddy, Chris McDonald, will join me for that one -- he knows the raw reality of "living the dream".


A reader sent me an interesting interview with Renato Canova -- the article provided interesting things to consider. Two of Canova's key beliefs struck me as particularly relevant:

(a) the need for change within an athlete's program -- the dynamic nature of athletic fitness across an athlete's lifespan; and

(b) the need to minimize fuel consumption at specific event pace.

Fuel consumption (and mix) is an essential consideration for ultradistance athletes -- it may go some way to explaining why the fastest athletes (defined as pace/power at FT) don't always win Ironman.

For what it is worth, for events over seven hours, I'd define race-specific fitness as power/pace at AeT and I'd measure how well-trained an ultra athlete is by calculating AeT power/pace as a percentage of VO2-Max power/pace. The more traditional benchmark is to use Functional Threshold, rather than Aerobic Threshold.

I'll let Jeff and Alan pick this up after we've reached internal agreement on the terminology that we'll be using at Endurance Corner. There are many ways to say the same thing.


Recent Books

With my recent focus on Ironman Canada, my reading has taken a backseat -- however, I did have time to read an interesting book on running -- Run Easy by Ron Clarke. It was another one from Alan's extensive library -- likely out of print in the USA.

This past weekend, Mat lent me his copy of Lance Armstrong's War -- the insight into the cultural and social background of the pro peleton was the most interesting part for me.

Like Lance, I take note of the people that speak of me in public. They give me extra motivation to ensure that I do my absolute best to achieve my absolute best. If I am honest, then (for some reason) even the folks that merely mention me tend to fire me up. I've asked the Lads to _never_ _ever_ defend me in public.


True Limiters

Alan and I were talking about performance the other day and he made the comment that one of the things that he liked about my philosophy was my view that genetics don’t play a large part in athletic performance. If a guy in our office thinks that I said that then I’d better clarify my position. I’ll do that in a minute.

Daniels talks about the ingredients for success in his book. His ingredients are: Inherent Ability; Motivation; Opportunity; and Direction. At the end of that opening chapter, he sums up that the ingredients essentially boil down to ability and motivation.

To clarify, genetics play a key role in how far (and fast) you’ll progress relative to others. However, your DNA plays much less of a role in how far you’ll progress relative to yourself. You’re ultimate achievement will be impacted far more by non-physiological factors than many think. [For the purposes of this article, I will overlook work on the role of genetic modes of expression in brain function.]

In a culture where motivation is driven (largely) from relative performance -- genetics will, therefore, play more of role in determining how close you’ll come to your Ultimate Potential. Why? Because many people are externally, rather than internally motivated.

What prevents athletes (or anyone else) from realizing their Ultimate Potential in a given field? I’ve watched many highly successful people over the last eighteen years and will share some observations on what truly limits us.

Resistance to Change -- I'm on record (somewhere) having said that I've never met a problem that couldn't be overcome by additional effort. That philosophy served me very well. I achieved an 8:29 Ironman and a couple of second places. I then spent most of 2005 nuked and used my same patterns to take me back to a 3rd place finish (22 minutes slower than my best). In order to move past my previous success (or even try to get back to it) -- I had to make simple, yet deep, changes to my fundamental beliefs about endurance

Ego -- in his blog, Mat writes about the challenges of training with guys that he knows are faster than him. He closes wondering if he will have the humility to let people that he "knows are slower" go up the road. I asked him if he really knew the background of everyone that he'll be racing in Kentucky. Keying off a stranger that's bent on blowing themselves up can be a dangerous strategy. I know a few guys that have made tactical decisions based on athletes that didn't even finish the bike leg.

Control -- training and racing produce strong emotions at times. Over the last month, I've cried when running well -- fitness is a strong drug and the emotions that result from the various chemicals that we release with powerful training can cause strange actions. I interpret most strong emotions as "power" -- some of my training pals interpret them into anger (or disrespect). That can be useful if you've got a hard interval to do but disastrous if you are 60 miles from home on an endurance ride. Probably the most talented guy that I ever trained with confided in me that he was simply unable to control himself when racing -- great for Half IM and shorter races but he never fulfilled his long course potential.

Financial Stability -- spending a good chunk of our lives working at our maximum capacity (and resting from triathlon) is the greatest performance enhancer a tired athlete can do for themselves. Like most stressors, you don't realize how much debt/poverty drains you until you've removed it (and recovered).

Recovery -- I write about this one a lot. I know athletes that have been watching their racing slow for multiple seasons, yet struggle to see what the cause might be. I also watch athletes coping with running injuries, adjust their programs by making everything "quality" and reverting to patterns that have caused happiness in the past (e.g. back-to-back IM racing). Some of these athletes are coached by the smartest people in our sport -- you have to wonder if people are considering the cause of chronic fatigue and injury.

Time -- for people that "get it" -- time is the ultimate limiter, much more than talent or genetics. Starting at 30-years-old, I might (just) be able to squeak out my genetic potential before my athletic capacity starts to wane. As well, there's only so much that we can take out of our daily lives to work towards a goal. I have a team of people that help me towards my goals.

Patience -- the final one is my favourite. Most people will leave the playing field before they reach their potential. By sticking around, you'll make less mistakes while the new entrants (clamor for their 'right' to) repeat your errors.

After all that, it comes back to Daniels. To perform best, relative you ourselves, ultimately we're limited by our motivation.


I'll be offline from now until September 12th. I might publish, I might not. We'll see.

Many thanks for your support over the last year,


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10 July 2007

Personal Planning, July 2007

This week I'll write about a few techniques that I use to enhance my personal effectiveness. Should make a change from the training discussion of the last few posts.

I've written before about longer term Personal Planning (see 5 September 2006) -- that is the template that I use for a 1-5 year time horizon. Looking over the medium term is a useful exercise for setting strategic direction. However, it is merely an initial step because it lacks immediacy as well as a concrete plan for daily action.

Personal excellence (for me) is driven by the creation of habitual (daily) actions towards ethical & challenging goals.

The photo this week is my white board. Up until a few weeks ago, I was using it for a To Do list for Alan, Mat and myself. However, it struck me that my greatest value added to the team isn't keeping lists for the Lads! In fact, if team members can't self-manage and meet their own deadlines then the team will be stronger without them. So my "management" was holding us back.

I considered how best to use the board to remind myself, and my team, the key elements of my personal game plan.


Left Column -- winning Ironman Canada is a near-term, achievable, highly challenging goal. Two years ago, that item was raise equity & debt funding for our Scottish property venture. Four years agao, that item may have been "run a sub-3 hour marathon off-the-bike". The exact nature of the item isn't all that important (in a larger sense) but having a near-term, challenging goal that requires daily focus... that helps me manage my time, focus and daily actions. You could call it the short-term expression of my Ultimate Vision.

Not To Do -- below that item (in red) are the three items that I've identified that tend to create disharmony. However, I've rephrased them into positive statements.

Don't seek to control the world becomes... Assist Without Owning
Avoid over-scheduling becomes... Limit New Commitments & Keep Schedule Simple

Those two points are my #1 self-sustained stress factors.

Sitting here, typing this out, I realized that I'm missing something on listening. So I just added... Hear People Clearly. When I get excited, I can spend more time thinking about what I will say next -- than listening.

My "not to do's" are essential because they are habits that I have developed that bring stress to me and limit my effectiveness. I love my flaws as much as I love my strengths, even productive change is challenging.


Central Column -- these are the items that I need to action daily in order to rapidly and effectively move towards my goals. I'll walk you through them because (for me) there is a powerful simplicity.

Love Monica -- concrete daily actions that demonstrate that M's important to me. These actions (in themselves) may not be all that important but their effect is the most powerful collective action that I can take each day. Some examples: garbage, composting, heavy lifting, empty the dishwasher, charge iPod, watering flowers, sit on couch, eat baking and chat.

Elite performance comes from the cumulative effect of many small decisions -- my marriage seems to mirror my sport. This is a radical shift in perspective for me. I have a blind spot for the connection between actions and love. Seems pretty clear when I type it out, though!

Train Daily -- this week's Alternative Perspectives is written by my good buddy, Sam Doolittle. He says it far better than me.

Wake-up Early -- the most important thing that I do each day is get out of bed. Sounds simple? Watch what happens when you don't "have" to get up in the morning. Personal productivity plummets -- when you have all the time in the world to achieve something, it often fails to get done. Deadlines & forced daily commitments are essential for "novice" achievers to get moving.

No Booze -- one hangover every 7-14 days knocks 10-15% off my annual productivity. In the fields that I seek to compete (triathlon/finance), I can't afford to give that kind of edge to my competition.

Media-Lite -- the amount of "signal" contained in the Western media is tiny compared to the noise and bias. In order to think clearly, I've greatly reduced my access to media. I still get a ton and am constantly tempted to return to my old ways. Here's the stuff that currently gets through my filter...

Slate.Com -- politics: I could easily do without
Economist.Com -- main source of media info: I read 30-50% of the on-line edition
CNN.Com, WSJ.Com and FT.Com (headlines)
Doonesbury.Com -- daily cartoon
CoachKP.Com -- help my buddy and find out what he's _really_ doing
XTri.Com & Ironman.Com -- keep an eye on my coaching & athletic competition
Weather.Com -- don't want to get caught at 10,000 feet in a hail storm!
Athlete Blogs -- find out how the Lads are doing through a different filter

That's a lot of stuff to review and I could easily pare it down a further 75% with zero impact on my ability to achieve my goals.

Email Mondays -- This is an on-going experiment for me. I've greatly increased personal energy and chopped my email traffic by 65% in one month. We'll see if once a week will work for the long term.

In order to maintain my client contacts, this new policy had an unintended consequences... in the early days, one of the clients asked how to get in touch with Monica if I died! He may have been trying to tell me something...

I took the hint and now work the telephone with my clients. Telephone is draining for me because it is my least effective medium of communication. Next year, I will shift to video conferencing and that should help a bit. The telephone cuts through a ton of the back-and-forth that results over the Internet and that makes it worth the effort.

Quick email messages may seem convenient but their existence provides disruption and interrupts the flow and quality of thought. Ultimately, my greatest value added flows through the quality of my thought.

I've asked Mat and Alan to check emails at Noon and 4pm when they are working. My gut feel was that we would get the greatest benefit from going off-the-grid on "office days" but I decided to try a more moderate trial.


Below my daily action points are my weekly action points: write this blog (weekly) and read good books. These come back to quality of thought -- practice expressing myself in writing and let good ideas flow into my head.


The right column contains short hand for key projects within my business life. In a sense, each item is a "client" of mine. I tend to view any business-related activity/person/project as a client. I keep a mix of established, venture and development "clients" within my personal portfolio.


I combine my white board with a single-sheet of paper for each week. Each Sunday, I write out my schedule for the entire week as well as my key "to do" items and telephone calls.

Since leaving Hong Kong in 2000, I've seen my (relative) personal productivity plummet. However, my global reach, personal freedom and direct effectiveness have soared. From the outside, I've been told that I do a tremendous amount. It doesn't feel that way to me. I used to "do" far, far more working 60-hour weeks while training for triathlon. The difference now is that _what_ I do is much more powerful and reaches many more people -- I've traded efficiency for effectiveness.

We all create clutter and dead time in our lives -- I am the same.

I work on building the habit of identifying (then removing) people, projects and opportunities that distract me. It is often unpleasant at the front end to clear away "clutter" -- I can find myself wondering about getting rid of old clothing!

To be clear, the most challenging items to clear away are those that are attractive. I say "no" to a tremendous amount to things that would be an effective (and fun) use of my time. Learning to do that with compassion is a focus for me.


My main point is that planning is most useful when combined with a system of daily action. Above are a couple of systems that I use to help keep myself rolling.

Hope this helps,


13 June 2007

More On Personal Planning

This letter will focus on a recent conversation with a buddy of mine. He was asking me for advice on Personal Planning. Our photo this week is Richter Pass on the Ironman Canada course. Two things that I think of every day (maybe every waking hour) -- Monica and Ironman Canada.

Oh yeah, Mat is reviewing my websites (GordoWorld.Com, Byrn.Org, CoachGordo.Com) as part of his summer internship. We will be simplifying the articles and streamlining navigation. If you have any favourite articles then please print and save at your end. For republishing and/or non-commercial uses, please drop me a line in advance.

Books that I've recently read (all good): The Last True Story That I'll Ever Tell; All Marketers Are Liars; and Through Our Enemy's Eyes. Currently reading "Ghost Wars".

One business book and the rest are background reading to evaluate what our leaders are saying about the threat from terrorism. I think that there is room for improvement on how the issue is being framed.


Before we shift to the topics, a bit of a personal update. This weekend, we're doing a high-altitude training camp across the Rockies to Winter Park. My version is...

Saturday -- 210K Boulder to Winter Park via Trail Ridge Road; easy run PM
Sunday -- 180K Winter Park to Rand, return; easy run off the bike
Monday -- AM Swim; PM Easy Run
Tuesday -- AM Swim then Long Run; drive back to Boulder

Tuesday marks the 11th day of my first specific prep training cycle. If things go as planned then I'll have six days with 5+ hours of training; a long run; and four decent swims. The main focus of this training block is my riding.

The lads don't know it yet but the Sunday ride will have a 10m draft zone -- following last week, a couple of them mentioned that they wanted to get their noses in the wind. So this will be a perfect opportunity for a Reality Check. Several sustained hours of 128-145 bpm are very different when the heart rate isn't being driven by repeated high power surges.

The new arrivals at altitude will change Saturday to: AM long course swim; drive to WP; Berthoud Pass Ride (10K climb starts 9000+ ft); easy run PM with the group. The long ride on Saturday has an extended piece over 10,000 ft (to end a 3+hr climb) and that is VERY draining when you aren't fully acclimatized.

A future letter will cover my thoughts on altitude -- my practical altitude experience (real, artificial, sea level to 20,000+ feet) is broad from both mountaineering and triathlon. I have had plenty of different experiences and will share my views for you to consider.

Oh yeah, the pool is around 8,500 feet so it should be entertaining watching a bunch of fatigued triathletes use three-stroke and flip turns! I doubt that we'll be going very fast.


Personal Planning -- Part Two
A friend asked: When you were tired in 2005 and knew it was time to take a break from triathlon, how did you know what to do? I have so many questions in my head about the future that I don't know where to start. What is the best plan for me?

Here's what I meant to say. There are several aspects of this topic that are important to me:

The first thing to do is write down EVERY question and issue that you have. Make it a two column table. In the second column, write about how each topic makes you "feel" -- there will be a tremendous amount of self-knowledge there.

Know that I strive to do the best plan for "me". Telling you what to do would be a mistake because you don't need to do what I would do. "Your" job is the same as mine, figure out the best plan for "you". Don't follow what I do, per se. That said, my case study might give you some ideas -- plus I enjoy writing about me! Remember that I had a lot of good fortune over the last few years -- I probably just got lucky! You mileage will vary.

In Spring 2005, I was not willing to consider that it was time to take a break until it was apparent that I couldn't do _ANY_ material training.

To move out of denial, I had to get very tired. Monica had to walk me around the block to get my body moving again. I did Swim Camps (Chop House Challenge) and started training for the Leadville 100. I was completely missing the numerous, very clear, signs that I was fried.

More than enjoying training, what I really love is personal achievement. Sitting around fried doesn't offer me any of that. So... I dropped training and moved on to something else, where I had a shot at some personal achievement. Not everyone is achievement oriented -- I think that most people would prefer to be liked. I also have a strong desire to be accepted but my self-acceptance is high enough that my main thing is achievement. A more spiritual way of presenting this would be a constant search for my ultimate potential -- perhaps I'll get there some day. For now, I tend to have a desire to "win" at most of what I do.

Once I moved past denial, I came very quickly to acceptance -- I nearly always do. I think that I skipped "anger" but you'd have to ask Monica about that. More on this topic HERE - a very good read.

With acceptance in hand, I looked around at what I could do. At that stage, the two best "options" in my life were Monica and Chris (my business partner). I asked Monica to marrry me and I listened very careful to what Chris told me was happening in the business. When you have a relationship with a high energy entrepreneur then there are always opportunities around. In speaking with Chris I realized that a problem that we had (too many good deals, not enough money) had created an opportunity to form a new company. My Hong Kong business attire was pulled out of the closet and I spent two years helping him establish the new company.

The lessons as I see them:

***When you are unable to do the work required to reach your goals -- it's time to take a break. The will to win is nothing without the will to prepare. I was struggling to get out of bed!

***Lives are fluid, change is natural and should be (at a minimum) accepted. Part of the reason that I warn people against public goal statements is that it takes massive self-confidence to change direction once you've made a public statement. There is a very strong social bias against changing course. It is one of the toughest obligations of leadership.

***My best plan at June 2007 will not be my best plan at March 2008. I always have the ability to change my plans. My goal is to make the best choices (today) given my skills, opportunities and desires.

***The plan will change but your core values are likely to stay the same. Knowing what is truly important to you; knowing what gives you satisfaction -- this knowledge will ease you through the periods of transition.

***Transitions are VERY tough -- I've been divorced, changed careers (3x), relocated internationally (4x), lost my health (2x)... all challenging things. However, through it all, I always enjoyed spending time with "me". Sticking to our personal ethics really helps in difficult times. It's why I avoid associations with people with weak ethics -- in both finance and athletics it can be tempting to spend time with the ethically slack.

The fact that you were asking me about my "break" means that you need to take one. Here are some other points for the overtrained athlete to consider:

If you continue then you won't improve -- you've seen your performance stagnate, or decline. More of the same will generate the same results. You are wasting valuable time.

Accept that you may never achieve your goals. You certainly won't achieve them by following the same path. In my journey, this acceptance was very liberating and opened up many new, and rewarding, paths/relationships for me.

If you take a break then you can put yourself in a position to benefit from the return of your drive, your health. What is different for me in 2007? Two main things -- long term financial stability and the massive support that I receive from Monica. Many athletes are drained by a lack of financial and emotional stability in their lives.

Stability matters, in 2004, the difference between Tom and me was 0.35%. In other sports the differences are even smaller.

The road back:
***2005, regain health and create stability
***2006, see if I could "prepare" again
***2007, gain support of a mentor with strengths that matched my blindspots

I've "won" well before August 26th -- I'm enjoying playing a strategic game with my body. Finance is the exact same game with contacts, emotions and intellect.

Many who win, never win anything at all -- this is especially true of those that lose their personal ethics, most commonly these days through fraud or doping.


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03 June 2007

Personal Investment Strategy

A.C. Writes:

I live in XXXX and bought my first property 14 months ago. I have done well in the 14 months that I have owned it. It has appreciated in value somewhere between 20 and 35% if the comparables are to be believed. It may have even increased by more. I am looking to move and I wonder whether I should remove equity from the property and purchase a second home and rent out the first all be it at a loss, or sell the first and purchase a substantially more expensive property and only own one. The XXXX market is difficult to read and I suppose if enough people / journalists / commentators tell us the market is over valued and will crash it will eventually become a self fullfilling prophecy but what would you do? Stay put for 12 months and see what the market does, remove equity and purchase a second home or sell and purchase?

What I'll do here is share the questions that I ask myself as well as the information that I prepare for myself when evaluating a property investment decision.

This should not be taken as investment advice or any recommendation on what to do with your own money. My goal here is to highlight some concepts that, I believe, are essential for making smart investment decisions.


First up, what is the expected yield on the investment -- there are a lot of different ways to look at yield.

Gross -- when people are selling to you, they will quote Gross Yield and they will define that as Total Annual Rent divided by Purchase Price. As an example, if you are paying $550,000 for a property with a $2,500 per month rent then your estate agent might quote a prospective yield of (12 x 2,500 / 550,000) = 5.5% per annum.

Now that might sound pretty good, 5.5% per annum plus the potential for capital growth. However, Gross Yield on Purchase Price isn't what you really get as a landlord. What I like to consider is my net yield.

Net -- when I buy, I want to calulate my Net Yield and I define that as Net Annual Income divided by Gross Acquisition Cost.

To calculate Net Income you need to factor in... insurance; advertising; letting agents fees; maintenance; accounting; void periods; and all other costs. You also need to consider the time commitment that you will make, which can be material if you try to self-manage.

To calculate Gross Acquisition Cost you need to factor in... purchase price; acquisition costs (legal, valuation, bank fees, finders commissions, stamp duty); renovation costs (we redo most of our flats before letting); and furniture.

If you are running things as a business then you also need to consider an allocation of your central overheads. We have a team of 15 that works full-time in Edinburgh and that _excludes_ our development partner's group (contractors, sub-contractors, site management) as well as our lettings agent's group (letting, cleaners, accountants). There is a considerable amount of effort that goes into managing a residential portfolio. It's no wonder that most groups prefer to focus on commercial property.

When you start to factor all these points in... that 5.5% per annum that you were promised starts to look much less -- in some cases you'll 'lose' up to 50% of your Gross Yield. For this reason, many residential portfolios operate with a net yield lower than their cost of debt.

When we started investing in the mid-90s, it was the other way around, our net yield was 2-4% above our cost of finance. It was a great time to be investing. 20% down and our net yield serviced the mortgage with a little extra left over.


With the yield you are in a position to calculate the total return (IRR) on the equity component of your investment -- explaining my views on capital structures as well as equity IRR calculations will have to wait for a future edition.

A quick scan on google turned up some options to help you if you want to read more -- this one looked interesting. Remember that, when we forecast growth, we will have a bias towards what's happened over the last three years.

With my investing, I want to consider a range of outcomes (likely and unlikely) and weight their likelihood. If I am comfortable with the implications of each outcome then I'll invest.

There are investments that have a great expected rate of return that I have passed on because I was concerned about the "implications" of a highly remote event. In finance, "implications" can include personal bankruptcy or a material reduction in standard of living. Our photo this week is Monica in Paris, being able to visit France is a luxury that we want to be able to keep in our lives.


Now that you have a grip on the yield/total return -- you need to consider your alternative uses for the capital. I'll illustrate some examples...

Credit Card Debt -- this could be clocking up at 15-25% per annum. Your greatest investment is often paying down your most costly debt -- then cutting your cards into pieces. Credit cards are the bane of financial prudence -- Monica started a company in Colorado and we get 2-3 credit offers per WEEK.

Money Market Funds and Bank Deposits -- depending on your currency, you can earn 4-6% per annum for short term deposits. I never search for the last 0.1% and only invest with the largest banking groups. Seeing as I don't have any capital upside with this investment, I want the lowest possible capital downside.

Business Ventures -- I keep an allocation of my portfolio reserved for "exceptional deals" -- things that pop-up at short notice that have the potential for a large capital gain. When a great opportunity presents itself, you want to be able to take advantage of it.

***When you are paying off a large mortgage, car payments and/or credit cards then you will have to pass on opportunites that have the potential to give you the financial freedom to do what really matters to you -- generally, the things that we truly like cost very little.

For many of us, the true cost of leverage lies in opportunity cost as well as the emotional burdens. The interest rate is often the least of our worries!

Phew, a bit of a long winded way to say... Consider what else you can do with the money and consider the time/energy/emotions that each of those investment opportunities requires from you. Residential letting can be an intensive investment on many fronts.

Kicking back with a low risk portfolio is "boring" but over a 15-45 year time horizon boring starts to look pretty good!

Maybe I should have been an actuary...


Now let's touch on some of your specific questions...

Q -- Should I rent at a loss? Double my exposure? Move into a massive house?

A -- Can you support three-years of your projected financial loss? Can you support one year of zero rental income? How long will your family remain financially solvent if you (or your partner) lose your job? Have you looked at your likely "total return" (equity IRR) across a variety of capital growth scenarios?

It's only been the last few years that investors (and bankers) decided that they would tolerate property deals that didn't cover their cost of finance. This is a relatively new phenomenon (outside of start-up VC) and should provide you with an insight into where current valuations are relative to historical norms (super high).

In 2005, I had more than 100% of my net worth invested in property -- at that level, I was seriously uncomfortable. So, I took actions to reduce my exposure to a level that I felt comfortable with. I think it was JP Morgan that advised a worried young investor to "sell to the sleeping point".

I sleep a lot better in 2007.

So... I was comfortable with the nature of my investment (prime Scottish residential) but I was uncomfortable with the quantum of my exposure (>100% of Net Worth).

What would I do?
I would likely purchase a house in the best neighbourhood that I could afford that had a price well _under_ the maximum that I could afford. With my personal investment, I need to stay well under the "sleeping point".

What should you do?
I have no idea but bear in mind that certain elements of the property market appeal directly to the way our minds are programmed. More concepts...

Envy -- in a rising market there are plenty of transactions that lead us to feel good about holding property. In a declining market, there are less transactions and we tend to fool ourselves about the true value of what we are holding.

Stories -- people love stories -- the property market abounds with stories of folks making money -- as well as characters that are experts at taking advantage of our desire to dream about easy money. We only hear about the good deals -- people don't brag about their dud investments.

Nominal returns -- NOBODY talks about the true cost of investing. We bought a condo in Boulder in 2004 for $360,000 and sold it for $409,000 this year (~5% return across the period).

Sounds like a good deal?
When you factor in cost of ownership, transaction costs (massive in the USA) and alternative uses for the capital -- it was my single worst investment across that period and Monica's family took a lot of the management hassle off our hands!

Still, it was a good deal "for me" -- there's more to consider that just the pure financial return.

Cycles -- if you are in your 20s, or even if you are in your late-30s like me, then we have no REAL memory of a truly crappy property market. 1989-1992 was poor in the UK and the 70s were a disaster all over (I am told). Going further back (see Irrational Exuberance, 2nd Edition) you'll see that property markets (like all markets) have periods were they snap back to trend.

Within my own investing, I want to make sure that I'll be OK if the target market/asset class snaps back to trend and overshoots way under trend. I have missed a lot of great deals because of my financial prudence. However, I've done enough decent deals to outperform my goals.

Security & Guarantees -- when markets turn down, I want to make sure that I'm not the first port-of-call when the banks start calling their security. In the early 90s, many US banks decided to exit the UK market -- remembering this lesson, we pay more to bank with people that are unable to leave our markets, providing money is not a commodity business and we choose our partners carefully.

Not exactly black and white, eh? For me it is a lot like athletic training -- best guesses based on imperfect and changing information. As well, there are exceptions for most of the "rules". Still, the rules have served me well.

Bottom line -- at this stage of the cycle, I wouldn't leverage past my ability to comfortably service the debt in an economic downturn.

Be patient -- you'll be saving and investing for the rest of your life. At some time over the next 10-15 years, there will be great deals that nobody wants to buy. When that happens, you will want to have the capital to take advantage of those opportunities.

As an investor, one of our greatest fears is missing out -- it's tough to sit on cash when everyone is leveraging up to the eyeballs.


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12 May 2007

Success, Discipline, Bad Deals and Bodhisattvas

The photo this week relates to my final topic of bodhisattvas. The other topics that I'll share ideas on are success/results; discipline/compromise; and bad deals.

Before we kick off a public service announcement on helmets and seat belts... the good weather has a number of my pals riding naked!

It is worth remembering that we never choose when we will have a life threatening accident. Helmets have saved me from two very serious head injuries. If you don't want to wear a helmet for yourself then wear it for your friends/family -- we are the ones that will be left to pick up the pieces when you sustain a serious injury.

If you insist on riding without a helmet then please, at a minimum, carry an organ donor card.


Success vs Results
A friend recently remarked that while he 'lived' better than anyone that he knew, he believed that I enjoyed the way that I lived far more than him. There wasn't any envy in his statement -- just an observation on the difference between consumption and satisfaction.

There is, I believe, a related topic in athletics -- the difference between achieving success and achieving results. There are a lot of different aspects of this topic and I will limit myself to a couple of sub-topics this evening.

There are several training techniques that produce results while rarely leading to success. I'll share a few:

***Starvation training, exercise anorexia, depletion training -- whatever you'd like to call it. Over the short term, self-starvation can be performance enhancing. There are several successful trainers that actively push their athletes down this path -- results are achieved and others (including the athlete) are left to pick up the pieces.

***Overtraining -- a really interesting topic for me. Within my own training, I was successful, with a high quality of life during all of my overtraining phases. When I look around my friends and read case studies of world class athletes, I see that there are positive physical and mental adaptations that occur as a result of the lessons leading into an overtrained state. Pretty much everybody at the top of their sport has blown themselves up at some stage.

Having come out the other side of both these topics, I find it difficult to participate (in any way) in an athlete's desire to impair themselves. However, I do have empathy for the athlete that argues for his right to nuke himself. You'll certainly miss your health when it is gone, so it is best to ensure that you have a very good reason for venturing to the limit.

These topics present interesting ethical dilemmas that (I expect) healthcare professionals must balance on a daily basis. The balance between respecting a person's right for self-determination and my desire to surround myself with individuals that embody the life that I want to live.

At many levels, athletes look to their coaches/trainers/advisors/mentors for affirmation that their strategies are "what it takes". I'd caution you to consider if a solitary focus on results will, ultimately, lead you along the path of a successful life.

Speed, money, body fat percentage, net worth -- these may enhance our perceived quality of life but they do not represent quality of life. The more fixated we become on them, the more we'll miss them when they're gone.


Discipline vs Compromise
Another buddy of mine shared an observation that taking care of his financial obligations was forcing him into a position of compromise with his training. He noted that he struggled with compromise -- the underlying sentiment being that he was results focused on his training and didn't want to back down from achieving in that field.

If you've been reading this blog for a while then you'll know that financial prudence is a fundamental belief of mine. When I am out of financial balance, I can't really think about much else. This presents challenges as I broaden my consulting practice to help people with their financial situation. In fact, I have a little sign beside my desk now... "assist without ownership". The sign is part of my drive to free myself from the illusion of controlling anything outside of myself.

I thought about my friend's comment and my first response (internally) was a quick retort that there is a massive difference between compromise and discipline. However, given a week to mull it over... I think that my buddy had it absolutely correct.

Changing our patterns is difficult
Changing our patterns takes time and effort
Meaningful change requires new methods of thinking
Without the catalyst of a crisis, most are unable to make meaningful changes

I think that my strong initial reaction was generated by my own pattern of thinking. Here is how I see it...

"I never compromise, I make positive decisions that support my desired goals. I'm doing what it takes to achieve success."

You can easily change this to...

"I am constantly compromising, all I do is say 'no' to myself. I try so hard to escape my failed patterns. Poor me."

Same thing...
Different mind set...
Different probability of success.


Bad Deals
Whether it is a poor investment, a weak hiring decision or a failed relationship, we are all going to make a few bad deals in our lives. Due to space constraints and to protect the guilty (i.e. me!)... I'll skip the specific examples.

Here are the key things that have helped me deal with my most serious personal challenges:

Forgiveness -- not your spouse, not your business partner, not your employee -- forgive yourself for having made such a poor decision to start with. When I'm in a bad deal, nearly all of the angst that I feel comes from a mixture of fear and embarrasment for a self-generated failure. I made a poor choice -- I blew it -- things didn't work out as planned. To think clearly, to move forward in a positive manner, my first step is to forgive myself.

Effective -- you'll have a lot more success in your exit strategy if you focus on being effective, rather than being right. Seeing as you've (hopefully) managed to forgive yourself for entering into the deal -- there is no need to get the other party/company/boss/employee to admit that they screwed up as well. You don't need to be "right" -- you do need an exit that protects your position while preserving your ethics. If you are in settlement negotiations remember that your self-respect is the only asset that you truly own.

Tests -- while you are working towards a successful exit strategy, expect to be challenged emotionally with 'unreasonable' requests. I used quotes because it is important to remember that the other party is likely fighting for their own financial/emotional survival. In these situations, people can do some strange things.

Sunk costs -- in a bad deal, the time/money/emotions of the past are gone. What matters is having the mental clarity to make effective decisions about where you will invest your current (and future) time/money/emotions.

As a professional investor of 17 years, I can tell you that (as a rule) you will make the greatest return by never, ever, ever, ever following your money when a company is off plan. I watched us burn millions of pounds learning that lesson in the early 90s. A simple rule that is far from easy to implement.

As a human being of 38 years, I can say that the strength of my relationship with Monica stems from the self-knowledge and self-commitments that flowed from the errors that I made in previous relationships. To get a different outcome, I had to change my approach, rather than my partner.

Finally, for what it's worth, my most valuable life lessons have come as a result of bad deals. The financial and emotional costs that I've paid have returned huge dividends through improved decision making and perspective about my life situation.


If you click the link then you'll get a proper definition of a bodhisattva -- I like Jack Kerouac's, "a brave wise being or a great wise angel". I think that I had one of these mythical creatures in my house the other day.

Allow me to explain...

The photo that leads the blog this week is my father-in-law as a young man. As you can see, he was a military man and worked on a carrier flight deck.

A few months after that photo was taken, Robert was involved in an accident where he was sucked into a jet intake. His buddies pulled him out of the engine and he was dead on the scene. The engine blades sliced his shoulder quite badly and he lost enough blood for his heart to stop. Fortunately, the crew managed to revive him.

He's never really explained to me what dying was like -- I doubt that he'd be able to find the words and, even if he did, how could I understand. Anyhow, after they managed to get him stable from the first accident, his shoulder became infected and it wasn't looking too good for him. Interestingly, when he describes this period of his life he focuses on his friend in the hospital, playing checkers and laughing daily. Dying was quite beneficial for his mental outlook!

I attended Robert's 70th birthday party and he explained a few things to us. He didn't really give a speach, rather he shared a few ideas that had been helpful to him. It was a bit like being handed thirty zen koans. I only remember a few things from his talk but he's been threatening to publish his memoirs.

The observation that stuck with me was his statement that he is constantly surrounded by mirrors.

When I am at my most "clear", I don't seek to overcome, or fix, myself. Rather, I use self-acceptance to create empathy by seeing myself reflected in others. Some traditions talk about being "one" with the world -- so far the best that I can manage is a little empathy. It's a start.

Another of the things that he shared is that the accident super-charged his ability to "feel", specifically, to experience love. A person that is supercharged on love has some interesting characteristics -- Robert's emotional circuit breakers can get overloaded and he's prone to crying when he's really happy -- which means that he cries at just about anything because he sees beauty in most things (other than the Bush administration but he's working on that).

Like a lot of my best teachers, simply being with him leaves me feeling better. He's got quite a bit to teach me but I know it all already. My head likes to file everything in sequential or opposing terms. Some knowledge doesn't quite fit that way.

Back next week,

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04 May 2007

May Q & A

Still on the road this week so a few thoughts on: priorities; realistic protocol choices; and externals.


S.T. writes…
“Important things tend to receive great criticism from ourselves. At least this is what my market research shows, which was done among my friends. We always think that our priority list is not correct. For example, we always ask “why this is #1?” and why this is #8? (in a top-10 list)…

“Anyway, when you have free time and you’re in good mood, pls write a post on this very subject “deciding what is really important to you”. I think that this decision is very short-lived and it’s like making a tattoo. You like it now (in our case you consider it important now), but are you going to like it after 5 or 15 years? In my humble opinion, decide what is important now and is rated #1 now, it’s not something that can last for too long, maybe that was the case in the 90s, not in the 2k years. It can even become counterproductive in our fast changing world. Everything goes, turns and moves fast and our “important things” (probably) follow."


Some general points on goals and priorities.

Within my life, my goals are signposts (or waypoints). They are not a destination in themselves, rather they help me be the sort of man that I want to be. They support a desired lifestyle and ethical framework for me. With that in mind, I’m always free to change my goals (or my approach) with new information.

Some of my pals (and readers) often appear to take my goals more seriously than I do. What I strive for is total commitment with limited attachment -- some days go better than others on that front! I think that we need to be wary of sticking to stated goals when changing circumstances show that another makes more sense. That's why I advise careful thought before making public statements -- they often come back to bite when we are least equiped to deal with them!

That said, what I’ve found in my own life is that my true goals are timeless in nature. They span cultures as well as trends/fashions. These are the values which lie beneath the items that I may place on my Top Ten list. See my Personal Planning post (September 5th, 2006) – the key things for me are:

Big Picture
>>>Successful marriage combined with personal satisfaction
>>>Open communication based on kindness and respect
>>>Practice listening skills
>>>Observe and reflect

Key Likes
>>>Like to train and write
>>>Like to achieve
>>>Enjoy temperate weather with ample sunshine
>>>Maintain expense/income balance

All of the above are available to me on a daily basis and, with the exception of my marriage (and the weather), only require action on my part. I have complete control over them.

Within my life, I see very little link between “balance” (in the Western sense) and personal satisfaction. It often feels that I have to work at keeping my life focused (and a bit out of balance), in order to achieve a deeper level of success.

However, there is a strong link between “harmony” and personal satisfaction. Harmony flowing most easily when I am living up to my commitments to myself – everything that I appear to do for “others” is undertaken as a result of a desire to maintain my personal view of self. To think otherwise can generate a lot of resentment – there are a lot of highly successful “self-less” people living lives of background anger due to failing to realize this point.


D.M. writes…
“My main constraint (as for a lot of us!) is time.... …I'm able to manage 10 hours of training per week while keeping my life balanced. As a result, my training consists of a mix of intervals, time trial efforts ( e.g. 5k run or 60min bike TT) and longer sessions (e.g. 90min steady run or 3 hour ride). So far I am improving and my body absorbs the intensity well.

“I know you prefer a lower intensity approach and it clearly works very well for you and many others. My question is, simply, with a 10h per week time constraint, do you feel that a higher intensity approach is warranted, or is there a better alternative?”


I think you answered your own question – your life is stable, you are improving and you feel like you are absorbing the training. Those three items describe an athletic approach that is successful in terms of our life.

What I’ve seen in my own training as well as the training of my athletes is that for an athlete to get close to their “ultimate athletic potential” (whatever that may be) requires a level of time commitment that most people don’t want to make. The time required simply doesn’t fit into their overall life goals. It sounds like you’re in that position right now. So I’d stick with what’s working for you.

What you may find is that using the occasional “Big Day” (see my Coaching Long Course Athletes article) in your training provides a different sort of training stimulus for you. Consistent, variable overload, absorbed over time. That goal can be achieved by a multitude of methods & protocols.


S.B. writes…
“… there are performance plateaus that people reach fairly quickly (within a few years), are very difficult to get past, and very wildly between different people. For example, I'm skeptical that I'll ever get my LT up or over 300w - my physiology doesn't seem to lend itself to that, and that's fine, I'm 155lbs. In a bike racing context, I can train up my short term sprint wattages much faster and higher than most other people are able to (which is perfect for Ironman, right?). I train with guys who have easily exceeded my strenght/weight ratios.

“So, are you putting a subtlety on the "absorbed" work versus the "completed" work - e.g. we all go out and do training that we might not be absorbing, even if we think we are?

“Now, for IM I feel like I agree with you more since the parameters are a little different - I know I can physically do all the things required to do very well at IM - it's a matter of building endurance and durability to do them over longer terms. But at the end of the day, aren't there still simple genetic/physiological aspects that play a major role, given we may not *really* know where those limits are?"


You will maximize your “speed” when you maximize your “stamina” – that is why I place such a fundamental emphasis on the long term, consistent application of steady-state aerobic training.

You are correct with the subtle emphasis that I’ve started to place on “absorbing”, rather than completing. There is an over-emphasis on the completion aspect of training – there are a lot of simple (but not easy) ways for us to enhance our absorption of training (sleep, nutrition, massage, flexibility, time management, financial stability, emotional stability). The items that I share within this blog are what, I believe, drive a deeper level of performance.

Well before I was racing elite, I learned (through Joe Friel) that my limiter was the ability to recover, not the ability to train. Most the athletes that I work with start their first year with me doing a lot “less” in their eyes – yet at the end of the year, they have done “more” because they didn’t nuke themselves, stayed healthy and had greater consistency.

Finally, genetics are the ultimate “external”. There is zero that can do about them. Time spent worrying about them is 100% wasted energy.

Focus on what you control. Ideally, what you control right now.

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17 March 2007

Just One Thing

A roadtrip shot to kick off this installment. That's my brother, Chuck, looking at the camera and we're rolling in California.

A book recommendation for you, Just One Thing, John Mauldin (Editor). I finished the chapter on Psychology Matters. That chapter, alone, is worth the cost of the book. It is an excellent essay on how thousands of years of neural programming make it quite tough for us to execute a strategy that runs counter to our collective biases/instincts.

The chapter authors are writing about investment strategy but the psych chapter is broadly applicable. For example, it's why I'm always encouraging athletes to establish a simple, basic week which they repeat.

Success starts from being able to keep a single promise to ourselves. We make that a habit and grow outwards from there.

I'm working on four "one things" that will sustain my preparations to win Canada in August. Don't Drink; Wake Up Early; Train Consistently; Travel Less. There isn't a single mention about main sets or any physiological matters in my strategy -- the training is a given. What matters is creating the ability to maximize my ability to absorb the training and my "one things" enable that to occur.


Given that I posted my tougher sessions last time, I expect that a number of you will be bound to try them. Be warned, most athletes get the intensity phases of their seasons wrong and blow themselves to bits. I've ended my year a few times with inappropriate intensity. You'll also be tempted to open the trottle on every single session and go crazy with stacking the intensity. Remember that you only need a little bit.

For every (very) tough main set that I add to my week, I tend to remove 2-3 hours of aerobic training. Most athletes cannot afford to lose that amount of aerobic volume from their weeks.

Put more plainly -- optimizing most adult athlete's VO2 Max performance is normally sub-optimal for their race performance.

As well, if you are preparing for a 4-17 hour event in April or May then seeking to optimize your fitness in March/April will be counterproductive for your overall athletic development. There will be a lot of athletes doing end-of-season training for the Boston Marathon, the Wildflower triathlon and/or Ironman Arizona that, while (possibly) scientifically optimal, will prove to be sub-optimal.

By training smart, we can do very well by avoiding the training (then pacing) mistakes that our competition will make. I always remind my crew that we should let the other athletes make the mistakes. It's tough enough to train properly -- no need to stack things against ourselves.

Be honest with yourself on your likely limiters as well as where you've made mistakes in the past. Most adult athletes are limited in terms of their steady-state endurance, not their central cardiovascular systems.

These tips fit hand-in-glove with the psych chapter. See if any of this makes sense in your athletics, family life, investment strategy or work place attitude:

1 -- Under emotional duress. people shift to high risk, high return choices -- even if they are objectively poor choices.

2 -- When self-esteem is threatened, people become upset and lose their capacity to regulate themselves.

3 -- Self-regulation is required for many forms of self-interest behaviour... ...self-regulation appears to rely on limited resources that operate like strength or energy, and so people can only regulate themselves to a limited extent.

4 -- Making choices and decisions depletes this same resource... once this resources is depleted... the self becomes tired and depleted, and its subsequent decisions may well be costly or foolish.

5 -- Irrational and self-defeating acts become more common in the wake of rejection.

I see (and exhibit) a lot of the above at an Epic Camp. Nothing like extreme stress to bring out the best (or the limiters) in a person.

Anyhow, there is a lot more in the chapter and I'd encourage you to get yourself a copy. The "Psychology Matters" chapter was written by James Montier -- great stuff.

Keeping it simple and trying to be true to my word,


26 December 2006

True Wealth

The photo this time is my birthday celebrations yesterday. That is a monsy-muffin on top of some caramel ice cream. Pretty tasty!

I'm glad that I waited a bit as I managed to come up with some additional ideas on this topic. A good place to start this conversation is my piece from Jan 1, 2006. Then review my Personal Planning piece from Sept 5, 2006. Those are the ones that explain what I actually do in order to move forward.

How did your year go? Did you increase your personal wealth? Within my own life, 2006 saw a big increase in personal wealth. However, it wasn't in the sorts of places that we normally look.

My definition of wealth includes: nutrition; fitness; finances; friends; personal productivity and Monica.

Traditionally, when we think about wealth we look to an outward appearances of assets. If we go a little deeper then perhaps we consider the size of a person's balance sheet.

I've written about how I like to look at net assets (assets minus liabilities). This is because many people that exhibit traditional wealth are actually caught in a trap due to the combination of personal debts and their lifestyle choices. Ramping up asset acquisition and personal expenditure, slightly quicker than they can "afford". With a tailwind of rapid asset inflation and easy credit, it takes a tremendous amount of discipline to be prudent.

Looking back in my own life, there are a number of financial lessons that I remember from my childhood. The one that stands out above all the rest is my dad's advice to save 10% of everything that I "make". It has been the bedrock of my financial planning and it's made all the difference to me. In university, as a graduate trainee in London, as a venture capital partner in Hong Kong... I've never, ever, ever, spent more than I earned. If I could offer you one tip for financial security then that's the golden rule. If pro triathletes that live on less than $2,000 per month then a professional manager can certainly get by on what she earns.

The buy-out investor's equivalent of this Golden Rule is "never finance operating losses". I'll save the lessons of venture capital for another time.

I subscribe to a free investment letter put out by a guy called John Maudlin -- he writes each Friday and, occassionally, sends along the writings of other people. One of these ones that he passed along (I think) was a definition of wealth that was "the ability to finance a lifestyle".

and, being in a conservative mood I added...
"the ability to finance a lifestyle over time and changing circumstances"

Now that appealed to something in me because it seemed really, really safe. There's something about that safety that calms. Of course, I might have become caught in that trap that affects many of my former collegues in finance and investment... ...ever increasing standards used to delay the time when they will start "living" their lives.

Once you want to have a house on three continents and consider flying commercial an inconvenience... well, if you want all that, indexed, over time and changing circumstances... you can see why some of these guys end up dying at their desks.

Of course, when a person's actions divert from their words over time... they don't really want what they say.

What's all this have to do with wealth? Good question. Well, if money is linked to wealth then did your spending over the last year increase your wealth? Do you spend on the things that make you wealthy?

The modifed definition appealed to me and I wrote an entire article on just that point. However, something was missing so I didn't post it. I'll share a parable, I think that it's from The Alchemist

There is a man sitting by the well in the desert. He's too scared to leave the well for fear that he might die of thirst. Eventually, he dies by the well.

How often do we fail to live for fear of failure?

So what was missing from that definition? Attitude!

Three book recommendations -- A New Earth; The Education of Little Tree; and On Death and Dying. I read these right after finishing those three wealth titles that I included last time.

Each one provides ideas that you can use in decided what matters for your personal plan. A New Earth has an interesting section on the concept of attitude -- the author talks about three forms of attitude: acceptance, enjoyment, enthusiasm. When I think about the people that achieve -- they have a tremendous amount of all three -- probably a sign that they are living in harmony.

So... after spending three months using my Personal Planning template, it struck me that one way to measure true wealth is to consider the probability of enjoying any given moment.

Not the probably of enjoying every given moment -- I'd say that is close to zero for me. Rather... the probably of enjoying the current moment at any given time.

I don't know if that seems like a revelation to you. It certainly did for me. Why? Because I started to look at people, spending, actions, potential commitments... everything... I considered it and asked myself... "what is the likelihood of this choice increasing my true wealth"?

I started to see how certain decisions, made to increase financial wealth, were actually draining true wealth. Of course, I noticed these decisions mainly in others. It's always more easy to see the self-help illustrations in those close to us, rather than ourselves!

So I went back to my Personal Plan and noticed that a few "important" items simply faded away. Some areas of conflict seemed to lose their uneasiness within me. When I define wealth as my current happiness -- I don't want to let people "steal" it from me.

Of course, you would be right to point out that anything that I feel inside is my creation. Still, choosing certain paths makes it more likely that I won't need to achieve satori to have a life with meaning.

Your next question might be who is the "me" that "I" am always referring to? He seems to get in the way a lot...

I got a zen book for my birthday...



06 October 2006

Unifying Theory

A few years back, Scott and I were in Taupo the day after Ironman New Zealand. If you scan the results over the years then you'll see that the year I was 7th (I think) there was a South African guy that was 2nd or 3rd. His name escapes me but he's an accomplished Ultrarunner -- does the Comrades Marathon.

That evening, Scott leaned over to me and said, "hey, let's go see what we can learn from that guy". We sauntered over and I had a practical demonstration of Molina's view that every successful person has something to teach us. Over the years, I've tried to carry this view with me -- some days I do better than others.

An openness to new ideas is a trait that characterizes many of the best Kiwi coaches. Staying open to new concepts is really tough due to our minds constantly trying to impose a Consistency Bias on us -- as well as -- our tendency to filter all input in a manner that supports pre-existing beliefs. Fire up any (and every) forum the internet and you'll see many experts demonstrating both consistency bias and pro-active filtering. It's something that we all need to watch if we want to make effective decisions with imperfect and uncertain information. As an aside, when I think I have certain and perfect information, I get a bit nervous. Life, as opposed to death, is more probabilities than certainties.

So that's the Molina bit of this story. Now Physics... first up, I have a grade eleven physics education so don't take _anything_ that I write as accurate on the science itself.

When I was reading The Quantum World I noticed that the author (Ford, I think) had a deeper desire that underlay his explanation of the technical detail. He had a desire for a unifying theory that could bridge between Newtonian and Quantum mechanics. A grand theory that would bring harmony to discussion in his field by fitting everything within a new framework.

Ford also ran through what physicists like in a theory -- simplicity, broad application, able to test, robust... these were a few things that I remember. His chapter does this subject a lot more justice and is a worthwhile read simply to understand (one view) of the components of an effective summary of knowledge.

Now what's this have to do with Molina. Well, whether it is: (a) endurance training; (b) property investing; (c) choosing life partners; (d) personal satisfaction & happiness; (e) a life with meaning; (f) raising kids; or (g) anything that is important to you...

In all these areas...there are a multitude of theories, protocols and methods for achieving an end goal. Some of these are stated explicityly and others are implied through our implicit actions, statements and beliefs.

Personally, I have the same end goal for everything in my life (My Prime Directive) but that's me. If you think about it then you'll likely have various end goals that are important to you and their importance will vary over time.

Time! Consider where you spend your time in your life. Depth of knowledge, over time -- perhaps that's a form of wisdom. Perhaps it is depth of self-knowledge independent of time? Perhaps wisdom is consistency of right action -- treat others as we wish to be treated.

I was on my run this morning and backing off from 147 bpm each time I got excited on this topic. On my run I came up with an exercise in the Unification of Knowledge. I'm writing it here so that I can come back next September when considering what to do for my retreat!

Choose any topic that's important to you.

How do you know that something is important to you?

Choose the topic upon which you spend the most time each week. If this isn't the most important thing in your life then you should probably re-prioritize before you unify your knowledge.

Another aside... don't be fooled by words or thoughts -- the items that we do consistently are the ones that are most important to us. Overlooking actions can be a fundamental mistake in business, especially unethical actions. The best lesson I learned in my early career was never back a "crook" and always be willing to make less money in order to retain your personal ethical standards.

I've known many people that spend the bulk of their week on actively feeding a sense of victimization; worrying; or being fearful. Know that you WILL get what you most focus on -- choose wisely!

Back to our topic -- let's choose Endurance Training because that was the context that I was thinking about.

1 -- Start a little book and in it write down statements and beliefs on your topic. Spent a month simply noting these items -- try to get as many different views as possible, don't classify them.

The internet is a great for sourcing a wide range of views -- someone once asked me if I was worried that reducing the amount of media input I receive would reduce the availability of good information for decision making. Here I would answer that one needs to separate "noise" from "signal". Most of the input from modern media is merely noise designed to attract our attention (through fear, envy or entertainment). In order to give myself a chance to process information on subjects that are important to me I try to actively reduce the noise in my head. I spend very little effort remembering things that aren't important to me.

2 -- So... after a few weeks of building the Statement List -- review it and beside each "fact" note: (a) I agree; (b) I'm unsure; (c) I disagree.

3 -- Once you've got all your beliefs down on paper -- sort them into their categories (yes, unsure, no).

4 -- Spend some time on each belief figuring out under what conditions it would be appropriate in the "other" camp. In other words, under what conditions would your true beliefs become false & false beliefs become true. A great reality check for an investor that doesn't want to sell is to ask him under what conditions he would be willing to sell.

5 -- On your unsure beliefs consider the sources (written, verbal, practical, theoretical, other...) that can help you learn more about them.

I often remind myself that most of my best lessons came from learning what was _not_ appropriate for me. When I blow it -- that's when I really learn. It's also something that I bear in mind with my coaching. We need to have a willingness to let ourselves, and our clients, make their own mistakes -- the lessons learned are far more powerful and longer lasting.

6 -- Then consider the various philosophies that are present in your field.

For example, a great swim coach once presented his philosophy to me as "build power; recover; repeat". That was his over-riding objective in working with all his elite athletes. Its simplicity had an immediate appeal to me. If you were an athlete in his squad, you would always know the overall objective. There can be a lot of power in simplicity.

List out all the various philosophies that you've studied in your area. For example, if your topic is "success in the workplace" then think about the most successful people that you've worked with. How did they approach the task? Which of your beliefs are consistent/contray to their own.

By the way we generalize all the time...
...Friel Training, Molina Training, Gordo Training...
...Buffet Investing, Value Investing, Momentum Trading...
...Yield Play, Arbitrage Play, Capital Growth Play...

What I want to do here is look at the assumptions that underpin the generalization. Spend more time on seeing the similarities than the differences -- our brians prefer it the other way.

So after all this... we come to what I've been thinking about over the last little while...

The most powerful philosphies are the ones that are: simple; inclusive and effective.

If we are seeking to build a successful personal protocol then we want to spend the most of our time studying under teachers that excel in these areas. We also want to study under (ethical & effective) teachers that have approaches different than our closest mentors. We probably want to study a few heretics as well but not so closely that our ethics are diluted. Within my own life, there are a few very successful teachers that I don't want to study under because I find their ethics lacking.

Phew, that sounds like a lot of work. Well, it's a good summary of what happened to me in my 20s (through luck more than choice) in Finance. In my 30s, it is an reasonable summary of my conscious and unconscious approach to learning about sport.

Most people are not willing to invest the work (effort over time) required to become masters in their fields. Ultimately, success (at one level) derives from undertaking (and absorbing) the most work in a given field.

Anyhow, I know that many of us spend a ton of mental mindpower on the areas in which we have a passion. Within my own life, I think that this exercise would help me redirect a portion of my effort from strengthening my biases towards identifying, and broadening, my decision making framework.


One final thought that has been shown to me in September is that to receive we must learn how to successfully give.

If you are finding that your sponsors/clients/customers are not as forthcoming as you'd like then consider what you have been offering them over the last little while.

Effective people spend as much time figuring out our needs as they do in satisfying their own.

Happy Fall,

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05 September 2006

Personal Planning

I had a buddy ask me about my annual planning process. This might be useful.


For a few days (I need 7-14), I get myself somewhere with no internet hook-up, no telephone.
I sit down and figure out where I spend my time -- each day, each week, each month.
I write down a plan. Key headers...

  • Big Picture (3-4 most important things)
  • Key Likes (3-4 areas that most drive my personal satisfaction)
  • Geography (where I will spend my time — key due to all my travel)
  • Body — key points for my body
  • Mind — key points for mind/knowledge/education
  • Spirit — when and how I will rest (from training, from work, from everything)
  • Places I want to visit
  • Personal Asset Allocation (today, five year, ten year)
  • Next twelve month expense projection
  • Next twelve month income projection
  • Personal Top Ten List — the ten most important things in my life that require focus, effort and time
  • Actions — what actions/habits are most important to me
  • Hazards — what items need to be watched to avoid roadblocks

In the process of doing this review, without distractions, you'll learn a lot about whether your effort is aligned with your goals. As well, you'll learn if your goals are consistent with your main satisfaction drivers.

I build that out annually and review it quarterly. It's been an immensely valuable tool for me.

Lots of folks resist the idea that we create our own reality through thinking about it. I always ask myself “how can I achieve anything without constantly thinking it about it”?


26 March 2006

Springtime in Britain

I am back on “the world’s favourite airline” returning to Hong Kong for the second week of my business trip. Week One went well for me and I managed to combine work, travel, recovery and exercise. My 2006 strategy of training camps combined with structured (and forced) rest is working very well for me.

Scotland in March is beautiful – the papers were talking about spring being late (I’m still on my media-lite program but little bits leak through my self-imposed filters. I find myself enjoying Edinburgh more and more as my routine gets established.

The overnight stop somewhere when crossing a stack of time zones… I am going to try to work that into the game plan more often. It gives me the chance to have a decent night’s sleep along the way. I’ll be stopping in Hong Kong for four nights on the way back. My formal meeting schedule is light so that should allow plenty of time for informal interaction with friends. Perhaps that would be another tip – under schedule yourself especially the start & finish of each week and day.

Recently, someone asked me how I keep my training and nutrition rolling on the road. Nothing fancy, I simply “do my best”. My training volume more than halves and I tend to eat a more traditional lunch (soup & sandwich). The things I try to watch: (a) low sugar diet; (b) some form of exercise every day; and (c) sleep lots. The sugar is a fundamental one for me – if I eat processed, sugary foods then I gain weight on the road. If I don’t then I am fine so long as get my exercise.

When I worked in Hong Kong, I would haul my bike any place where I thought that I could get a ride in. Sydney, Melbourne, Phuket, Los Angeles, New York and Singapore all spring to mind as places where I managed to ride while on business. Sometimes I would structure my trips so that I would stay an extra day to squeeze a long ride in before heading home. It took a lot of organization to pull that off – before triathlon, I would try to squeeze in mountain summits.

Now… I’m on a schedule where I have tremendous time flexibility when I am with Monica and away from Scotland/Bermuda/Hong Kong. So I do a “bike heavy” program when I am not on business travel – if you’ve followed my training over the years then it is a very basic routine that I’ve learned from Molina. When I feel good, I insert simple main sets. When I am tired, just I log the time. When I am _really_ tired – I sleep a ton and try to get a single workout completed each day (anything to avoid taking a zero in the log).

When I am on the road, the training remains simple and my flexibility has to increase. Ideally, I like to swim and run each day. In Scotland, I’ve joined a health club with a pool. When I am up to it, I wake up and jog to/from the pool (15 minutes of running each way). At the pool, I tend to swim between three to four thousand meters. The whole session takes me less than two hours door-to-door. So long as I don’t schedule early (or late) meetings I can sleep ten hours and train before returning to the office.

When I get home from the club, I cook myself a meal (the only time that I consistently cook) then head into the office or my first meeting of the day. That’s pretty much it. I have all my training done first thing and find that relaxes me if things come up at the office and I can’t get out early.

One morning this past week, I couldn’t face the pool for some reason. So I did a longer run – I enjoying checking out property sites as well as residential developments on my runs. My partner takes the lead with all “property” & “site” related aspects of the business but I like to see what’s happening in the city.

Last Tuesday, I had the time and energy to do a double run so I fit a lap of Arthur’s Seat into my day pre-dinner. That’s as big as it gets in Scotland. My last trip, I tried a lot harder to get volume in and forced a couple of workouts. As a result, I was RUINED when I returned from my trip – result… three zeros and an average of 11 hours per week in the fortnight _after_ the trip.

M would probably point out that killing myself with a few buddies in London might have been a contributory factor to the fatigue. My London training today was a lot more sane. Russ (the uber-vet) took me on the Christmas Common ride and it was a very civilized affair (at least from the vantage point of his wheel). After sitting in for three hours, Russ suggested that I might want to do a little bit of work at the end. After fifty miles of drafting, one can’t really decline so I pitched in (a little) to get us back to the car. 3:45 of riding and I didn’t have any bike issues this time.

Back at Michael’s place (my first time in a detached house in London – very nice), I grabbed a snack and we headed out for a swim. I was expecting an easy float in the water but it ended up fairly steady. The pool seemed cold at the beginning but after a 1500 build, it was just right. I threw my paddles on for my second 1500. 12K are left for me to hit my overall swim distance target for the month.

Someone on my board made the observation that traveling is not rest – it is draining in itself, especially when traveling overnight and across time zones. Hopefully, my more moderate approach will pay dividends. I will be kicking off my Hawaiian training camp with an Olympic distance race the day after I land in Kona. The race is in a week and I have more than forty hours of air travel ahead of me. Better start resting now.


Plateau People

A frequent training error that I observe in highly motivated athletes is…
a desire to train with fast athletes rather than…
a desire to train like the athletes that consistently improve.

Athletes that consistently improve will do a lot of training either alone or with like-minded training partners. You can get very fit by training with a dedicated guy that is slower than you (a point that I continue to remind Clas when I am sitting on his wheel).

With this in mind, I happily received the news that Albert Boyce smoked his age-group at Ralph’s this past weekend. The only other person that I have seen show equal training maturity (and desire) was Clas when we did the North Island camp and he finished 2nd to Cameron with a 2:42 marathon of the bike. Only Albert knows what his Epic Camp was like. To me, it was truly impressive. I certainly couldn’t have done what he did.

So few people are willing to do work that is required to improve their entire portfolio, preferring to fool themselves that they are doing what it takes because their program is difficult and they are whipped.

Long steady-state efforts.
Going past the emotional challenge of fatigue.
Working on our whole game, especially the unexciting parts.

All of the above are choices, often challenging to make when tempted with aspects of our training that might be more “fun”. Successful athletes are able to take satisfaction from doing what it takes.

It’s no different with nutrition – carrot cake tastes good to me whether I am lean or puffy.

Before I left Christchurch, I was listening to John Newsom give advice to a fellow coach. Something that he said rang particularly true…

“I’ve been watching it for years. There is a rapid improvement curve for the first few season. There’s nothing special about that if they are training full time. Then they plateau and wonder why they aren’t as fast and Bevan or Gemmell. Do they have _any_ idea how long those guys have been going? The amount of training and hours they have put into it?
You don’t just rock up and become Top Ten in the world.”

Most people do what they want.
Champions do what it takes.


19 March 2006

Hong Kong March 2006

Back in Hong Kong for a 25 hour lay-over. This wasn’t part of my original plan but Qantas offered a free upgrade combined with a better fare if I rerouted from my original plan to overnight in Sydney & Singapore on my way to Scotland.

I get a big kick out of Hong Kong now that I don’t have to live here. It is intense here. Driving to the hotel last night at midnight, I realised that I could still get in a solid nine hours of partying before having to hit my hotel room. Suppose that it is a bit like Vegas here in that respect.

I skipped the all-nighter and decided to get some sleep instead. It was 6am New Zealand time when I lay down so I didn’t get much in the way of quality shut eye.

Had a rude awakening when I found my first two Starbucks closed at 8am. Fortunately, a French-style café bailed me out with a monster latte before my run.

I could tell you all about my (very restful) day but Molina says that often I’m the only one that finds these things interesting. More specifically, he said that I should savour the fact that M is patient enough to listen to my training reports because, odds are, that might not be the case after five years of marriage. Although… I called my super-vet athlete last weekend and his wife gave me a run down of his bike session – he’s 68 so perhaps there is hope for me.

What I find interesting about Hong Kong is that a lot of people think that it is really good living here. I imagine that the lifestyle here represents what tens of millions of Asians aspire to achieve. Asia is quite useful for offering contrast and perspective – I recommend a trip through India or rural China for any Westerner that has a habit of complaining about their lot in life.

Back to Hong Kong (or Shanghai if you get there)… these cities are top of the heap in East Asia. Plenty of opportunities, lots of action, huge crowds – absolute craziness. I was driving in from the airport last night and realised that _everything_ I was seeing was less than twelve years old (about the time I arrived here for the first time). That included the airport, the highway, the two bridges I crossed, the tunnel I went through and enough housing to hold 250,000 people. They build a “Christchurch” each year here.

So I am thinking to myself…

What’s going to happen when little Hong Kong’s start popping up all over Asia. We’ve probably got over seven million people here going crazy. Twenty or thirty years from now – say a dozen HK-look-alikes with ten million people a pop. That is a whole lot of consumption. Not bad if you are into construction, infrastructure or consumer goods.

However… what struck me was the smoke that I was driving through. They talk about “hazy days” here but really it is simply smoky air that is full of dirt. I wonder how many days a year you can actually see across the harbour now?

I don’t want to deny anyone their desire to work, shop, consume and battle up the socio-economic ladder if they think that’s what they need to do. It’s just that the following struck me on my run.

Last year I sold my house in Christchurch – to get a similar standard of housing here would be 50 to 100 times the cost of my place in New Zealand. Then I tried to price out the “optional extras” that are required to live well in Hong Kong.

I’d need 24-hour security because organized gangs have a habit of breaking into detached houses in the middle of the night. Not sure what that would cost. Then I thought about the air that I would have to breathe. I couldn’t figure out how to price air quality. As well, if I had kids then it wasn’t clear to me how I would price the fact that they are likely to grow up with asthma. What are clean air and health worth?

Mulling this over made me really appreciate the simplicity and high quality of life that is available in Scotland, New Zealand or The Rockies. Perhaps that is a sign of getting older – when we are willing to trade economic opportunity for personal security, clean air and a beautiful environment.

When I am here, I like to run past my old street (Wilson Road) in Jardine’s Lookout. I run past the height of my personal Hong Kong property ambitions and smile. I had it all when I was thirty but I really had nothing. Had I stayed there for a further five years then I would have had even more (about triple my current NAV), but even less of what I truly value today.

The trouble that we often have with being dissatisfied is that we can’t figure out what will satisfy us. The lesson for me is simple: “Collect experiences, not objects”.

Make time for new experiences – you never know what is going to happen.


Had an only-in-Hong Kong experience walking through Central this afternoon. They are redeveloping the Mandarin Oriental hotel. Right now they have eight story billboards for Christian Dior on the building.

They are making money from the demolition! That is one of the things I love about this place.


I tend to get two types of questions from folks that relate to my time in Asia as well as my experience with “boom towns”.

The first is “do you miss it”?

There are times when part of me does miss aspects. Deals, fund raising, monitoring relationships, international structuring, learning about new industries – that was very challenging and, when you are with a good team, that provides near limitless opportunities for learning. The aspects of that life that I miss, I’ve been able to recreate in my current business. As a big bonus, I’ve managed to structure myself so that I can achieve the stimulating aspects while avoiding the need to live in a big city. I’ve been quite fortunate that my friends, and technology, have enabled that to happen.

Thinking back through the ten years that I lived in London and Hong Kong, the single best aspect was having had the opportunity to be part of an outstanding international team. Within the team, the most stimulating aspect was learning from these people and, with them, striving for investment excellence.

I’ve been reading the Essays of Warren Buffet. One of Buffet’s key points was that he wants his CEOs to act as it they own 100% of their companies. The first group of folks that I worked with where like that; they truly treated every bit of equity finance as if it was their own money. That culture of responsibility was instilled by the senior partners, a most effective use of leadership.

The second question I get a lot is from people living in boom towns that are familiar with my story is about leaving to try something different.

…I wonder if I would be happier elsewhere.
…I’m not sure if this is the life for me.

My friends and former colleagues that are still going full bore don’t ask this question much. So if you are frequently wondering what the heck you are doing working for an investment bank… or if you find yourself wondering why you are flying off on yet another consulting assignment… …then I’ll pass along a modified version of what the senior partners told me when I left London.

***Enjoy yourself – boom towns are unique places in unique times.

***Learn as much as you can – rapid growth provides rapid opportunity for learning and advancement.

***Meet as many people as you can – smart people (and con artists!) are attracted to booms.

***Make some money – take advantage of the opportunities to earn capital while learning and working hard. In the right team, you are being paid to learn from some of the best in the business.

***Get out – this didn’t make sense to me for many years but it does now. I’ll expand a bit.

If you are having fun, learning, building your network and making some money then the overall cocktail can be a heady mix, especially if you are in your 20s or early 30s (the area where I have some actual experience).

Some can manage to stay grounded through the successes; money; perceived increases in status; and power that accrue from working hard in favourable circumstances. My first boss is one of those guys. I just bumped into him at the lounge in Hong Kong and he looked the same as always. If you saw the three of us sitting there (his wife of 30+ years was with him) then you’d have no idea who he is or what he’s managed to achieve (two successful businesses from scratch, billions invested wisely).

He’s a unique guy, most beneficiaries of “success” are slowly changed over time and it wasn’t until I got out until I was able to see the changes – that is part of the reason for my wry smile each time I run past my old house on Wilson Road.


I’ve been thinking about Pride a lot lately.

A positive aspect of pride is something that I cultivate in myself. I take pride in delayed gratification and enjoy my capacity for self-denial. Bit strange perhaps but, I imagine that, it is a key attribute in folks that are good at long term project management (personal finances, education, endurance athletics, employee development, investment management, parenthood).

I’ve been thinking about one goes about beating a superior adversary? Simple, you don’t. Your only hope is that circumstances result in the guy beating himself.

It happens to all of us. We all have areas in our lives and situations where we beat ourselves.

Why do we do that?

As we improve, often a pride develops that has negative effects on our performance.

Training sessions become daily battles as the “stronger” athlete never wants to show that he’s “weak”. Races become mentally challenging because the joy of participating leaves and is replaced with an anxiety about relative performance. As fans, we directly contribute to this by projecting our “hero’s” athletic performances into our personal well being.

Helping athletes improve is one role of the coach. Helping athletes deal with the mental challenges presented by the public and private perception of this improvement is an even more challenging area. It is an area where I think that there is a lot more that I could do.

When we see excellent athletes struggle to repeat rookie year performances, I think that overcoming pride is the key element of recapturing what was “lost” after that first season.

Do you wonder why most elite athletes are pretty quiet on the internet? It’s because we are killing them, even when we love them.


A few quotes that have been rattling around in my brain:

The only performance that truly matters is how we do relative to ourselves.

There will come a time where you have to release the pressure to perform and totally accept whatever happens.

The perfect race doesn’t exist. What does exist is clarity of process once when we get our minds out of the way of our bodies.

In all things, be strong at the end.


07 March 2006

Managing Technology

M likes to say that, with me, "a new week deserves a new plan". Those that know me will know that I follow my plans with passion but am quite willing to change them on the basis of new information (or inspiration).

This can make me appear less consistent to my stated plans but (inside) I know that I am being rationally consistent to the Prime Directive. Living a satisfying life with meaning.

So here's my plan for managing Technology -- these are extracts from my Personal Top Ten. We'll see how I go. Had a minor slip yesterday when I was busted reading my board.

#4. Limit time spent on activities not on this list
-- Three days per week off-line: while in NZ (Tuesday; Friday and Sunday)
-- Internet surfing only on Wednesday and Saturday // keep a list of topics
-- No new consulting assignments unless they directly benefit this list

#6. Fortnightly retreats from email and telephone calls – done on a quarterly basis
-- Hawaii in April
-- France in June/July
-- Chamonix in December
-- New Zealand in January 2007


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04 March 2006

Tasmanian Technology & Training Retreat

Miss me? I really enjoyed my break.

In 2004, one of the best things that I did was take the whole month of October “off” from my normal routine. It was a very refreshing time for me and I gave myself the chance to sit back and review most aspects of my life.

When I logged on to my server this afternoon, it had been ten days since my last internet session. That’s the longest that I’ve been off-line since June 1998.

Back in November, I was having lunch with a friend in Hong Kong. My friend is quite a bit older than me and very old-school in his approach. We were talking about mobile telephones, email and technology in general. I was talking about what a nightmare it was for me when I went off line because all my email built up. My strategy has been constant connectivity to stay on top of my inbox.

Alan scolded me (in a kind way) and pointed out that I really needed to get some context on whether these things couldn’t wait a couple of weeks if I went on holiday. He pointed out that I was hardly the Prime Minster, so things could probably wait until my return. I said that I felt I needed to be on-line all the time because I was moving around and wanted to maintain my geographical freedom by being constantly available.

As in many things in life, the voice of experience proved correct. While there were over 2,000 messages lurking on my server (nearly all of them spam, thankfully) – there was nothing that couldn’t have waited for a couple more days (and they will have to as Vodafone roaming charges are STEEP when traveling abroad).

So now that I have the benchmark of ten days established, I need to figure out when I will be able to take a shot at extending it towards my overall goal of thirty days – that was my original plan from 2004 – a month each year to relax and reflect.

The change that happened to me once I removed all the clutter from my mind was pretty impressive. I did have one quirk with my technological retreat – I went a bit anti-television as well and M would ask me to plug the TV back in on occasion. We had a deal that she could watch when I was out of the room or having a shower.

So the changes I noticed…

>>>sleep // I was falling to sleep far easier and I woke up before my alarm every single day during my little retreat.

>>>peace // There was quite a bit of noise residing in my head during the first week. However, by the second week, things calmed down during the day and I was very relaxed and chipped during my sessions. A lot of week one’s main sets were fueled by “tapping the hate” as I like to say. Once the noise was gone, my main sets were driven more by “quiet power” – a great source of energy that I hadn’t been able to access for a while.

>>>clarity // With distance, comes perspective. My personal sources of fatigue, stress, energy and happiness. A clear break is quite useful for enabling me to see them for what they are. I write about them all the time but without directly experiencing them, it is very easy to get caught up in the chaos of the outside world. It’s tempting to tell ourselves that we can merely “ignore” the noise around us – however – it is equally effective to eliminate the sources. Some might argue that exclusion is a poor strategy but it strikes me that it is the most practical answer in situations where the sources of noise fail to offer any positive aspects to our lives. When I think about the peace that comes from elimination, I ask myself “why not” – why can’t I seek to exclude any sources of discontent or distraction from my life.

>>>energy-antsy // M said that I was a bit edgy at times as I deprogrammed during my retreat. It didn’t feel that way from the inside but I also remember that I never felt stressed when I lived in Hong Kong in the 90s.

Athletically, the question that I have been wondering about for at least ten months now was… will I ever be able to achieve the level of fitness that I hit in the summer of 2004. Lurking behind that was a fear that I would never be able to sustain the level of training that I achieved in 2003 & 2004.

I now see that it isn’t a matter of being able to do the training, rather it is a process of eliminating all the noise and distractions that prevent me from being able to achieve my goals. I write about that all of the time but it isn’t until we actually experience it that we can see the effect that the outside world has on us.

There are other questions that surround that main one as well. Why put the effort into achieving that level again? For me, it has never really been an “effort”; it’s simply been fulfilling what I wanted to do, what I felt that I was born to do. Not necessarily finance, triathlon, or any of my interests – rather to simply work towards something that I enjoy.

So living a balanced life, for me, might be better qualified as leading a diffused life. Given the importance that I give to achievement, a diffused life doesn’t seem to work for me. Nor does it really work for my pals and the people that I enjoy spending time with. The simplicity of giving one’s self the space and opportunity to do something properly – that is highly rewarding.

That’s one of the key lessons that we aim to show the lads at Epic Camp – we can achieve far more than we ever thought possible once we remove the obstacles, habits and attitudes that (we think) define our limits. Removing them (athletically) for a couple of weeks is a once-in-a-decade opportunity for most of the crew. I was fortunate at being given the opportunity to nearly completely remove them for a few years. I now see that was the unique opportunity, much more so than anything inherent in myself.

Removing all distractions to enable one’s self to follow a vocation/passion that provides a lot of personal enjoyment. Be it finance, academics, business or athletics sustaining that over many years is rare indeed.


So that’s covers the “Technology” and “Retreat” aspects of this piece. What about Tasmania and Training?

I often wonder if folks actually try to apply the training protocols that they preach. Have they actually gone out and tried to do what they are responsible for directly, or indirectly, advocating?

If yes, then have they demonstrated a consistent ability to translate training effort into performance? Have they demonstrated an ability to translate any effort into performance?

Do they hold themselves to the high standards of personal excellence? Are they good people, do they work with good people and what are they seeking to achieve in working with athletes?

Those topics featured clearly in my mind as I worked through a few main sets during Week One of my training camp. I often use imagined dissatisfaction to drive myself onwards in training.

It all started with the Hobart International Triathlon. I raced the AG-non-drafting race – I’m currently between triathlon federations and asked both the Bermudian (residence) and Canadian (citizenship) feds if they would have me. I’m not sure if things will really matter until 2008, I turn ITU-40 and I want to race ITU Long Course Worlds. Now that GTG are self-certifying I wonder how they go about certifying elites for their races. I simply want to race and, based on Hobart, don’t appear to be much of a threat for any short course prize money.

Hobart was my first race in 50 weeks and my first Olympic distance race since 1999 (!). What a fun way to do some hard training – I surprised myself with an ability to elevate my heart rate and keep it up. Nothing like chasing Marty Gaal to motivate a guy! While it was non-drafting, the course was 8 laps on the bike – that gave Monica a chance to feed me splits every 8 minutes or so. Before the race, I thought that counting the laps (I don’t have a speedometer on my bike right now) would be a hassle but I really enjoyed the format as well as the tough, but safe, course.

What I experienced with the race reminded me of something that I think is very important for athletes to bear in mind. The depth of steady-state stamina & fitness is a key component of how long we’ll be able to sustain our higher end intensities. I didn’t really start to make up ground until the second hour of the race. And there was quite a bit of ground to make up! Anyhow, I’ve always seen my best time at any given intensity following periods of high volume training. I also see that with most (but not all) of my athletes – certain populations, such as experienced super-vet athletes, simply get more tired, rather than more fit. So, I suppose the lesson is to search for our optimal volume mix.

And while I often say that protocol doesn’t matter – I suppose that what I really mean is that given that the optimal protocol is out of reach for most people (for whatever reason) then it is best to focus on what does matter, that’s in my Four Pillars article.

And, I suppose, therein lies the source of my dissonance with much of discussion I read on the internet. Again and again, I read folks debating the optimal way to train a sub-optimal approach. Again and again, I read folks that have yet to truly tap their personal potential advising others on the way to the top. There is so much certainty out there amongst the mediocre.

The coaches and mentors that I’ve come across that have been (and/or advised the) truly great. I never experience the same degree of certainly and negativity to conflicting ideas that I come across in many of the various on-line communities.

So I start to question if the disharmony that I feel is worth the benefit that I offer to others from participating in the discussion. I have to admit that while I missed my friends a lot, I didn’t really miss most of the cyber-characters that inhabit much of my world. The break was useful for giving me that context and spurring me to consider how best to interact with a medium that is open 24/7/365.

I’ll be trying some changes.

So back to the training camp – we had a blast. The roads in Tasmania are fantastic in terms of their overall quality – a great surprise as I had prepared myself for some rough surfaces. By and large, even on the minor and remote roads, we found great riding conditions. Average speeds were low due to the terrain, though. I’d briefed Bri & Marty before the camp about that. Didn’t want them to freak when they noticed how slow they were going because… we were ALL going that slow.

We took in the East Coast, Cradle Mountain, the Central Plateau, Hobart, Launceston and some other areas. M says that my training must remain classified (it’s a Mark Allen hold-your-chi-thing) but you’ll be able to put together a bit if Marty posts his report. What was most important to me was finding myself (once again) in the position to be “strong” and set a “good example” of how I believe that athletes should approach endurance training. It was nice to be able to train well and enjoy it.

We had a great time and hope to be back in the future.

Gotta run and catch a flight to Christchurch.


12 February 2006

Sources of Influence

I've been reading a lot of books lately and it is interesting how the various ideas end up shuffled, combined and constructed once they are inside my head.

Like all of us, I'm prone to external influence whether I accept it or not. So in times when I find myself a little melancholy, I step back and ask myself if my sources of influence are heading me in the right direction.

What are the main sources of influence that we experience in our current lives?

Print Media

There are probably more. Before considering some ideas on the above -- think about how much time you spend being influenced, in your current life, by the above. Many of us spend more time with the TV (or keyboard) then our wife or kids. One of the great things about my life is the large amount of time that I get to spend with M. Constant exposure to a person with high self-esteem is great for the soul.

I've been pretty shelled the last week. The fatigue has been from my business trip that started at the end of my big training camp. Two weeks of massive training, cross 13 time zones in two days; have a two week business trip; then cross 13 time zones in a day.

Perhaps I was being unreasonable to expect myself to sleep-in one morning then resume normal life. It's taken me a full week to sort myself out through sleeping 10-12 hours per night. Right now it is a bit after midnight -- the first time that I've made it past 10 in a week. So perhaps I am turning the corner. We'll see. Fatigue is a bit like injury. Even when we are healed there is a period of time where we need to rebuild confidence in ourselves.

Back to the books. Fooled By Randomness -- in that the author rips into the media. I thought that I would experiment and trim my exposure. So I've been down to the top screen (of the home page) for the FT, WSJ and CNN. I figure if anything major goes down then I'll read about it there. Not that there is much that I could do if anything major happens.

As for magazines, I have an electronic subscription to The Economist and that is quite a good way to stay on top of the large events happening around the world as well as searching for economic info when I need it.

So far my experiment has been a success. I'm still in the loop, as much as I need to be, and I've freed up additional time for writing and reading.

TV has been pretty much eliminated. I say pretty much because M busted me brain-dead, exhausted, surfing channels the other day and announced "you don't watch TV, turn that off". So now I try to turn the TV off, rather than changing the channel. There is something strangely hypnotic about that flickering screen.

Internet -- very tricky I find! As much as the media exist to entertain, rather than inform... the internet is a swirling mass of noise. How best to deal with all that noise? Well, I'm still working on that. Here's what I've come up with so far...

On the boards -- I asked myself what I was seeking to get out of the interaction. The main thing that I enjoy from the internet is writing and helping folks. Writing as it calms my mind. Helping folks as there is a clear positive feedback loop and we all like-to-be-liked.

Paradoxically, my site has always helped me learn to tolerate not being liked. There are a lot of unhappy folks out there that can't quite shed their persistent negativity. It is a trade-off between infecting my mind and learning to let their noise flow through me. Some days I do better than others!

So, I'm trying to stick with the threads that let me either help folks or write. Seems to be going OK. On the other threads, I've been around long enough to spot the ones that might develop into something interesting or simply aren't worth bothering. So I limit myself to a single view per day (and that's taking discipline, let me tell you!). I've even managed to avoid some altogether -- such as a recent one that appears to be speculating on my life expectancy (I don't want to know, but thanks for caring).

In chopping down the above there are a few things that I am seeking to limit.

#1 -- Exposure to advertising -- it is simply an unfair battle.

Allow me to share a story. In the 80s, folks in China didn't consider dandruff an issue. I know the people that were responsible for changing that in the 90s. The good folks that sell shampoo and my pals in the HK advertising industry, put together a plan to make a few (hundred?) million people uneasy about something that they never cared about before. They had a stack of cash and they got the job done.

To even the playing field, I'm trimming (as much as possible) my exposure to advertising. Should do wonders for my self-esteem. I'm going to have to count on my wife to salvage my appearance as I age!

M's kicking in with her attempt to reduce their grasp on her. She's been working her way through a book called Mean Genes and enjoying it.

As for interactions with people, those have been cut down quite a bit. I have a tendancy to hide-out when I get shelled. I ventured out on Saturday. We walked down to Sumner and watched the end of the Coast-to-Coast race. I had a Swedish buddy racing and I hadn't seen him for a few years. I managed to track him down -- he was totally shelled (it is a big day out, that race). Given that he isn't talkative at the best of times, I managed a handshake and an intro to Monica.

M noted that perhaps my hiding was ending, we'll see. I'm off on a two week vacation starting February 19th and I'm going to experiment with pulling the plug on the internet for two weeks. When I shared that with M this evening, she flashed me a wry smile. The addiction to connectivity runs pretty deep.

While I accept that completely hiding out might not be an effective long term strategy. I am struck by thinking back to the periods of my life which were the most satisfying. They all have a few things in common:

  • High workload towards a challenging goal;
  • Close interaction with a limited number of people that I respect; and
  • Limited exposure to any person or topic that didn't fit with the two points above.

...or I was in love.

Friends, family, clients, co-workers -- I'm fortunate in that while I create complexity with my travel and living arrangements -- my circle(s) in Bermuda, Scotland, London, Christchurch, Hong Kong and Boulder are pretty small. So life is, relatively, simple once I get somewhere.

More on that when I ponder Expectations and Simplification in the future.


10 February 2006

Consumption 2

Mulling over the comments that I posted, as well as some others that rolled in, triggered some additional ideas.

I think that my original point was missed, perhaps by me as well.

Step back from whether consumption is "good", "bad", "desirable", "undesirable"; "statemenlike" or "economically beneficial".

Step back from whether there are political costs and benefits to others.

Step back from the ironies of writing that piece from business class burning jet fuel across Asia.

Step back from allowing your mind to take issue and debate a small detail of what was written.

The central question that I was asking myself was... Does consumption in, and of itself, derive personal satisfaction and meaning? Specifically, would consuming more increase my level of personal satisfaction? Are the actions and compromises required for me to consume at this current level actually deriving me any benefits? If not, then could it be that the most rapid way to improve my satisfaction and reduce stress levels be achieved by reducing my consumption and, thereby, freeing myself from certain obligations? Why then do I spend so much energy enhancing my ability to consume?

I spent years kicking those around while living in Hong Kong.

Although binary situations hold intrinsic appeal to me, the choice isn't between gung-ho consumption and living in a cave, as one entertaining letter suggested. We can have a far greater impact on the world by staying engaged than cutting ourselves off (witness one man's impact on the fringe sport of long course triathlon training). The most interesting part of Friedman's argument was his observation that appropriate leadership could have an exceptionally large long-term beneficial impact on entire societies.

So my main point was to ask myself about the sources of long-term satisfaction in my life and consider if my consuption choices were based on any rational footing.

Mostly they aren't. So I've also been working on strategies to reduce sources of irrational influence on my choices. More on that when I get the chance.


09 February 2006

Consumption Feedback

Three posts received in the Mail Bag...

I found the President's state of the union strangely similar to much of what
Friedman had to say in his Flat World book. IMHO that book should be
required reading for all econ students at a minimum, for undergraduates as a
whole would be even better. I actually gave that book to Justin D. last
fall, as well as a copy of "the Worldly Philosophers" by Heilbroner....and I
think he actually read 'em! Econ doesn't have to be drudgery. Of course, I
read plenty of other stuff as wel, but. I have a voracious appetite for that
type of info.

I'm curious about a couple of comments you've made recently. I would like
for you to elaborate on your sentiments regarding the dinner conversations
you over heard in Colorado and how your globalized perspective filtered
them. If you don't wanna make them public I understand.


>A few random thoughts:
> 1. Fossil fuels are an incredibly efficient source of energy for moving
> things. For example, it takes less than a gallon of gasoline to move my
> car 20 miles in as little as 15 minutes. Takes about the same amount of
> water and gatorade for me to run 20 miles in about 3 hours. Suspect that
> the Taurus weighs more than ten times as much as I do. Depending on where
> I buy the water, the combination of water and gatorade might cost more
> than the gasoline too.
> 2. Small cars are great. I used to drive a Plymouth Colt that could get
> over 40 MPG on the highway. But, they aren't real practical when you have
> a family. We could barely fit everything we needed for me, my wife and
> our three year old son to go on a week long vacation into our Taurus
> sedan. In fact, we couldn't take my bike with us. If you have two kids,
> then it's just about impossible to car pool to school or sporting events
> or whatever if you just have a sedan. So, families just end needing
> larger vehicles than small cars.
> 3. US Government regulations on average gas mileage for the fleets of
> cars sold by automakers effectively outlawed the larger family station
> wagons. SUVs and mini-vans aren't calculated in that average. So, we
> drive larger vehicles with worse gas mileage than station wagons to
> increase the average fuel economy of the car fleet.
> 4. I don't think a lot of gasoline consumption in the US is related to
> the pleasure of driving. Most of it is related to the perceived value of
> having a certain size of house or property, which are often cheaper the
> farther they are from urban centers. So, many people drive more not so
> much for the sake of driving as they drive for the sake of living in a
> particular place. I'm lucky to be able to live less than 20 minutes from
> a place where I can do work that I enjoy.
> 5. You are correct that we send lots of money to regimes that are
> repressive and some that sponsor terrorism. But, we also buy lots of oil
> from Great Britain and Canada, and it's hard to do the second without
> doing the first. Also, buying lots of oil from Russia is probably not
> a bad thing to do, even if Russia is not exactly what we would call a
> democracy, if it helps keep that country muddling along toward the 20th
> century.


I would enjoy hearing more of your thoughts on consumption because this is of real interest to me. I had the same "uneasy" feelings you had once after watching a large garbage truck haul away the leftovers from a week's cruise. The garbage (particularly the amount of food) thrown away was disturbing to my wife and me.

We have always been on the "low end" of the consumption chain (we commute 100% by bike, no longer own a car, do not use our A-C in our hot summers, keep our heat low) etc. There is of course, more we can do but we also don't want to go on a campaign to make a statement or be activists. We feel the best we can do is live the way we feel is best for us, and hopefully, by example and not coercion, encourage others to do the same.

My wife lived for 2 years in a run down room while serving in the Peace Corp and I have lived and travelled in a number of third world countries so it may be easier (at least less of an adjustment) for us than many. but it is an important lesson and thank you for bringing it up.

I also enjoyed your comment about stopping to assess if you are doing things to make you happy, or just going through the motions. I know your blog is just a medium to express yourself but often they are what other people think about also so thanks for sharing.


06 February 2006

Consumption & Utility

I am back on the plane and it is exactly one month from my last monster-long-haul trip. This time I don’t have my sweetie with me – so it isn’t quite as much fun. I do enjoy airplanes, though. These long flights are quite enjoyable as well because I get to drink coffee all day – staying awake is part of my time zone management strategy. I also enjoy a few glasses of red wine and the food up here. I wonder why I enjoy airplane food? High sodium levels?

As I wrote about a couple of weeks ago, I have been reading a lot more books. I enjoy having the freedom to read when traveling. I only have about four hours of power on my laptop and I haven’t upgraded my power supply to be airplane-friendly. That forces me to be a bit creative on the plane.

Consumption – it won’t come as a surprise to anyone that knows a wide range of people that personal wealth has a weak link to personal satisfaction. There is a well-known (in certain circles) research analyst that’s put out some interesting articles on just what leads to personal satisfaction. Experiences, rather than physical things.

To me, a life with meaning isn’t really about happiness – in fact, to be satisfied with myself, I most often choose the path with the least short-term happiness. Perhaps, I am too wary of the easy way, the temptations of false gods and the trap of chasing fleeting pleasures – I might write about those points but they are well documented through the ages (see prophets as diverse as Buddha to Covey).

Taking a tangent for a moment (if I might before dinner is served)…

Something that I probably need to watch in myself – because I see it in all of my close friends and hear about it from M – is the tendency to take the “hard” way from fear of being slack or a crazed desire for immediate decisions/results/performance. Zealous, moderate, dedication… I wrote about commitment versus attachment somewhere in the archives.

OK, back to this consumption point. As part of my annual self-review, I question myself on whether I am spending my energy towards personal satisfaction, or merely keeping myself busy. I think that it is a very worth while activity and that it probably why I mention it so much in my writing.

A chapter at the end of The World is Flat talked about the need for global leadership on the Western World’s energy policy. It is something that really hit home to me. Here’s how I interpreted it…

Consider for a moment the sources of personal satisfaction in your life – family, friends, love, cycling, nature, travel, reading, writing, cooking, finding old books, football… whatever they may be.

Consider how you spend/consume your “energy” – money, time, fossil fuels.

Consider the countries that most benefit from a high level of fossil consumption.

Cross reference that list with the governments that are most repressive to their people and most supportive of those that seek to deprive you of your ability to enjoy your sources of personal satisfaction.

Now I haven’t fully tracked through the money chain but it is a compelling argument on the surface for a couple of points that keep popping up in my head.

First, due to oil, there is a massive wealth transfer happening from America (and elsewhere) to some of the least attractive governments in the world.

Second, if one accepts that point then shouldn’t we really divert a good chunk of public expenditure towards cleaner energy?

Third, it certainly puts an F-350 and a Hummer in a different light when you track the gas money back to the governments that most those drivers oppose.

Think it through. If that vehicle isn’t a source of lasting utility and it just might be providing an indirect, constant dividend for exactly the people that your tax dollars are paying to kill. This is an interesting situation where I find unity in the views of left & right – for completely different reasons.

Friedman does a great job of laying this out. I’ll merely add the observation that the bulk of our energy consumption fails to derive much utility.

As I get older, the dilemma of consumption comes up more and more. Watching us fill bags of garbage (hourly) at Epic Camp really hit me for some reason. Those feelings started back in 2004 when I was riding across the US and thought about leaving a trail of trash bags through every community we visited.

A final thought, somewhat unrelated but it has also been on my mind. Recently, I saw an advert for a ‘fitness’ calendar. The advert left me with a similar internal uneasiness. I haven’t quite been able to pin down the source but, perhaps, it is because I was seeing beyond the black and white image to the eating disorders, bone loss and lack of self-esteem that lives in a society that puts an unnaturally thin model on a pedestal.

Connecting the dots until they lead back to the source is not always comfortable. But what can we do?

So far I’ve come up with drive a Subaru, ride my bike more and love my wife.

I’m still working on the garbage.


24 January 2006

Monkeys and Dentists

I enjoy flights and periods where I can rip an entire book in one go. Binge reading – along with all my other outlier habits – appeals to me.

Fooled by Randomness, Taleb – another of my (thankfully growing) collection of works that help me understand how I view the world.

Reading the early part of the book, I remembered a series of saying that the a few successful (for themselves and, generally, others) investors have mentioned to me over the years…

On Attribution of Success

[winking] “Gordy, we all KNOW that success is always down to good management.”

Allocation of Risk, Sharing of Gains

“The nice things about this business (Venture Capital) is the inevitability of the homeruns if you stick around long enough.”
If we don’t know then who does?

“Remember this, history tells us that we never really know which Fund will hit it big. If you invest then invest a little bit in everything.”

“Everyone that I know that has made it big in life has bet the

…but didn’t the folks that went bust do the same?


Monkeys – it’s the old adage about placing a zillion monkeys in front of a typewriter and one will come up with the bible. The result is a large variation in actual outcome across a wide population with outstanding performance due entirely to chance.

Dentists – a small variation in actual outcome across a wide population with a high expected outcome.

So which one am I?

When I view my life to date through the prism of a series of probable alternative outcomes (Monte Carlo self-simulation)– it is simultaneously terrifying and liberating.

Terrifying because there is no way that I can reasonably run a scenario that gets me back to my current situation, sitting here, quite happily, on this plane. I simply cannot comprehend a reasonable scenario that gets me back here. When I think about the key events in my life, the outcome that occurred wasn’t what anyone would have predicted.

Liberating because, either way, I am a big winner. If I am dentist then I am extremely good one. If I am a monkey then I am a seriously lucky one. Both ways, there is a large element of relief that I either figured something out (not quite sure what) or am pretty clueless and should relax a bit more (always a good idea for relentless planners).

In finance, I certainly feel more like a monkey than a dentist. As this was a key point of the very eloquent author, my self-evaluation is likely anchored by his book.

In athletics, I’ve been “insulted” by people calling me a dentist before – “anyone would get your results if they followed your path”. That never really sounded like an insult to me, still doesn’t.

As the author notes, because set-backs are experienced as disproportionately negative events, most people don’t have the staying power required to persist until a breakthrough (even if it is due to random success!).

As I’ve grown older, my attachment to past decisions has reduced and I’ve given myself increased freedom to change my mind – often to the concern of those around me. It turns out that the author thinks that this is a good thing for my personal safety as well as happiness. He states it much better than I could paraphrase.

Perhaps it depends on which aspect of my life I look at. There is a stack in the book so grabbing pieces that suit my self-view is probably how I went about reading it. I found myself highlighting passages in the text that held particular appeal to me.

Anyhow, time to spend a little time mulling over my one/five/ten year plan – net even a month old and time for a revision. Good thing that I wasn’t too attached to it.

A patient wife is a great asset and source of stability. She’s probably reading this as you are.

The only constant is change.


01 January 2006


The perception of personal freedom is a fundamental part of what makes me happy.

The perception of a lack of personal freedom – the feeling of being overly constrained due to a sense of duty. This is a source of a lot of aggression, violence and dissatisfaction.

Getting one’s self to the point where there is an element of freedom – that can be a source of calm. Because of this, I spend a lot of time reminding myself that life is a choice – there are implications of each choice and not all of these are pleasant but... it is still _always_ a choice.

Being sick is getting _real_ old and winter has worn out its welcome in gWorld. That’s most likely because the illness isn’t hitting the road. I’m reduced to long walks around Montpellier – I've got this hot walking buddy that accompanies me -- walking her gordo.

December has reminded me about the athletic edge that I gave myself from avoiding the need to bunker-down and do “yet another” session in the cold. I knew that there was a reason that I started living in the tropics and swapping hemispheres.

Financial Freedom

What do you think when you hear those words? I think that most people would think about being able to _spend_ whatever they want.

Dietary Freedom

Is that about being able to _eat_ whatever we want?

Sexual Freedom?

How about that one?

In a consumer society we often think that additional happiness comes from being able to consume more – spend more; eat more; fool around more; drink more… whatever grabs our fancy.

It comes back to what I wrote about intent.

If we take away the controls then (at least initially) we can get a bit slack. Drop by any university campus and you can see that in action.

Lately, my thoughts have been on financial freedom. I'm a planner and I've used December to plan through 2006 (first) then through to my 40th (last week) and most recently through to my 50th (last few days).

When we understand how certain things support key long term goals -- that can make little short term inconveniences appear in a different light.

The trade off between the quick & easy option and investing for later return -- making that decision frequently -- building that into our core habits. That is a key element of the process of achievement. Nutritional success, financial freedom, many things are built upon the consistent application of this habit.

So here is what we did...

In the fall, we tracked every single expenditure we made in a 30-day period, right down to our lattes.

Many people prefer not to have this info staring them in the face. I've worked with some highly successful people that have no idea what and where they spend their money. They are rarely financially free.

I knew the number was going to be large. When I returned to the workforce, I had ratcheted my overheads back up to Hong Kong levels, telling myself that "I could afford it" and I could, today.

Later, I asked myself:
...what happiness was my incremental expenditure buying today?
...what was the potential cost tomorrow in terms of my freedom?

Going back to fulltime corporate work involved an element of sacrifice, a fairly compensated sacrifice but... if I simply blew all that compensation (because "I could") then the actual return on time invested would be pretty low. Nil, acutally.

Not surprisingly, as I get older, I realise more and more than personal satisfaction received relative to time invested, is an important consideration. Perhaps the only consideration once we are on track in our lives.

With our cash outlay tracking, I asked Monica to guess the ending figure in advance -- let's call her guess X. By the end of Week One we were at 1.5 of X. Ten days in we were at 2X and we finished up the month at 3X.

Most people can only name 35% of their monthly expenditure. I did a little better with my initial prediction being 85% of the total. To be fair to M, she didn't have the benefit of seeing what I was spending on the road starting up my company. She did well given the lack of transparency, what she didn't realise was that our household expenditure was 3x what she saw, suppose that I wanted to make that point. She's the more fiscally prudent member of the team so it wasn't required.

Armed with the base line figure, I projected out a full year including: personal expenditure (mainly travel for me); business overheads (office, staff and more travel); health insurance; rentals; and holidays.

With all those outgoings starting me in the face, my potential sources of income started to look a heck of a lot more attractive. Situations that appears to impinge my freedom rapidly changed into attractive ways for me to cover my overheads.

I also clearly saw that the easiest way to avoid items that irritate, or impinge, is to remove the expenditure that they are required to finance.

How does all this relate to freedom?

I need to set the scene for that.

Peter Drucker did a series a few years ago for the Economist (worth reading and if you have an on-line subscription you can review). One of the, many, interesting concepts was that human resources are the means of production in a knowledge based economy. Put plainly, when the "factory floor" is a desk with DSL, then YOU are the capital that drives your business. The implication being that if you are a smart person with marketable skills then you aren't tied to your employer. At least, in the same way as if you were a manual employee in the 'old' manufacturing based firms of the past.

Dental hygenist;
Paralegal or lawyer;
Marketing ececutive;
and on and on...

All of these positions are highly mobile. You need an office from which to work and other members of a skilled team but... you are highly mobile with a good skill set.

What can constrain that flexibility?

Mortgage payments;
Car payments;
Any form of personal debt;
The perception that you _need_ to live at a certain level of _expenditure_;

All of the above created (and sustained) by a high personal expenditure relative to personal savings.

To be able to utilise the freedom inherent in our skills is a key requirement to leverage one's self in a knowledge based economy. More plainly, in many things, you'll only negotiate your best deal when you are willing to walk away from the table.

Indeed, I'd say that it is an essential part of being able to get a fair price for one's services. Employee turnover is costly and inconvenient -- increasingly so as we become more and more ingrained within a successful organization.

So there's a double whammy -- personal overspending increases our reliance on our sources of income; and reduces the personal freedom that comes from savings exceeding expenditure.

Personal financial freedom being the ability to live the way we want, rather than spend whatever we want. One doesn't need to be financially rich to be free in this sense.

There are only a few sectors (and people) where external sources of capital enable long term deficit spending. When I think about that I come up with charismatic entrepreneurs and the US Government.

Phew, that was a long aside.

That was the set-up for building my strategy from 40 to 50 years old. Those can be highly productive years for the well placed knowledge worker. By then, we will have 15-30 years of work experience and a pretty good contacts network (or at least had a fair shot at building our network).

Network is a good way to consider it. If it is all about human capital then access to people and education become more and more valuable. I was trying to get to that in my MBA piece. The value lying in attaining access to, education from, the very best people.

In our 40s, we are old enough to give backers comfort that we know what are are doing, but not so old that people are concerned about our being too old to follow through. There is a clear age bias that starts to creep in from 55 onwards. I have witnessed that, and been a part of it.

Setting one's self up so that at 50, you have a high degree of financial freedom, that is very valuable in my book. Financial freedom defined as being able to live the way we want and work for who we want (most likely ourselves).

Now 13 years is the furthest that I've ever looked out. Generally, for business and personal planning, the furthest I plan is five years. Those five year plans change radically every one to two years. Knowing that change is going to happen, and not being married to the plan, is essential for success in a constanly changing environment (be it your company or your body).

Why did I look out so far this time?

My 2005 review showed me two things: (a) that I was on track from an NAV (net asset value) point of view; and (b) my overheads had jumped up significatly.

I wanted to figure out what was required to stay on track. Could I truly afford to live the way I thought? Like all good financial analysis, I built up a little spreadsheet for that...

The next step (for me) was to take a closer look at my expenditure and figure out if we are getting value for money on each line item. Nothing radical in business but how often do we do that personally? The personal annual budget -- worth considering on January 1st.

If you got this far then well done!

That was quite a mind dump and so I'll finish up with a little story for you.

It's not about me, although I do live a bit like the central character.

"Bob" started his career at 20. He sold retail for minimum wage in a small town. Not many people know that about him but he'll happily tell you about his background if you ask.

Given that he's an expert in his field, most people that meet him want to get some free consulting from him. So that ask him about what he knows. I was lucky, the first time I met him, I was tired so I simply listened while he told me the story of what he did.

Bob was good at retail. He knew a lot about his product range and was an avid user of the brands that he sold. Over time, some of his customers asked him for consultancy advice. At first, Bob couldn't believe that people would value his advice. He was flattered and worked for free. Eventually, his customers became paying clients.

Roll forward twenty five years. Bob's been a student of his field and the "science" of business. He's moved from retail, to consultancy to the founder of his own consultancy company.

Step by step.
Piece by piece.
Day by day.
Year by year.

Recently, "Steve" was talking to me about Bob. Steve wasn't talking about this story. Steve mentioned (with a slight tinge of envy) that Bob was taking another month-long cycling vacation. He was saying that it would sure be nice to have the financial freedom to do stuff like that.

Get it?
If you do then you are lucky.

Most people only see the vacation.

Choose wisely.


29 December 2005


As I’ve mentioned before, English entertainment is a bit sparse here in Montpellier. So this afternoon I found myself snuggled on the couch reading the internet with Monica.

Sitting side by side reading various sites and talking about the articles – when I think about that it shows how much things have transformed over the last few years. I think that I only set-up my first email account ten years ago.

Miss M is just as entertaining to me as the various crazies that one finds posting around the internet. I think that she views parts of the internet like The Gerry Springer Show –you are a bit embarrassed for watching but… you keep coming back! My secret this afternoon was that I was able to remember when I was exactly like the lads that were causing her a bit of horror. I kept that part to myself but she’ll know now as she’s an avid reader of this sliver of cyberspace.

I was reading various posts about goals, resolutions, top ten lists – what hit me initially was the emotion, the passion behind some of the posts.


Well, the post wasn’t exactly like that but it wasn’t far off and often interpersonal relations are best left off a public forum. The holidays are an emotional time for folks, he probably had a tough day… that’s what I told myself at the time.

Later, when I was lying in bed. My mind wandered a bit and I started to think through what had sparked something inside me. So here goes…

I am regularly asked for my opinion by strangers on a wide range of topics. That can make me uncomfortable at times. Why? Because I know that the decisions that work for me probably won’t work for you. The secret isn't what we do -- the secret is doing what each of us must do.

When I hear about people following a path that is similar to my own, I feel a certain responsibility. Wondering if perhaps I should have kept my mouth shut. But I don’t, and I can’t… so I get up in the middle of the night and write.

As an aside, I have had a few folks ask me whether I would start doing podcasts of my blog. The answer, for now, is no. This writing is really for me. To clear my head of a few things and remind myself of things that I want to remember. That’s also why we won’t be turning on comments. I don’t really want to debate. I simply want to write and move along.

Also, if it was a podcast then the voice that you would be hearing is mine. Right now you are listening to yourself. One of the things that I like so much about writing is that I disappear once I’ve done my work.

Now I should be careful of reading too much into how a stranger’s “to do” list impacts me but I spent most of today on the couch with a sore throat and can’t seem to turn off my head.

A little over six years ago, I put together my first top ten list. I had come to the point that the previous ten years had been fun but that I hadn’t given much thought to what I wanted to do. I spent all my time moving ever upward and onward. I’ve written that out before – and my wife saved it – so perhaps I’ll publish that at some stage.

So I wrote out my list and proceeded to chip away at it. It worked really well for me and five years later… we’ll I found myself in Kauai with nothing left on that list. It took me nearly a month to come up with a replacement. Now how did that list go? I’m not really sure because one year in I’ve got exactly the same list.

Does that mean that I haven’t _done_ anything in the last year?

Actually, I’ve done quite a bit and I’ve thought a lot about what I’ve done. Previously, I’ve advised… figure out where you spend your time/money/energy; figure out what gives you satisfaction; and align the two as best you can.

Reasonable advice, I suppose. It’s worked very well for me.

In building our goals, our lists – I would also add that they are most useful in helping us gain an understanding of what motivates ourselves. What lies behind our lists, our plans, our daily lives?

That last point is a fundamental one. Part of the reason we should all take an annual break is to provide ourselves with some space to consider “why”.

While I haven’t crossed off anything in 2005, I have come to better understand the source of my desires as well as what motivates me. There’s also been a realization that our goals have no inherent value in themselves – the value comes from living our lives consistent with achieving them.

I’ve also come to realise that my most important goals are the most “grey” and that they’ll likely never be crossed off. On my first top ten list I only had one truly “grey” goal – and it was the last for me to solve.

My business partner tells me I think too much. He could be right – I’d certainly sleep better if I could turn my head off. There is a strong link between relaxation and exhaustion in my life.

One final thought – I was reading Cosmo the other day (wife’s copy, you know…) and they had a Top Ten list – something along the lines of “signs that it is time to dump your man before New Year’s”. Well, #6 or #7, was… he’s talking about training for an Ironman in June and it is only December…

You’ve been warned.


18 December 2005

One Thing

Before you can do anything, you must learn to do One Thing.

This is a important topic to me because I see it as the key to avoiding breakdown in the Process of Achievement.

Our lives are a series of single decisions, single moments, with the only common element being that we are along for the ride in each of them. The only thing common with each scene is that "we" are there watching it unfold. Everything else comes and goes. While we may choose to obligate ourselves to others, ultimately, it's worth recognizing that there's only one person that's going to always be along for the full ride.

True selflessness most easily arises through compassionate selfishness. I have this little play that runs through my head quite often where I seek to explain to a friend that the most important skill for him to learn is "getting to no". In a world with an unlimited appetite for our time, our emotions, our input, our energy -- in order to be successful in a specific area, we must develop our skills to say no thanks to many attractive alternatives.

The Eighth Habit defines compromise as saying no to an attractive opportunity in order to do something more attractive. Most often, I find that we are saying "no thanks" today in order to free time to work towards deeper fulfillment tomorrow. I am sure that there is an element of training (or programming) required to be gratified in working towards gratification at a later date. Heck, I do that all the time and used to think that Western religions were a bit nuts for being based on that. Comes back to Mergler being most satisfied in doing what it takes to outcompete, rather than the performance on game day (which becomes inevitable).
I would arrive each year knowing that I was going to have a good race. The only question being "How Good?" -- Dave Scott

It can be a lot easier to take care of someone else than live our personal truths. Acting in an "honourable" way as we extinguish the passion in our souls through self-sacrifice. There is never a shortage of honourable causes that we can support.

Likewise, it is easy to fall into a trip of competition/effort towards a false god -- performance addiction; process addiction. My annual break works quite well for me to avoid becoming too engrossed. Of course, I am most happy when deep in process working towards achievement.

These days my "one thing" appears to be getting out of bed. If I'm up then it's going to be a solid productive day. At other times in my life, it's been things like... don't eat bread, skip the sugar, don't drink more than two beers -- the key being to break the pattern of self-sabbotage that is triggered from chosing to go down a path that doesn't support my goals.

High level achievement in any field requires strong project management skills. When we look at high achievers it's tempting to seek to emulate what they do. Similarly, when we look at fulfilled people, it's tempting to seek to emulate their actions -- or -- ask them what the secret is to their happiness.

This is a trap.

Everyone wants that magic answer. Just tell me what to do! Well, I could tell you what to do but it would simply be a recipie for making myself happy. In fact, any advice other than to look within will probably fail because my actions are merely a reflection of what I must do. They work for me because of what I must do.

Satisfaction comes from following our own truth, not the truth of our chosen guru, coach, mentor, peers.

Even armed with the answer -- most folks simply cannot do what it takes. They keep breaking down early in the process. Thinking too far ahead and being over-scheduled are the two most common sources of breakdown.

That is why my advice is so "simple". Because until we can master the simplicity of consistency, we'll never be able to handle the complexity of elite process management. Our minds are constantly being distracted from the task at hand.

The people, the publications, the thoughts within our heads... that distract us from constantly chipping away towards our goals -- they are often doing us a disservice.

Take a catalogue of where (and with whom) you spend your time. Cross reference that against your personal Top Ten list. The results will surprise most.

You can do a similar thing with money -- actual spending vs Top Ten things that provide personal satisfaction. If you can name more than 35% of your discretionary spending without the aid of a log then you are better than average.

So there's my first attempt on this topic.
  • Schedule less;
  • Take stock where you spend your resources (time being the most important); and
  • Remove habits/people that impede the simple actions required for incremental progress.
Simple, not easy.

It's not that mitochondrial density doesn't matter. It's that it doesn't matter to you. I'll keep researching though and let you know what I find...


16 December 2005

Should I get an MBA?

I get this question a fair amount so I thought that I'd share some ideas. I never offer up a straight answer to this question because a couple years of your life is a pretty big decision.

First a little background... I was fortunate in that my first job out of university was an analyst position in a firm, which was then, called Schroder Ventures. The partners then were a mix of former CEOs and MBAs. I didn't really have the desire to spend 15-20 years in industry so I figured that I'd need an MBA to get ahead. After two years, I got my applications, filled them out, got my references... the full deal. The day before I was going to post them out the Managing Partner called me into his office and asked me what I wanted to stay. I was stoked because I loved working for him -- his team remains the best group of people that I've ever worked with.

The first lesson -- never underestimate your value -- I had my applications filled out, I was heading out the door -- guys like that don't ask what you want for kicks as you head out the door. It's a lesson that I've been reminded of time and time again over the years. Of course, if you are going to push the boat out then you'd better be willing for someone to say no.

Business school is, generally, about two things: transitions and networking.

Transitions -- it's a fun way to change career directions. Often it can be tough to change career paths as we become more and more proficient at our current jobs. In finance terms, I've been doing pretty much the same thing for fifteen years -- I have more experience but the nuts & bolts are just the same and what I was up to in the early 90s.

Networking -- you will be surrounded by excellent people. I think that networking is the most important aspect of b-school and for this reason, I always recommend... if you do decide to go then you must go the the absolutely best school that you hope to gain entry to. It's worth waiting years to get into that school. If I had gone then I would only have gone to Harvard or Stanford. Probably only Harvard. Why? Because the MBA graduates where the people that I most respected in terms of the folks I came across. Comes back to "being our goals".

More on networking -- as that is a key goal then it's worth remembering that once you make it to school. You need to meet the people, be liked and work well with them. The folks siting around you in your lectures are the most valuable asset that you are going to leave business school with.

A lot of people think that you go to b-school for skills. Perhaps but they aren't necessarily the skills that you'd expect. Take a McKinsey Consultant, give him a Harvard MBA and he'll still be unlikely to model his way out of a paper bag -- that's OK, he'll be smart enough to hire a guy like me to model 24/7 at less than one-third of his starting salary! Appropriate decision making and team management are the skills that generally are in shortest supply.

Teams and judgement -- the best schools help their students improve in this area.

Cost -- it's pretty expensive to go to b-school. However, it is a lot of fun at a good time in our lives. So I'd fact the leisure component into your calculation -- especially if you've been working 60+ hour weeks since your undergraduate. It's nice to decompress for a couple of years. So, the capital cost isn't one that I'd worry about -- so long as you are going to the absolutely best school.

Recruitment -- if you are looking for a transition then, in your second year, I'd be putting as much effort into your interviews as your classes. It's a relatively short window to make that transition. Again, the best employers tend to recruit at the best schools -- another reason to get yourself there.

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01 December 2005

Make vs Spend

Sorry, just want to make sure I understand - you are saying to evaluate the financial opportunity cost in terms of (a) percentage of your personal Net Asset Value - ie. the impact that this decision is likely to have on one's long-term wealth, both in terms of capital draw-down and lost income to invest and (B) in terms of the ability to maintain one's standard of living (or at least a reasonable one).
When I left Hong Kong I knew that my income was going to fall _a lot_. However, my expenses were going to fall as well. What I didn’t realise was the magnitude of the change.

What happened was that I was spending less than 10% of my Hong Kong rate even while traveling in Australia/New Zealand. I was also able to buy a house in Christchurch for about one-year-HK-rental equivalent (early 2000, a nice time to buy property just about anywhere). Now not every VC is willing to live on couches and with the parents of adult friends while he figures out what he is going to do. Still, it worked for me.

On the income side, I took advantage of some coaching opportunities. They didn’t bring in a lot of cash but… they brought in a lot of cash relative to my triathlon cost of living. So while they wouldn’t make a good use of my time when I was in Hong Kong, they made a lot of sense when I was on the road.

The result was that once I subtracted my tri-life expenses from my tri/coaching/unearned income, I realised that I had a much larger multiple of capital available to finance myself. I’d based my initial estimate on Hong Kong expenditure but I discovered that by leaving Hong Kong I was able to eliminate nearly all my overheads.

Most people have no idea where they are really spending their money. They simply spend until they run out each month.

Also, beware of the trap of mistaking “standard of living” for “quality of life”. Most folks ratchet up their standard living (expenditure) in line with (or ahead of) their income. As a result, they are never able to accumulate any capital and are held captive to their perceived income requirements.

When you start to evaluate expenditure relative to NAV, rather than income – it can change your view on whether things are “worth it”. Folks that aren’t good at saving don’t really like to face this method of personal accountability. I know some folks that spend a multiple of their NAV on traveling to races (or clothes, or vacations, or whatever) each year.

Scott once told me that it’s not what you make, it’s what you spend. As with many things he told me, good advice.

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30 November 2005

What’s The Worst That Can Happen?

I’ve been enjoying writing again. Whenever I get busy or particularly tired, writing seems to go by the way-side.

Had someone ask me for the key things that I learned about writing from the Going Long process. Here’s what I wrote:
Probably the two most important things that helped me..

1 -- making a detailed outline of the entire book -- chapter by chapter and section by section. Very helpful.

2 -- clearing the decks -- setting my schedule up so that I had two full weeks to focus exclusively on the book. I wrote six days per week and had to finish the rough draft of the goal chapter before I was allowed to leave my office (which was a Starbucks).

I also hired Wy to collate my existing writings into the pre-draft of each chapter. That gave me ideas and text to get the ball rolling. There were extensive rewrites from the early drafts but once you have the entire book down -- totally rough -- it is FAR easier to create a solid product that reads well. Once we had the final drafts, Joe's cold review of the finished product -- start to finish was very, very valuable. So a project partner that understands your subject matter is valuable. Having a guy like Joe involved really helped me as I am weak in many of the areas where he is strong.
Overall, I was surprised at just how tough it is to write a book. My 2005 project was my 2nd book but I haven’t really got stuck into that project. While I have a lot of bits and pieces, I don’t have the chapter structure. Perhaps my super-long-haul flights in early 2006 will get me rolling on that. No rush there as I keep learning each year.

I received the following in my mailbag. I spent most my 20s feeling this way about one thing or another (sailing, athletics, travel…).
I've seen a few off-handed comments about how you semi-retired from the world of VC when you were about 30. I guess you always knew you would reenter the working world but you had some tri-business to take care of... is that a fair assessment?
I was 32 when I handed back my partnership – I’d been with the firm for ten years. At the time, I didn’t have any strong goals in terms of triathlon achievement. I figured that I’d be able to get into the low-9s in terms of IM performance but that wasn’t the driver for me at all. The main driver was that I’d become a bit bored with my working life and the pollution in Hong Kong was really getting me down. As well, I think that I was a bit worn out from ten years in London/Hong Kong – however – I didn’t feel that way at the time.
I've thought about taking time, maybe 6-9 months or maybe several years when I turn 30. This happens in about 2 years. I'm wondering if you could share some insight into how you decided it was time for you. I know it's a rather personal thing which wouldn't necessarily apply to me, but I'm interested in your thoughts anyway.
You are right that we each have to find our own way, our own experience. I’ve seen others try to follow the path of a friend that appears happy/content to find neither. Perhaps, that’s because a feeling of satisfaction arises from the way we think on the inside rather than how we are acting on the outside.

I didn’t have any real plan or strategy – I simply had a very clear feeling that I had to leave. Before I left the firm, I took a two month leave-of-absence. I spent most of that in Boulder and truly loved the freedom of being able to train (helped to grab a Kona slot in the first week of my break). Back then, I wasn’t constantly on-line and had much less going on. So I had 7-9 weeks that were almost completely my own. I’d wake each morning (staying in the mountains above Boulder) and write for 20-40 minutes. The process of morning writing, training and spending time alone – that helped me realise what I wanted to do and deprogram from Hong Kong.

If you are wondering what’s really possible with athletics then an experienced guy like yourself really needs to allow five years and attack it with a true passion/joy. With a period as short as 6/9 months, you’ll get into great shape but you won’t be able to make the physiological changes required to see what’s possible. You need a few years simply to prepare/build yourself so that you can do the training required to see what might be possible.
I feel like there's a lot more I want to do in my professional career, but I also realize that this might be a good time in my life to pursue athletics in a more focused manner.
You’ve likely got 50 years left to pursue both your working and athletic lives. That’s worth remembering – in a lot of different ways.

If you are just about to get yourself in a position to make a stack of cash in your career (Monsy calls that making “bank” – I always smile at that expression) – then… think it through before you hand that back to ride your bike. What I always do/did was review what I was forsaking financially against two criteria: (a) percentage of current NAV; (b) percentage of annual cost of living. Not a bad way to review most financial decisions because it focused on current capital as well as current burn rate. Probably the VC guy in me.

Thinking about that – I do the same evaluation in terms of my training – I look at average weekly volume in each sport compared to race distance. Learned that from Mister A – the big guy taught me a few things.

However, I have to admit that it is a HUGE trip to be right up at the sharp end (of any race) and there is a sell-by date on that (but Joe B is still winning them). However, if we are talking about being world class then you can do that in your 40s, 50s, 60s… and it is plenty competitive. I coach a guy in his late 60s and it’s been WAR between him and his pals for years. A good natured kind of war, though.

One of the things, for me, is that I haven’t been very good at kicking back and waiting it out. When I have been most happy is when I’ve thought something up and gone for it.

The thing that swung it for me was that I realised that my worst case scenario was that I’d get my old job back – perhaps at a bit less money but I was earning more than I needed. I was also earning far more than I needed to do the things that I loved. Reviewing where I was spending my time and money in 1998 and in 1999 was an eye opener for me.

So… I was fortunate to get myself into a position in my early 30s where I could support myself for a year of training. I also surfaced various part-time “jobs” that were able to contribute towards covering my overheads. So I managed to hold my personal NAV steady while doing what I loved. For me, that seemed like a great deal. I also had a multiple of my annual burn rate socked away so that gave material comfort.

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26 November 2005

Back Yourself

The guys that I used to work with in London recently launched a five billion euro investment fund. That struck me as a heck of a lot of cash. It also made me smile. Generally, terms in the venture capital industry are “2 & 20” – an annual fee of 2% of the fund and 20% of the capital gains returned to investors. Let’s say you double the investors’ capital, then you are talking about a profit share of one billion euro as well as a hundred million euro per annum of management fees. Inspirational stuff when you consider that their first fund (before most of the current team joined that business) was less than 100 million euro equivalent 25+ years ago, the annual management fees of the business could be close to double that today. Shows what a group of smart, motivated people can achieve with sustained long term focus.

Why is that relevant? It’s relevant because how often do we hold back because we aren’t sure if we are worthy of success? I can assure you that the folks in that business are regular folks (as “normal” as any of us, at least). They work hard and take advantage of their opportunities as best they can. For the senior folks, I imagine that it’s long ago ceased being about the money. They were always a pretty humble bunch in terms of how they lived.

Another neat stat is that my first boss’ current business went through a benchmark this year where they returned their first billion pounds to their investors. Raising a billion is pretty impressive – actually returning it (successfully) is even more impressive.

Stuff like that makes you think as I am not far off my first boss’s age when he hired me. Of course, simply doing things because one “can” is also a bit dangerous if our ethical compass gets out of whack, or if we fail to consider the best use of our intent.

Somebody asked me about recruiting the other day – I didn’t really answer them all that clearly at the time. I’ve been thinking about it. Having had a couple of weeks to consider, I think that I’d recommend a recruiting trip to Harvard Business School and focus on the Baker Scholars. I’ve come across six of them in my working career, all successful folks and good people to have backed. Been trying to figure out how I can tap that knowledge. Perhaps just file it for the future.

Thinking to triathlon and a couple of my training buddies. Folks generally fall into two camps, improving athletes and lifestyle athletes. The lifestyle crew often seem to be on a triathlon vacation. The improvers are enjoying themselves too, but have a certain fanaticism in their approach. When lifestylers talk about their races, they tell you what went wrong. I rarely hear about that from the folks that improve.

Perhaps, it is that people that move ahead focus on what can be done in the present, rather than what’s gone wrong in the past.

So many similarities between athletics and business. That is certainly the benefit of moving between worlds, countries, interests… we are able to gain perspective. Oh yeah, it you happen to be long on Dubai real estate? I’d be a little careful – I’ve only seen a few places that remind me of how Dubai looks right now – Bangkok, Shanghai and Jakarta. Shanghai was driven by global and domestic demand combined with the world class work ethic of the Chinese. Bangkok and Jarkarta ended in tears for a lot of people. Anyhow, the tourism infrastructure won’t be wasted but I certainly have my doubts on what level of real economy will be created there given the nature of the geographic neighbours. It will be a fun place to watch develop over the next few years. They are building a city-state from the ground up. Pretty impressive regardless of the return on equity for FDI.

This weekend is Ironman Australia, for an athletic example of what sustained backing yourself can do then do a google search of the 2001-2005 results for a guy called Chris McDonald. I bet he’s done 5,000 aerobic hours over the last five years. Not many folks give themselves the opportunity to see what’s possible. Chris certainly has.

Dark Power
My buddy Clas has been clearing bush in the forests of Sweden. He’s a “glass half full” sort of guy. If you are a triathlete dealing with near total darkness, cold and snow… well you might as well enjoy it. I used to think that the Vikings must have loved getting away from the cold for their trips kicking butt around Europe. However, in getting to know the doodes, I sense that getting away to a warm climate is fun but… there is an element of recharging that they receive from the cold and dark. That and the winter seems to be a good time to do “man stuff”.

Hangin’ in Paris
Monsy and I were walking across Pont Alexandre III a few days ago. Heck of a nice ‘pont’, I recommend it if you happen to be in Paris. So one Italian guy kisses his girlfriend and triggers a make-out break amongst just about every couple on the bridge. Gotta love Paris.

Monsy and I later decided that the entire country must smoke. Perhaps we’ve been spoiled from the smoking bans that have been implemented throughout most of the countries where we spend our time.

If you do get to Paris then I recommend the Musee d’Orsay. Pretty cool – walk up to the top and look across Paris through the clock that faces the river. Also check out the polar bear sculpture on the second floor. Being Canadian, I suppose that I am partial to a good polar bear sculpture.

The Café Marillon also has a great selection of West Coast rap. Team Mongo were grooving along with TuPac while hiding out from the sleet yesterday. Some kid sitting beside Monsy apologised to the waiter that he didn’t have any cash to buy coffee – but we did note that he had enough smokes to nail four back-to-back in 20 minutes! I sense this could be a recurring theme with our interactions with our euro-conterparts.

Follow Up
A buddy wrote me some interesting thoughts based on the last entry. I thought that I’d share two parts that really appealed to me:
How do you separate "accepting what was your best effort at the time" from what is actually a truthful best effort. It is tempting to let myself off the hook… …Maybe the answer is to judge myself in the present. After all, the present is what we can impact. Positive actions going forward make the past a valuable learning experience.

I think results are like wattage -- they come from effort. For some that effort is fun, for others it is work.
Successful people, that achieve peace, seem to have the ability to draw the line at how good is good enough. Successful people that achieve success, they often fail to achieve peace – that feeling of never measuring up stalking them.

Fun/Satisfaction – for me that comes from being able to move forward – the little steps – so long as I can move forward. It’s when I am not moving forward, that’s when my dissatisfaction climbs. Now, learning to think that I am moving forward when chilling out, recharging, resting – that’s something that I’ve been working on. Read a book called – In Praise of Slow recently. Quite repetitive but it did make me consider where speed might not be the most appropriate method of attack.

At my recent wedding, Chris reminded me (and the entire dinner) about the time that I took over his secretary’s computer because she wasn’t typing the drafting changes fast enough into the deal legals. That was 1993 and I was certainly in a big hurry back then.

That’s all for today. Actually sitting on the tarmac in an Air France airbus right now. Pretty neat use of technology. I now have global internet roaming to go with my snazzy new machine.

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20 November 2005

Why Wait

I was out running last night running through the streets of Edinburgh. While running around physically, I was running through my head mentally, taking inventory of the year. It’s been a pretty big year for me. Actually, it wasn’t night, it was the middle of the afternoon but after a week in Asia, the return to Scotland had my head a little confused in daylight terms.

I’ve no idea how often I’ll be writing here but various things keep rolling through my head and it helps to clear them out by getting them down.

Why Wait – that’s short for “why wait to be great”. You can apply it to a wide range of things. Such as:
There’s always a good reason to party
There’s always a good reason not to train
There’s always a good reason to put myself last
I’ll stretch later
I’ll start tomorrow
That’s a conversation that I hear all the time.

Anyhow that wasn’t the main thought that was running through my head. I’ve been reading the internet as usual and the conversations are starting to fade in their appeal to me. I normally don’t mind the repetition but for some reason it was wearing me out. I probably need a vacation… or to simply train a little bit more… or to get back into my routine – I’ve been on the road for weeks and there is only so much fine dining one fellow can handle.

I read so much about folks focusing on what doesn’t matter and I wonder if they are killing time so they don’t have to take action on what does matter.

Actually, I don’t wonder. I know. At least I know for me.

So back to my run. My reflections – it always seems easy for me to achieve. For years, I couldn’t figure out why I was able to move ahead so quickly. Actually, those thoughts didn’t really start until I moved into athletics and shot ahead so much faster than I ever thought possible. When I was in finance, it’s a lot more up and down, the progress isn’t really as clear because each deal is pretty similar, the growth appears in terms of deal complexity, deal size and overall portfolio size. Also, in finance, much (all?) of the growth appears outside of ourselves. The closest things to marks is salary – suppose that’s why we can get trapped into seeing ourselves in our paychecks.

1990 – first class honours econ/finance, university scholar
1993 – youngest partner in my firm
1998 – climbed Denali, my first true expedition
1999 – first IM, little over 11 hours
2000 – left venture capital after ten years, moved to New Zealand to focus on elite athletics
2002 – spent summer in Edinburgh helping start a property investment business, won Ultraman
2003 – first sub-9 IM
2004 – rode across America, first sub-8:30 IM
2005 – pretty solid year:

March – Had a decent result at IMNZ but found a lack of satisfaction in the overall experience because everyone (other than the guy that I wanted to race) beat themselves. Have to say “chapeau” to Cam Brown. Ended the month by getting engaged.

April – Took on an assignment to re-domicile a fund management business. Decided to sell my house in New Zealand and wind-up my Kiwi Consulting business.

May – Started the month with a road trip to find a suitable jurisdiction for the fund management business. My vote was Cayman – everyone else preferred Bermuda. Decided that they were probably right, incorporated a new company in Bermuda and got the wheels rolling to move the business. While in the UK, realised that there was an opportunity to launch a new company, spent two weeks creating a business plan and info memo for the new company.

July – Got married.

August – Managed a couple of 100K run weeks. Saw the results for Ironman Canada and saw no reason to give up on my dream.

October – Decided that Hawaii is a lousy location from which to conduct business with the UK.

November – Closed the first round of funding for a new company focused on Scottish residential property investment. Six months from conception to legal completion. Joined the board of the new business.

Monica pointed out that we have, we will, spent/spend Saturdays…

In Kona
In Boulder
In Saint Paul
In Edinburgh
In Dubai
In Glasgow/Edinburgh
In Paris
In Montpellier

That seems like an awful lot of travel. One of the things that I do well is being adaptable to a wide range of people and situations. We’ll see how adaptable because I am going to be commuting between hemispheres in early 2006.

“I believe that, generally, people that are good at something are good at everything.” – that’s a quote from my business partner and his key hiring criteria.

My first boss used to hire associates and junior executives based on two criteria – school results and value for money (lucky for me I did well and was extremely cheap).

So why all the outlining? It is a preamble to some things that I’ve observed. Looking back over the last twenty years, I’ve managed to do reasonably well at some very diverse fields: academics, financial analysis, international finance, elite athletics and fund management.

What is the key component that I’ve observed in myself and others around me?

To succeed relative to others: a willingness to consistently out-work the competition for as long as it takes.

To succeed relative to self: a deep satisfaction from taking the actions required to work towards challenging goals.

Intent – if you want to learn about a person’s true intent then look to where they spend their time. What do they really do? Not what they say. True intent is seen through actions. That’s why when our actions aren’t true to ourselves, we slowly crush our spirits. More on that perhaps some other time.

Mile Twenty
Patrick wrote on my board… “…most of us have "accepted" that the wall will come and we can't do anything about it so might was well push it until it hits us and then we can create our own laundry list of excuses (nutrition/wind/temp/etc). this fear is hard for me to grasp on an intellectual level (not athletic, b/c I have been there myself)...why fear the possibility of underperforming by going easy on the bike when you know that this bike effort is undoubtedly going to force you to under perform once you hit the run…”

Great piece of writing…

The challenge of getting past Mile 20 is present daily. All achievement stems from creating the environment and habits that support getting past lots of little Mile 20s.

Most of us are too deeply programmed into our existing patterns to break out unless we are in a new field. Amateur athletics is so new to most of us, we haven’t had the chance to create self-defeating patterns.

Even with a, relatively, clean slate – we bring our existing patterns along wherever we go. As a result, we see many successful AG athletes with pre-existing success in a range of fields. The field depth isn’t as strong as single sports so new athletes can make a mark quite quickly, say five years of focus.

The illogic of self-sabotage might be driven from an underlying fear. If we do everything right and don’t perform… then we might realize our ultimate fear – that deep down we really do ‘suck’. I’ve met more than a few people that are driven by this contradiction.

OK that’s enough for now.

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