Wednesday, December 01, 2010

Busy Professional's Optimized Diet and Exercise Plan

In this modern age we are all very busy with our professional life and family life. We have no time for exercise or in following a structured diet plan.

As we grow older we pack in few extra pounds and go on crash diets as if those can save us from anything.
The ideal scenario is to follow a diet/exercise plan  which fits into our busy lifestyle and can be followed without compromising work/personal life balance.

I call this the  Busy Professional's Optimized Diet and Exercise  Plan and here are the basic 5 rules-

1. Exercise during Lunch or Early Mornings:  

Exercise at Lunch time for 40 minutes, try doing this 4-5 times a week, this works great for Night Owls like me. For people who can get up early  in the mornings you can switch the time slots. Combine cardio and weight exercises,  run for 15 minutes and weight lift for 25 minute . Try isolating  each muscle group everyday like  Chest/Triceps, Back and Biceps, Legs and Shoulders such that those muscles are sore after workout. Take off during weekends by spending  time with your families and giving your muscles time  to rest and regenerate.

2.  Natural Diet for Breakfast and Lunch:
Only eat fruits and vegetables during the day. Start with 2 cups of Skim Milk and instant coffee and a banana for your morning commute. Apple/Carrot/Cucumber/Banana for the lunch after your workout. This regiment frees up your dinners to spend time with  your families and enjoy a non-guilty meal. This regiment  eliminates planning for lunch except for visiting grocery store once a week and prevents you from indulgences during the day.

3. Stay Away From Alcohol:
Alcohol is poison period, irrespective what pseudo medical establishment says about its benefits. It changes the brain chemistry and when times are tough  people tend to self medicate with Alcohol. It eats away your brain neurons and affects your sleep pattern. Final problem is it packs empty calories which adds up to the meal you are eating.

4. Stay Away From Sugar/Deserts
Sugar is basically glucose and pure source of energy. After dinner  your stomach is already filled with Calories that you dont need to add glucose to the mix. There are no beneficial effects of taking sugar.  Refined Sugar (White) does not contain any Vitamins or minerals needed for your body. Sugar like alcohol affects brain chemistry by giving you a buzz but at the end of the day it is use less.

5. Stay Away From Snacks
Snacks which most of them are fried in oil are  packed with fat calories and salt similar to sugar do not contain any essential nutrients.  On top of it all it can lead to a glaring addiction of munching on something all the time. A small packet of chips can pack in 500 fat calories and 1 hour of running burns 500 calories.

What are the results of this plan: 

This plan definitely works at-least for me whenever I have been on it 100%. I dramatically lose weight in the initial stages. You could also be on it partially but that will only be partially effective and sometimes could just maintain your existing weight. Unfortunately 3,4,5 are the most important and maximum results can only be gained by following all the rules.
The name of the game is discipline and commitment you show will give you results.

What are the advantages-

- Balances work life and personal life, so you do not have sacrifice a lot to lose weight.

- Very Cheap to maintain, a gym membership and $10 per week on buying groceries is all it takes.

- Very intuitive and easy to follow. There are no complex rules and  dos/donts behind it.
 - No need for supplements, there is no evidence supplements work in a pill form anyway. You are getting most of the nutrients you need  with your  natural diet.

Wednesday, September 15, 2010

Review of Good Boss Bad Boss

 Professor Sutton has finally written a practical book about managing in the work place. Being a Purdue MBA grad I can vouch that the current MBA curriculum have overt theory and does not contain practical advise.

This  books contains gems like the list below which can be  readily applied in your next meeting.

12 Things Good Bosses Believe


1. I have a flawed and incomplete understanding of what it feels like to work for me.
   2. My success — and that of my people — depends largely on being the master of obvious and mundane things, not on magical, obscure, or breakthrough ideas or methods.
   3. Having ambitious and well-defined goals is important, but it is useless to think about them much. My job is to focus on the small wins that enable my people to make a little progress every day.
   4. One of the most important, and most difficult, parts of my job is to strike the delicate balance between being too assertive and not assertive enough.
   5. My job is to serve as a human shield, to protect my people from external intrusions, distractions, and idiocy of every stripe — and to avoid imposing my own idiocy on them as well.
   6. I strive to be confident enough to convince people that I am in charge, but humble enough to realize that I am often going to be wrong.
   7. I aim to fight as if I am right, and listen as if I am wrong — and to teach my people to do the same thing.
   8. One of the best tests of my leadership — and my organization — is "what happens after people make a mistake?"
   9. Innovation is crucial to every team and organization. So my job is to encourage my people to generate and test all kinds of new ideas. But it is also my job to help them kill off all the bad ideas we generate, and most of the good ideas, too.
  10. Bad is stronger than good. It is more important to eliminate the negative than to accentuate the positive.
  11. How I do things is as important as what I do.
  12. Because I wield power over others, I am at great risk of acting like an insensitive jerk — and not realizing it.

Monday, September 06, 2010

Fox vs Hedgehogs

Finally I hit the Holy grail of decision making when I accidentally listened to dr. Phil Tetlock give a presentation at

If are very interested like me in psychology of decision making then this is a great presentation. Iam a big fan of Nassim Taleb but unfortunately Taleb teaches about uncertainties but not how to deal with uncertainties except to say be safe and don't take risk.

Phil classifies people into two different categories Foxes and hedgehogs.

Hedgehogs are the visionaries and have one main theme in life or in markets or in politics.
Some Examples of hedgehog thinking are-

- We are going to see massive  deflation and Dow will fall below 5000.
- we are going to see hyper inflation and  gold is going to hit $5000 and oil $200 a barrel.
-USA has seen its final moments and is going to disintegrate.
- China is going to have revolution and communists will be thrown out.

Hedgehogs get married to their positions and can never change, even when their positions don't happen. They justify it by saying that it will happen in the long run.

 Foxes  take best of many worlds

- They do not have any entrenched positions but combine many positions.
- They change their positions  quite often when presented evidence.

Here are the results-

Foxes on average are better decision makers than hedgehogs
Foxes do not get as much attention like hedgehogs.
When hedgehogs are right they have fame come along with it.
Hedgehogs do not  even do better than basic computer algorithm.

Wednesday, July 21, 2010

Review: The Invisible Gorilla: And Other Ways Our Intuitions Deceive Us

This is a fun book to read and eye opener to many people. If you have been reading about behavioral economics then it is not as new. Some illusions are useful and other are just page fillers.

Chapter 1 - Illusion of Attention, or, the belief that we are attentive to much more than we actually are at any given moment.

  • What the authors mean here is that we only pay attention to things we expect to see.
  • In case of driving pay extra attention to the unknown.
Chapter 2 - Illusion of Memory, or, the illusion that our memories are much more exact than they are.

Chapter 3 - Illusion of Confidence, or, the illusion that confidence (in others) is a good sign of competence.
  • This is one of the best illusions people fall for easily whether when interviewing people or in a business meeting or at college campus.
  • Most extroverted people show more confidence than introverted people. Does that confidence lead to competence?
  • Statistically Extroverted people and introverted people show the same amount of competence in accomplishing a task.

Chapter 4 - Illusion of Knowledge, or, the illusion that we have detailed knowledge about many things that, in fact, we only have vague knowledge of.

Chapter 5 - Illusion of Cause, or, the illusion that two things happening sequentially necessarily signifies cause/effect relationship.
  • This illusion is mostly seen in financial markets.
  • Most important thing to remember is correlation does not mean causality. Economic variables can show correlation for long periods of time before they break and it could be merely coincidental that they behaved that way.

Chapter 6 - Illusion of Potential, or, the illusion that in every human, there is a vast array of untapped potential waiting to come out (if only we learn to use more of our brains, listen to Mozart, "train our brains" etc.)
  • Most of the brain improvements techniques like playing Video Games, Chess or solving cross word puzzles statistically have proven not to improve the brain.
  • People who are good at Chess naturally have good IQs but you cannot say that their Chess game improved their IQ.
  • Physical Exercise improves brain more than any of the other activities.

Wednesday, July 07, 2010

Review of Fooled By randomness!

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

I enjoyed this book and kudos to Taleb for making such a dry subject very interesting.

I prefer this book over the Black Swan since this book attacks all uncertainties in life than Black Swan which is focused on just one type of uncertainty.

My biggest beef is when Taleb proudly proclaims - "Instead of immediate philosophizing and working at McDonald's, he went to work as a trader to become financially secure"

Now Taleb is it not the whole idea of your book that many people are stuck in dead end jobs, suffer misfortunes or experience bad health just because of pure randomness in life in-spite of their best efforts and advises people to practice stoicism?

It looks like you did not follow your own advice by deterministically trying pursue illusory financial freedom at the same time making fun of Carlos and John who were trying to do the same.

My personal experience has been you need to have personal conviction about your positions in order to make money in the markets. Yes you could go wrong and lose your ass as happened to Carlos and John. But even the most successful investors/traders like Warren Buffet and George Soros had personal conviction. Do you really think Soros bet billions against the British Pound without personal conviction that he is going to make a profit?

Taleb is right on one aspect which is we need to have an open mind and review ones position constantly but not having personal conviction on your position is a sure way for mediocrity.

Peter Lynch clearly put it - "Show me a trader who always has a 10% stop loss and I will show you a portfolio with 10% loss"

Sunday, May 23, 2010

New Way To Look At Equity Options

Equity Options consist of basically Call Options and Put Options-

Imagine Deutche Bank DB is selling at $60 per share today May 22nd.

Call options gives us the right to buy a stock at a specific price and a specific time.
DB call to buy @ 65 is selling for $1.65 expires on June 18th, 2010.

Put Options gives us the right to sell a stock at a specific price and at a specific time
DB puts to sell @ 55 is selling at $2.55 expires on June 18th, 2010.

Let us go back and look at various usages of options-

1. Buy Insurance on your portfolio.

2. Sell Insurance for the portfolio.

3. Speculate on movement of the stock with very less cash on hand.

Sunday, May 02, 2010

Halo Effect

This book makes a mockery of the Self Help Business Books and one size fits all formula for business success. In particular goes after Built to last and in search of excellence.

Basic premise of the book is that good results from a company creates a Halo effect which causes the managers to attribute many factors for its success after the fact.

It is a chicken and a egg problem. Did the factors cause success or the success created these factors?

Author intelligently argues that a companies success causes the factors to be generated since the these companies regress after sometime.

Success can be caused by multitude of factors-
1. Positive Business Cycle
2. Chance Innovation
3. Being at the Right place at the right time
4. Leadership, employees and HRM

On a well documented statistically significant study- Culture, Leadership, employees and HRM contribute to about 10% of the company's performance.

Here are some of the well documented Delusions-

1. Halo Effect:
tending of analysis of a company to reflect only the overall results
Tendency to look at a company's overall performance and make attributions about its culture, leadership, values, and more.

2. Correlation and Causality:
the lack of proof of causality in many situations
Two things may be correlated, but we may not know which one causes which.

3. Single Explanations:
one factor is unlikely to be the reason for success or failure
Many studies show that a particular factor leads to improved performance. But since many of these factors are highly correlated, the effect of each one is usually less than suggested.

4. Connecting the Winning Dots:
problems with only considering "winners"
If we pick a number of successful companies and search for what they have in common, we'll never isolate the reasons for their success, because we have no way of comparing them with less successful companies.

5. Rigorous Research:
mistaking large volumes of data for good data
If the data aren't of good quality, the data size and research methodology don't matter.
6. Lasting Success:
most companies trend to the mean eventually
Almost all high-performing companies regress over time. The promise of a blueprint for lasting success is attractive but unrealistic.

7. Absolute Performance:
companies can do well and still fail if a competitor does better
Company performance is relative, not absolute. A company can improve and fall further behind its rivals at the same time.

8. The Wrong End of the Stick:
successful companies may do various things but that does not mean that doing those things will make you successful
It may be true that successful companies often pursued highly focused strategies, but highly focused strategies do not necessarily lead to success.

9. Organizational Physics:
business organizations are just not that predictable
Company performance doesn't obey immutable laws of nature and can't be predicted with the accuracy of science - despite our desire for certainty and order.

Tuesday, January 19, 2010

Insights From Behavioral Finance

Insights From Behavioral Finance

Most common biases which have been unearthed by Behavioral Finance Experts are as follows-

1. Over Confidence
- We attribute our skills for our success but blame others for our failures.

- Over trading when we are successful and extreme caution when we lose money.
- Over concentrate into a single stock or few stocks

- Overconfident investor is only a trade away from a very humbling wake-up call.

- Good amount of skepticism is needed for every position.

2. Selling Winners and Keeping Losers (Prospect Theory)
- A loss is two times more painful than a gain
- So we don't like taking loses even when we have made mistakes about prospects of a company.
- On the other end taking profits makes us feel better so we sell winners prematurely.

3. Herding
- One of the most important words of Sir John Templeton, "This time it is different is one of the most expensive words in the English Language"
- when bubbles form or when stock becomes a darling people just herd into it.
- Obviously it is dangerous to prick a bubble, any one who shorted Nasdaq stocks in 1999- 2000 was out of the market.

4. Hindsight Bias
- People think they could have predicted an event after the fact it has occurred.

5. Survivorship Bias
People only look at the survivors to theorize from the result they never look the prople who have been dead and are not included in the statistic.