Remarks by Naval Adm. William H. McRaven

Remarks by Naval Adm. William H. McRaven

The following is adapted from the commencement address by Adm. William H. McRaven, ninth commander of U.S. Special Operations Command, at the University of Texas at Austin on May 17.

See Video:  Remarks by Naval Adm. William H. McRaven

The University of Texas slogan is “What starts here changes the world.”

I have to admit—I kinda like it.

“What starts here changes the world.”

Tonight there are almost 8,000 students graduating from UT.

That great paragon of analytical rigor, Ask.Com, says that the average American will meet 10,000 people in their lifetime.

That’s a lot of folks. But if every one of you changed the lives of just 10 people, and each one of those folks changed the lives of another 10 people—just 10—then in five generations, 125 years, the class of 2014 will have changed the lives of 800 million people.

Eight-hundred million people—think of it: over twice the population of the United States. Go one more generation and you can change the entire population of the world—eight billion people.

If you think it’s hard to change the lives of 10 people, change their lives forever, you’re wrong.

I saw it happen every day in Iraq and Afghanistan.

A young Army officer makes a decision to go left instead of right down a road in Baghdad and the 10 soldiers with him are saved from close-in ambush.

In Kandahar province, Afghanistan, a noncommissioned officer from the Female Engagement Team senses something isn’t right and directs the infantry platoon away from a 500-pound IED, saving the lives of a dozen soldiers.

But, if you think about it, not only were these soldiers saved by the decisions of one person, but their children yet unborn were also saved. And their children’s children were saved.

Generations were saved by one decision, by one person.

But changing the world can happen anywhere and anyone can do it.

So, what starts here can indeed change the world, but the question is: What will the world look like after you change it?

Well, I am confident that it will look much, much better, but if you will humor this old sailor for just a moment, I have a few suggestions that may help you on your way to a better a world.

And while these lessons were learned during my time in the military, I can assure you that it matters not whether you ever served a day in uniform. It matters not your gender, your ethnic or religious background, your orientation, or your social status. Our struggles in this world are similar and the lessons to overcome those struggles and to move forward—changing ourselves and the world around us—will apply equally to all.

I have been a Navy SEAL for 36 years. But it all began when I left UT for Basic SEAL training in Coronado, Calif.

Basic SEAL training is six months of long, torturous runs in the soft sand, midnight swims in the cold water off San Diego, obstacle courses, unending calisthenics, days without sleep and always being cold, wet and miserable.

It is six months of being constantly harassed by professionally trained warriors who seek to find the weak of mind and body and eliminate them from ever becoming a Navy SEAL.

But, the training also seeks to find those students who can lead in an environment of constant stress, chaos, failure and hardships. To me basic SEAL training was a lifetime of challenges crammed into six months.

So, here are lessons I learned from basic SEAL training that hopefully will be of value to you as you move forward in life.

1. Every morning in basic SEAL training, my instructors, who at the time were all Vietnam veterans, would show up in my barracks room and the first thing they would inspect was your bed. If you did it right, the corners would be square, the covers pulled tight, the pillow centered just under the headboard and the extra blanket folded neatly at the foot of the rack—that’s Navy talk for bed.

It was a simple task, mundane at best. But every morning we were required to make our bed to perfection. It seemed a little ridiculous at the time, particularly in light of the fact that were aspiring to be real warriors, tough battle hardened SEALs, but the wisdom of this simple act has been proven to me many times over.

If you make your bed every morning you will have accomplished the first task of the day. It will give you a small sense of pride and it will encourage you to do another task and another and another. By the end of the day, that one task completed will have turned into many tasks completed. Making your bed will also reinforce the fact that little things in life matter.

If you can’t do the little things right, you will never do the big things right.

And if by chance you have a miserable day, you will come home to a bed that is made—that you made—and a made bed gives you encouragement that tomorrow will be better.

If you want to change the world, start off by making your bed.

2. During SEAL training the students are broken down into boat crews. Each crew is seven students—three on each side of a small rubber boat and one coxswain to help guide the dingy. Every day, your boat crew forms up on the beach and is instructed to get through the surfzone and paddle several miles down the coast.

In the winter, the surf off San Diego can get to be 8 to 10 feet high and it is exceedingly difficult to paddle through the plunging surf unless everyone digs in. Every paddle must be synchronized to the stroke count of the coxswain. Everyone must exert equal effort or the boat will turn against the wave and be unceremoniously tossed back on the beach.

For the boat to make it to its destination, everyone must paddle.

You can’t change the world alone—you will need some help—and to truly get from your starting point to your destination takes friends, colleagues, the goodwill of strangers and a strong coxswain to guide them.

If you want to change the world, find someone to help you paddle.

3. Over a few weeks of difficult training my SEAL class, which started with 150 men, was down to just 42. There were now six boat crews of seven men each.

I was in the boat with the tall guys, but the best boat crew we had was made up of the little guys—the munchkin crew we called them. No one was over about 5-foot-5.

The munchkin boat crew had one American Indian, one African-American, one Polish-American, one Greek-American, one Italian-American and two tough kids from the Midwest.

They out-paddled, out-ran and out-swam all the other boat crews.

The big men in the other boat crews would always make good-natured fun of the tiny little flippers the munchkins put on their tiny little feet prior to every swim. But somehow these little guys, from every corner of the nation and the world, always had the last laugh—swimming faster than everyone and reaching the shore long before the rest of us.

SEAL training was a great equalizer. Nothing mattered but your will to succeed. Not your color, not your ethnic background, not your education and not your social status.

If you want to change the world, measure people by the size of their heart, not the size of their flippers.

4. Several times a week, the instructors would line up the class and do a uniform inspection. It was exceptionally thorough. Your hat had to be perfectly starched, your uniform immaculately pressed and your belt buckle shiny and void of any smudges.

But it seemed that no matter how much effort you put into starching your hat, or pressing your uniform or polishing your belt buckle, it just wasn’t good enough. The instructors would find “something” wrong.

For failing the uniform inspection, the student had to run, fully clothed, into the surfzone and then, wet from head to toe, roll around on the beach until every part of your body was covered with sand. The effect was known as a “sugar cookie.” You stayed in that uniform the rest of the day—cold, wet and sandy.

There were many students who just couldn’t accept the fact that all their effort was in vain. That no matter how hard they tried to get the uniform right, it was unappreciated.

Those students didn’t make it through training. Those students didn’t understand the purpose of the drill. You were never going to succeed. You were never going to have a perfect uniform.

Sometimes, no matter how well you prepare or how well you perform, you still end up as a sugar cookie. It’s just the way life is sometimes.

If you want to change the world, get over being a sugar cookie and keep moving forward.

5. Every day during training you were challenged with multiple physical events. Long runs, long swims, obstacle courses, hours of calisthenics—something designed to test your mettle.

Every event had standards, times that you had to meet. If you failed to meet those standards, your name was posted on a list and at the end of the day those on the list were invited to a “circus.”

A circus was two hours of additional calisthenics designed to wear you down, to break your spirit, to force you to quit. No one wanted a circus. A circus meant that for that day you didn’t measure up. A circus meant more fatigue, and more fatigue meant that the following day would be more difficult—and more circuses were likely.

But at some time during SEAL training, everyone—everyone—made the circus list. Yet an interesting thing happened to those who were constantly on the list. Over time those students, who did two hours of extra calisthenics, got stronger and stronger. The pain of the circuses built inner strength—built physical resiliency.

Life is filled with circuses. You will fail. You will likely fail often. It will be painful. It will be discouraging. At times it will test you to your very core.

But if you want to change the world, don’t be afraid of the circuses.

6. At least twice a week, the trainees were required to run the obstacle course. The obstacle course contained 25 obstacles including a 10-foot-high wall, a 30-foot cargo net and a barbed-wire crawl, to name a few.

But the most challenging obstacle was the slide for life. It had a three-level, 30-foot tower at one end and a one-level tower at the other. In between was a 200-foot-long rope.

You had to climb the three-tiered tower and, once at the top, you grabbed the rope, swung underneath the rope and pulled yourself hand over hand until you got to the other end.

The record for the obstacle course had stood for years when my class began training in 1977. The record seemed unbeatable until one day a student decided to go down the slide for life—head-first. Instead of swinging his body underneath the rope and inching his way down, he bravely mounted the top of the rope and thrust himself forward.

It was a dangerous move—seemingly foolish, and fraught with risk. Failure could mean injury and being dropped from the training. Without hesitation, the student slid down the rope, perilously fast. Instead of several minutes, it only took him half that time and by the end of the course he had broken the record.

If you want to change the world sometimes you have to slide down the obstacle head-first.

7. During the land-warfare phase of training, the students are flown out to San Clemente Island near San Diego. The waters off San Clemente are a breeding ground for great white sharks. To pass SEAL training, there are a series of long swims that must be completed. One is the night swim.

Before the swim, the instructors joyfully brief the trainees on all the species of sharks that inhabit the waters off San Clemente. The instructors assure you, however, that no student has ever been eaten by a shark—at least not recently.

But, you are also taught that if a shark begins to circle your position, stand your ground. Do not swim away. Do not act afraid. And if the shark, hungry for a midnight snack, darts towards you, then summon up all your strength and punch him in the snout and he will turn and swim away.

There are a lot of sharks in the world. If you hope to complete the swim you will have to deal with them.

So, if you want to change the world, don’t back down from the sharks.

8. As Navy SEALs, one of our jobs is to conduct underwater attacks against enemy shipping. We practiced this technique extensively during basic training. The ship-attack mission is where a pair of SEAL divers is dropped off outside an enemy harbor and then swims well over 2 miles—underwater—using nothing but a depth gauge and a compass to get to their target.

During the entire swim, even well below the surface, there is some light that comes through. It is comforting to know that there is open water above you. But as you approach the ship, which is tied to a pier, the light begins to fade. The steel structure of the ship blocks the moonlight, it blocks the surrounding street lamps, it blocks all ambient light.

To be successful in your mission, you have to swim under the ship and find the keel—the centerline and the deepest part of the ship. This is your objective. But the keel is also the darkest part of the ship, where you cannot see your hand in front of your face, where the noise from the ship’s machinery is deafening and where it is easy to get disoriented and fail.

Every SEAL knows that under the keel, at the darkest moment of the mission, is the time when you must be calm, composed—when all your tactical skills, your physical power and all your inner strength must be brought to bear.

If you want to change the world, you must be your very best in the darkest moment.

9. The ninth week of SEAL training is referred to as Hell Week. It is six days of no sleep, constant physical and mental harassment and one special day at the Mud Flats. The Mud Flats are an area between San Diego and Tijuana where the water runs off and creates the Tijuana slues—a swampy patch of terrain where the mud will engulf you.

It is on Wednesday of Hell Week that you paddle down to the mud flats and spend the next 15 hours trying to survive the freezing-cold mud, the howling wind and the incessant pressure from the instructors to quit.

As the sun began to set that Wednesday evening, my training class, having committed some “egregious infraction of the rules” was ordered into the mud. The mud consumed each man till there was nothing visible but our heads. The instructors told us we could leave the mud if only five men would quit—just five men and we could get out of the oppressive cold.

Looking around the mud flat, it was apparent that some students were about to give up. It was still over eight hours till the sun came up—eight more hours of bone-chilling cold. The chattering teeth and shivering moans of the trainees were so loud it was hard to hear anything. And then, one voice began to echo through the night—one voice raised in song.

The song was terribly out of tune, but sung with great enthusiasm. One voice became two, and two became three, and before long everyone in the class was singing.

We knew that if one man could rise above the misery then others could as well. The instructors threatened us with more time in the mud if we kept up the singing—but the singing persisted. And somehow, the mud seemed a little warmer, the wind a little tamer and the dawn not so far away.

If I have learned anything in my time traveling the world, it is the power of hope. The power of one person—Washington, Lincoln, King, Mandela and even a young girl from Pakistan named Malala—can change the world by giving people hope.

So, if you want to change the world, start singing when you’re up to your neck in mud.

10. Finally, in SEAL training there is a bell. A brass bell that hangs in the center of the compound for all the students to see.

All you have to do to quit is ring the bell. Ring the bell and you no longer have to wake up at 5 o’clock. Ring the bell and you no longer have to do the freezing cold swims. Ring the bell and you no longer have to do the runs, the obstacle course, the PT—and you no longer have to endure the hardships of training. Just ring the bell.

If you want to change the world don’t ever, ever ring the bell.

To the graduating class of 2014, you are moments away from graduating. Moments away from beginning your journey through life. Moments away from starting to change the world—for the better.

It will not be easy.

But start each day with a task completed. Find someone to help you through life. Respect everyone. Know that life is not fair and that you will fail often, but if you take some risks, step up when the times are toughest, face down the bullies, lift up the downtrodden and never, ever give up—if you do these things, then the next generation and the generations that follow will live in a world far better than the one we have today. And what started here will indeed have changed the world, for the better.

Peter Lynch

In the early 1980s, a young portfolio manager named Peter Lynch was becoming one of the most famous investors in the world, and for a very understandable reason – when he took over the Fidelity Magellan mutual fund in May of 1977 (his first job as a portfolio manager), the assets of the fund were $20 million. He proceeded to turn it into the largest mutual fund in the world, outperforming the market by a mind-boggling 13.4% per year annualized!

Lynch accomplished this by using very basic principles, which he was happy to share with just about anyone.  Peter Lynch firmly believed that individual investors had inherent advantages over large institutions because the large firms either wouldn’t or couldn’t invest in smaller-cap companies that have yet to receive big attention from analysts or mutual funds. Whether you’re a registered representative looking to find solid long-term picks for your clients or an individual investor striving to improve your returns, we’ll introduce you how you can implement Lynch’s time-tested strategy.

Peter Lynch Quotes:

“Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it.”

“If you stay half-alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them.”

“Investing without research is like playing stud poker and never looking at the cards.”

“Absent a lot of surprises, stocks are relatively predictable over twenty years. As to whether they’re going to be higher or lower in two to three years, you might as well flip a coin to decide.”

“If you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes.”

The Lynch Philosophy

Once his stellar track record running the Magellan Fund gained the widespread attention that usually follows great performance, Peter wrote several books outlining his philosophy on investing. They are great reads, but his core thesis can be summed up with three main tenets: only buy what you understand, always do your homework and invest for the long run.

1. Only Buy What You Understand

According to Lynch, our greatest stock research tools are our eyes, ears and common sense. Lynch was proud of the fact that many of his great stock ideas were discovered while walking through the grocery store or chatting casually with friends and family. We all have the ability to do first-hand analysis when we are watching TV, reading the newspaper, or listening to the radio. When we’re driving down the street or traveling on vacation we can also be sniffing out new investment ideas. After all, consumers represent two-thirds of the gross domestic product of the United States. In other words, most of the stock market is in the business of serving you, the individual consumer – if something attracts you as a consumer, it should also pique your interest as an investment.

2. Always Do Your Homework

First-hand observations and anecdotal evidence are a great start, but all great ideas need to be followed up with smart research. Don’t be confused by Peter Lynch’s homespun simplicity when it comes to doing diligent research – rigorous research was a cornerstone of his success. When following up on the initial spark of a great idea, Lynch highlights several fundamental values that he expected to be met for any stock worth buying:

  • Percentage of Sales: If there is a product or service that initially attracts you to the company, make sure that it comprises a high enough percentage of sales to be meaningful; a great product that only makes up 5% of sales isn’t going to have more than a marginal impact on a company’s bottom line.
  • PEG Ratio: This ratio of valuation to earnings growth rate should be looked at to see how much expectation is built into the stock. You want to seek out companies with strong earnings growth and reasonable valuations – a strong grower with a PEG ratio of two or more has that earnings growth already built into the stock price, leaving little room for error. (To read more, see How The PEG Ratio Can Help Investors and Move Over P/E, Make Way For The PEG.)

3. Invest for the Long Run 

Lynch has said that “absent a lot of surprises, stocks are relatively predictable over 10-20 years. As to whether they’re going to be higher or lower in two or three years, you might as well flip a coin to decide.” It may seem surprising to hear such words from a Wall Street legend, but it serves to highlight how fully he believed in his philosophies. He kept up his knowledge of the companies he owned, and as long as the story hadn’t changed, he didn’t sell. Lynch did not try to market time or predict the direction of the overall economy.

In fact, Lynch once conducted a study to determine whether market timing was an effective strategy. According to the results of the study, if an investor had invested $1,000 a year on the absolute high day of the year for 30 years from 1965-1995, that investor would have earned a compounded return of 10.6% for the 30-year period. If another investor also invests $1,000 a year every year for the same period on the lowest day of the year, this investor would earn an 11.7% compounded return over the 30-year period.

Therefore, after 30 years of the worst possible market timing, the first investor only trailed in his returns by 1.1% per year! As a result, Lynch believes that trying to predict the short-term fluctuations of the market just isn’t worth the effort. If the company is strong, it will earn more and the stock will appreciate in value. By keeping it simple, Lynch allowed his focus to go to the most important task – finding great companies.

Lynch coined the term “tenbagger” to describe a stock that goes up in value ten-fold, or 1000%. These are the stocks that he was looking for when running the Magellan fund. Rule No.1 to finding a tenbagger is not selling the stock when it has gone up 40% or even 100%. Many fund managers these days look to trim or sell their winning stocks while adding to their losing positions. Peter Lynch felt that this amounted to “pulling the flowers and watering the weeds”.

Conclusion

Even though he ran the risk of over-diversifying his fund (he owned thousands of stocks at certain times), Peter Lynch’s performance and stock picking ability stands for itself. He became a master at studying his environment and understanding the world both as it is and how it might be in the future. By applying his lessons and our own observations we can learn more about investing while interacting with our world, making the process of investing both more enjoyable and profitable.

The Courageous Rosa Parks

Rosa Park and Rev. Martin Luther King

Rosa Park and Rev. Martin Luther King

Most historians date the beginning of the modern civil rights movement in the United States to December 1, 1955.  That was the day when an unknown seamstress in Montgomery, Alabama refused to give up her bus seat to a white passenger.

This brave woman, Rosa Parks, was arrested and fined for violating a city ordinance, but her lonely act of defiance began a movement that ended legal segregation in America, and made her an inspiration to freedom-loving people everywhere.

Rosa Parks was born Rosa Louise McCauley in Tuskegee, Alabama to James McCauley, a carpenter, and Leona McCauley, a teacher. At the age of two she moved to her grandparents’ farm in Pine Level, Alabama with her mother and younger brother, Sylvester.

At the age of 11 she enrolled in the Montgomery Industrial School for Girls, a private school founded by liberal-minded women from the northern United States.

The school’s philosophy of self-worth was consistent with Leona McCauley’s advice to “take advantage of the opportunities, no matter how few they were.”

Opportunities were few indeed. “Back then,” Mrs. Parks recalled in an interview, “we didn’t have any civil rights. It was just a matter of survival, of existing from one day to the next. I remember going to sleep as a girl hearing the Klan ride at night and hearing a lynching and being afraid the house would burn down.”

In the same interview, she cited her lifelong acquaintance with fear as the reason for her relative fearlessness in deciding to appeal her conviction during the bus boycott. “I didn’t have any special fear,” she said. “It was more of a relief to know that I wasn’t alone.”

After attending Alabama State Teachers College, the young Rosa settled in Montgomery, with her husband, Raymond Parks. The couple joined the local chapter of the NAACP and worked quietly for many years to improve the lot of African-Americans in the segregated south.

“I worked on numerous cases with the NAACP,” Mrs. Parks recalled, “but we did not get the publicity. There were cases of flogging, peonage, murder, and rape. We didn’t seem to have too many successes. It was more a matter of trying to challenge the powers that be, and to let it be known that we did not wish to continue being second-class citizens.”

The bus incident led to the formation of the Montgomery Improvement Association, led by the young pastor of the Dexter Avenue Baptist Church, Dr. Martin Luther King, Jr.

The association called for a boycott of the city-owned bus company. The boycott lasted 382 days and brought Mrs. Parks, Dr. King, and their cause to the attention of the world.  A Supreme Court Decision struck down the Montgomery ordinance under which Mrs. Parks had been fined, and outlawed racial segregation on public transportation.

In 1957, Mrs. Parks and her husband moved to Detroit, Michigan where Mrs. Parks served on the staff of U.S. Representative John Conyers.  The Southern Christian Leadership Council established an annual Rosa Parks Freedom Award in her honor.

After the death of her husband in 1977, Mrs. Parks founded the Rosa and Raymond Parks Institute for Self-Development. The Institute sponsors an annual summer program for teenagers called Pathways to Freedom. The young people tour the country in buses, under adult supervision, learning the history of their country and of the civil rights movement.

President Clinton presented Rosa Parks with the Presidential Medal of Freedom in 1996. She received a Congressional Gold Medal in 1999.

Mrs. Parks spent her last years living quietly in Detroit, where she died in 2005 at the age of 92.

After her death, her casket was placed in the rotunda of the United States Capitol for two days, so the nation could pay its respects to the woman whose courage had changed the lives of so many. She is the only woman and second African American in American history to lie in state at the Capitol, an honor usually reserved for Presidents of the United States.

How the Anglos Stole Thanksgiving

The Real First Thanksgiving in St. Augustine

The Real First Thanksgiving in St. Augustine

Thanksgiving is a deeply meaningful annual ritual for Americans. It is singled out as the day to recall a gathering nearly 400 years ago when two clashing cultures – the Pilgrims and Native Americans – came together in feast and prayer.  That’s the history every American kindergartener making a construction-paper turkey is taught; that’s the history of cultural cooperation, acceptance and gratitude we celebrate each November.

Today, two distinct cultures – Anglo-Protestant and Hispanic – are on the brink of profound and irrevocable change in America with immigration becoming an increasingly thorny political issue.

There is President Obama’s promise of comprehensive immigration reform in the first 100 days of his administration, “a priority I will pursue from my very first day,” which has not come to pass.  Instead, “He could go down as the worst president in history toward immigrants,” said Arturo Carmona, executive director of the liberal activist group Presente.org.  In fact, he has deported nearly 3 million Latinos, including 50,000 parents of American citizens.

His draconian actions have left tens of thousands of frightened children, whose moms and dads suddenly vanished, living in foster care or as wards of the state.

What we are witnessing is a clash of cultures in America that is as excessive as it is pointless.  The late Samuel Huntington, a renowned Harvard Political scientist, illustrates it in an essay entitled the “The Hispanic Challenge” (Foreign Policy, March-April 2004), where he fans the flames in the first paragraph:

America was created by 17th- and 18th-century settlers who were overwhelmingly white, British, and Protestant. Their values, institutions, and culture provided the foundation for and shaped the development of the United States in the following centuries.  The persistent inflow of Hispanic immigrants threatens to divide the United States into two peoples, two cultures, and two languages. Unlike past immigrant groups, Mexicans and other Latinos have not assimilated into mainstream U.S. culture, forming instead their own political and linguistic enclaves—from Los Angeles to Miami—and rejecting the Anglo-Protestant values that built the American dream. The United States ignores this challenge at its peril.

Huntington concludes his essay by discounting Latino author Lionel Sosa, author of The Americano Dream, who wrote that the Americano dream “exists, it is realistic, and it is there for all of us to share.”  Huntington declares, “There is no Americano dream.  There is only the American dream created by an Anglo-Protestant society. Mexican Americans will share in that dream and in that society only if they dream in English.”

Who are the Americanos?  We are the 54 million American citizens of all skin colors, nationalities and religions who descend from a rich Spanish culture – a culture that Anglophile academics like Huntington have erased from our history books.

I observed this firsthand while serving on Florida’s State Board of Education, overseeing the approval of statewide textbooks.  American history books ignore the epic northward advance by Spanish pioneers into the southern tier of the United States, and fail to discuss the far-reaching contributions of Latinos from our country’s inception to its present day.

For example:

  • 42 years before the English colony at Jamestown, explorer Pedro Menendez founded Saint Augustine as our first North American city in 1565, granting Florida the longest recorded history of any state. The Spanish flag flew over Saint Augustine for nearly 250 years.
  • When the Continental Army was nearly bankrupt, they sent a representative to seek funds in Cuba, and the money they needed was collected from the public treasury and from private Hispanic citizens to finance the Battle of Yorktown, the decisive battle of the Revolutionary War.
  • The patriotism of Hispanics cannot be questioned.  Hispanic soldiers have served in the U.S. Armed Forces dating back from the American Revolution to the war in Afghanistan with 44 Medal of Honor recipients. About half a million Hispanics fought the Axis powers during World War II.  Lance Cpl. Jose Gutierrez was the first person to die in the Iraq War, and more than 25 percent of the 58,195 names on the Vietnam War Memorial are Hispanics.
  • Spanish – not English – was the first European language spoken in North America. There are more than 2,000 U.S. cities with Spanish names, as well as the states of California, Arizona, Texas, Utah, New Mexico, Colorado, Nevada, Montana and Florida.
  • The U.S. is the second-largest Spanish-speaking country in the world.  A large number of Hispanics are bilingual, which is a plus since our exports to Latin America are nearly three times larger than our exports to China.  Spanish language skills and cultural affinity give our country a competitive advantage in doing business with a rapidly growing $6.4 trillion market of 579 million people in 21 countries plus Puerto Rico.

Oh, and about that first Thanksgiving? Here are a couple of other things our children’s history books fail to mention:

  • In St. Augustine on September 8, 1565 — 56 years before Plymouth, the Spanish and the native Tamaqua celebrated the first feast of Thanksgiving.
  • Near El Paso on April 20, 1598 — 23 years before Plymouth, five hundred colonists led by Juan de Oñate celebrated the end of a grueling expedition across Mexico’s Chihuahua Desert.  Their Thanksgiving celebration with Native Americans is recognized in resolutions by the Texas legislature.

Perhaps if the four million children in U.S. kindergartens this year – 25 percent of whom are Latinos – were taught the truth, not only about the rich history of Americanos in helping make this country so great, but also about Thanksgiving, this most American of holidays, then maybe we would have a healthier attitude on immigration reform and Americanos in general.

The truth. Surely that’s something for which we can all be thankful.

How Warren Buffett Plans to Profit from the U.S. Oil Boom

Oil and GasThe United States produced more crude oil than it imported in October for the first time in almost 20 years, the federal Energy Information Administration announced last week.

The U.S. also produced more oil in September than it has in any one-month period over the last 24 years, partially as a result of the rise of hydraulic fracturing, and the country is importing less than it has in 17 years.

It’s no surprise then that Warren Buffett just reported his third quarter portfolio update and he, or one of his recently hired fund managers Todd Combs or Ted Weschler, reported holding a single new stock in the third quarter:  Exxon Mobil Corporation.

The size of the Exxon holding suggests that it was a Buffett purchase.

There are collectively 43 stocks in Berkshire Hathaway’s portfolio, which is valued at $92.04 billion. Exxon joins a group of other oil and gas stocks in Buffett’s portfolio: National Oilwell Varco Inc. (NOV), Phillips 66 (PSX), Suncor Energy Inc. (SU) and ConocoPhillips (COP).  In total, energy stocks comprise 7.9% of its total.

Exxon Mobil Corporation (XOM)

Berkshire reported owning Exxon Mobil in the third quarter in an amended filing, but actually first bought the stock in the second quarter, without filing, and hid the fact until now. In the second quarter he bought 31,244,110 shares. In the third, it added 8,845,261. The average share prices for the two quarters were both $90.

The Exxon Mobil stake has a 3.7% portfolio weight and represents 0.91% of the $407 billion market cap company’s shares outstanding.

The most noteworthy change Warren Buffett made to Berkshire’s portfolio is the addition of a sizable new position – 40.1 million shares valued at $3.4 billion — in energy super major ExxonMobil (NYSE: XOM).  In fact, Buffett constituted roughly three-quarters of the position in the second quarter and obtained confidential treatment from the SEC in his previous filing as he continued to build the position.

In many ways, ExxonMobil is an obvious choice for Berkshire’s portfolio; here are three reasons Buffett selected it:

It’s just plain cheap

At 11.8 times estimated earnings per share for the next 12 months, ExxonMobil shares trade at a 23% discount to the S&P 500′s forward earnings multiple; meanwhile, it pays a 2.7% dividend yield against just 2% for the index. Furthermore, the valuation was lower when Buffett was building his position — the stock’s average forward earnings multiple was 11.3 in the second quarter and just 10.8 in the third quarter — the sort of multiples that ought to generate some interest when they are associated with one of the best managed, most profitable companies in the world.

ExxonMobil is the second-largest company in the world by market value

The reported value of Berkshire’s stock holdings per today’s filing is a staggering $92 billion. In addition, Berkshire generates a flood of cash on a permanent basis that Buffett must attempt to allocate profitably. (Berkshire’s operating cash flow for the first nine months of 2013 was $20.7 billion.)

As such, when it comes to publicly traded stocks, Buffett can’t waste his time on minnows; he needs to focus exclusively on hooking the largest groupers in the corporate ocean. With a market value of $407 billion, ExxonMobil — the world’s second most valuable company — is just such a catch. ExxonMobil’s size and liquidity enabled Buffett to make it his largest new position since he put more than $10 billion to work in another mega cap issue, IBM, in 2011.

ExxonMobil has longevity

Warren Buffett will only invest in businesses that have genuine staying power; for a long-term investor with a multigenerational time horizon, permanence is a very attractive quality.

Buffett’s confident that ExxonMobil shares that characteristic. We know this because in his 2011 shareholder letter, he argued against buying gold by comparing the far-in-the-future value of all the world’s existing gold stock in the world and a hypothetical portfolio of productive assets with the same current value made up of “all U.S. cropland…, plus 16 ExxonMobils.” In the conclusion of his argument, he writes:

A century from now… ExxonMobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions…

A century is a long time, but there is every reason to believe ExxonMobil will be churning out gobs of cash — and returning it to shareholders — for the next several decades. That’s not a bad start for a buy-and-hold investor, particularly when it is bought at the right price.

One of My Favorite Books

Think-and-Grow-RichNovember 8th was the anniversary of the death of  Napoleon Hill who has inspired more people to become successful than any other person in history, including me.

His classic book Think and Grow Rich is considered the greatest self-improvement book of all time, with more than 70 million copies sold worldwide.  It’s helped millions of people to become successful, and you too can benefit from its lessons by listening to the free audio version or by reading it here.

Lionel Sosa was chosen by the Napoleon Hill Foundation to write Think and Grow Rich:  A Latino Choice.   Lionel chose 13 Latino stories to illustrate the 13 principles that Napoleon Hill synthesized from twenty years of interviews and study of the success philosophy of the richest men at the turn of the 20th century:  Alexander Graham Bell, Andrew Carnegie, Thomas Edison, Harvey Firestone, Henry Ford, King Gillette, John D. Rockefeller, Charles M. Schwab, William Wrigley Jr., F.W. Woolworth, and many others.

Lionel chose me to illustrate the first principle, which is to “Develop a Definite Major Purpose”.  Hill’s research showed that “there is one quality which one must possess to win, and that is definiteness of purpose, the knowledge of what one wants, and a burning desire to possess it.”  Success towards achieving your goals in life begins with knowing where you are going.  Hill knew that “without a definite major purpose, you are as helpless as a ship without a compass.”

As the first person to illustrate and write about the “law of attraction” which was copied and made famous recently by the book and movie The Secret, Napoleon Hill stated that:

Any dominating idea, plan, or purpose held in your conscious mind through repeated effort and emotionalized by a burning desire for its realization is taken over by the subconscious and acted upon through whatever natural and logical means may be available.  

 The Life of Napoleon Hill

Oliver Napoleon Hill was born in Wise County, Va., on Oct. 26, 1883. For young Napoleon, the wealthy industrialists he came to admire in later years were far removed from this primitive land where poverty, illiteracy and superstition reigned.

Nap, as he was called, was 10 when his mother passed away, leaving his father to care for him and his brother. James Hill was ill-equipped as a single parent and had difficulty in taming his son’s increasingly wild nature.  Napoleon was enamored with the outlaw Jesse James, carried a six-shooter on his hip and went about the county terrorizing its citizens.

But James Hill soon remarried, and his new wife Martha quickly established herself as a force in the two-room log cabin.  Napoleon, still pained from the loss of his mother, found a guiding light.  Martha saw the boy’s potential and encouraged him.  She told him he wasn’t a bad boy, and that he just needed to direct his energy toward accomplishing something worthwhile.  She suggested he use his overactive imagination to become a writer.

When he welcomed the idea, the well-educated Martha spent the next year tutoring him. She promised to buy him a typewriter if he gave up his six-shooter. “If you become as good with a typewriter as you are with that gun,” she said, “you may become rich and famous and known throughout the world.” Napoleon agreed to the deal.

At fifteen, he landed a position as a freelance reporter for a group of rural newspapers, followed a few years later by a job with Bob Taylor’s Magazine, a popular periodical that offered advice on achieving power and wealth.

How Andrew Carnegie Inspired Him

His first major interview was with the then richest man in America—73-year-old Pittsburgh steel magnate Andrew Carnegie—and that interview changed his life.  Hill intently listened as Carnegie recounted his extraordinary accomplishments and proffered his theories on personal achievement in the book The Wisdom of Andrew Carnegie as Told to Napoleon Hill.

“It’s a shame that each new generation must find the way to success by trial and error when the principles are really clear-cut,” Carnegie told him.  What the world needed, Carnegie suggested, was a philosophy of achievement, a compilation of success principles from the country’s greatest businessmen and leaders to show the commonality of their stories, and serve as inspiration and enlightenment to those wanting more in life.

He issued a challenge to Hill:  Commit the next 20 years, without compensation, to documenting and recording such a philosophy of success, and he would introduce him to the wealthiest and most successful men of the time. Hill jumped at the opportunity.

And so, for the next two decades, between numerous business ventures and starting a family, Hill went about fulfilling the pledge.  He met with Theodore Roosevelt, Thomas Edison, John D. Rockefeller, Henry Ford, Alexander Graham Bell, King Gillette and other contemporary giants. Carnegie believed that “definiteness of purpose” was the starting point for all success—that “the man who knows exactly what he wants… has no difficulty in believing in his own ability to succeed.”  The concept became the foundation for Hill’s later writing and professional focus.

Think and Grow Rich

After numerous rejections, Connecticut publisher Andrew Pelton agreed to print the book.

Hill’s eight-volume Law of Success debuted on March 26, 1928, offering the collective wisdom of the greatest achievers of the previous fifty years.  His work became a sensation.

The sheer size of Law of Success is daunting, running to 800 to 1000 pages depending on the edition.  Originally designed and produced in a 16 part series, each volume or chapter was substantial yet accessible.

In March 1937, he significantly reduced the book to about 200 pages, and changed the named to Think and Grow Rich – the first three print runs, increasing each time in numbers, came in rapid succession and all sold out, and it continues to sell today.

Here is an original two hour video of Napoleon Hill produced in 1937 going over the concepts of the book.

 

Ford CEO Alan Mulally

Ford Motor Company CEO Alan Mulally

Automaker Ford was losing billions of dollars when Alan Mulally took the wheel in 2006.

Here, in an interview conducted by New York based Rik Kirkland, senior managing editor of McKinsey Publishing, Mulally reflects on his leadership style and his efforts to turn around the organization.

When Alan Mulally was named president and CEO of Ford, in 2006, the famous American automaker was on the brink of bankruptcy. The company was preparing to post the biggest annual loss in its 103-year history—$12.7 billion.

Seven years later, Mulally is widely seen as the man behind one of the most impressive corporate turnarounds in history. Ford has posted an annual profit every year since 2009, its stock price has rebounded, and a new corporate culture has transformed the way the organization works. In an interview with McKinsey’s Rik Kirkland, Mulally reflects on his approach to leading a large global organization, the process by which Ford seeks to understand the global business context, the importance of managing your energy (and not just your time), and why he thinks “One Ford” is more than just a catchphrase.

McKinsey: How would you describe your leadership style?

Alan Mulally: At the most fundamental level, it is an honor to serve—at whatever type or size of organization you are privileged to lead, whether it is a for-profit or nonprofit. It is an honor to serve. Starting from that foundation, it is important to have a compelling vision and a comprehensive plan. Positiveleadership—conveying the idea that there is always a way forward—is so important, because that is what you are here for—to figure out how to move the organization forward. Critical to doing that is reinforcing the idea that everyone is included. Everyone is part of the team and everyone’s contribution is respected, so everyone should participate. When people feel accountable and included, it is more fun. It is just more rewarding to do things in a supportive environment.

Say, for example, an employee decides to stop production on a vehicle for some reason. In the past at Ford, someone would have jumped all over them: “What are you doing? How did this happen?” It is actually much more productive to say, “What can we do to help you out?” Because if you have consistency of purpose across your entire organization and you have nurtured an environment in which people want to help each other succeed, the problem will be fixed quickly. So it is important to create a safe environment for people to have an honest dialogue, especially when things go wrong.

A big part of leadership is being authentic to who you are, thinking about what you really believe in and behaving accordingly. At Ford, we have a card with our business plan on one side and the behaviors we expect listed on the other. It is the result of 43 years of doing this.

McKinsey: There have been major changes in the external environment during your long career. How have those affected the way you lead?

Alan Mulally: People often say that the world is becoming more volatile and more complex, that there are exponentially more “moving parts.” The world has always been a complicated and volatile place—it is just that we now have the tools to recognize it, to try to make sense of it, and to respond to it. That can make the process of understanding the broader environment in which we operate feel more complicated. Understanding what is happening in the world has always been a critical part of doing business at Ford. It should be a critical part of doing business anywhere.

McKinsey: How do you make sure Ford understands the larger context?

Alan Mulally: Every week we have a Business Plan Review meeting, or BPR. Our entire global leadership team, every business leader, every functional leader, attends either remotely or in person. We talk about the worldwide business environment at that moment—things like the economy, the energy and technology sectors, global labor, government relations, demographic trends, what our competitors are doing, what is going on with our customers. Of course, we are all out there all the time as part of our jobs, going around the world. The BPR process is the foundation. It provides a fantastic window on the world—the whole team knows everything that is going on.

Then we take it a step further and discuss how those trends are likely to evolve. Looking ahead is critical. We talk about more than what our customers value right now. We talk about the forces in the world that are going to shape what they will value in the future.

Take energy, for example. While we believe petroleum is going to be around for a long time, it is going to cost more and take more time to bring to the market. So we are going to pay more for energy. Beyond that, we believe there is a social consciousness that is developing where people really want to consider alternative energy sources that are more sustainable and good for the planet. So, for every market in the world, we are pushing harder to develop vehicles that range from gasoline versions to diesel, natural gas, hybrid-electric and all-electric ones. We also see a future for hydrogen. That technology roadmap is informed by our clear point of view about where the world is going.

McKinsey: Tell me more about how this process translates into everyday decisions.

Alan Mulally: As part of the BPR, we look closely at our plan in the context of the risks and opportunities presented by the current and future business environment. The BPR meeting is a kind of status check. It is both a strategic plan and a relentless implementation plan. So we look at every element of the income statement and the balance sheet. As new information emerges, we incorporate it right into the plan.

So, for example, discretionary income in the Asia-Pacific region is increasing, and many economies are reaching the takeoff stage for our industry, as new car buyers enter the market. We have used extensive data and research to determine the factors that will influence their purchasing decisions, and we have a specific plan in place to capture those consumers by providing a complete family of best-in-class vehicles. We regularly go over that data to see if anything has changed. If the facts underpinning the plan have changed, our plan has to change as well. The data tell us how we are doing, and in that sense, the data set you free, which is pretty cool.

McKinsey: And how does the leadership style you described translate into your day-to-day work?

Alan Mulally: The first thing a leader does is facilitate connections between the organization and the outside world. You can only grow value and profits by 10 to 12 percent a year, which is what great companies do, if you satisfy customers better than the competition. Second, leaders hold themselves and their teams accountable for deciding, “What business are we in? What is the deep consumer need we are uniquely positioned to satisfy?” And finally, leaders are responsible for trying to articulate and model a set of behaviors.

One of the biggest parts of the leader’s job is reinforcing the processes we are using to meet our goals. Again, that is where the BPR comes in. It is more than a way of asking, “How are we doing?” It is asking, “How are we doing against the plan? What are the areas that need special attention? And then all through the year, what is our plan to improve our performance in the following year?”

McKinsey: You’re widely credited with reshaping the culture at Ford. What’s different now?

Alan Mulally: At the heart of our culture is the One Ford plan, which is essentially our vision for the organization and its mission. And at the heart of the One Ford plan is the phrase “One Team.” Those are more than just words. We really expect our colleagues to model certain behaviors. People here really are committed to the enterprise and to each other. They are working for more than themselves. We are a global company, so we really have to stay focused on the work. There are so many people around the world involved in our daily operations that it has to be about more than a single person—it truly has to be about the business. Some prefer to work in a different way. Ultimately, they will either adopt the Ford culture, or they will leave.

McKinsey: Running large companies is demanding, and you’ve been at this game a long time. How do you maintain your mental and physical stamina?

Alan Mulally: Everybody always talks about how you need to manage your time. You need to manage your energy as well. You first have to ask, “What gives me energy?” There can be lots of sources: your family, exercise, your spiritual well-being. Try to combine those, along with your work demands, into one integrated calendar so that everything is built into your lifestyle. You can get beyond having to tell yourself, “OK, I’m going to have my family life next year in August, on vacation.” Instead, jot down what is really important to you, see if you have allocated time for it, and adjust the calendar if necessary. In our house, we had a family meeting every week—the family BPR—where we reviewed what we needed to do and the support required to get us through the week. It is another kind of process step, and a really important one.

McKinsey: One last question: Henry Ford had a vision. But the world, and the transportation industry, is dramatically different now. Has the Ford vision changed?

Alan Mulally: Henry Ford understood that the desire to move—to have freedom of mobility—is enduring and universal. As economies grow, and even as human beings grow, the first thing they want to do is move. It is a powerful vision—opening up the world’s highways so that everyone can have freedom of mobility, and can access the opportunities for growth that those experiences can offer.

The vision will remain constant, while our role in realizing that vision might evolve. There are tremendous opportunities for safe and efficient transportation in the future— in rapid and public transportation, for example. So we might be part of connecting different modes of transportation—bicycles and waterways and cars and buses and subways—all as part of the vision of enabling movement and bringing people together. Ford can use technology and innovation to deliver products and services that enable that experience at the most fundamental level. That is what we do.

About the authors

Alan Mulally is president and CEO of Ford Motor Company. This interview was conducted by Rik Kirkland, senior managing editor of McKinsey Publishing, who is based in McKinsey’s New York office.

by Elaine ChavagnonThis article appeared on Nov. 4, 2013 in Family Wealth Report, and it was written by London based reporter Elaine Chavagnon, based on an interview she did with me last week.

Tiger 21, the peer-to-peer network for high net worth investors, is in expansion mode in Florida after unveiling a second group in Miami in September and currently preparing for the launch of a third in Palm Beach next month.

But besides tapping the expertise of wealthy individuals and families locally, the New York-headquartered organization is looking to deepen its footprint in the Sunshine State by drawing on the strong ties it has with Latin America, Charles Garcia, chair of the Florida group, told Family Wealth Report. 

One of the main factors linking Florida – which has for a while been regarded as a wealth management “hotspot” - to Latin America is the fact that 23 per cent of the state’s 19.3 million inhabitants are of Hispanic or Latino origin, compared to a US average of 16.9 per cent (source: 2012 US Census data). The US also exports 2.6 times as much to Latin America as it does to China, with the continent being Florida’s largest trading partner.

At the same time, some 15,000 Latin Americans are ultra-high net worth individuals representing at least $2.3 trillion in wealth, according to recent estimates. Indeed, last week Garcia met with Guillermo Romo, a Tiger 21 member in San Diego, CA, who is recommending Latin American individuals to Garcia he thinks would be good members.

“Romo confirmed that a lot of Mexican UHNW families are choosing Miami over Houston, TX, Dallas, TX, San Diego, CA, and Los Angeles, CA,” Garcia said.

And, in what Garcia views as an early sign that the economy in Florida is getting stronger – fueled in part by LatAm investors - the real estate market has improved considerably in recent time.

He said: “While in 2008/9 there were 68,000 empty apartments, all of that inventory has now gone and people are progressively building again. Some of that is because there are a lot of very wealthy Latin Americans – from countries like Brazil, Peru, Colombia, and Venezuela – that have invested heavily into real estate in Miami.”

LatAm focus

Having recently added several new Miami members from Latin America, Garcia said he has now decided to open the doors to LatAm families. Tiger’s Miami group includes seven Hispanics, representing about 33 per cent of these individuals (these are not Latin Americans, but US citizens of Hispanic descent or “Hispanic Americans.”)

“If you talk to the large wealth managers in South Florida, some of them are 100 per cent managing wealth from LatAm families. Others are managing money from South Florida families mostly, while others have more of a national practice,” Garcia said.

“I’m starting to invite people from Mexico, Guatemala, Costa Rica, Panama, Colombia, Peru; I have someone from Venezuela and the Caribbean. It gives us a better outlook as to what is going on in those countries,” he said. (Likewise, part of the reason Latin Americans want to join Tiger is because they want insights as to what’s going on in the US.)

However, the type of peer-to-peer experience offered by Tiger is “very unusual” for Latin Americans, Garcia said, as they’re culturally not as open about their finances as other members are perhaps used to.

“People often joke that everyone has three books: the book you show the government, the book you show your wife, and the book with the real numbers. Disclosing information to other Tiger members – even though it’s confidential – is very tough.”

Garcia added that he’s thinking of creating a Miami-based group comprised primarily of Latin Americans, or at least half Latin Americans and half US members. (The idea would be to have around six meetings in Miami, and then have about six in LatAm.)

“I’m also trying to recruit women, as there are some very prominent LatAm business women I’ve already spoken to whom I think would make excellent members,” he said.

About Tiger

By way of background, Tiger 21 is an acronym for The Investment Group for Enhanced Results in the 21st Century and its members collectively manage over $20 billion in total assets.

The organization has 225 members overall, 85 of which are based in New York; 40 in Canada (Vancouver, Toronto, Calgary and Montreal), and then there are around 100 across Los Angeles, CA, San Francisco, CA, San Diego, CA, Miami, FL, Washington, DC, and Dallas, TX.

Members are typically entrepreneurs, chief executives, inventors and other senior executives with backgrounds in financial services, real estate, industrial and consumer goods, legal services, entertainment and medicine.

The groups meet monthly to share investment ideas and experiences on a range of wealth-related issues (Garcia said 50 per cent of the meetings are focused on investments and the other half are focused on business, personal or family issues). Members also have access to investment opportunities including private equity, real estate and hedge funds.

“I think it’s interesting that when people accumulate a lot of wealth, they have a certain feeling of isolation,” Garcia said.

“When you have sold a business, for example, you might have a lot of money, but that doesn’t necessarily make you a good investor. The same skills that made you a good business person actually can be counter-productive in terms of managing your wealth.”

Growth

Garcia believes that, in order for Tiger to grow, the organization needs to recruit strong chairs that know enough about the financial markets, how to facilitate meetings and, above all, how to recruit.

Even though most of Tiger’s growth comes from member referrals, a lot of time goes into bringing new members on board, with the ultimate decision resting in the hands of the group in question.

“There is interest in opening groups in Atlanta, GA, and Chicago, IL, but you need to find the right person first,” Garcia said.

“One of the things I’ve been doing is interfacing with money managers and talking to them about Tiger – I met one earlier this week and they have already made three referrals to me. They have to understand that Tiger doesn’t compete with them; an average Tiger member already has three wealth advisors.”

Garcia said he aims to take the number South Florida members from 21 to between 40 and 50 by the end of next year.

# # #

TIGER 21 members focus not only on improving their investment acumen, but also on leveraging the power of their wealth and networks for philanthropy, business opportunities, estate planning, and raising socially responsible children.  TIGER 21’s success is built upon the willingness of members to share their best thinking, experience, curiosity, and vast networks with their fellow group members, as well as the entire TIGER 21 community.  If you are interested in being part of the TIGER 21 South Florida chapter please call Charles Garcia at 561-703-2631 or by email to Charles.Garcia@tiger21.com; if you live in another part of the country call Harley Frank, Director of Membership at (212) 584-0222 or Harley.Frank@tiger21.com.

5 Catalysts Can Create Jobs and Substantially Boost GDP

U.S. EconomyToday, labor-force participation is at a 34-year low, and the United States has two million fewer jobs than it did when the recession began. Weak investment, demographic shifts, and a slowdown in productivity growth are dampening the economy’s trajectory.

But the United States does not have to resign itself to sluggish growth.  Game changers: Five opportunities for US growth and renewal, a new report from the McKinsey Global Institute (MGI), identifies specific catalysts that can add hundreds of billions of dollars to annual GDP and create millions of new jobs by 2020.

Game changers zeroes in on five mutually reinforcing opportunities:

  • Shale-gas and -oil production. Powered by advances in horizontal drilling and hydraulic fracturing, the production of domestic shale gas and oil has grown more than 50 percent annually since 2007. The shale boom could add as much as $690 billion a year to GDP and create up to 1.7 million jobs across the economy by 2020. The impact will extend to energy-intensive manufacturing industries and beyond. The United States now has the potential to reduce net energy imports to zero—but only if it can successfully address the associated environmental risks.
  • US trade competitiveness in knowledge-intensive goods. The United States is one of the few advanced economies running a trade deficit in knowledge-intensive industries. But changing factor costs, a rebound in demand, and currency shifts are creating an opening to increase US production and exports of knowledge-intensive goods, such as automobiles, commercial airliners, medical devices, and petrochemicals. By implementing five strategies to boost competitiveness in these sectors, we believe the United States could reduce the trade deficit in knowledge-intensive industries to its 2000 level or close it—which would add up to $590 billion in annual GDP by 2020 and create up to 1.8 million new jobs.
  • Big-data analytics as a productivity tool. Sectors across the economy can harness the deluge of data generated by transactions, medical and legal records, videos, and social technologies—not to mention the sensors, cameras, bar codes, and transmitters embedded in the world around us. Advances in computing and analytics can transform this sea of data into insights that create operational efficiencies. By 2020, the wider adoption of big-data analytics could increase annual GDP in retailing and manufacturing by up to $325 billion and save as much as $285 billion in the cost of health care and government services.
  • Increased investment in infrastructure, with a new emphasis on productivity. The backlog of maintenance and upgrades for US roads, highways, bridges, and transit and water systems is reaching critical levels. The United States must increase its annual infrastructure investment by one percentage point of GDP to erase this competitive disadvantage. By 2020, that could create up to 1.8 million jobs and boost annual GDP by up to $320 billion. The impact could grow to $600 billion annually by 2030 if the selection, delivery, and operation of infrastructure investments improve.
  • A more effective US system of talent development. The nation’s long-standing advantage in education and skills has been eroding, but today real improvements are within reach. At the postsecondary level, expanding industry-specific training and increasing the number of graduates in the fields of science, technology, engineering, and math could build a more competitive workforce. At the K–12 level, enhancing classroom instruction, turning around underperforming high schools, and introducing digital learning tools can boost student achievement. These initiatives could raise GDP by as much as $265 billion by 2020—and achieve a dramatic “liftoff” effect by 2030, adding as much as $1.7 trillion to annual GDP.

These opportunities can have immediate demand-stimulus effects that would get the economy moving again in the short term and also have longer-term effects that would build US competitiveness and productivity well beyond 2020. Taking action now could mark a turning point for the US economy and drive growth and prosperity for decades to come.

 

New York Headquarters

YPO (Young President Organization) and Vistage are global peer-to-peer groups that help chief executives become better leaders, solve their business challenges, and get better results. Both groups were started in the 1950s and combined have nearly 40,000 members in hundreds of countries.

I’ve been a long time member of both organizations, and always made better business decisions when I shared sensitive information with this group of trusted advisers who gave me invaluable feedback.

What I like about peer-to-peer groups is that it reinforces the fact that you can’t do it alone.

We often try to, imagining that we can see and know the things we need to know without the discerning eye of an outside point of view. I think it’s easy to get off track. Most of us know what our purpose is or what we would like our legacy to be, but we are constantly pressured from external sources to deviate from it. Or we are seduced by extrinsic rewards like money, power, and recognition that cause us to detour from being our authentic selves.

It’s much easier to just keep on doing what we are doing, and say to ourselves that — obviously — we are doing what we are doing because it makes us happy.

And that’s what drew me to “The Investment Group for Enhanced Results in the 21st Century”, better known as TIGER 21 – the premier peer-to-peer network for ultra-high-net-worth investors. TIGER 21’s over 220 members collectively manage more than $20 billion in investable assets.

TIGER 21 members, who have risen to exceptional heights within corporations or are entrepreneurs and have built and sold successful businesses, join TIGER 21 because they recognize these same business skills rarely translate into successfully managing one’s personal assets.

Founded in 1999, TIGER 21 has groups in New York City, Los Angeles, San Francisco, San Diego, Miami, Washington D.C., Dallas, Calgary, Vancouver, Toronto, and Montreal. It plans to launch a group in Palm Beach on December 5, 2013, and in Chicago and Atlanta by March 2014.

Members, who are carefully vetted with background and other checks, must have at least $10 million in investable net worth, and the average member has a $75 million net worth.

The members focus not only on improving their investment acumen, but also on leveraging the power of their wealth and networks for philanthropy, business opportunities, estate planning, and raising socially responsible children.

TIGER 21’s success is built upon the willingness of members to share their best thinking, experience, curiosity, and vast networks with their fellow group members, as well as the entire TIGER 21 community.

The core of the TIGER 21 experience is what occurs in group meetings, which are completely confidential and chaired by highly successful business leaders who facilitate the meetings. TIGER 21 meetings provide a unique forum for candid discussions and peer-to-peer learning among individuals facing the challenges and opportunities of managing their wealth and their daily lives. Members sharpen their investment acumen through critique and coaching, as well as exploring common issues of wealth preservation, estate planning and family dynamics.

The range of expertise and investment styles shared in a confidential and intimate environment of trust and transparency, offers members unique insights and immeasurable value not found anywhere else.

Members’ ages vary significantly. From young professionals in their early thirties to active and retired business owners in their eighties, the diversity of age ranges contributes significantly to the TIGER 21 learning environment.

Members also enjoy a very exclusive concierge service to help them with their travel, lodging, and entertainment, as well as purchases of cars, jewelry, art, insurance and other products and services.

When individuals join TIGER 21, they are encouraged to attend meetings in other cities to expand their relationships, as well as to attend the annual three day conference with their families where they can meet the other TIGER 21 members and a host of top rated resources oriented towards investments and the issues and opportunities facing ultra-high net worth families.

In this short video a longtime TIGER 21 member who rose to become Chairman of Fleet Securities, Inc. after Fleet Bank acquired Quick and Reilly Group, and that has relied on his group members to make key decision in his life.

And then there is the retired Vice Chairman of CIBC World Markets, who is also been a longtime TIGER 21 member and who describes why this peer-to-peer experience is such an important part of his life.

What’s clear is that aside from sharpening their investment acumen, they also meet as peers to discuss the important questions of their lives and to support each other during difficult times. They encourage each other to make the necessary course corrections to avoid the avoidable problems we all can get ourselves into.

Save us from ourselves so to speak.