Archive for the ‘Can you explain…’ Category

Get Smart: How to Think About Thinking with Chris Stewart

Wednesday, July 20th, 2011

chris-stewart.jpg W. Christopher Stewart is a philosophy professor at Houghton College in Houghton, NY, where he teaches courses on aesthetics, the history of philosophy, Nietzsche, Kierkegaard, philosophy of science, and business ethics. He is the author of, among other things, an essay on magic and technology forthcoming in The Hobbit and Philosophy,and earlier co-authored an essay on magic, science, and the ethics of technology for Harry Potter and Philosophy. He has served as a consultant for Pfizer, where he advised a team of marketing experts on the relationship between clinical research, consumer behavior, and Pascal’s wager.

TILE: What exactly is philosophy?
Chris: Philosophy explores fundamental assumptions about the world and what it means to be a human being. Alasdair MacIntyre (a philosopher from the University of Notre Dame) called it “the discipline in which you learn to think about what you’re doing in other disciplines.” I like that because it highlights the fact that philosophers are interested in everything, but at a very deep level. They’re interested in the underlying assumptions that inform other activities and disciplines, from science to business to sports to anything else you can imagine.

TILE: We can’t all be Aristotle. Philosophy, like finance, often scares people away. Is it even possible for the average person to philosophize like a pro?
Chris: Aristotle himself said that philosophy begins with wonder. We look around and see the way things are, and then begin to ask questions.

Philosophizing is a natural human response to experience. The evidence for that is the most common question on the lips of every small child: “Why?” Somewhere along the way, many of us lose our natural sense of wonder, and philosophizing starts to seem like something unfamiliar or strange.

Also, philosophizing isn’t just about expressing opinions, which is the easy part. It’s knowing why we believe what we believe, and being able to provide reasons to anyone who asks us for them.

That’s not easy, but anyone can do it. Just keep asking “Why?”

TILE: What’s one of your top takeaways from a favorite philosopher?
Chris: Plato said that, although mandatory physical exercise does no harm to the body, mandatory learning “never sticks to the mind.” I’ve thought about that quite a bit as a teacher, but I think it applies pretty well in any context. Any time you’re doing something simply because you think you have to, not because you want to, it’s probably not doing anyone much good, including yourself.

TILE: What’s the best advice you would give to your teenage self?
Chris: Be yourself. It sounds trite, but I really do think the impulse to conform to what everyone else is doing limits your potential. Socrates was big on “the examined life.” (Read Plato’s “Apology” to see Socrates in action.) So don’t just run with the pack. Constantly ask yourself “Why am I doing this? Where is it leading me?”

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

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Investing with Socrates

Monday, July 18th, 2011

chris-stewart.jpg W. Christopher Stewart is a philosophy professor at Houghton College in Houghton, NY, where he teaches courses on aesthetics, the history of philosophy, Nietzsche, Kierkegaard, philosophy of science, and business ethics. He is the author of, among other things, an essay on magic and technology forthcoming in The Hobbit and Philosophy, and earlier co-authored an essay on magic, science, and the ethics of technology for Harry Potter and Philosophy. He has served as a consultant for Pfizer, where he advised a team of marketing experts on the relationship between clinical research, consumer behavior, and Pascal’s wager.

TILE: What does philosophy have to do with money?
Chris: One very large and important branch of philosophy has to do with human happiness or well-being, and what money or wealth (among other things) contribute to human life. We all want what the ancient philosophers called “the good life,” but we’re often confused about where to find it. What are the key ingredients of the good life? Can a human being be truly happy without friends, music, beauty, meaningful work, or money?

Socrates famously challenged his fellow Athenians to examine their values and priorities, warning them against placing the pursuit of wealth or honor or power above virtue and the health of their “souls.” So philosophers have said quite a lot about what money properly contributes to the good life, and how it can sometimes get in the way.

TILE: One of the areas of philosophy that you’ve studied is business ethics. Tell us about it. Why is it important for young adults in particular to be able to identify good business practices or understand a company’s core mission?
Chris: As human beings, we don’t just do things, we evaluate the things we do. There’s more than one way to do this. We might ask, for example, what’s the best thing to do from a legal point of view. Is what I’m doing legal or not? Or we might ask what’s the best thing to do from a business point of view? How can I make the most money? Or we might ask what’s the best thing to do from an ethical point of view? How will my actions affect others (not just me)? Business ethics explores how all of these kinds of questions relate to one another, which is particularly important because what’s best from an ethical point of view isn’t always the same as what’s best from a business point of view. Business ethics goes beyond simply not breaking the law, and helps you make good decisions within the realm of what the law permits you to do.

Also, who we become as people is shaped by the environments in which we work. So when you’re deciding who to work with, or what to invest in, check out the way that people within a given organization treat one another, and how they treat the people they claim to be serving. Look for evidence in a company’s core mission statement for a clear understanding of how the product or service that company provides makes the world a better place, not just for its owners or employees, but for everyone. That’s where you’ll find the moral justification of any business, not in whatever philanthropic causes the business supports, which however worthy (think Ronald McDonald Houses) might have nothing at all to do with its core business.

It’s becoming more and more apparent that not-just-for-profit business, more than government or philanthropy, is the most important engine for solving problems in our world. By the same token, it can also cause tremendous harm. So businesses, and those who invest in them, must have a clear understanding of why they exist, one that goes well beyond making money for their owners.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

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Spotting a Dancer: Pamela Vail on Philanthropy & the Arts

Wednesday, July 13th, 2011

pam-vail.jpg Pamela Vail is a performer, choreographer, improviser and teacher. She is an Assistant Professor of Dance at Franklin & Marshall College, and also performs with several professional dance companies and creates her own choreography. To sample some of her work, visit architectsdance.org or acanarytorsi.org.

TILE: It’s a big question, but what does money have to do with the arts?
Pam: Everything and nothing, actually. The reality is that artists need money to make and produce art, but the actual soul of art has nothing to do with money. Art is creative expression.

TILE: From your perspective, what kind of support are artists really looking for?
Pam: I think artists are looking for support on a number of levels: for people to simply come see their work; for general advocacy – that people actually care that they can and do make work; emotional support; and, of course, financial support.

TILE: Is being in the audience just as important as becoming a major financial patron?
Pam: Related to your earlier question, I think the answer to this question is a resounding yes. I might venture to say that it may be even more important to be an audience member.

TILE: Art doesn’t have to appear on the stage or be hung on museum walls. How do you see art and daily life intersecting in today’s world?
Pam: In some ways, I see art more and more in “everyday life.” There has been a great new trend of “flash mobs” with music and dance, which is a great example. I also notice more artists making “site-specific” work, bringing art out from theaters and into public life – exposing it to many who may not otherwise choose to go and see art. Art is also more accessible via the web (YouTube in particular), and there are a number of TV shows that center around music, dance, and art. While this is encouraging to me, I also see a decline in audiences for live art – perhaps because it is so easily accessible otherwise. This is troubling to me.

TILE: What’s the best advice you would give to your teenage self?
Pam: Stay open to things that may seem weird, odd or unusual. Go see lots of stuff. If something makes you nervous, try it. Know that the models for art making and performing out there are not the only options. You can create your own models for art making and make art wherever you are. Try not to assume anything about anything or anyone, including yourself! Stay curious. Know that you will change – in ways that you can never anticipate. Enjoy the process – that’s the meat of life – this can be a hard one in a product-driven culture. But it’s important. Every day is important.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

Have a burning question or an expert you’d like to see interviewed? Just Ask TILE!

Teaching and Learning in the South Bronx

Wednesday, July 13th, 2011

evan-piekara.jpg Evan Piekara is an alumnus of Teach For America, a national organization that works to ensure educational opportunities for students of all backgrounds. During his 4 years as a corps member, he taught 6th and 7th grade in the South Bronx. He’s also worked as an Institute Staff Member, helping to train the 2008 and 2009 corps. As a result of his classroom experiences, he developed some interesting views on education in America and the importance of gaining financial understanding at a young age.

TILE: What inspired you to become involved with Teach for America?
Evan: I was inspired by its mission that all children deserve an excellent education, and the fact that TFA works tirelessly to ensure that your income level or where you grew up does not determine your future.One thing that has always impressed me about TFA is that it is constantly looking to improve and become more effective. It has both a short-term strategy of getting people involved in education who may not have entered in the first place with a long-term mission of them using these experiences whether as teachers, business leaders, lawyers, doctors, politicians, or advocates to continue to support the mission and improve education for all.

TILE: What qualities do you look for in teachers who become part of your organization?
Evan: TFA places a huge emphasis on leadership, teamwork, resilience, and achievement. These are all qualities that are utilized in the classroom and help you to work towards becoming a successful teacher who will move students forward.

TILE: What are some important things you have learned while working for Teach for America?
Evan: It’s helped me learn a great deal about myself, grow as an individual and as a professional, and it’s really helped me to become much more analytical, reflective, and use out-of-the-box thinking to find a solution to any number of problems or obstacles.

TILE: What kinds of core knowledge, skills and values do you hope to instill in students?
Evan: I want to instill in them a sense that they can succeed on every level and although things might not always be easy, through hard-work, determination, and using their education they can be successful in whatever they aspire to do. A lot of our discussions center around goal-setting, mutual respect, using strong communication skills, independence as well as working in a team, and being a leader.

TILE: Why might it be important to help students obtain financial literacy?
Evan: It is important because it can help them to avoid the pitfalls that many people struggle with, and also to open doors for them in the future. For example, they might realize that college is a viable option through managing scholarships and student loans that they can pay-off once they start their professional careers.

TILE: What advice would you offer to your teenage self (financial or otherwise)?
Evan: Education is so important and each day in class and outside is an opportunity to learn and grow.For me, I was fortunate to have parents who instilled those values in me, and who financially stretched money, made me work for money, and taught me the value of a dollar.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

Have a burning question or an expert you’d like to see interviewed? Just Ask TILE!

Why We Give: Brett Kopelan and the Worst Disease You’ve Never Heard Of

Wednesday, July 6th, 2011

Everyone gives for their own reasons – compassion, anger, or sometimes just the tax deduction. But some people have personal experiences that change them forever – and compel them to fight for a cause they truly believe in.

Brett Kopelan is the Executive Director of Debra, a charity that funds research for a terrible disease called Epidermolysis Bullosa (EB for short). Debra also runs programs that help families whose children are afflicted with the disease. Brett has an M.A. in Child Psychology from Columbia University and a daughter with ED. His personal experience with the disease inspired him to make it his life’s work to combat the disorder and support families like his own.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry.

Business Head, Philanthropy Heart: Steve Beck On Impact Investing

Tuesday, June 28th, 2011

steve-beck.jpgSteve Beck is the Co-founder and CEO of SpringHill Equity Partners, an impact investment manager providing capital and support to growing businesses supplying basic goods and services to low-income households in Africa. After spending most of his career as a management consultant, Steve recently launched into the world of social venture capital. His goal? To more intentionally integrate his business “head” and philanthropy “heart.” He’d probably encourage others to do the same.

TILE: How would you describe social venture capital in your own terms?
Steve: Social venture capital is about providing money (“growth capital”) and lots of help to fast-growing, for-profit ventures, with the intention of generating significant social (and/or environmental) benefits along with a financial return to the investors. This whole area has been struggling for a few years now to find language to describe what it is and does. The name that seems to have taken hold is “impact investing” — that is, investing with the intention to deliver social and/or environmental benefits in addition to financial returns. Think of it as venture capital to “not-just-for-profit” enterprises.

TILE: Why is impact investment important? In other words, why the middle ground between philanthropy and for-profit investment? Why not keep dollars for giving and dollars for investing in separate jars?
Steve: Well, we have kept them in “separate jars” for too long and look where that binary thinking has got us. Global problems of chronic poverty, conflict, disease, oppression and injustice are simply too big and too urgent to be left to charity and the NGO community, which have neither the resources nor the reach to address these issues at scale. Impact investing has the potential to tap into the much larger pool of for-profit investment capital and unleash entrepreneurial creativity and the disciplines of the market to address these issues in a much more dignifying, sustainable, and scalable way.

An ‘impact investment’ example might help here. Nearly half the world’s population uses open fires to cook their food, with devastating consequences. Cooking in the global south presents a triple threat: to health (cooking over an open wood fire is like smoking 40 cigarettes…each meal!), personal economics (poor families spend up to a third of their annual income on cooking fuel or spend hours each day foraging for wood), and the environment via deforestation and global carbon emissions.

SpringHill invested in a business in Kenya that is producing and distributing fuel-efficient cookstoves to low-income households. Each stove saves half the fuel and eliminates 85% of the toxic smoke emissions. It’s a product that saves health, money, and the environment. The business is designed to be profitable by selling the stoves at $14 each — not an “impulse buy” for the families that need them, but one that is within reach, and in any case will pay for itself within about 8 weeks from the fuel saving. The business is on track to sell 80,000 stoves in its first full year of operation. As a business, it’s accountable to the consumer (not to a donor) — the product had better be good or we will go out of business. If the product performs well, the business will be profitable and we’ll have sufficient capital to continue to grow the business from Kenya to neighboring countries. As stove sales expand, we make a growing dent in the triple threat described above…and we make money doing it, thereby attracting other entrepreneurs and investors into the market for a better stove.

TILE: Is there a place for young people in the social investment world?
Steve: Yes, there are numerous places for young people in this world — and it’s essential they take them up. But first let’s widen the lens beyond the narrow “world” of financial capital. Whether or not they have access to substantial financial means, each of TILE’s members possesses extraordinary assets that can be intentionally invested for the benefit of others. I’m talking about knowledge, skills, gifts, aptitudes, time, energy, perspective, and optimism — much more important currencies than dollars and cents. Every time you intentionally invest your assets to address social problems you are a social investor. And young people are often the best entrepreneurs because they are not locked into conventional thinking and are prepared to take more risks early in their careers.

TILE: How did you end up where you are today?
Steve: Via a circuitous route: 18 years in business, 3 years’ graduate study, 6 years in professional philanthropy, and now 2 years in social venture capital. Having studied international development, I emerged from college with an idealistic, “save-the-world” ambition and attitude. (I actually wrote a paper for one of my undergraduate classes entitled “World Hunger: Causes and Solutions”…that’s how idealistic I was). I got an entry-level job in management consulting and, without a lot of forethought, built a career analyzing markets and enterprises, (eventually) providing strategic advice to leaders of some of the world’s largest companies. My job was to help them decide “where to play” and “how to win”. After 18 years in business, I had an opportunity to give more direct expression to my ideals and went into the professional philanthropy world, running a company that applied investment discipline to grant-making aimed at addressing problems in some of the world’s hardest places. I did that for six years before starting an impact investment firm focused on Africa. My answer to question #2 explained one of the reasons for this move. In hindsight, I’m grateful for the experience I had working with leaders of firms that were competing in the world’s most competitive markets – this was a great training ground for what was to follow.

TILE: What’s the best advice you would give to your teenage self?
Steve: Be an intentional investor. I’m thinking of two things in particular:

One, invest in significance over success. Don’t let your concept of success be defined by the size of your bank balance and the consumer goodies you own. Be intentional about what’s important to you. This means finding ways to give practical expression to your values. If you say you’re concerned about slavery and human trafficking, examine your consumption expenditures. Can you buy fair trade products…products that are free of slave labor?

Two, invest with conviction. The Irish poet, Brendan Kennelly wrote, “If you want to serve the age, betray it.” “Betray the age” means exposing the culture’s moral blind spots. What might those be? Maybe it’s our refusal to treat every person with equal worth and dignity? Or our obsession with our rights rather than our obligations?

Our youth — YOU — are best placed to expose the blind spots of today’s culture. So, harness and direct that rebellious energy (I was a rebellious teen) onto something that is worth spending your life doing…or un-doing.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

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“Getting It” Before You Begin To Give It Away: Sharna Goldseker of 21/64

Thursday, February 10th, 2011

sharna-goldseker.jpg Sharna Goldseker is the director of 21/64 – a nonprofit that helps families make important decisions about philanthropy and helps young donors find their philanthropic voice. Sharna is an expert on the way giving fits into wealth and family relationships. In addition to consulting and speaking extensively on generational transitions, she also facilitates a network of seventy 18-28 year olds who are or will be involved in their family’s philanthropy, and she helped found Slingshot, a funding collaborative for Jewish funders in their 20s and 30s.

Works for us. Here she shares some really thoughtful advice about youth giving and the new philanthropy.

TILE: Why should young people consider getting involved in philanthropy 
in the first place? Isn’t that something that should be left to
 adults?
Sharna: Research shows that each generation brings a unique set of values, skills and experiences to the philanthropic table and therefore at any age, people can contribute to society and learn from one another in the process. For instance, Generation Y (pdf download) (people born between 1980-2000) have grown up with information technology, connected to people around the world, and in a more diverse society then generations before. While older generations may have more years of experience to bring to bear on their philanthropy, Gen Yers can bring their facility with technology to leverage their networks and communicate, advocate and contribute online. Their values of justice, compassion and acceptance of other people bring humanity to their philanthropy. And Gen Yers’ commitment to issues, as well as innovation, often on a global scale, would benefit many non-governmental organizations today. Besides, being a part affecting change that is larger than ourselves can add meaning to our lives.

TILE: What are the first steps that someone can take if they want to get involved?
Sharna: At 21/64, we have found that it’s often hard to think about what to fund or what organization to join before asking ourselves three questions:
What am I inheriting? Not financially, but what are the stories, values, messages my parents and grandparents have passed down to me?
Who am I? What of that family legacy do I want to incorporate into my life today? What are my own values? What are my passions? And then ask,
What do I want to do about it? How can I align my values and my resources to have an impact on the needs of the day? What are the issues that I see as important (e.g. bringing clean water to everyone; providing quality education; enriching people’s lives through art, etc.) that I care about and want to dedicate my time, energy and other resources to?

TILE: What advice would you give to young people who can’t decide where
 to focus their philanthropic efforts?
Sharna: It’s not uncommon for people to have trouble deciding where to start when there are so many important challenges to solve in the world. To help with this dilemma, we created Picture Your Legacy, a deck of colorful images from which users can choose those that most speak to the funders they aspire to be and the type of impact they want to have. While the cards include images of arts, the environment and other areas to support, Picture Your Legacy helps users articulate if they want to take risks and invest in social entrepreneurs or support established organizations; consider funding as an individual or in collaboration with others; and, it raises other components of being a thoughtful and strategic funder which are often hard to identify on your own.

TILE: Why do you do what you do? What do you like best about your job?
Sharna: As director of 21/64, a non-profit practice specializing in next generation and multigenerational strategic philanthropy, I get to work with my next generation peers to help them find their own philanthropic identity and move resources to affect change in society. I also consult with families and know how hard it can be to make philanthropic decisions across the generations, especially when funding colleagues are moms, dads, siblings or grandparents. If I can help a family navigate their generational differences and build a way to communicate, then I’m not only helping the family but also helping them be more effective funders.

TILE: What’s the best advice you would give to your teenage self?
Sharna: My great uncle had been in real estate in Maryland and left instructions in his Will for a foundation to be set up upon his death. As someone who grew up knowing there was a charitable foundation that shared her name, I always struggled with earning the right to this “philanthropic inheritance.” After years of serving as an intern at different non-profits and gaining a graduate degree in non-profit management, I came to realize I not only loved the work, but also had an opportunity to make a difference in the world through allocating philanthropic resources. While I didn’t initially earn the assets in the foundation, I can still bring my own values, experiences and skills to bear on the foundation as a member of the Board. Looking back, I would encourage my teenage self to take the time to develop my own identity, figure out who I am, and who I want to be in the world, as I’m now a better family member and foundation director because of it.

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The Road from Liberia to Gilt City

Friday, January 14th, 2011

nathan-richardson.png Nathan Richardson is the President of Gilt City, the local child of new (and wildly successful) luxury deals site Gilt Groupe. But he’s more than that. Throughout his career so far, he’s traveled from Senegal to Libera to Yahoo! Finance and Dow Jones. Big-hearted, intelligent and multi-talented (obvs), we’re proud to call him a friend here at TILE.

TILE: What’s it like working for Gilt? Is your wardrobe amazing?
Nathan: It’s a blast – we work really hard, move the ball forward every day, work closely as a team, and get to engage with some of the coolest restaurants, clubs, services and events in the hottest cities in America. Fair to say my wardrobe has been upgraded and the number of hoodies and fashion sneakers that I own multiplied like a gremlin.

TILE: In your career, you’ve worked at a bunch of different companies – from Citibank to Yahoo! Finance to Dow Jones online. How have these different experiences helped you in your current job?
Nathan: Every experience taught me a different set of skills that play into the diverse hats that I wear in a given day [at Gilt]. I learned about financial mechanics at Citi, about moving fast and being only as good as what you did that morning at Yahoo Finance (a healthy paranoia), and about the importance of brand & voice at Dow Jones.

TILE: You’re very accomplished in the business world, but you’ve also taken the time to help others – both in the Peace Corps and as the director of the International Rescue Committee’s Liberia Program. How do you balance these two passions?

Nathan: I joke that I am a humanitarian to fashion people – providing them great value on the luxury items that they have to have! All of my experiences have several things in common: the pace, the energy, and the need to be fully committed in a way that transcends a 9 to 5. I also stay involved with my Peace Corps family and the artisans I worked with at the Artisan Village of Thies. I’m also a big fan of the IRC’s work in Liberia, and I’ve returned several times to check in on projects that I am passionate about.

TILE: What’s the Peace Corps like? Would you recommend it to someone graduating from college?
Nathan: Loved my experience in the Peace Corps – it is one of the toughest jobs you’ll ever love as the tag line says. I gained exposure to projects and accomplished more in those 2.5 years than you can imagine  – as well as gained lifetime best friends.

The Peace Corps’ three goals are to share American culture with the host country; learn about the host country culture and share it with America (Senegal is amazing!); and technical transfer – I was a small business volunteer with several serious projects.

TILE: What’s the best advice you would give to your teenage self?
Nathan: Wow – that’s a tough one. I would probably say broaden your horizons earlier, learn a language, and love the moment a bit more. What do I mean by that? I wish I’d learned Chinese and studied in China at an early age and also remembered to celebrate all the amazing things that were going on around me…

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So you want to be a socially responsible investor?

Friday, January 7th, 2011

joel-solomon.jpg Joel Solomon’s career is somewhere between entrepreneur, philanthropist, and activist. His philosophy is that companies should focus on socially responsible growth – meaning they should care about their impact on their society and the environment, but not give up on making money. Since 1996, he’s been the president of Renewal Partners, a company focused on creating a “triple bottom line” economy. And he’s a pretty big dreamer – while most companies focus on a 10 or 20 year strategic plan, Joel has a 500-year vision about how the work of current generations is crucial. He was nice enough to share a bit about his plans and how you can play your part in changing the world.

TILE: What is socially responsible investing?
Joel: Socially Responsible Investing is about placing your money into companies whose products and services represent your values and beliefs. Every dollar you spend or invest is a direct vote by you for what matters in life and on the planet.

TILE: How can businesses make money and be socially responsible at the same time?
Joel: Business can make plenty of money by being good citizens of the environment – for their workers, and for the communities where they make products and in those where they sell them. Good ethics and planet-responsible behaviour* are fully compatible with making reasonable financial returns. In fact, clear values and true purpose, when combined with the tools of business and money, make a powerful combo that can drive social change.

TILE: Why do you do what you do?
Joel: My life is committed to respect for the hard work my ancestors did to give me my life, and to do everything I can to see that what matters most to me is available to future generations. Those commitments led me to make business and finance serve my long term goals. Every day I get to meet some of the brightest, most creative, most inspiring entrepreneurs and leaders in the world. That’s my reward for staying true to my values and purpose.

TILE: How do you think young people can play a role in philanthropy?
Joel: Young people with access to philanthropy should learn all they can about the issues of our times, especially those that touch your heart and mind the most. Ask lots of questions. Read. Get exposed. Volunteer in organizations you believe in. Find a career that expresses your true values. Learn all you can about the non-profit world. Ask for observer status at foundation meetings. Ask for a small grants budget so you can gain experience making decisions with donations. Seek mentors and experienced advisors. Attend conferences.

TILE: What’s the best advice you would give to your teenage self?
Joel: Commit to your own maximum potential to learn, lead, and live, such that your life and work make a positive impact for today and tomorrow. Follow your inner calling. Develop creativity. Do deep work on yourself, soon, and continually.
Develop pragmatic skills. Travel. Be compassionate.

* Please excuse our extra ‘u’s. Though he was born in Tennessee, Joel is now a resident of sunny Vancouver, Canada.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

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Steve Goldman Takes the Impulse Out Of Investing

Friday, April 16th, 2010

steven-goldman.png When you want the cold, hard facts about a stock or a market, you look for a person like Steven Goldman. He’s spent the last 25 years as a chief market strategist for Weeden & Co., which basically means he does the really hard math so you don’t have to. (Weeden is a brokerage and research firm serving mostly institutional investors.) Steven looked up from his computer long enough to share an inside look at the work that keeps the market moving.

TILE: So how did you end up where you are today?
Steven: In the midst of heading to business school in 1979, I was offered a job at a regional brokerage. I decided to enroll in both. I was excited about working for a smaller equity brokerage firm, which would allow me greater visibility along with access to most of the seasoned employees. My initial interest was to focus on emerging and undiscovered stocks. That year and over the next few years, stock prices moved symmetrically up 30%, down 30% etc… I noticed that the stocks that I had selected always moved with the direction of the stock market. In reviewing historical patterns, I found that these symmetrical movements were not confined to three years but to 17 years (from 1966 to 1982). So my next endeavor was to not focus on undiscovered or emerging stocks, but to understand what measures can be applied to predict stock prices. My graduate thesis was called “A Non Random Walk Down Wall Street.” In 1981, I purchased an Apple II computer and I haven’t stopped since (though I have since upgraded my computer).

TILE: You’ve said that part of your job is “getting a feel” for where stock prices will go in the next few months. How much of your job is calculation and how much is intuition?
Steven: Well, I have developed over a hundred indicators, which can be broken down into four basic areas:
Market Structure – Is the market strengthening or weakening?
Sentiment – Are traders too bullish or too bearish? This is used to determine if stock prices will reverse in the short term.
Valuations – Are stock prices considered fully valued – which may start to restrict the market gains – or are valuations reasonably priced?
Interest Rates – This indicator has been less significant in the past few years. It basically involves watching the direction of interest rates to determine when a rise in interest rates or the decline in rates are reaching inflection levels with regards to stock prices. Interest rates spread between BAA rates (lower quality) vs AAA rates (higher quality) have been helpful to look at in the past few years. Despite all these standard “tools” and models, I will still synthesize all relevant factors to develop a stock market forecast over both short-term and intermediate time frames.

TILE: What advice would you give to a college student considering careers in the financial sector?
Steven: Wall Street offers a myriad of different jobs. Though my focus is exclusively in equity, larger firms have numerous specialists and strategists in many different areas such as distressed debt, interest rates, foreign currencies, convertible bonds etc…

Larger firms will have extensive trading programs and upon the completion of the programs, they will help you decide in which area you would be most valuable to the organization.

Other important things to consider are the process of self discovery… how excited or passionate would you be working in this environment… Can you handle the emotional highs and lows? How do you handle being wrong and how resilient will you be afterwards? Are you interested in math, the gamesmanship involved? Do you like to toy around with computers and complicated games like chess? A minor in math, computer programming and economics would be helpful in terms of identifying your interests and preparing you for a career in finance.

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