The Gansett Post

Don't Bring Me Solutions. Bring Me Problems

Posted on June 1, 2020


You read that right. Recently, I've noticed a number of managers and executives across the business world saying things along the lines of: don't bring me problems, bring me solutions. I'm sure that these sentiments seem wise to many people in positions of leadership. After all, nobody wants to be constantly hearing about problems from their direct reports. If those people just solved the problems themselves, it would be so much easier, right? No, that's wrong. Why? It is wrong because asking your employees to solve the problems that they find before sharing them with management just gets them not to share those problems with managament at all. If you are giving your employees work to contend with all day long, then what incentive do your employees have to spend their limited free time solving your most difficult problems for you? What, do you really think that your employees want to solve your biggest problems by themselves in what little free time you give them only to be rewarded for their innovative and valuable hard work with a pat on the back? Come on. That's not what's going to happen. Instead, your employees, knowing that you don't want to hear about problems but, rather solutions, will neglect to tell you about the problems that you have until those problems have coalesced into disasters.

You may not like it. You may prefer that your employees never brought you any problems that they hadn't solved first, but for your business to succeed you need to be aware of your vulnerabilities. When an employee comes to you with a problem, they should be met with genuine curiosity. If the problem is not a problem at all, then you need to explain to them why it is not a problem and give them the opportunity to respond. What they come back with may surprise you. Maybe they have thought about something that you haven't. See, the way to deal with difficult problems isn't to hide them away in a dark corner until they are solved but, rather, to share them with everyone you can. We don't solve hard problems by hiding them in the dark, we solve them by bringing them to the light. We solve challenging problems by getting to know them, by having lunch with them, by making them our friends. Only by being familiar with these most challenging of problems can we ever really hope to solve them.

Disclaimer: None of the content in The Gansett Post or on the Gansett Group website is intended as investment advice or advice of any kind. By using the Gansett Group website, you agree not to hold Gansett Group, any of its employees, or any third party provider liable for any damages resulting from any decision you make based on the content of this site or other content available through this site.




Confidence

Posted on May 21, 2020


The very word puts us at ease and simultaneously brings us to the edge of our seats. When someone confident is speaking, we pay attention, waiting to hear what important words will come forth, but is it a good thing to be confident? I would define confidence as the ability to increase the perceived value of something, while leaving the actual value the same. For salespeople, confidence increases the client's perceived value of the product being sold. For you, living your everyday life, confidence increases other people's perception of your value. Confidence is often thought of as a positive attribute, but on the whole, I would argue that confidence is one of the most overvalued traits that a person can possess. Confidence is very good for convincing people that something has value, but confidence does absolutely nothing to increase that thing's value at all. Confidence, among other things, allows a salesperson to sell a $20,000 car for $30,000 dollars, but there is a problem. Our lives are full of many many encounters, and in life, as in the stock market, the true value of things is revealed over time. Businesses may think that they benefit from confident salespeople, and they can in the short-term, but in the long-term a business that sells well without providing value will leave customers with a sense of betrayal. In our line of business here at Gansett, confidence is even more detrimental. Confident is the last thing that we want to be, because we want to be right together, not convince each other that we are right when we are not. If someone at Gansett gave a very confident sales pitch for an investment that had serious issues (and we hired employees that were not used to thinking independently), people might be convinced to make a very bad decision. Of course, we do not want to be running a confidence defecit, either. That is why the focus needs to be on curiosity. A common curiosity will allow us to find truth effectively, without getting emotionally attached to the success of our ideas. Progress over persuasion. Curiosity over confidence. That is the Gansett way.

Disclaimer: None of the content in The Gansett Post or on the Gansett Group website is intended as investment advice or advice of any kind. By using the Gansett Group website, you agree not to hold Gansett Group, any of its employees, or any third party provider liable for any damages resulting from any decision you make based on the content of this site or other content available through this site.




My Thoughts on Company Dress Codes

Posted on April 3, 2020


As some of you may already know, Gansett has a casual dress code: we want our employees to dress the same way during the week as they would dress on a weekend. Our policy is not typical of most financial companies, so I thought that I would write this post to explain the ideas behind the policy.

The first reason for the policy is that we want our employees to feel comfortable at work. We simply believe that our employees will be happier and more productive if they can come to work in the attire that makes them feel comfortable instead of being forced to wear expensive formal attire day in and day out.

The other major reason for the policy is that suits and other formal business wear create a sense of trustworthiness and a feeling of seriousness that has no place at Gansett Group. When we are discussing ideas, we aim for honest, creative, skeptical, and even playful discussion. Our company is unique in that our goal is not to sell services, but rather to make great investments. We want our employees to be creative and skeptical investors, not salespeople. Yes, we hold the radical belief that our employees can dress themselves, and we believe that in the future, all companies will follow our lead and implement casual dress codes as well.

Disclaimer: None of the content in The Gansett Post or on the Gansett Group website is intended as investment advice or advice of any kind. By using the Gansett Group website, you agree not to hold Gansett Group, any of its employees, or any third party provider liable for any damages resulting from any decision you make based on the content of this site or other content available through this site.




Thoughts on Active vs Passive Management and the Coronavirus

Posted on March 23, 2020


Both active and passive strategies can be worthy approaches to portfolio management at this time, depending on the investor's constraints and objectives, as well as the nuances of how the investor applies their strategies in their investing. It must be said that the ideal strategy right now would provide its practitioner with liquidity. Now that many great businesses are trading with their stocks at depressed multiples, it is a good time to buy good companies, unless you believe that this pandemic will bring about humanity's extinction, in which case, who cares about their investments anyway. If this is the end of the world, then maybe we should be buying cans of beans instead of stocks. Assuming that it is not the end of the world, though, both active and passive strategies could have provided liquidity at this time.

A component of many passive strategies is dollar-cost averaging, which takes a portion of the investor's income periodically and invests it into an index fund. If a passive investor has a sufficient amount of cash saved up and is still receiving income, then they should continue to buy the index at the depressed prices and reinvest their dividends as well, thereby averaging down and lowering their cost basis. If an active investor had predicted this market crash, and liquidated their entire portfolio before it happened, then they would also be in a great position, sitting on the sidelines of the market and waiting to jump in. On the other hand, there are probably more active investors that have over-extended themselves with their entire portfolio invested in volatile stocks, because they didn't want to miss out on the longest bull-run in history. These investors might find themselves in the precarious position of needing to sell their stocks to be able to afford their expenses, thereby taking a massive loss on a number of their positions. Therefore, it can be said that neither a passive nor an active strategy is necessarily better in theses circumstances, but rather that prudence and appropriate asset allocation, regardless of strategy, were the factors that determined an investor's position in this crash.

I read the following article in market watch: As Dow wipes out over 3 years of stock-market gains, here’s a warning about calling the bottom, and there can, no doubt, be risk in trying to call the bottom. That's why I think that dollar-cost averaging is an important strategy in these times, and why I am using it in my own portfolio. Investors with cash on hand should look at this as a time to buy businesses that they will own for the rest of their lives at cheap prices. Investors that are mostly invested, but not over-committed should keep a long term view and sip a pina colada as they wait for the storm to pass. Lastly, investors that are over-committed should sell what they have to and re-evaluate their asset allocation and risk tolerance after conditions improve, so that they can be comfortable with their investments going forward.

Disclaimer: None of the content in The Gansett Post or on the Gansett Group website is intended as investment advice or advice of any kind. By using the Gansett Group website, you agree not to hold Gansett Group, any of its employees, or any third party provider liable for any damages resulting from any decision you make based on the content of this site or other content available through this site.




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