Grow Your Portfolio the Intelligent Way

The Occam’s Razor of Productivity

By Jim Woods
  • The Occam’s Razor of Productivity
  • ETF Talk: Introducing the VanEck Vectors Pharmaceutical ETF
  • Protect Yourself in Style
  • Government, Please Just Stop
  • Nobody Cares

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The Occam’s Razor of Productivity

Want to achieve more in life? Of course, you do. The fact that you read this publication basically tells me just that. Yet for most of us, the idea of achieving more comes with the corollary notion that we are going to have to do a lot more, put in more hours, work harder and generally take on more and more tasks and responsibilities.

Yet what if doing less could allow you to achieve more? Now, when I say, “doing less,” I am not talking about slacking off and just letting fate’s wind sail you across life’s lake. What I am referring to here is taking on fewer overall tasks and really concentrating on getting the critical things in life right.

Another way to describe this principle in action is to hone your focus on the most important tasks at hand, and thereby become a “master of selectivity.” You see, it is by concentrating your efforts on the most important priorities needed to achieve your goals, and letting go of extraneous and often distracting tasks, that you can enhance your performance in business and in life.

This idea of mastering selectivity and prioritizing tasks was the subject of a Wall Street Journal article titled, “How to Succeed in Business? Do Less,” by Morten Hansen, former management consultant and now professor of management at the University of California, Berkeley.

In the article, Hansen explained how his strategy for success at his “dream job” at Boston Consulting Group was to work exorbitant hours, a practice which he said often resulted in 90-hour workweeks. Yet despite all his time and hard work, there was one colleague he had that put in far fewer hours, yet always had better solutions to problems than he did. Moreover, this co-worker put in a normal 8 a.m. to 6 p.m. day, never stayed late and never worked nights or weekends.

So, was this outperforming co-worker just that much smarter and talented than Hansen (as well as the rest of his colleagues)?

What Hansen discovered later in his academic research is it’s not a case of “talent” or “natural ability” or the willingness to “work hard” that can result in successful outcomes. Rather, researchers have found that what is even more important to success is the ability to master selectivity.

“Whenever they [top performers] could, they carefully selected which priorities, tasks, meetings, customers, ideas or steps to undertake and which to let go,” wrote Hansen. “They then applied intense, targeted effort on those few priorities in order to excel.”

Hansen’s research also found that just a select few critical work practices accounted for as much as two-thirds of the variation in performance among the subjects in a 2011 research study. “Talent, effort and luck undoubtedly mattered as well, but not nearly as much,” wrote Hansen.

So, how did the best performers in his study do this?

According to Hansen, “Rather than simply piling on more hours, tasks or assignments, they cut back.” Hansen then likened this ability to cut back and focus on what really makes the most difference to the philosophical principle known as Occam’s Razor. Named after the philosopher and theologian William of Ockham, this principle stipulates that the best explanation in matters of philosophy, science and other areas is usually the simplest.

“At work, this principle means that we should seek the simplest solutions — that is, the fewest steps in a process, fewest meetings, fewest metrics, fewest goals and so on, while retaining what is truly necessary to do a great job,” wrote Hansen. “I usually put it this way: As few as you can, as many as you must.”

I like to apply this principle to my own life via something called the “minimum effective dose.” What this means is you want to concentrate on doing the things that have the most impact on your results, and that have the fewest extraneous elements and/or time commitments.

For example, in the realm of fitness, I engage in what’s known as high-intensity training, or HIT, to get the best strength and conditioning results in the briefest period of time, and in the safest, most efficient manner.

Your editor engaged in the ultra-difficult, ultra-productive and supremely time-efficient high-intensity training protocol.

When investing and selecting top-performing companies for my Successful Investing, Intelligence Report and Bullseye Stock Trader newsletter advisory services, I concentrate on finding stocks with the strongest earnings, strongest relative share-price performance and stocks that are in the strongest industry groups. By focusing on these key components and filtering out much of the “noise” of extraneous data, I am better able to make good investment choices.

Finally, the principle of focusing more on less, i.e. focusing your effort on the most critical elements of a task or objective rather than becoming sidetracked by the superfluous, is something we can all apply to nearly every part of our lives.

So, if you want to achieve success in any walk of life, focus on the critical elements — and then get them right. Once you do that, you’ll often find the rest tends to fall into place.

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ETF Talk: Introducing the VanEck Vectors Pharmaceutical ETF

* (Note: this is the first article in a series of three about pharmaceutical exchange-traded funds (ETFs) *

The pharmaceutical industry is one with two prongs.

There are the small, risky companies that let investors can gamble on purchasing in hopes they can find a buyer, while there also are the giants doing the buying and engaged in all sorts of research, development and production for various drugs. Today, we’re going to discuss a way to invest in the latter stocks through the VanEck Vectors Pharmaceutical ETF (PPH).

This fund invests in just 25 of the biggest and best pharmaceutical companies. For investors looking for exposure to the whole market segment, this investment is a simple one. Many of the larger holdings in this fund are household names or names you might hear about in television advertisements. Its holdings are chosen based on size and liquidity.

Over the last 12 months, this fund has posted a return of 11.43%. It has $227 million in assets, making it not too big, but not too small. PPH pays a modest 1.55% yield, and its expense ratio is 0.42%, which is nothing special. The fund has recovered from a precipitous fall in late March, like the rest of the market, and now is close to its pre-COVID-19 levels.

The top 10 holdings for this fund compose about half of its portfolio. Those stocks include Eli Lilly and Co. (LLY), 5.51%; AbbVie Inc. (ABBV), 5.14%; Novartis AG (NVS), 5.03%; Sanofi (SNY), 5.02%; and AstraZeneca Plc (AZN), 5.00%.

Plus, 63% of PPH’s holdings are based in the United States. The largest components of the remainder are based in the United Kingdom, Switzerland and France, with some of these representing only a single holding.

For investors looking to participate in the profits of the world’s leading names in pharmaceuticals, VanEck Vectors Pharmaceutical ETF (PPH) could be a convenient way to own them all in one place.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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Protect Yourself in Style

Okay, so we all have to wear masks to help prevent the spread of COVID-19.

That’s just good science, and I am a big fan of good science. But I also like to look good while promoting good science. That’s why I’ve decided to make my own masks and to make those available to you with my new Way of the Renaissance Man masks.

Protect yourself and those you care about in style with these handmade, 100% polyester masks that come with a sleeve to insert a greater level of protection with an N95 filter insert (not included).

Combat coronavirus in style, and always have a clean one handy by getting two or more now! The masks retail for $19.99 each, but today I’ve discounted the price to $14.99.

And as a special bonus offer for The Deep Woods readers, take another 20% off your order when you buy two or more.

Simply use the promo code: DEEPWOODS20 to get your special subscriber pricing.

Hey, protect yourself and look good doing it. Now, what could be cooler than that?

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In case you missed it…

Government, Please Just Stop

I don’t know about you, but I’ve had just about enough of Big Government telling me what to do.

Stay six feet apart, no assemblies of more than 10, 20, 50 people, shelter in place or whatever the latest restriction on our freedoms is to “save us” from coronavirus. Meanwhile, millions of people have lost their jobs, their businesses and even their freedom.

Just take the case of New Jersey business owners Ian Smith and Frank Trumbetti of Atilis Gym in Bellmawr. The two were arrested recently and charged with one count of fourth-degree contempt, as well as one count of obstruction and one count of violation of a disaster control act because they kept their facility open in defiance of statewide coronavirus mandates.

So, if citizens don’t comply with government edict, well, just put them in jail. After all, government is the real entity that matters, not the citizen (as I slather on the sarcasm).

Then last week, I spotted another form of big government harassment, this time by Congress and its House Antitrust Subcommittee, targeting “Big Tech” and it’s potential “censorship” abuses. The subcommittee has hauled up, virtually speaking, CEOs of the four biggest, and I say four of the best, companies operating today to complain about how they run their businesses.

Because, after all, everyone knows that politicians instinctively have the skills to lead a giant technology company better than the billionaires who run and who created these enterprises (there’s that sarcasm again but it is needed today).

The illustrious panel includes Jeff Bezos of Amazon.com (AMZN), Tim Cook of Apple (AAPL), Mark Zuckerberg of Facebook (FB) and Sundar Pichai of Alphabet/Google (GOOGL), all men of genius, and all men who have done more good for society via creating products that nearly everyone uses and that nearly everyone finds value in than any member of Congress ever will.

Not to mention that these companies have created tremendous wealth for their shareholders, for countless other companies associated with them and for so many small businesses, personalities, artists, etc. who use their platforms to promote their businesses. Yet that doesn’t matter to either Democrat or Republican, liberal or conservative, politicians.

It seems like both sides of the political aisle want these companies to toe the line and do what they want them to do, or else! Yes, we’ll just impose some fines, restrict your freedoms (and by extension the freedom of your customers), and make sure you are scared of big government because after all, you don’t have the right to run your enterprises — that right is reserved for government bureaucrats who get to decide what your online content should be (sarcasm alert No. 3, if you’re counting).

Then we have the most controversial, yet perhaps most destructive, form of government intervention — federal troops in our cities conducting what amounts to kidnappings of citizens exercising their First Amendment rights.

Now, this is not just my assessment, this is the assessment of my fellow small “l” libertarian brother in arms, Judge Andrew Napolitano. In an op-ed in The Washington Times titled, “How totalitarianism begins in the U.S,” the judge wrote the following about the abuse of federal power in response to the protests in Portland, Oregon.

Last weekend, with no notice or local consent, the U.S. Department of Homeland Security sent teams of agents — untrained in crowd control and wearing military fatigues — onto Portland’s streets. Their uniforms bore no governmental, administrative or personal names, just the word “Police” on masking tape. They descended upon the city in unmarked SUVs and began grabbing people indiscriminately off the streets, without regard to the person’s lawful presence or personal behavior.

According to the account of one victim, he was walking peacefully in the downtown area, observing the chaos, when five masked men in fatigues exited an unmarked SUV, grabbed him and pulled him into the car. They tied his hands with plastic behind his back. They pulled his cap over his face. They kept him for two hours and then released him. They filed no charges against him.

Now, this is outrageous behavior on the part of government. Yes, the Portland protests over the policing in that city don’t seem warranted from my perspective, and I don’t condone violent protests, riots or any other form of violation of individual rights by mob.

Yet if you are a consistent thinker and someone who stands on principle, you must also “call it as you see it,” and point out the violation of rights being imposed by the feds in that city. As the judge wrote: 

The feds’ activities are unconstitutional because they are using government force to arrest people without probable cause or arrest warrants. We know there is no legal basis for these “arrests,” as they have not charged anyone. Moreover, this is so harmful and terrifying — being kidnapped, handcuffed, blindfolded, not spoken to and then released, all for no stated reason — it will chill others from public dissent. 

The First Amendment to the U.S. Constitution requires the government to protect speech, not assault those who exercise it. If these indiscriminate beatings and kidnappings are intended to deter folks from publicly dissenting, it is profoundly unconstitutional, counterproductive and will be costly to the federal government.

Sadly, this is where we are in 2020 America.

Grappling with a global pandemic, and with Big Government’s response to that pandemic, as well as its overreach into the freedom of association that is the big tech companies and its sinister infringement of citizens’ freedoms literally in our city streets.

To this I implore government to please, just stop.

And though this request will likely fall on the deaf ears of those in power, it’s up to us, American citizens who can objectively evaluate the impingement on our liberties taking place, to fully comprehend the threat. Because once we know the threat, we can speak out against it in whatever forums we have.

As I am fond of saying in this column, the only solution to bad ideas (in this case the very bad ideas of government abuse and overreach), are good ideas. And the only way to promote those good ideas is through rational conversations and sound arguments.

That is what I do in this column, and it’s what we all must do in order to promote a more perfect union.

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Nobody Cares

“You will become way less concerned with what other people think of you when you realize how seldom they do.”
–David Foster Wallace

It is easy to obsess over what others may think about us. And as much as many of us would like to think we don’t do that, a quick gut check into the depths of uncomfortable truth tell us otherwise. Yet if we pause for a moment and set aside our vanity, it’s actually easy to comprehend the reality that other people are less concerned with us and more concerned with their own inner dimensions. Realizing you are the only one obsessed with yourself is ultimately a liberating insight because it allows you to focus on what you want to experience, and not what you want others to think about you.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods

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