A foot in the door
Psychologists Robert Cialdini and David Schroeder (1976) tested the
foot-in-the-door concept in an experiment with solicitors for contributions to
the American Cancer Society. They reasoned that if they could get people to
contribute anything, they might get them to contribute more. Thus, they had two
teams of solicitors (each team consisting of a male and female college student)
use a standard request ("I'm collecting money for the American Cancer Society.
Would you be willing to help by giving a donation?"). Another two teams used the
same approach, but added the phrase "Even a penny will help" at the end.
Forty-two people were canvassed with each approach. Which approach was more
effective? With the standard approach, 12 out of 42 people donated, while with
the "Even a penny will help" approach, the teams received 21 contributions out
of 42 tries. Clearly, the small-favor approach worked to increase contributions.
But if the contributions were smaller (since even pennies were acceptable), then
it still might not be as effective as the regular pitch. The standard approach
earned a total of $18.55, while the penny approach earned a total of $30.34.
This approach to sell a bit first to sell more later it's a classical and the idea behind is consistency. People love to be consistent if they had done something in the past they are more inclined to repeat it in the future in a bigger scale. So on a business perspective we should get clients to buy a bit or to try our product and then.... It's easier to sell more to a current customer than to convert a new costumer.
"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. There must be some
wisdom in the folk saying: 'It's the strong swimmers who drown.'"
- Charlie Munger
This is true not only on the investment side. When i used to play tennis (before broking my leg climbing Mont Blanc) usually i didn't try to win the point and just throw the ball back. Many times the other guy just put the ball out by himself! I was able to win against much better players just staying in the game!
In my job (I help people make money with money) we have 2 investment funds that have a simple rule/philosophy and are 2 of the best in Europe. How can this be possible? We don't go for home runs.
Don't try to win fast and you win!
From WSJ
Merck & Co. said it plans to slash its 81,000-strong
workforce by 20% over the next two years, a stark show of the diminishing
research-and-development capabilities of some of America's biggest health
companies.
Well not only the struggling companies fire people, everybody is racing to more with less. If labor is a cost it makes sense to trim it as much as you can. Companies all over the world are replacing workers with machines, outsourcing and doing everything they can to be less dependent on their workers.
I see the power to make money working at a job strongly diminishing. It's easier to make money being an investor than to be an employee!
This story also reflects the fact that Merck has been mediocre inventing new drugs. That has a price and they are paying it big time. The only companies that are still wiring are companies that have something that their clients love. Amazon, Google, etc.... You need to have something for the clients in order to survive.
I have seen this graph (below) in The Atlantic. What we see is that the only group that raised their income since the 70's are the couples that both work.
Why is this? Why the single Dad & the single mom didn't improve?Why the married couples where only one of them works didn't improve at all?
I have 2 explanations:
1.Only the top tier of the educated/knowledge improved in the last 30 years. The Globalization/Automation is killing the middle class. Jobs are being replaced by machines and some middle class jobs were transferred to third world. I guess most of the top tier American can and do live together and both work.
2.If both parties in a household work they can accept/accommodate the fact the other need to work overtime, has to travel, to put some sleepless nights, etc... When you are married with someone that doesn't work and expects you at home for dinner, usually they don't compromise and they want you home early. People that don't work want they husband/wife to have a balanced life. When you have a balanced life you go nowhere!
If you want to get ahead in life marry someone that also wants to get ahead!
Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote.
― Benjamin Franklin
This phrase says it all, to take a vote has nothing to do with fairness. In Portugal all the political parties even the ones that claim to shrink the state/cut taxes/cut spending when they get into power they raise taxes and more taxes. We are the country with one of the biggest governments & bureaucracy. We have rules for everything (you can't drive your own car with Havaianas! there is a rule for that!!!!) 2 or 3 million people live directly or indirectly from the state. The state has borrowed and spent money from future generations.
What do do?
I don't vote because i can't make any difference and because there is no party that even considers shrinking the Government and lower the taxes & regulations.
I am not yet the well-armed lamb but i plan to be!
Why do i live in Portugal?
because we have sun, security, it's very cheap & i have a great job (Helping investor's to make money with money)
From the election statistics i can see that more & more people don't vote, i don't see people discussing politics in dinners. It looks like people are anesthetized with shock!
