The Halo Effect

I was very fortunate to come across this book - so far the best business book I have ever read!

This post contains an excerpt of the review I posted in Amazon.

"We as humans deal poorly with uncertainty. We like explainations (the simpler and the shorter the better), we like (and create) heroes (the superman, superstar CEO) and we like to believe that the world is fair, and that the worthy and the good will succeed and prevail at the end. We also love stories - the drama, the suspense and the happy ending. Above all... our society, our schools, our religions and our media lead us often to forget how to think, specially by ourselves."

Again, do not accept passively what you are told, what you hear and what you read. Always apply your critical thinking and jugdment.

Above all, make up your own mind and think for yourself.

Precious Time

The best things in life are free. Time is the most precious resource which is given to every one and which needs to be carefully managed. Money can buy a lot of things, but it can't buy an extra second.

The concept of time is so pervasive, and yet, it's so hard to define it without resorting to a circular reference. Time is mostly understood by the changes which occur over a given 'time period' (here's the circular reference).

When we choose to spend time doing something - like reading a book, going for a stroll or even doing nothing (what a waste!) - we are implicitly foregoing all the other possible alternatives to spend the same time - and there's no return. You can't turn back the clock. What a tough choice! That makes time so most precious!

Time is also one of the most precious gift one can give to anybody. Our time, our full attention and our dedication is priceless!

It seems to me, that most people live their lives like they would live forever. Fear and pride often lead us to do nothing, to say nothing... and therefore we miss many opportunities... that are gone forever and that we later regret. How different it would be if we would learn that we have only a small amount of time to live.

In terms of scale, when compared to the age of the universe - currently estimated around 14 billion years - a human life is less than a fraction of a second...

Personally, I feel that time moves faster as I got older. When I was young, days were endless and countless... and I could hardly wait to become eighteen. But nowadays, time move so fast... days quickly turn into weeks, months and years...

Well... spend your time well, and above all, make each moment count!

“The only reason for time is so that everything doesn't happen at once.” - Albert Einstein

Success And Failure, In A New Light

I recently read the book 'The Innovation Paradox : The Success of Failure, the Failure of Success' by Richard Farson and Ralph Keyes. It has some interesting key points.

We as humans tend to polarize things. Everything needs to be either black or white. We tend to see success as very good thing and failure as a very bad thing.

The fact is, that success and failure are very close to each other, like two sides of the same coin. In fact, people (or companies) who succeed in the short term may fail in the mid-long term and vice-versa. Failure is not a failure if everything was done and prepared right, and most important of all, if we are able to learn something from it. A failure must then be seen, as a stepping stone in the way to success.

The only true failure, is in failing to try. Courage is to act not by lack of fear, but in spite of fear. The most exhilirating and exciting moments that we as humans can experience, is in the pursuit of something which we perceive as challenging, difficult, unattainable... even impossible. The sweetness is in the hunt, not in the achievement itself. Once the goal is achieved, we are immediately filled with a void, and we immediately look for another more ambitious goal...

That's one of the greatest mysteries and beauty of the Human kind - an eternal discomfort, an eternal hunger, an eternal search for higher goals and dreams.

We are far more likely to regret the things we didn't do than the things we did, specially because we will never know the outcome of the things we didn't do.

So don't be afraid to fail, don't be afraid to get out of your comfort zone. Try and fail, and learn, and try again,,, fail some more and try yet again... that is, my friend, the secret to a successful fulfilling life.

Tinnitus - Protect Your Ears

If you were like me, you would never have heard of 'Tinnitus' before. Tinnitus is a condition also known as 'ringing in the ears' since people suffering from it - including myself - hear a constant buzz in the ear 24 hours a day. It's not painful but it is extremely annoying, and it affects your ability to sleep and to concentrate.

The cause and mechanism of Tinnitus is still not fully understood, but it's believed that it involves both the physical ear and the brain in a complex circuit which creates a phantom sensation, in this case, a non-existing sound.

Over 50 million in the USA and over 6 million people in the UK suffer from this condition.

The best way for you to avoid this condition is to avoid or to wear ear plugs everytime you are exposed to loud sounds, specially for long periods of time.

Take care, and enjoy the silence (I still can't - but I hope to enjoy it one day).

Changing Jobs

Today is my last day at my current job. Next week I'm starting a new one.

I've stayed with this company for more than 12 years. I've seen it grow from a small rented office to the largest exporter of my country. I've lived through its complete rise and fall.

I'm filled with mixed feelings, but I look back over the past 12 years with gratitude and appreciation for the rich professional and personal experience. I also look with hope and confidence in the future. It's very important to always strive to be a better man and a better worker. And to the colleagues and friends I leave behind, I wish them all the best.

I close this post with the quote: "Every end is a new beginning".

Global Management Challenge

I'm a member of the team that will represent Portugal next week, 22-23 of April 2009, in the International Final of the Global Management Challenge competition.

The Global Management Challenge is the world's largest strategy and management competition which includes 30 countries. It was actually started in Portugal back in 1980 and it's continuously spreading around the world.

The competition itself consists of 8 virtual companies, one company per team, competing against each other for the highest share value at the end of five rounds. There are many decisions to be made: how much to produce of each product, how much to spend in research & development and advertising, the configuration of the distribution network, how many workers to hire with which salary and so forth.

The simulator itself is quite complex, and the fact that the development of the economical environment is not known, and that you are competing against other 7 teams makes it even more complex.

For more information on the competition, please follow the links below:

• Global Management Challenge - Portuguese Site
• Global Management Challenge - International Site
  

I'm looking forward to meet and compete with the other 29 countries, and I'll do my best to properly represent Portugal. Wish me luck!

Quick update: Russia won the International final! Portugal (my team) finished in 8th among 30 countries.

Economics 101

I read somewhere that "economy is the science of fulfilling infinite desires with finite resources". I couldn't agree more.

Human beings are unsatisfied by nature and will always want more, better, faster, smaller, bigger, you name it. The pursuit of that ideal of a better future is what moves us forward.

Along the way, we have to make some hard choices, since we have limited means, such as time, money, energy and so on. Time is by far the most scarce resource of all. We can never buy more, and every spent minute is gone for good. Regarding money, we can choose to spend right after we have it for the sake of the instant gratification, or save and defer the spending for some time in the future (delayed gratification).

Most of us dream and fantasize of unrealistic hopes. They tend to be impossible in nature, because most of the excitement and pleasure comes with the wanting, not with the fulfillment. If all of our desires would come true quickly, they would suddenly become meaningless. And at the very same time that one desire is satisfied, another one, even bigger pops up.

On this note, I'd like to post here an excerpt from the movie 'The Life Of David Gale':

"What is it that you fantasize about? World Peace? Do you fantasize about international fame? Do you fantasize about winning a Pulitzer prize? Or a Nobel Peace Prize? An MTV music award? Do you fantasize about meeting some genius hunk extensively bad but secretly simmering with noble passion and willing to sleep on the wet spot?
Fantasies have to be unrealistic, because the moment, the second, that you get what you seek, you don't, you can't want it anymore. In order to continue to exist; desire must have its objects perpetually absent. It's not the "it" that you want, it's the fantasy of "it". So desire supports crazy fantasies.
This is what Pascal means when he says that we are only truly happy when daydreaming about future happiness. Or why we say the hunt is sweeter than the kill or be careful what you wish for, not because you'll get it, but because you're doomed not to want it once you do. So the lesson of Lacan is "Living by your wants will never make you happy". What it means to be fully human is to strive to live by ideas and ideals and not to measure your life by what you've attained in terms of your desires, but those small moments of integrity and passion, rationality, even self sacrifice. Because in the end, the only way that we can measure the significance of our own lives is by valuing the lives of others."

DNA And Synthetic Life

All life on Earth - be it a bacteria, a microbe, a virus, a plant, a tree or an animal encodes its generic information as DNA (Deoxyribonucleic acid). DNA is a sequence of four types of nucleotides (A, C, G & T) which make up genes which in turn make up chromosomes.

A human being possesses 23 pair of chromosomes, that is a 22 pair of chromosome plus a X-Y pair for males or a X-X pair for females.

Man share 98.8% of their DNA with the chimpanzee. Any two human beings share 99,9% of their DNA. Think about it - only 0,1% of your DNA separates you from every other human being out there.

Recently, Man has been able to decode DNA sequences from various species (including human) and it has been able to recombine and assemble entire new DNA sequences from scratch. It has even come to the point where it's possible to create new simple synthetic organisms. It's quite impressive! Watch Craig Venter on TED speaking about creating synthetic life. It's really amazing!

Take My Advice - I Don't Use It Anyway

"Advice is what we ask for when we already know the answer but wish we didn't." - Erica Jong

We often look for other people advice. We are sometimes uncertain or uncomfortable with a decision. Several times we take some advice because it makes us feel more confident and at the same time less responsible since after all it was a 'shared decision' (by the way, that's why so many businesses rely on external highly-paid consultants).

Often there is the case of cognitive dissonance, which is an uncomfortable feeling caused by holding two contradictory ideas at the same time in your mind. Most of the cases, a decision is already made on an emotional basis, but the rational side of the brain can not find logical reasons or arguments to sustain that decision. No matter how many people we turn to for advice, no matter how logical all the arguments may be, we will inevitably follow the emotional decision, the heart always wins.

I think that you can (and sometimes you should) ask for opinions from people you trust to be honest and tell you the truth, even if you don't want to hear it, but at all times you have to make up your mind on your own. The final decision is yours and yours alone, and you have to make your own path taking at all times full responsibility for you and for your life.

So my advice to the reader is - don't take advice!

My Personal Chaos Theory

One of the most exciting things in life is that every second you are presented with a multitude of options - big and small, and you have to make a choice. Even doing nothing is a possible course of action. Once the decision is done, and an action is taken, it can not be taken back. It immediately belongs to the past. The past and the future always meet at the present. We can not never know the future, but have the obligation to learn from the past.

For sure, all of us have our personal experiences about things we did, which we wished we did differently... even if only curiosity to know what it would be like if we have chosen a different path. Our jobs, our education, our friends and our loves are often dictated by random events, special circumstances, apparent coincidences or even fate. There is no such thing as destiny... we all create and write our destiny, with every small decision and every small action.

Like the Chaos Theory, our the path of our lives move in twisted turns and are deeply intertwined with the lives of other persons and with the environment. Similarly, like the effects on weather caused by the fluttering of the wings of a butterfly in China, all of our own decisions and actions, no matter how small and insignificant they may seem, in the long term, they will change the World.

Looking at life this way, every moment of every living being becomes truly special.

The Next Twenty Years Are Going To Be Completely Unlike The Last Twenty Years

I just watched the Crash Course by Chris Martenson. It consists of 20 chapters (videos) of about 3h20 duration. It was quite a revelation. It describes a well formulated integrated approach to the three 'E's: Economics, Energy and Environment.

It states that the next twenty years are going to be completely different from the past twenty years, because over the past 100 years, mankind has built social, economical, financial, environmental models that are simply not sustainable, and that need to be changed dramatically or they will collapse.

I wish some of the facts and conclusions would not be true, but the arguments and logic is grounded in the laws of mathematics and physics, and those laws can not be changed.

I don't want to sound alarmist or pessimistic, my advice is that the reader watches the Crash Course and makes up their own mind.

George Orwells's Animal Farm and 1984

I recently read both Animal Farm and 1984 by George Orwell. They share a lot of common elements, such as the betrayed revolution; the oppression and repression of a totalitarian regime; the exploitation of the majority for the benefit of a small minority; the suppression of free thinking and free will; a continuous state of war and terror; and the fact that the cure turned out to be worse than the poison.

Both of the books are a satire to the communist regimes, specially the old Russian one. 1984 is deeper and more dense, and also an essay on the human nature and human condition.

I personally think that democracy is the 'least evil' form of government. Still, I think it gives too much power to the government and it encourages short-term popular actions in detriment of more useful long term policies. I believe in the motto 'Less Government, Better Government'.

Anyhow, these two books are timeless, powerful masterpieces which I highly recommend.

Tennis: I Love This Game

Tennis - I absolutely love this game. It's a mixture of skill, art, strength and intelligence. It's a pure delight to watch a professional tennis game.

My favorite male player is the swiss Roger Federer and my favorite female player is the serbian Ana Ivanovic.

I'm pushing for Roger Federer to win the 14th Grand Slam and to regain the #1 ATP rank title! I also have a tennis ball signed by Federer (in the photo).

At the moment, the Indian Wells tournment is being played in California. It's worth 1000 ATP points and it finishes on the 22nd of March. Go Roger!

Nothing Comes From Violence

It looks like ever since the beginning of mankind, that we are condemned to violence, specially against the weak. We read about it everyday in the newspapers, we see it everyday in the television.

Our governments spend obscene amounts of taxpayers money pursuing more sophisticated and powerful weapons which do not contribute nothing to the happiness or wealth of the citizens. Ironically, and just as in George Orwell novel '1984', the 'Ministry of War' was called 'Ministry of Peace', so our governments name our 'Attack Ministry" the 'Defense Ministry'. Even more ironically still, the countries with the largest stocks of Weapons of Mass Destruction (the ones which were never found in Iraq) are the ones who try to prevent other countries from acquiring them.

Could it be that mankind is doomed to self annihilation? The Bulletin of the Atomic Scientists have created a symbolic Doomsday Clock that marks the minutes before midnight, where midnight represents "catastrophic destruction". That clock is mentioned often in the recent movie Watchmen.

I'm against the use of violence with the exceptional case of self-defense. Violence only breeds more violence, and as Mahatma Gandhi said 'An eye for an eye makes the whole world blind'. We are all humans, with all our feelings, thoughts, dreams, hopes, aspirations, flaws and frailties.

A favorite quote of mind is 'Hate has a reason for everything, but love is unreasonable' by Raiuhes Ahaefvthe.

And to finish this post, I leave here the words of wisdom of Monsieur Le Sting:

Fragile, by Sting

If blood will flow when fresh and steel are one
Drying in the colour of the evening sun
Tomorrows rain will wash the stains away
But something in our minds will always stay
Perhaps this final act was meant
To clinch a lifetimes argument
That nothing comes from violence and nothing ever could
For all those born beneath an angry star
Lest we forget how fragile we are

On and on the rain will fall
Like tears from a star like tears from a star
On and on the rain will say
How fragile we are how fragile we are

On and on the rain will fall
Like tears from a star like tears from a star
On and on the rain will say
How fragile we are how fragile we are
How fragile we are how fragile we are ...

Celebrating The International Women's Day

Women are absolutely fascinating and beautiful in every possible way... so it's only fair that today, the whole world celebrates and honors them.

The greatest mystery to men has always been the question "What women want?". I suspect that not even women know the answer...

And now, let John Lennon do the talking:

Woman, by John Lennon

Woman I can hardly express,
My mixed emotion at my thoughtlessness,
After all I'm forever in your debt,
And woman I will try express,
My inner feelings and thankfullness,
For showing me the meaning of succsess,
oooh well, well,
oooh well, well,

Woman I know you understand
The little child inside the man,
Please remember my life is in your hands,
And woman hold me close to your heart,
However, distant don't keep us apart,
After all it is written in the stars,
oooh well, well,
oooh well, well,

Woman please let me explain,
I never meant to cause you sorrow or pain,
So let me tell you again and again and again,
I love you (yeah, yeah) now and forever,
I love you (yeah, yeah) now and forever,
I love you (yeah, yeah) now and forever,
I love you (yeah, yeah)...

Performance Objectives & Employee Appraisals

There is a quite fascinating almost magical view of performance objectives at work. Usually they are attached in any form to money and this is exactly the problem. As soon as the compensation of an individual is determined by an indicator, the measurement of the indicator becomes distorted, similar like the Bohr principle that states that you can not measure an object without interfering with it.

Also, there is often the case where one measures one indicator that he believes will accurately represent a desired outcome, whereas the opposite is true, thus creating a dysfunctional system. There's a wonderful paper On the folly of rewarding A, while hoping for B that describes exactly that problem which can be observed in Sports, Consulting, Universities, Business and Government.

About Performance Measurement and Management there's an excellent book which I greatly recommend: Measuring and Managing Performance in Organizations (link to Amazon).

All in all, here are the problems I see with the current practice of establishing objectives and rewarding people in regard to the degree of achievements of those objectives:

• There is a considerate amount of effort that needs to go into the whole objective setting, monitoring & measurement process. This involves the discussion about the relevant objectives, how they can be quantified and measured, the monitoring of those indicators and the verification of those objectives.
• The objectives are usually set at the beginning of the year. What will happen is that other tasks, activities and projects, even if more important for the company (or department) will not be given attention, because they are not being rewarded. Even in the case that the initial objectives become obsolete, they are still pursued.
• The objectives take the character of an extraordinary achievement as the result of super human effort. Is this really the case? Do people really work above their capability and capacity in order to achieve them? Is that desired or even useful? Besides, people work within the capability of the system they belong to. It's not realistic to expect system capability improvements without changing the system itself - or is a miracle expected?
  
• People, as human beings, will naturally tend to make the numbers look good. This aspect can take many forms. For instance: short term results can be improved at the cost of mid term results; the calculation formula can be used or interpreted loosely; or the dirt can simply be swept under the rug or the eyes can just look the other way.

What should be done instead?

My opinion is that first and foremost, people should be rewarded by aggregated meaningful indicators, such as Return On Investment, or Return On Equity or Margin. Note that these are all relative profitability measures, which is what really counts for measuring business success.

Second, we can not discard the responsibility of managing people. That includes being informed and giving feedback. That being the case, the manager should be in an excellent position any time of the year, to make a sound judgment of the employee. I personally believe that the manager alone should not be given the power to solely rank an employee. I'm more in favor of a weighted 360 degree evaluation that takes in consideration the feedback of the employee, the manager, colleagues and customers.

About the appraisal of the employee, the normal evaluation systems have tens of parameters. It's almost necessary to have a training on how to understand and use each parameters. I would prefer less than ten parameters.

Finally, each employee should prepare and present a one page with the achievements of the last year. This page should not contain more than ten achievements. Small is beautiful, and less is more!

Less Government, Better Government

I just started a new portuguese blog called "Menos Governo, Melhor Governo" ("Less Government, Better Government").

It intends to inform the portuguese citizens of the impacts and effects of the government policies on their daily lives. It follows the Austrian School of economics theory.

http://menosgovernomelhorgoverno.blogspot.com

A Case Against Public Spending

Specially in times of economic crisis, governments wants to increase public spending. The argument goes that it creates jobs and encourages consumption. Let's pause for a second. If those arguments would be true, a country could get out of a economic crisis by putting all their citizens building pyramids, or instead, just digging up and covering holes in the ground.

Also - there is no such thing as public spending. All the money that the government spends is private, as it is taken (or more politically correct - collected) from the citizens.

My arguments against public spending are the following:

• First of All... money can not be created out of nothing. Governments can only finance themselves by either a) borrowing and therefore creating debt, a liability imposed on future governments and generations; b) printing more money, which effectively reduces the wealth of everybody holding money and creating inflation; or c) increase taxes.
• Government has no way to verify whether its investment is a worthy, needed investment or not. For what is worth, it may build pyramids in the desert. In the private sector, the validity of all investments is tested by the means of profit and loss.
• There is a constant pressure on the government, from lobbies, special interest groups, companies, cities, regions for a "piece of the pie". The government is made of people, who as human beings are sensitive to these forces.
  
• By investing in public projects, resources (capital, workers, equipment, land, ...) are diverted from other projects which would be managed more carefully, and more efficiently.
  

Why it's generally assumed that the government is better suited to manage the money of the citizens than the citizens - who provide the money - themselves remains a mystery to me.

Parkinson Law also dictates that over time, government will want to spend more, and more and more, and that it will also need constantly more people to manage all the contracts and subcontractors.

Think For Yourself

Nowadays, a lot of people has forgot to think. They let the media, the government, the teachers, the companies, the lobbyists to do the thinking for them, and to shape the public opinion.

From very young, we are taught to accept as true, the teachings from our fathers, our teachers, our world leaders on every subject, from religion, sex, politics to economy, science and art. We are not encouraged to question or to challenge those teachings. In school, we are rewarded by our capability of memorizing instead of thinking.

It's very easy not to think. But the person who does not think for itself it's not free, it's a prisoner of others. Specially the media, they have the extremely powerful ability to distort, amplify, conceal, and deceive.

Speak your mind - no matter as crazy, as absurd, as provocative as it may be. Don't be afraid of expressing your opinion, even if unpopular or even if against conventional wisdom or established interests.

Inform yourself from various different sources with different perspectives.

Always keep an open mind, and above all, Think For Yourself!

To finish this post with a nice quote which sums it all up:

"The conventional view serves to protect us from the painful job of thinking" - John Kenneth Galbraith

The Greatest Inventions Of Mankind

In my opinion, the greatest inventions of mankind are, in order:

1. The Spoken Language
2. The Written Language
3. The Press (by Gutemberg)
4. The Internet

All the inventions above are about communication with oneself and with others; and with the preservation of knowledge.

It's communication that has allowed self-expression, thought, art, love to develop as well as the appearance of civilization. As human beings we are deep social beings with the need to interact with each other.

The preservation of knowledge allows us to benefit from all the experience, thoughts, discoveries and inventions that took place before us. To quote Isaac Newton “If I have seen further, it is by standing on the shoulders of giants.”

A Case Against Government Bailouts

I'm personally against government bailouts, be it an industry, a set of companies (such as banks) or an individual company. The arguments that government (amplified by the media) use is that these institutions are too big or too strategic to fail. However, we must note the following:

• If the company is in a non viable position, it got there due to bad management, inefficient usage of resource or failure to anticipate market condition changes - in sum, the market forces are saying that they don't want or need the company
• Resources (capital, workers, equipment, land, ...) are being tied up to an investment that is not sustainable, and therefore it drains resources from other profitable investments
• Competing companies, which are better managed, make a better usage of resources and correctly anticipate market condition changes can not prosper, because bad companies are kept alive artificially
  
• By rescuing a company in trouble, the government creates a moral hazard, which will a) encourage the rescued company to take bigger risks and b) create the obligation to save any other company or industry in the same situation
• If the situation and prospects of the company are sound, a private investor would certainly be found. There would be no need for government intervention in the first place!
• A non viable company, artificially sustained by government, does not create, but consumes wealth
  
• Finally... money can not be created out of nothing. Governments can only finance themselves by either a) borrowing and therefore creating debt, a liability imposed on future governments and generations; b) printing more money, which effectively reduces the wealth of everybody holding money and creating inflation; or c) increase taxes. In short, the government will make everybody poorer in order to bailout a few favorite constituents which do not deserve and are not worth to be saved (read the previous points)

What is the alternative them? Should the government just let the big institutions and companies fail? The answer is a big 'Yes'. Just look at the case of Lehman Brothers. It failed, the interesting assets got sold, the interesting workers were hired at a different companies, and the world moved on.

What about the 'domino effect', unemployment rise, lost taxes, consumption decrease? There needs indeed to exist a short term negative effect, so that that the market and economy can adjust, where the resources can be reallocated to more efficient usages, those that actually generate true wealth.

It's important to mention though, that the negative impacts are not the result of the recession, but of the bad decisions, actions and malinvestments carried out during the expansions.

Just look at the case study of Japan in the 90s. The Japanese economy peaked in 1989 and it has been in recession or stagflation since then, even though interest rates are zero, banks have been bailed out or even nationalized, and public spending surged to trillions of dollars.

If the government insists on bailing out bad companies and funding unnecessary public investments it will postpone temporarily the effects of the recession, but in the end it will only make the recession deeper and longer.

Carnival Means Venice

"I stood in Venice, on the Bridge of Sighs; A palace and a prison on each hand." - Lord Byron

TED - Ideas Worth Spreading, Free To The World

Have you heard about TED? TED stands for Technology, Entertainment and Design and it's a series of talks by some of the most intelligent, enthusiastic, successful, creative and passionate people in the planet. You can find among others, Bill Gates speaking of 'How to Change the World', Al Gore on 'Climate Crisis', Bono on 'The Fight Against Extreme Poverty', Richard Branson on 'Entrepreneurship', Jeff Bezos on 'Innovation', Benjamin Zander on 'Music and Passion'. Besides the great, controversial, provocative ideas that will stimulate your mind, you can find in TED a great source of inspiration. As a bonus, you also get free lessons on the art of speaking, presenting and selling your ideas. TED talks are free, and a true gift to mankind. Visit TED at www.ted.com.

The Austrians Are Right, Keynes Was Wrong

I just finished reading the book "Economics for Real People" by Gene Callahan written in 2004. I feel like a veil has been removed from my eyes. Our schools, governments and media constantly brainwash us with Keynesian ideas which are just plain wrong. An alternative Economic Theory exists: the Austrian School, founded by Carl Menger (in the photo) in 1871. If you want to understand how the current crisis originated and where the economy is heading, you don't have to look no further - just read the book! Look also for "Peter Schiff" in You Tube to get a glimpse of the Austrian School ideas which go against currently established conventional wisdom. A few key points (from my review of the book in Amazon):

• Real economic growth can only be achieved through Production and Savings and not through Consumption and Debt
• The only real money is attached to a real collateral, such as gold as opposed to the current paper money that the central banks are happy to print out of air
• Central banks should not have the power to "print money" or fix interest rates
• Government intervention should be minimal - subsidies, protectionism, price fixing, regulation, public spending are to be avoided
• Free Markets with the Law of Supply and Demand will tend to maximize the value and wealth of both the individual and sociey

And The Oscar Goes To

Sunday, 22nd of February, the 81st Academy Awards will be held in Los Angeles. My favorite movies from last year were The Dark Knight, Australia and Slumdog Millionaire. Anyhow, here are my favorites for some of the most important categories:

• Best Motion Picture of the Year: Slumdog Millionare - very original, funny and moving and great direction
• Best Performance by an Actor in a Leading Role: please not Brad Pitt!
• Best Performance by an Actress in a Leading Role: Kate Winsley (first) and Anne Hathaway (second)
• Best Performance by an Actor in a Supporting Role: Heath Ledger (rest in peace) - the Joker was a stunning performance
• Best Performance by an Actress in a Supporting Role: no opinion here
  
• Best Achievement in Directing: Danny Boyle for Slumdog Millionaire, the director of Trainspotting
  

Funny T-Shirt

Parkinson Law

Parkinson is a personal hero of mine. He formulated the famous Parkinson Law in 1955 in The Economist magazine - the article can be found here. It essentially states that:

Work expands so as to fill the time available for its completion.

This apparently simple rule, can be generalized into: available resources will consumed up until their full capacity. Notice the importance of that! It means that the consumption of time, money (budgets), memory/CPU, employees, etc. will tend to match their availability, whether they are necessary or not!

It's important to notice that this conclusion was reached during the study of the British Colonial Office where the number of officers increased continuously even as the number and size of the Great Britain colonies declined. This is explained by two factors:

Factor I: An official wants to multiply subordinates, not rivals and
Factor II: Officials make work for each other

This can be observed in practice in big organizations and companies as well as in the public governments. The sheer size of an organization can hide and accommodate all sorts of inefficiency, waste and unnecessary spending. When the bad times hit, everybody looks surprised at the impact on the organization and at the amount of "fat" that has grown steadily over time and that suddenly has to be cut.

In my opinions, organizations (specially governmental ones) need to shuffle their middle-top management structure every one to two years because of the following:

• Time silently will creep in habits, complacency, policies, politics, personal interests and even some form of corruption
  
• Small kingdoms will arise where the king tries to expand his influence (usually through an increased budget or personnel) and also tacit agreements emerge among the different kingdoms as to have every kingdom not attacking another and to protect each other
• The organization becomes more bureaucratic, bigger (fatter), slower, resistant to change and to new ideas and becomes a consumer of more and more resources
  

Reviews: The World Is The Greatest Judge

The time and money available to any individual is very scarce. When you buy a book or movie ticket you're not only investing your money, you are also investing your *precious* time. The problem is, you can only know for sure whether the investment was worthy after the money and the time is spent forever. While preferences and tastes vary from individual to individual, one can get a good "quality indicator" by:
a) Researching some information about the author and about the book, music or movie.
b) Finding the customer ratings, and reading public reviews - usually the most important are the most positive and most negative
Personally, my favorite sources of this type of information are Amazon for books and music CDs, and IMDB for movies. While not 100% accurate, it greatly improves the probability that you make the right choices. I also feel some obligation to share my opinions with other potential consumers so that they can benefit from my experience. You can find my book reviews in this link.

Make A Difference

Most of us want somehow to change the world, to leave our mark and make it a better place. Why not make the whole difference to one needing child? For $22 USD a month, through Children International you can provide basic food, health and education to a child from an underdeveloped country. Since 2005, I'm sponsoring Teddy Mukuka (in the photo) from Lusaka, Zambia, who is now 9 years old. I get regular letters and pictures from him. It's a great feeling, so I greatly recommend it.

My Funny Valentine

Tomorrow is Valentine's Day. According Wikipedia the holiday is named after two early Christian martyrs and it was made popular in the middle ages, when courtly love flourished. Also according Wikipedia, the tradition goes that lovers take the day to express their love for each other by sending Valentine's cards, presenting flowers or confectionery.

As I write this post, the "My Funny Valentine" song keeps playing in my head - I just love it! Try to listen to the versions by Matt Damon (yes - the actor), Sting or the J. J. Soul Band.

Well... time to bring out the Romeo inside.

"If I profane with my unworthiest hand
This holy shrine, the gentle fine is this -
My lips, two blushing pilgrims, ready stand
To smooth that rough touch with a tender kiss."

Software Architecture

There are a lot of different opinions and discussions of what exactly Software Architecture is. I personally like the definition from Bass, Clements and Katzman:

"The software architecture of a program or a computing system is the structure or structures of the system, which comprises software components, the externally visible properties of those components, and the relationships among them".

The definition of IEEE (IEEE 1471) is more comprehensive in the sense that it includes the explicit connection to both the context and the underlying principles:

“The fundamental organization of a system embodied in its components, their relationships to each other, and to the environment, and the principles guiding its design and evolution.”

What is then the goal of Software Architecture? In my opinion, first and foremost a Software Architecture is a solution which tries to maximize different (sometimes competing) objectives under a given set of constraints. As a result, the Software Architect needs to balance a large number of factors, such as economical, technical, political, social and aesthetic under technology, personnel, schedule and budget constraints.

Regarding the deliverable of Software Architecture, this is the “Architecture Description” (IEEE 1471), sometimes referred to as the “Architecture Blueprint”. The Architecture Description is a collection of views which present different perspectives of the same architecture blueprint. There is, however, no consensus about the set of views which must be included in an architecture description. The Zachman Framework, defines 36 views while the Rational Unified Process (RUP) defines 4+1 view models.

There are usually more than one possible valid software architectures solutions for a given problem. It’s important to stress the point that that an architecture can not be judged or evaluated unless the context of the problem on which it was developed is well understood. Based on that context, architecture alternatives can be assessed and compared against each other. Bass, Clemens and Katzman propose a methodology called Software Architecture Analysis Method or SAAM for short. Microsoft, in MSF v4 for CMMI Process Improvement, offers a similar methodology called Lightweight Architecture Alternative Assessment Method (LAAM). Essentially, each architecture alternative is evaluated and ranked according different project specific attributes, such as: performance, scalability, reliability, availability, usability and functionality under constraints such as technology, resources, cost and schedule; and against project business objectives, such as: return on investment, time, budget and risk. This provides a structure and systematic methodology which should be documented for future reference.

Oil Peak

Together with climate change, which most of us have heard about, the end of oil is the greatest challenge to Mankind, ever! It's quite surprising that media and governments do not inform the citizens of the world about an event which threatens the lifestyle of all people on Earth. Our economy, our society and our civilization relies on an endless supply of "cheap" energy. As the peak of oil approaches - and believe me that we will live to witness it - oil will get increasingly scarce and expensive up to a point that it will break the social and international balances (think "Gulf War 2.0"). While there have been many initiatives on alternative energy sources, such as Wind, Solar, Biomass and Hydrogen, there is still no economical, feasible alternative to oil. I strongly recommend that the reader becomes acquainted with what the Oil Peak is and what it means. The Peak Oil Wikipedia article is a good place to start. Those who want to learn more in depth, can read the book "Twilight In The Desert" by Matthew Simmons or for those who are portuguese and enjoy novels, they can read "O Sétimo Selo" by José Rodrigues dos Santos.
I would like to end this post on a high note, so a couple of positive points:

1. Oil Usage and Climate Change are closely related, so reducing Mankind dependency from Oil will greatly benefit the environment.
2. President Barack Obama has pledged 150 billion over the next 10 years in order to build a clean energy future.
3. All over the world, everybody is getting more aware and more sensible to environmental isssues, so the reduction of waste and the increase of energy efficiency is gaining momentum.

Wikinvest

Well, if you're interested in the stock market, be sure to check out Wikinvest. It's a great site to learn how the markets work and where they are headed. It's also a great place to share opinions about markets and companies.

Twitter

I just recently joined Twitter - so I'm finally a full Web 2.0 citizen :)

You can follow me @ http://twitter.com/JoaoCortez

The Daily Reckoning

I'm now following The Daily Reckoning which provides both a great read and food for thought. Most of politicians, central banks and media take the ideas from Keynes as written by God Himself. They are now trying to solve the problem using the same principles and methods that have created it in the first place. There's a less known economical theory - the Austrian School - which is more fundamentally sound and that accurately predicts the expansion and recession cycles caused by the Keynesian government and monetary policies.

The Daily Reckoning is very critical, but very, very refreshing and very stimulating. Give it a try!

Thought Of The Day

“Yesterday is not ours to recover, but tomorrow is ours to win or lose.” - Lyndon B. Johnson