Averaging down is a skill. Done well it can be your greatest asset. Done poorly it can mean disaster.
In business and life, you can win over almost anyone by just listening to them during a conversation. It’s hard to dislike someone that listens too much. It’s easy to dislike someone that talks too much.
In business and life, you can win over almost anyone by just listening to them during a conversation. It’s hard to dislike someone that listens too much. It’s easy to dislike someone that talks too much. Humans are innately tribal. We have a strong need to belong to groups (tribes) and maintain fulfilling relationships with others. 99% of building relationships is listening.
Have you ever spoken to someone that wasn’t listening to you? You were trying to bring up an important topic, challenge, or issue. They were hearing you, but they weren’t listening to you. They were distracted by choice or by circumstance. They kept looking at their phone. They hurried the conversation along. They responded in ways that made it clear they weren’t listening. Bottom line – you weren’t important enough to listen.
Maybe it was a boss, partner, colleague, client. Maybe it was a friend, parent, or spouse. Few things hurt more than when someone makes you feel invisible when you are right in front of them. We’ve all been on the receiving end. It is annoying. It hurts. Even worse is we can all point to occasions where we were the ones not listening. I know I’m guilty.
When you think of your closest relationships, your best relationships, it’s with people that give you their undivided attention. You like people that listen to you. You end up loving people that listen to you.
Listening is the greatest gift you can give someone, and it’s free.
Abraham Lincoln, Bill Clinton, Ronald Reagan were all great listeners. Regardless of their personal flaws (and perhaps a scandal or two) they were beloved Presidents because they were known for giving people their undivided attention.
Lincoln held an open-door policy as President where he made himself available to listen to anyone who came to the White House to speak with him. He spent hours each day listening to citizens who wished for an audience. This helped Lincoln gain insight into public sentiment during the war.
In 1863, striking coal miners in Pennsylvania petitioned the White House, demanding higher wages. Rather than side with industry leaders, Lincoln agreed to hear the miners’ appeals in person. He listened patiently to their grievances, asked probing questions, and decided their requests were fair. Lincoln took action to have them met, believing it important to protect workers and the right to organize. His careful listening and empathy resulted in a pioneering decision.
Bill Clinton was famous for keeping long work hours and an exhaustive schedule of meetings and public events. But in conversations, he gave people his complete focus. He made eye contact, listened without distraction, and asked engaging follow up questions. This made people feel genuinely valued, heard, and understood.
In 1993, Clinton met with Nelson Mandela during his first official state visit to Washington as South African president. Clinton invited Mandela to an intimate lunch where they spoke for hours. Clinton listened intently as Mandela shared his life story, vision and hopes for South Africa’s future. Mandela said of Clinton, “He possesses an all-consuming curiosity to know everything about you…It’s been a long time since I have met someone with such a gift for personal connection.” Their friendship helped steer South Africa’s transition.
Ronald Reagan was known as the ‘The Great Communicator’. Reagan’s leadership was also marked by an underappreciated ability to listen. Soviet leader Mikhail Gorbachev said of Reagan, “He never took cheap shots at his opponent to score points…He believed in dialogue. He listened and made an effort to understand the other’s point of view.” Gorbachev noted Reagan’s patience for listening to understand rather than attack during debates or disagreements.
Each one of these Presidents weren’t perfect. When you talk to people (or read in Lincoln’s case) it wasn’t necessarily their policies that made them special. ~50% of people will always be against policies. They were loved because they knew what 100% of people want – to be listened to.
In 1907, two teenagers, Claude Ryan and Jim Casey took out a $100 loan and opened the American Messenger Company. They would create what would become the world’s largest package delivery service, United Parcel Service (UPS).
In 1929, Jim Casey, added to the company policy book that UPS people would always be addressed by their first name. Casey was known for knowing all the employees first names down to those that washed trucks. “He had genuine interest in people whenever he met someone, he wanted to hear their stories and ideas on making the company better. He would never rush a conversation and would give the person his full undivided attention.”
In 1966, Ron Wallace was hired to be a UPS delivery driver. He would then move up the corporate ladder occupying many leadership roles. He was the head of UPS North German district for six years and then president of UPS Canada for three years and then President of UPS International before retiring in 2002.
In Leadership Lessons from a UPS Driver, Ron Wallace tells the story of his first encounter with Jim Casey in the late 1960’s at a UPS building in Seattle:
“It was late in the day, and I was the only person around. I was focused on hooking up a charger to a dead battery in one of our package cars when I suddenly felt someone standing next to me. I turned, and there he was, Jim Casey himself. I couldn’t believe my eyes, and I’m sure he saw the look of shock on my face.
He stuck out his hand and said, “Hello, my name’s Jim. What’s yours?” Fortunately, I could remember it.
Then he said, “Here, let me help you, I’ll hold the cables if you want to try to start it.”
For a few seconds I thought I was dreaming. Here was Jim Casey, our founder, a legend, and a man I idolized, getting his hands dirty while working alongside me at the very end of the day.
After the car started, Jim asked if I could take a few minutes to talk with him. He motioned toward a bench, where we sat and talked for about thirty minutes. During this conversation, he asked me what I thought about “our” company and what ideas I might have to help us better serve our customers and become more efficient in our operations. Jim treated me as if I was his mentor, instead of the other way around.
It was a day that I’ll never forget and an experience that shaped my approach to leadership for the rest of my career.”
I’m a conviction investor. Conviction is like building any relationship. It takes time to develop. It can’t be rushed. It’s impossible to have the same conviction at the beginning of a new investment that you had at the end of a successful investment. Every new investment is a new relationship.
In A Beginner’s Guide to Researching MicroCap Stocks, I mentioned how frequency and consistency of management conversations can become a big edge. I put in a lot of reps with management through in-person, on-site, and virtual meetings. I try to read/listen to everything they say publicly. I ask other investors that own the stock to ask the same questions so I can see if management is consistent. I’m making notes about answers, comments, tone (Journalytic is a great tool for this).
It’s the same with any relationship – When you consistently talk to someone over a long period of time you can sense when something is wrong. They don’t have to tell you.
I’ve been investing for 20 years and every day I still wake up paranoid of what I don’t know about my investments. Productive paranoia and humility are crucial to winning. I was able to be a full-time private investor for ten years not because of my gains, but because of the losses I didn’t take. Your gut feeling, aka intuition, is the sum of all your senses combined with your past experiences. The ability to identify the signs of something changing in management, before others, is pivotal. Talking to management and listening can be an incredible edge.
“As an aside I occasionally give talks to MBA classes about Sleuth Investing (in Ivey’s business school in Canada, or in Columbia in the U.S.), and found it odd that very often, the smarter the students, the more difficult it is for them to grasp the idea of physical stock research. And even those who do, usually right away they want to computerize it, automate it, do it with databases, A.I. algorithms …What most instinctively resist is the hard work of person-to-person contact, and the use of all five senses, so as to generate an un-quantifiable, un-modellable gut feel.”-Avner Mandelman, The Sleuth Investor
A few weeks ago, I was having a rough day. It was a combination of a few things plus lack of sleep. At the end of the day, I walked into the house staring at my phone trying to return some last-minute emails. My 7-year-old daughter was at the kitchen table drawing.
“Hi Daddy. I can’t wait for summer…”
I gave her a smile and a nod and continued typing away on my phone.
“Daddy, do you want to go outside, and you can watch me roller skate …”
“Sure honey just give me minute.”, She gets up and sets a 1 minute timer on the oven timer.
“Daddy, it’s been a minute…”
I don’t even hear her I’m glued to my phone. “Daddy, you said …”
“Just give me another minute.”
Rinse Repeat ten more times. She’s getting upset and I’m getting unnerved.
“Daddy, but you said…”
I snap in anger, “Stop nagging me! I’ll be done when I’m done!”
She’s visibly in tears and runs to her room. I press send on the email I was writing and walk up the stairs and sit down next to her on her bed.
“I’m sorry. I’m working on a lot of things right now. This house, our vacations, your summer camp, those clothes…I work really hard for this and sometimes it gets stressful.”
She looks up at me, “But Daddy you weren’t listening to me. I don’t care about any of that stuff. I just want you.”
I melted. My eyes welled up in tears. I got on my knees, grabbed her little shoulders, looked her in her eyes and said, “I love you. I’m sorry.”
The worst thing you can do as a human is not listen to the people you love.
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Averaging down is a skill. Done well it can be your greatest asset. Done poorly it can mean disaster.
Nicolai Tangen is the CEO of Norges Bank Investment Management, Norway's $1.4 trillion sovereign wealth fund.
Dilution is the subtle erosion of ownership. This hidden, persistent addition of new supply of shares leaves shareholders with less and less of the company’s value. Dilution, like inflation, is a silent killer of returns.