Categories
Opinion

Ethics in Business (and Life)

I was surprised that the part of my post about negotiation on Tuesday that drew the greatest number of comments was “It’s a really scummy thing when people do this to you, and it’s just as scummy if you do it to them” in relation to dirty tricks pulled by car dealers (and my advocating that you shouldn’t try to pull dirty tricks back on them).  It was especially surprising, as I’d put a teaser in the post that I expected to get SOMEONE to ask for details about:  “There are ethical ways that you can get a fair deal from a car dealership which are far more likely to work.”  Commenters seemed to be more interested in pulling a dirty trick on a car dealer than on getting a better deal!

Rather than turning the comment section into a back and forth where people repeatedly assert what they feel is “right”, in this post I’m hoping to outline the reasons why I made that statement, and the limitations of the other perspectives offered. I’ll be using this definition of values, morals and ethics in this post.

In “Zen and the Art of Motorcycle Maintenance” Robert Pirsig makes the assertion that ethical codes are used to judge and attack OTHER people, and aren’t used to guide the behaviours of the group itself (as it’s a codification of things all members of the group already understand).  Whether it’s hippies (calling other people “squares”) or Victorians the code’s purpose is to attack.  Hopefully I’ll avoid doing that here.

I find the golden rule (“Do onto others as you would have them do onto you“) to be a fairly good guiding principle that fits well with my values.  I’m a fairly empathic person, and can usually see things from other people’s perspective, such that if I treat someone badly it really makes ME feel like crap.

I’ve jokingly suggested to friends a modification to this rule: “Do onto others as you would have them do onto you.  And assume other people follow the same rule.”  What this twist lets us do is assume that how people treat us is how they WANT to be treated, and allows us to take revenge as long as it’s poetic justice:  we wrong them in the same way they wrong us, but with the deliberate misunderstanding that they desire for this to happen.

A number of comments seemed to base their perspective on similar ideas.  “Car dealers try to pull dirty tricks on customers, so its OK for us to do the same thing to them.”  I think this is the wrong way to approach the situation for a number of reasons.

  1. This is how feuds start.  You retaliate against them, car dealers (and their salesmen) justify their actions as saying “see, the customers are doing the same thing to us!” and they start using even dirtier, more unethical approaches.  Eventually the entire marketplace becomes so disreputable that it collapses.  As has been written about before, I think this change is happening for real estate agents, and I suspect car dealerships will increasingly adopt a “no haggle” policy (as Saturn has done) as the Internet allows sale prices to become increasingly easy to determine.
  2. This can bleed over into other negotiations you enter where the other person *IS* behaving honourably.  Once you’ve seen that you can use the dirty trick to get a good deal, the temptation will be there to use it more often.  As my friend got used to doing it in real estate deals, and eventually attacked me with the same trick.  “Once you start down the dark path, forever will it dominate your destiny, consume you it will…
  3. It harms YOU when you behave badly.  There’s a group of Internet videos which are of people torturing Tickle Me Elmos (such as dowsing him in gasoline and burning him while he dances and sings).  This doesn’t hurt the doll in any way (it’s not alive), however it DOES harm the torturer.  “The point isn’t whether it’s an issue for the creature. It’s what does it do to us.”  Serial killers usually get started torturing animals, in situations like this I think the toy is clearly a proxy for an animal or something that COULD experience pain.  Whether torturing animals contributes to eventual criminal behaviour or is an early sign of underlying issues is a debatable point, but I think it’s fair to say bad behaviour often leads to more bad behaviour.

jesse made the comment “So what is negotiation but extracting more money from the naive?” which I HOPE implies a misunderstanding on one of our parts.  My view of negotiation is it’s a “dialogue to resolve disputes“.  We’re negotiating with our partner when we argue about who should wash the dishes or change the baby’s diaper, and we’re negotiating with a car dealer when we disagree about the price.  To view negotiation as a method for preying on the “naive” and making their (probably already pretty bad) lives worse to benefit ourselves is a remarkably callous approach to life.  This attitude could result from someone who has been forced into a job that requires them to prey on unsophisticated buyers (and they adopt this attitude so they can live with themselves).  In such a case I think they should immediately quit and find a new way to earn a living as their current profession is causing them significant harm.  If they’ve come to this belief on their own, sadly I think they’re defective as human beings, and I can just about guarantee that there will be unhappiness that results from this in their future.

Categories
Investing

Top Stock Picks for 2009 Competition Q1 Update

I entered into a stock picking contest with some other bloggers – who shall rue the day they decided to do battle with Four Pillars!  🙂

Traditionally, the only way to do well with stock picking contests is to swing for the fences and hope for the best.  With that in mind I picked 4 small Canadian oil stocks which have been beaten down quite a bit.  If oil rebounds next year then these stocks should perform quite well.  There are probably better plays on the price of oil but this is the best I could do on 3 minutes of research.  Keep in mind these are pretty much random selections – do not consider this a recommendation or any kind of advice!

BCF.to – Bronco Energy $1.27.  I started watching this stock a few months ago when it was trading at $10 (it’s now less than $1.50).  My Dad saw some analyst recommending it on BNN – great call – down 85%!

HOC.to – Holly Corp  $3.65

TOG.to – TriStar Oil and Gas  $11.41

CLL.to – Connacher Oil Gas  $0.74

How am I doing?

Not bad…not bad at all!  My picks are down 2.67% which is good for 3rd place (so far).

Here are all the competitors and their results:

  • IntelligentSpeculator     4.33%
  • TheFinancialBlogger     -0.94%
  • FourPillars     -2.67%
  • Million Dollar Journey     -2.96%
  • DividendGrowth     -8.27%
  • WildInvestor     -8.90%
  • Wheredoesallmymoneygo     -21.77%
  • ZachStocks     -24.19%
  • MyTradersJournal     -27.54%

The other competitors (click to see their picks)

The Wild Investor stock picks

Zack Stocks stock picks

Dividend Growth Investor stock picks

My Traders Journal stock picks

Where Does All My Money Go stock picks

Intelligent Speculator stock picks

The Financial Blogger stock picks

Million Dollar Journey stock picks


Categories
Announcements

I Still Need Your Votes Again (March Madness Blog Competition)

I’m competing in today’s March Madness bracket over at Free Money Finance. This is a big competition which results in money being donated to the winner’s charity – I choose the American diabetes association (it had to be an American charity).
If you want to vote then go over and leave a comment with “trust” – you can also vote in the other bracket for the Financial Blogger (comment with “banks”) – see the post for details.

Note – I’m still losing but it’s close so your vote will count.  Voting ends early on Wednesday morning.

Categories
Personal Finance

Another “Kick at the Can” in Negotiations

There are a number of behaviours which are universally despised, yet often creep up as a scummy way to get a good deal out of someone.  When an offer is made and accepted, to then take back your offer and try to get a better deal is a very low move.  If you’re haggling in a developing country and you make an offer which is accepted by a merchant, try withdrawing it and offering a lower amount.  You’ll see someone go, rightfully, from cheerful and happy to near violently angry.

This creeps up as a scam when people negotiate with you and while you’re negotiating in good faith (and assume they’re doing the same), they are in reality (and without your knowledge) only the first line of negotiation.  Once you’ve reached an agreement with them, they’ll then say they need to get someone’s final permission for the deal.  This permission will be withheld, then negotiation will reopen and the new person will try to get an even better deal out of you.

This often happens with car dealerships, where you think the salesman has the power to negotiate, but all of a sudden at the end the sales manager won’t go for it and the deal you thought had been accepted disappears and you have to pay more.  A similar situation happened to a friend of mine recently where she’d negotiated a trade-in value and told the dealership that she didn’t want them saying the trade-in was in “worse shape then they expected” and try to reopen the negotiation.  She invited them to inspect the car before it was brought in, or stand by the valuation they offered.  Of course, they tried to do exactly this (expecting once she’d had her car towed in she’d take the lower offer) and, good for her, she walked.

A car BUYER could do this in reverse by one spouse going in and pretending they were going to buy the car, get to the final stage of making the purchase, and then say they needed to get the final ok from their husband / wife.  Of course, the spouse would refuse, then show up and use the previously agreed purchase price as the starting point for the new negotiation.  I would recommend AGAINST doing this for three reasons.  1)  It’s a really scummy thing when people do this to you, and it’s just as scummy if you do it to then.  2)  The dealership is going to recognize this trick and not fall for it (they’re happy to play games with you all day – you’ll probably get frustrated and give in before they do).  3) There are ethical ways that you can get a fair deal from a car dealership which are far more likely to work.

Another friend used this as his favourite trick when negotiating real estate deals.  He’d hash out a deal, haggle away and pretend he was ready to do it.  Once an agreement was reached, he’d suddenly reveal something that stopped the deal in its tracks (which he’d known about all along and avoided mentioning in the negotiation), then he’d use this to reopened negotiating, trying to get a better deal than previously agreed to (with him having the new information that he knew a price they WOULD agree to).  With some people he was able to get away with this repeatedly (improving the deal each time).  I was somewhat impressed at the deals he negotiated, but was unimpressed with his tactics (and unwilling to do this personally).  He even tried it with me and it almost killed our deal (and unfortunately would have involved lawyers if he hadn’t honoured what we’d agreed to).

If you’re negotiating with someone, and you reach an agreement, DO NOT accept it if they try to reopen the negotiation by adding someone new to the conversation or by bringing up some previously undiscussed issue and trying to reopen the negotiation as a whole.  In some circumstances, such as if a buyer discovered damage to a property they had agreed to buy, you should negotiate about the new issue (the damage in this case and who should pay to get it repaired), but don’t let them use it to reopen the deal as a whole.

If the deal is very important to you, keep reiterating to them that you’ve made an agreement and an offer has been accepted.  If the deal isn’t very important to you (or you have another option for a comparable deal), refuse to do business with someone who tries to pull this on you.

Categories
Announcements

I Need Your Votes Again (March Madness Blog Competition)

I’m competing in today’s March Madness bracket over at Free Money Finance. This is a big competition which results in money being donated to the winner’s charity – I choose the American diabetes association (it had to be an American charity).
If you want to vote then go over and leave a comment with “trust” – you can also vote in the other bracket for the Financial Blogger (comment with “banks”) – see the post for details.

Categories
Personal Finance

Changing Your Opinion

I read a couple of interesting articles recently over at the Simple Dollar – the first article was about a recent car purchase, a pretty good analysis of why they ended up buying the car they did.  This post had a lot of comments that were critical of the fact that he bought the car using financing even though he had the cash.  Many of the commenters took him to task because he had said so many times in the past that you should only buy something if you can pay cash (and can afford it).  The second post was talking about money management from a risk perspective and addressed a lot of the comments from the first post.

The interesting thing I got out of these posts and the comments was that many bloggers (not just the Simple Dollar) often take on an authoritative tone and hand out pearls of wisdom as though they are the 10 commandments.  One common situation is someone who has a lot of debt and then realizes they need to start cutting their expenses and paying off the debt.  All of a sudden they become experts in the field and start doing ‘top 10 [incredibly obvious] ways to save money on groceries’ or whatever.  I used debt reduction blogs as an example but this is common with all types of blogs.

One of the keys to being an expert is to sound confident that you know what you are doing.  As Mr. Cheap pointed out so well in a post called “absolutes” – you can’t be an expert if you are wishy washy on what you are saying.  You have to be firm that your idea or method is not just the best way, it’s the only way and any other possibility will end up in disaster.  Unfortunately very few things are all that clear cut – this is why “rules of thumb” are often quite useless – they just don’t apply that well to most scenarios.

In the case of the Simple Dollar – the author has used the blog to journal his own financial life from being heavily in debt to his current status of being very successful financially.  A large part of his financial success has been to sticking closely to “rules” like only pay cash for items which is a pretty good rule to follow if your number one goal is to pay off debt.  Now however, he’s come to the point where the rules that apply when heavily in debt, no longer apply to the same degree to someone who is doing well financially.

It was interesting to read some of the comments from readers who felt “betrayed” that Trent would go against his own advice from the past.  I think that he made a good financial decision that makes sense for him and his family – it’s the “betrayed” readers that need to look at who they put up on a pedestal and why.  At the same time if a blogger decides to put themselves up on a pedestal then they should make sure it’s not a high one – you don’t want to have big fall to the ground.

One could make the same argument about the recent Derek Foster uproar when it became public knowledge that he sold all his “hold forever” dividend stocks.  While I still question his move to cash, I also would have to question anyone who reads one investment book and plans their entire investment strategy around it without doing any other research.

Categories
Announcements

LinkStuff for Friday, Mar 27

Busy times – I hosted the carnival of personal finance on Monday which contained 98 entries.  The theme was learn the basics of investing.  And the funny thing is that I’m hosting it again – 2 weeks later on my other blog – the ABCs of Investing.  If you are a blogger then make sure you get your picks in for that carnival nice and early – I really, really hate late submissions ie enter by Sat, Apr 4 at the latest.

Posts of the week

Being Frugal had a guest post (which I wrote) about the very basics of asset allocation.

The Wisdom Journal is rethinking the American Dream.

Cash Money Life says I hate doing taxes.  Join the club Patrick!

The Financial Highway talks about the pros and cons of leveraging.

PT Money had an interesting post on borrowing from your 401k – making the best of a bad situation.

The rest of the links

Canadian Capitalist concluded his 19 part series on Derek Foster with a book review of Money for Nothing.

Financial Blogger explains why you shouldn’t do market timing.

ABCs of Investing explains how interest rates affect bond prices as well as online discount brokerages.

The Oblivious Investor wrote about target retirement funds.

Money Ning reminds says there is an impending retirement crisis.

Good Financial Cents is wondering if the markets beginning to thaw?

The Consumer Boomer explains how to tap your 401k without penalty.

The Intelligent Speculator wonders if the market is on steroids.

Investing School discusses diversification across different asset classes.

Million Dollar Journey wrote about the purpose of money.

Bible Money Matters answers the question – when will we see the stimulus package paycheck increase?

Moolanomy explains Dave Ramsey’s Baby Steps to financial freedom.

Categories
Opinion

Public Speaking

My favourite Jerry Seinfeld joke is:

“According to most studies, people’s number one fear is public speaking. Number two is death. Death is number two. Does that sound right? This means to the average person, if you go to a funeral, you’re better off in the casket than doing the eulogy.”

Like most people, I always *HATED* having to speak in public.  I come by it honestly:  my mother tells a story where she had to give a class presentation in high school and she was so nervous she went to her family doctor and tried to get tranquilizers.

In large part BECAUSE so many people are uncomfortable speaking to a group, it can be a valuable skill in just about any occupation (it’s rare and therefore valued).  My father was middle management at a factory and, within the union and within management, people who could stand in front of a group and yack for a few minutes would often be promoted far beyond their intelligence or ability should have allowed.  A neighbour of ours was always willing to get up in front of a group to give an impromptu speech and despite being lazy he moved up the ranks at the post office (he went from being a letter carrier to travelling around doing training at various regional offices).

If you’re looking for a skill to develop that could help you with your career advancement, without knowing anything more about your situation I’d bet that public speaking would be a good choice (it’d be hard to go wrong with writing or sales either).

I’m not a gifted orator (by any means), but I’ve gone from being petrified at the idea of speaking to a small group to being able to give technical talks to over 100 people.

Step 1:  Realize most people feel the same way you do

I think the first step in developing public speaking skills is to realize that almost everyone is very nervous speaking in public.  It’s not something that you either have or you don’t, it’s a skill that most people who give talks have developed over time.

I’ve given up on learning a second language or a musical instrument.  I’ve tried (and failed) repeatedly at both and I just don’t have the aptitude (or enough interest / dedication).  Conversely I’ve known a large number of people who have dramatically improved in their speaking skills while I’ve known them, despite initial reservations.  I’ve never known anyone who kept working at speaking in public and DIDN’T improve.

Step 2:  Find a place to practice

Unfortunately this is a hands on skill.  You can’t master it by reading about it.  Talk in public every chance you get.  Create chances to speak in public by signing up for drama (if you’re still in school) or auditioning for a play.  If there’s a group in your area, join Toastmasters or the Dale Carnegie public speaking course.

By nature I’m a raging introvert.  In high school I realized that being shy and unwilling to talk to groups would severely hold me back in life, so I acted in the school play one year (2 whole lines baby!) and started a school newspaper (and assembled and managed the staff).  After a year of doing both of these I was more than willing to throw myself in front of a group and say something.

Step 3:  Get feedback

I’m a big believer that to improve at any skill you need feedback (or the ability to accurately evaluate your own performance).  Toastmasters and the Dale Carnegie course both have this feedback built in (and a good director of a play may give some useful feedback).

Step 4:  Accept the nervousness

Realize that for many people (such as myself) speaking in public will always be a fairly nerve-wracking experience.  When I’m presenting to a graduate course (about a dozen people) I get butterflies and have to go to the bathroom every 15 minutes beforehand.  I have been complimented repeatedly on my presentations, so in spite of nervousness, it’s possible to do a good job.  I get SOME satisfaction from giving a decent presentation or talk, but the nervousness doesn’t disappear.  I think it’s good for us to push ourselves outside our comfort zone at times, so this doesn’t prevent me from accepting opportunities to talk in front of a group.

Step 5:  Continually improve

There are always ways to improve at anything you do.  If you’re the best in the world at something, you can still keep getting better at it.  Sometimes you’ll be satisfied to just use the skills you’ve developed (it takes time and effort to improve), but for the things that are really important to you, it’s possible to keep getting better.  The way to do this is to be reflective about your performance, consider ideas for improvement from others or generate ideas for improvement yourself and TEST them.

Are you comfortable speaking in public?  How did you develop this skill if you are?  What is holding you back (besides fear, you chicken 😉 ) if you aren’t?