Saturday Links: Millennials’ Backwards Investment Exposure

Millennials have their current investment allocation backwards relative to their elders. (The Reformed Broker)

Millennials have less invested in stocks than their elders

Alibaba founder Jack Ma’s advice on hiring: (Twitter, Bluegrass Capital)

— “Find someone who you think will be your boss in 5 years.”

From Morgan Housel: Ways to keep your competitive edge (Fortune)

“Someone with a 110 IQ and the ability to recognize when the world changes will always beat the person with a 140 IQ and rigid beliefs…The ability to realize when you’re wrong and when things have changed is more important than an ability to solve problems that are no longer relevant. This seems obvious until you watch, say, Kodak or Sears putting effort into solving 1980s problems in the 2000s.”

— Empathize with your customers: “Forty-seven percent of mutual fund managers do not own any shares in their own fund…I suspect if you dug deeper into different businesses you’d find something similar. What percentage of McDonald’s executives frequent a restaurant as a legitimate customer interested in the chain’s food, not as a suit on a fact-finding mission?…The inability to understand how your customers experience your product promises an eventual drift between the problems a business tries to solve and the problems customers need solved.”

— Communicate effectively: “The spoils rarely go to the person with the best idea. They go to the person with a good idea who can explain things easily and effectively… Most business edges are found at the intersection of trust and simplicity. Both rely on the ability to tell customers what and why you’re doing something before losing their attention.”

— Being willing to fail more often than your competition: “Bezos again: ‘If you double the number of experiments you do per year, you’re going to double your inventiveness.’ The key is creating a culture and financial structure that allows you to fail without ruin. This means not docking employees for trying things that don’t work, and not betting so much on a single idea that its failure could cripple the company.”

— Be willing to wait longer than your competition: “The world of rewards sits on a spectrum: Small rewards in the short run, big rewards if you wait longer…If you can wait five years when your competitors are only willing to wait two, you have an advantage that is both powerful and uncorrelated to intelligence or skill.”