A Millennial Responds to Simon Sinek's Response on Millennials
Written by: Nicole Anglace
Have you seen Simon Sinek’s response to the “Millennial question” on Inside Quest? As with any viral video, there have been a great number of reactions to it. (Click the image to view)
Some were very positive; Simon stated that since the release of this video many viewers have indicated that they have now started to ban the use of cell phones in meetings and others are even turning their phones off when they get home.
Some have been a bit critical. That being said, I would like to review Simon’s take on my generation.
Millennials: Entitled, Narcissistic, Self-Interested, Unfocused, Lazy
These adjectives are, quite frequently, used to describe my generation. For some, they may have a degree of truth behind them and perhaps for good reason. But I hope that, by and large, these accusations are largely erroneous. However, I do agree with Simon, these descriptions do tend to stem from several characteristics.
Simon’s 4 Characteristics of Millennials
Parents and “Failed Parenting Strategies”
As Simon discusses the detrimental aspects of our upbringing, he explores the impacts of both helicopter parenting and, the infamous, participation trophy. To me, the argument here is essentially that the efforts of our parents. While their intentions may have been laudable, this practice inadvertently taught us a rather poor lesson. The things we want in life will happen, often with little personal effort. This certainly ties in with the sense of entitlement.
However, at least to me, it feels like Simon justifies this by saying that it’s not the Millennial’s fault… that we were simply dealt a bad hand. I wholeheartedly disagree with this statement. Saying this removes the responsibility from the Millennials and puts it on our parents. It would be more appropriate to say that we have adhered to and lived by the idea that we can do anything we want to do (as our parents taught us when we were you) perhaps to a fault. It is our responsibility to acknowledge this faulty mental frame and adjust so that it functions within the bounds of the guidelines set forth by our firms.
We can still achieve our goals, but we must learn to go about it in the proper manner. An effort which may necessitate proper mentoring from our coworkers and leaders.
As Simon mentions, cell phones and social media are more intrusive and detrimental than many of us may realize. Rather than us programming our devices, it is the other way around. Many of us have experienced the phenomenon of a phantom rings/vibration. We react to our phones even if the stimulus is imagined.
What’s worse is that we let technology impact us both emotionally and psychologically. When we are separated from our devices many of us panic, it’s as if a part of us has been removed.
As Simon indicates, many of us have become addicted to the rush of dopamine we often experience when we scroll through social media and count our likes. Simon mentions the fact that researchers have discovered a correlation between Facebook usage and symptoms of depression.
To that end, I feel it is important to mention that a relationship has also been established linking Facebook use with the each of the Big Five, most notably self-esteem and narcissism. Clearly, human nature is quite complex, and understanding the inner-workings of a subset requires a much larger lens than we may be prepared to handle.
As things stand, technology has a persistent grasp on our lives. We need to learn to detach from it and reintegrate ourselves with the real world. To expound on Simon’s other point, we no long focus on the propagation or nurturing of relationships. In fact, it has gotten to a point where we would much rather send a quick text to satisfy our need for social interaction than ask our coworker about the status of a family member after a surgery. We need to disconnect in order to reconnect.
We grew up in a world where instant gratification is presented as the norm. You want to know the score of the super bowl? Just google it. Can’t find a good restaurant? Use Yelp. Need gas? Gasbuddy. Need groceries but you can’t drive? Uber… or, if you’re lucky, AmazonFresh. Every facet of our lives has an app/device that can provide you with the answers or results you seek.
Given that our world has become increasingly more automated and everything is instant, it is no wonder that we have developed an inability to be patient. While I neither condone nor support it, I can certainly understand why some of my generational cohorts are criticized for being impatient, especially in the workforce. Perhaps the longest waits we regularly encounter are simply to update the apps on our phones.
I do agree with Simon here; we need to learn that this expectation for instant fulfillment doesn’t translate to the workforce. In order to make an impact and have total job fulfillment, we need to come to grips with reality. This takes time. We have to put in the effort and realize that we can’t look at this in the short term, the “impact” of our efforts in the workforce has a cumulative effect that will not have a fruitful yield in the short term.
Learning this virtue of patience is not easy. Perhaps, one thing that will help nurture it is proper guidance and clarity at work, especially regarding the firm’s expectations for you.
When addressing this characteristic, Simon discusses his belief that corporate environments are failing to provide the Millennials (and, subsequently, Gen Z) with the leadership necessary to instill the proper values and skills needed to succeed in the workplace. He continues to say that given the state of things, it is now on the shoulders of company to help the employee overcome the challenges of the digital generation and the need for instant gratification.
The focus needs to shift from the long term life of the individual than the short term gains and the numbers. But most of all, Simon says cell phones ought to be banned in meetings. This rule is suggested to help us regain that social aspect of our lives that we seem to be lacking.
As I’ve mentioned throughout my review of Simon Sinek’s response to the “Millennial Question”, ensuring that your company has good leaders and effective mentors is imperative. We don’t want our hands held, but we do want guidance. We want to do more than succeed, we want to excel.
In order to do that, we may need help overcoming our shortcomings. It comes down to this: invest in us and we will reward you.
Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds
Written by: Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies, J.P. Morgan Asset Management
A quiet revolution is taking place in the alternatives world. The idea of alpha/beta separation has finally made its way from traditional to alternative investing. This development brings with it a more transparent, liquid and cost-effective approach to accessing the “alternative beta” component of hedge fund return and a new means for benchmarking hedge fund managers.
The good news for investors is that the separation of hedge fund return into its components—rules-based alternative beta and active manager alpha—has the potential to shift investing as we know it. These advancements could democratize hedge funds and, at long last, make what are essentially hedge fund strategies available to all investors—even those who aren’t willing to hand over the hefty fees often associated with hedge fund investing.
A benchmark for alternatives
With respect to traditional equity investing, we have long accepted the idea that there is a market return, or beta—but this hasn’t always been the case. Investors used to assume that to make money in the stock markets, one needed to buy the right stocks and avoid the wrong ones. The idea of a market return independent of skilled stock selection seemed ridiculous to most market participants. Yet today, we would never invest in an active manager’s strategy without benchmarking it against its respective beta.
Interestingly, hedge fund managers have been held to a different standard. Investors have been much more willing to accept the notion that hedge fund strategy returns are pure alpha, and that their investment returns are based entirely on the skill of the fund manager. That notion explains why investors have been willing to accept a “two and twenty” fee structure just to access what has been perceived as one of the most sophisticated and powerful investment vehicles available.
In thinking about the concept of beta, consider its precise definition—the return achievable by taking on a systematic exposure to an economically compensated risk. In traditional long only equity investing, the traditional market beta has been further refined as a number of other risks have been identified that are commonly referred to as “strategic beta.” These include factors such as value, momentum, quality and size. But no one ever said that these risk factors must be long-only.
Over the past decade, as more hedge fund data became available, academics began to disaggregate hedge fund return into two components: compensation for a systematic exposure to a long/short type of risk (alternative beta), and an unexplained “manager alpha.” What they found is that a significant portion of hedge fund return can be attributed to alternative beta. That fact has turned the tables on how we look at hedge fund return. With the introduction of the alternative beta concept, hedge fund managers will have to state their results, not just in terms of total return, but also as excess return over an alternative beta benchmark.
Merger arbitrage—an alternative beta example
The merger arbitrage hedge fund style can be used to illustrate the alternative beta concept. In the case of merger arbitrage, the beta strategy would be the systematic process of going long every target company, while shorting its acquirer. There is an inherent return to this strategy because the target stock price typically does not immediately rise to the offer price upon the deal’s announcement. This creates an opportunity to purchase the stock at a discount prior to the deal’s completion. The premium that remains is compensation to the investor for bearing the risk that the deal may fail.
Active merger arbitrage managers can add value by choosing to invest in some deals while avoiding others. Therefore, their benchmark should be the “enter every deal” strategy, not cash. In fact, the beta strategy explains the majority of the return to the average merger arbitrage hedge fund. And it doesn’t stop there. Other hedge fund styles that can be explained using alternative beta include equity long/short, global macro, and event driven. Note that the beta strategy invests in the same securities, using the same long/short techniques as the hedge fund strategy. The difference is that the beta strategy is a rules-based version that can become the benchmark for the hedge fund strategy. After all, if a hedge fund strategy cannot beat its respective rules-based benchmark (net of fees), an investor may be wiser to stick to the beta strategy.
Implications for investors
What does all this mean for the end investor? Hedge funds have traditionally been the domain of sophisticated investors willing to pay high fees and sacrifice liquidity. Alpha/beta separation in the hedge fund world means that investors can finally choose whether to buy the active version of the hedge fund strategy or opt for the passive (beta) version. Hedge fund strategies can be effective portfolio diversifiers. Now, through alternative beta, virtually all investors can access what are essentially hedge fund strategies in a low cost, liquid, and fully transparent form. For investors who haven’t had prior access to hedge funds, this could be welcome news. Not only can investors look at an active hedge fund manager’s strategy and determine how it has done compared to the systematic beta equivalent, they can also invest in ETFs that encapsulate these systematic strategies.
When looking at one’s traditional balanced portfolio today, there are plenty of questions around whether the fixed income portion will achieve the same level of diversification it has provided in the past. After all, with yields still low, there is little income return. Additionally, the capital gains that came from interest rate declines are likely to reverse. With fixed income unlikely to adequately fulfill its traditional role in portfolios, there is a need to find an alternative source of diversification. This is where alternative strategies may help. For investors seeking to access diversifying strategies in liquid and low-cost vehicles, alternative beta strategies in ETF form are one option.
Looking for an alternative to enhance diversification in your portfolio?
For investors looking to further diversify their overall portfolio, JPMorgan Diversified Alternatives ETF (JPHF) seeks to increase diversification and reduce overall portfolio volatility through direct, diversified exposure to hedge fund strategies using a bottom-up, rules-based approach.
Learn more about JPHF and J.P. Morgan’s suite of ETFs here.
Call 1-844-4JPM-ETF or visit www.jpmorganetfs.com to obtain a prospectus. Carefully consider the investment objectives and risks as well as charges and expenses of the ETF before investing. The summary and full prospectuses contain this and other information about the ETF. Read them carefully before investing.
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