Friday, 25 May 2007

Theory, experience and thinking method

Wherever a fossilized life disclosed, there must be masses of rules.
---- Nietzsche

Life and the real world have infinite details and are impossible to be analyses completely, everyone hence can only digest a snapshot for his specific purpose. And the inevitable distortion during this process is the source of many errors and misunderstandings which are hard to find.

Theoretical frameworks are just one kind of these snapshots, the only difference between the frameworks and other snapshots is that they've been strictly organized to be self-completed in their own logic system and certified by the authorities.

Of course we can't deny the importance and usage of them, since these magnificent systems are built up by the former genius with great efforts to solve the complicated problems, and the power of these theories have been proved by the observed evidences.

But the problem is, nowadays, most people tend to believe these theories are the completed rules and truths, and they used to apply the conclusions of these theories without the understanding of the basic assumptions, of the main forces and limitations shaped the evolution of the thoughts, and of the occasions on which the nature born distortion in the theory would lead to errors.

I believe that is the reason why management veterans contempt for the theory gurus and consider the jungle experience the only source of skills. They don't trust any second-hand knowledge and think any digest and abstraction is a loss of the reality, and they even claim that the truth of management can't be retrieved without diving into the field.

Can the management insights be learned indirectly? In fact, I think most pragmatic and complicated knowledge in the real life management can divided into 2 realms which I call the "hardcore" knowledge and the "softcore" skills. I label the "hardcore" knowledge as the subjects which provide toolset, such as the economics, the mathematics and etc. And the "softcore" skills, are in fact the mindsets which is for setup new "theory"s in the short time, for instance, on how to solve the problem of performance deduce in my development team, we usually identify, learn, solve, and forget them in short time, and these activities include most of our daily works. And I think that there are 2 points when we improve our "softcore" skills.

Firstly, I think the blind abuse of the theory is stupid and it is vital to realize that anyone has to pay if they pay no effort on studying the context and the limitation of the framework they use. The way I prefer is to "re-find" the theory in the specific context, that is, try to solve the problem with the specific limitation in the context without the help of existed theory, and explored the solution with the comparison between the solution and the theory to combine the context and the existed wisdom together.


On the other hand, I can't accept the claim that the experience is some kind of myth and can't be learned indirectly. And I don't believe that the experienced people without thinking have any advantage above the green hand who are smart.

In my opinion, the experience in use is no more than the real life story plus reasonable thinking method. As to the real life story, I think it can be found and refined by the experienced masters in the areas; if these gurus who are familiar with most aspects of the realms couldn't retrieve the useful info from the real life, I can' t believe a common person with experience can do so.

So, I believe the most important factor whenever practicing and learning the management is the thinking method which is the meta skills for solving any problem. We should improve our thinking method continuously and utilize it to analyze the problems. And never believe the rules are rules.

Thursday, 24 May 2007

What a Huge Bubble

There are always "reasonable" myths support the bubbles before their broken, that's the story of the current Chinese stock market.

Many analysts argue that this turn of bull market is totally different with the former bubbles:

The rising of RMB leads to a re-estimation of nearly all the assets in China, especially real-estate and the stock.

The world wide high liquidity of money influences the supply-demand relationship which fuels the rising price.

The current performance of the corporations in the stock market have been improved greatly and are best in the history.

It is believed that the Chinese government will not interfere in the market by traditional command approach.

Seem professional, hum? But it is often much more worse of a skilled but incomplete thoughts than the common sense.

Common sense tells us that it is impossible for so many people to win the market, specially when all the people around you rushing into the game.

Common sense tells us there is little possibility to win most of players in a zero-sum game without specific advantages.

OK, now tell me, are you the smarts and the brightest?

And furthermore, the above optimistic based on some questionable assumptions:

What is the decisive factor of the stock pricing? Frankly speaking, I don't know exactly. However, the point is not the key, but the fact that NO player has thought it over before their acceptance of the "professional" ideas. That is dangerous and indicates that there has great possibility in the current market that the price has ALREADY been highly estimated because of the extremely high(avg. PE is approximately 75) preference of risk when pricing, which has sparked by the large institutes, and the common people probably even didn't know what this term(preference of risk) means.

Even if the above good news are all true, they can't guarantee the current high price. For example, if some one tells me that a stock with profit of -$0.1 valued $2 while profit $0.1 values $20, I can't believe this reasoning before he tells me why. Maybe the values of the stocks rise, but is there enough evidence that can support the current high price? No one can exactly explain how these factors decide the price and to what extend!

Some interesting things happened to Chinese government, who is trying to follow the professional approach which intend to utilize the market force rather than the commands to regulate the irrational market. But I'm very doubt for its capability because it has no experience of this extremely complicated stuff. The worst result may be, the government fails to use the market approach and the crazy will develop to a great crisis before the effective regulation found. Who will pay for this lesson? And are you still consider it a good news?

In a word, I'm not a professional and expert, but I believe the "PIGs" rather than "BULLs" and "BEARs" are the mainstream of the market, and the Bubble grows!

Wednesday, 23 May 2007

Startup Post

This is my first post on this site.

I setup this blog to present my posts which record my recent new life abroad(from mainland China), and help to develop my skills for expressing my ideas in English.

If you are interested in my other articles in CHINES, you can find them at http://fastfting.spaces.live.com/

Thanks for all the supports.