Robo advisers or not as the case maybe….?

IMG_20160711_2110078

My good friend has recently moved his life and business to Jávea in Spain. Jávea is a coastal town in the comarca of Marina Alta, in the province of Alicante, Valencia, Spain, by the Mediterranean Sea. Situated on the back side of the Montgó, behind a wide bay and sheltered between two rocky headlands. The area was first inhabited in prehistoric times, 30,000 years ago by cave dwellers on Montgó.

My role was to assist him on business structure matters in Europe, focus is incredibly important when you are transitioning life and business to a new country and environment.
We decided to take the weekend off and on the Sunday climb Montgó, which rises to 753 metres (2,470 ft). It is the last spur on the Cordillera Prebética Mountain Range. The mountain rises dramatically from the valley floors. surrounding it and dominates the skyline for miles around. Its craggy cliffs are home to some of the most unusual flora and fauna in Spain. The mountain is renowned for its rock formations, cliffs, caves and natural harbours. From the Xàbia side Montgó is often said to resemble the head and trunk of an elephant and a real endurance test in 35 degrees of heat!
We always have many high energy discussions and decided, as the hike up the mountain was 7km and potentially 5 hours of climbing by the cliff edge, that talking about human 2 human and robo-automation maybe a good way not to focus on the sheer drop of the mountain edge.

It is true to say that there has been about 35% of current jobs in the UK at high risk of computerisation over the following 20 years, according to a study by researchers at Oxford University and Deloitte. (‘The Future of Employment: How susceptible are jobs to automation’. Data supplied by Michael Osborne and Carl Frey, from Oxford University’s Martin School). Figures on UK job numbers and average wages from the Office for National Statistics and Deloitte UK.)
Whilst this is not 100% it can cause a level of insecurity when reviewing certain media and developments by companies for the replacement of humans.

A robot anesthesiologist designed by Johnson & Johnson is going off the market. Only three years after approval, the company has stopped production on the Sedasys machine due to poor sales.
The Sedasys machine was designed to provide anesthetic to patients undergoing routine surgeries. The American Society of Anesthesiologists was especially alarmed because anesthesiology is one of the riskier aspects of many surgeries. The machine, which administered the drugs while monitoring the patient’s vital signs, was originally considered for use on a number of surgeries.
Johnson & Johnson agreed to use it only for procedures like endoscopies, colonoscopies, and esophagogastroduodenoscopy. By mid-2015 it was being used in four hospitals. Apparently, that was not enough to justify its continued manufacture.
It’s always unsettling to think that a robot could put a whole profession out of a job especially when that profession involves years of training and expensive education. Apparently, no one is entirely safe. On the other hand, more and more people are facing astoundingly high healthcare costs. The Sedasys system cost one tenth as much, per procedure, as a human anesthesiologist.

Jávea_desde_el_Montgó

We discussed another sector: financial advisers and financial services, where robo advisers could potentially override human competence in areas. Robo advisers do a great job of maintaining client portfolios. But that’s only one part of the job of financial management and that is why human advisers are not going away anytime soon. Traditional human advisers deliver the kind of personal, hands-on service that investors consistently say that they want.
Just as important, advisers are able to offer the continuing coaching to address the challenges clients face along the way – from market-volatility to cash-flow needs to ensure that transitory issues don’t devastate their long-term strategy.
Some critics point to supposed advantages of robo advisers. For one, they say that a passive, robo-managed portfolio will outperform a portfolio actively managed by a human. But that’s a matter of investment strategy, not an argument for going exclusively with digital advisers. Many human advisers might recommend passive investment strategies, depending on the needs of the client.

The need for human help

Ultimately, it’s all about what investors want and what they seem to want more than anything is the human touch. Many of the most successful digital platforms already include access to human advisers, while others are being retrofitted to serve as portals for traditional advisory practices.
That does not mean, of course, that there’s no market for digital services. Some traditional human-centered advisory firms, for instance, are adding digital tools to their offerings. But they’re doing so as a complement to the kind of personalized service that only they can provide to clients, not as a replacement for it. Creating and coaching households through the realisation of an optimal comprehensive financial plan still relies on the responsiveness and rapport only a traditional adviser can provide.

An interesting report by A.T Kearney state assets under management by robo advisers are estimated to increase 68 percent annually to about $2.2 trillion in five years, according to a forecast from the firm. About half of that is expected to come from money that’s already invested and the rest from non-invested assets. The robots may prove to be even better than humans at one of the most important tasks required of an investment adviser: knowing how to dodge taxes.

“The dramatic collapse of commission prices and the rise of automation means that institutional-grade tax-loss harvesting is now within the reach of all investors,” reads a blog post from robo-adviser pioneer Wealthfront, whose claim to fame is programming a robot with all the wisdom of professor Burt Malkiel.
There is no question that robo automation is an innovation, brought on by the millennials, there is significant value to efficiency if robots can execute customer lifetime value and brand customer loyalty. However, all of this raises some important questions. Like, could growth in robo-advisers among the fattest part of the demographics curve lead to more crowded trades and more tightly correlated markets? What are the implications for government from robots armed with “institutional grade tax-loss harvesting” strategies? Will the conference circuit become filled with awkwardly dancing robo advisers and robo sales traders? And will they play hookie during the breakout sessions to go shoot a round of golf with handicaps of approximately negative 40?

If we start seeing portfolios with 90 percent allocations to the Robo-Stox Global Robotics & Automation Index ETF, we’ll know something went wrong.

All of the aforementioned gives us plenty to ponder, I feel…….

Are good story tellers happier in life and business?

I recently travelled to Southern Europe, to assist a friend who has moved country for a new life and new business. At the airport I managed to fill my arms with the usual stack of daily news and happily found a copy of the Wall Street Journal. The ‘Personal Journal’ in today’s issue really raced my mind on an article around happiness, life, love. I have been writing for the last few years on the subject and then had a 38,000 feet epiphany: “it may not be how happy we are in our lives or in love, but it maybe the stories we tell”?

A Hopi American Indian proverb says: “Those who tell the stories rule the world.” Well, just maybe these words of wisdom are totally correct.
It is true that in our information-saturated age, business leaders “will not be heard unless they’re telling stories,” says Nick Morgan, author of Power Cues and president and founder of Public Words, a communications consulting firm. “Facts and figures and all the rational things that we think are important in the business world actually do not stick in our minds at all,” he says. But stories create “sticky” memories by attaching emotions to things that happen. That means leaders who can create and share good stories have a powerful advantage over others. And fortunately, everyone has the ability to become a better storyteller. “We are programmed through our evolutionary biology to be both consumers and creators of story,” says Jonah Sachs, CEO of Free Range Studios and author of Winning the Story Wars. “It certainly can be taught and learned.”

In William Shakespeare’s time, the word “conversation” meant two things—verbal discourse, and sex.
That’s how intimate the most well-known poet and playwright in the English language viewed the act of talking with another person.
Since the dawn of language, people have shared stories with others to entertain, persuade, make sense of what happened to them and bond. Research shows that the way people construct their individual stories has a large impact on their physical and mental health. People who frame their personal narratives in a positive way have more life satisfaction.
They also may be more attractive. New research, published this month in the journal Personal Relationships, shows that women find men who are good storytellers more appealing. The article consists of three studies in which male and female participants were shown a picture of someone of the opposite sex and given an indication of whether that person was a proficient storyteller. In the first study, 71 men and 84 women were told that the person whose picture they were looking at was either a “good,” “moderate” or “poor” storyteller. In the second study, 32 men and 50 women were given a short story supposedly written by the person in the picture; half the stories were concise and compelling, and half rambled and used dull language. In the third study, 60 men and 81 women were told whether the person in the picture was a good storyteller and were asked to rate their social status and ability to be a good leader in addition to their attractiveness.
The results were the same across all three studies: Women rated men who were good storytellers as more attractive and desirable as potential long-term partners. Psychologists believe this is because the man is showing that he knows how to connect, to share emotions and, possibly, to be vulnerable. He also is indicating that he is interesting and articulate and can gain resources and provide support.

Psychologists say it’s important to keep telling each other stories. They help you remember why you were attracted to each other in the first place. In tough times, they help you make sense of what has happened. Many marriage therapists have couples in crisis each explain their side of events and then weave their stories into one cohesive narrative. “It’s a way to build and maintain a bond over shared history,” says Anna Osborn, a licensed marriage and family therapist in Sacramento, Calif.

How can you use storytelling to continue to bond in your relationships?

Principles to Remember
Do’s:
– Consider your audience – choose a framework and details that will best resonate with your listeners.
– Identify the moral or message your want to impart.
– Find inspiration in your life experiences.

Don’t’s:
– Assume you don’t have storytelling chops – we all have it in us to tell memorable stories.
– Give yourself the starring role.
– Overwhelm your story with unnecessary details.

Embed conflict to motivate and inspire
Josh Linkner was worried his employees were becoming complacent. Then the CEO of ePrize, a Detroit-based interactive promotions company, Linkner had seen his company become the dominant leader in the online promotions industry almost overnight. In the mid 2000s, “we had double and triple growth every year,” he says. “I became worried that we would start clinging to our previous success instead of forging new success, and that our creativity would decline.” “Greatness is often achieved in the face of adversity,” he says, “but we didn’t have a competitor to gun against.”
So he made up a fake nemesis. At an all-company meeting, he stood up and announced that there was a brash new competitor named Slither. “I told everyone they were bigger than us, faster than us, and more profitable,” he says. “Their investors had deeper pockets. Their footprint was better, and they were innovating at a pace I’d never seen.”
The story was greeted with chuckles around the room (it was obvious the company was a ruse), but the idea soon became embedded within ePrize’s culture. Executives kept reinforcing the Slither story with fake press releases about their competitor’s impressive quarterly earnings or infusions of capital, and soon the urge to best the imaginary rival began to drive improved performance.
“It inspired creativity,” Linkner says. “In brainstorming sessions, we used Slither as the foil. Instead of saying, ‘OK, guys, we have to reduce our production time. How are we going to do that?’ I would say, ‘The folks over at Slither just shaved two days out of their cycle time. How do you think they did it?’ The white boards filled with ideas.”

Anchor the story in your personal experiences
Vince Molinaro, managing director of the leadership practice at Knightsbridge Human Capital Solutions, Canada’s biggest HR advisory, tells clients he knows exactly when his career direction snapped into focus. It was at his first job out of college, with an organization that helped needy individuals get back on their feet. Vince loved the mission but found the atmosphere uninspiring. “Everyone just went through the motions,” he says. “I remember thinking, ‘Is this it? Is this what working in the real world is like?’”
A senior manager named Zinta sensed that Vince wanted to have a bigger impact, and asked him to join several likeminded colleagues on a committee to make their workplace a more positive environment. They began to make subtle changes, and coworkers’ attitudes started to improve. “I saw firsthand how a single manager can change the culture of a place,” he says.
Then Zinta was diagnosed with aggressive lung cancer. In her absence, the office culture began to revert back. On a visit to see Zinta in the hospital, Vince told her about the disappointing turn of events. She surprised him with a confession: Since she had never smoked and had no history of cancer in her family, she was convinced that her disease was a direct function of putting up with a toxic work environment for so long.
Shortly after, Zinta sent Vince a letter telling him he would be faced with an important choice throughout his life. He could allow the negative attitudes of others to influence his behavior, or pursue professional goals because of the sense of personal accomplishment they offered. “In her time of need she reached out to me,” he says. “She was a mentor to me even though she didn’t need to be.”
Two weeks later, Zinta passed away. But the letter changed Vince’s life, inspiring him to leave his job and start his own consulting business devoted to helping people be better leaders. “I’ve seen the kind of climate and culture that a great leader can create,” he says. “For the last 25 years, I’ve tried to emulate that.” He still has Zinta’s letter.
When Vince first began sharing this story with his leadership clients, he was taken aback by their reaction. “There was a connection they had to me that was really surprising, he says. “It’s like they got me in ways that I wasn’t able to directly communicate.”
“It also gets them thinking about their own story and the leaders that have influenced them. In my case, it was a great leader. Sometimes it’s the really bad ones you learn a lot from.” Whatever the case, he says, the power comes from sharing your story with the people you lead so they better understand what motivates you.

A final thought: stories do grab us. They take us in, transport us, and allow us to live vicariously and visually through another’s experience. As I’ve said often in my work around presence, shared stories accelerate interpersonal connection. Learning to tell stories to capture, direct and sustain the attention of others is a key leadership skill. Storytelling also greatly helps anyone speaking or presenting in front of an audience.

As Steven Spielberg once said:

‘The most amazing thing for me is that every single person who sees a movie, not necessarily one of my movies, brings a whole set of unique experiences. Now, through careful manipulation and good storytelling, you can get everybody to clap at the same time, to hopefully laugh at the same time, and to be afraid at the same time.’

Guest blogger, international wine expert Aitor Trabado talks about Port

vino-oporto-2a

Aitor Trabado now concludes his 4th and final wine blog on Port Wine:

Today we will talk about Port wine. I love sweet wines. They come in different ways. We have sweet wines produced leaving the fruit in the plant for a longer time, allowing the water to evaporate thus making the sugar levels higher. Many producers elaborate this kind of wines either with white and red varietals. It comes with the expression “Late Harvest” in the label.

A step further is leaving the fruit in the plant even longer waiting for a fungus to attack the grapes: the botrytis cinerea. The most popular of these wines are the French Sauternes, where we can find Château D’Yquem, whose wines are really sought after and very expensive. In Hungary they produce the Tokaj following the same principle.

Then we have wines made by adding alcohol to stop the fermentation. This provokes the yeast to die due to the action of the alcohol. The remaining sugar that has not been turned into alcohol will give its particular sweet taste. Portugal’s Porto is the best place in the world for this kind of wine. The first notice we have of this wine goes back to the XVII century, when the wine had to be added alcohol to survive its transportation to England by sea due to the wine shortage they had in the island.

Red Port wines use mostly the following grapes: Touriga Franca, Tinta Roriz, Tinta Barroca, Touriga Nacional and Tinto Cão.

We can divide the red Port wines into two big groups: those which are aged in oak barrels and those which are aged in bottle.

port-wine-porto

Aged in oak are full bodied, fruity wines with a deep red tonality and dark fruit flavors. We have Port Ruby, aged for two or three years, Port Reserva, a more quality wine, and Port Late Bottled Vintage (LBV) with four to six years in oak.
Then we have Port Tawny, which can be 10, 20, 30 and 40 years old.

The other group is the one aged in bottle. We have here the Port Vintage, the best wine produced in a single vintage. These wines spend two years in the barrels, then more in the bottle. Their longevity due to its quality is the longest one of Port wines. These are the most full bodied, structured Port wines. Not done using grapes of a single vintage is the Port Crusted. They can also age well in bottle.

Finally we have white Port, produced using Malvasía Dourada, Malvasía Fina, Gouveio and Rabigato. They age for two or three years in big oak barrels and we can find them in dry and sweet styles.

Port wineries have traditionally bought grapes to other producers. Still, some of them have their own plots where they cultivate their own grapes. These are called Quintas and when the Port is done with the grapes of one single quinta the name of it appears in the label. Some of the most popular are Quinta de Vargellas of Taylor’s; Quinta da Roêda, of Croft and Quinta do Panascal, de Fonseca.

Some other important producers of Port wines are Niepoort, Graham’s, Cockburns, Sandeman, Dow’s, Ferreira, Quinta do Infantado and Quinta do Noval.

Port is one of the places where the grapes are still pressed by stepping into them, not using press machines.

If you want to enjoy a nice glass of Port wine, serve it with cheese or chocolate, and make sure you sit, relax and share it with a friend. This will be the best way to discover Port.

Aitor Trabado

Twitter: @atrabado
Mi Amigo El Vino – www.miamigoelvino.com

My other posts:
Guest blogger, international wine expert Aitor Trabado
Aitor Trabado talks about Cabernet Sauvignon
Aitor Trabado talks about white wine

Guest blogger, international wine expert Aitor Trabado talks about white wine

Aitor Trabado today talks about white varietals

Last week we talked about the red varietals I like most. This week we will talk about white ones. In any case, I normally prefer a red wine over a white one. I certainly believe in matching wines and food, and I’ve tasted pairings in which flavors of meals and wines are really enhanced by the matching but I also believe that when the company is good, the wine is good and the food is good, there is no way any of it will be spoiled by the, let’s say, mismatch.

For white varietals, I will go with these three: Riesling, Gewürztraminer and Viogner. Both in Mosel, Germany and in Alsace, France you will find great wines made with the first two. Weingut Barzen in Mosel and Domaine Schlumberger in Alsace produce great wines. I love Riesling. It comes in four different levels of sugar, from the dry Trocken to the so sweet Beerenauslese. Barzen makes all of them with great quality.

One Gewürztraminer I love is the one Domaine Schlumberger makes and also a superb sweet one produced in Spain by Gramona, a cava specialist making this Vi De Gel or Ice Wine with this varietal. Incredibly well balanced wine. Also in Northern Spain’s El Bierzo Luna Beberide makes a great Gewürztraminer.

In France you can find great Viogner wines, as it is a French varietal, but one that I really love is produced in Spain. Vallegarcía Viogner, Montes de Toledo-Vinos de la Tierra de Castilla La Mancha. I’ve tasted several vintages of this wine and it is always great.

Lately I’m getting fond of Chenin Blanc, especially that of the Loire Valley. Domaine de Bellivière makes a great one in Les Rosiers. I also have in my tasting queue two Chenin from South Africa.

Northwest Spain is widely recognized by its white wines. It is true that Albariño, the varietal found in Rías Baixas, produces a great wine. For my taste, it’s a bit too acid, though from time to time I enjoy a bottle of Albariño. Terras Gauda, Pazo de Señorans or Mar de Frades are good Albariños.

white

Near the border with Portugal there is a small area within Rías Baixas named O Rosal. A great wine with Loureiro varietal is produced here; Dávila L-100 by small winery Valmiñor is a superb white wine.

Near Rías Baixas we find two more Dos: Ribeira Sacra and Monterrei. Another two varietals here, Treixadura and especially Godello, are really great. Vega de Lucia de Bodegas Gerardo Méndez and Guitián produce fruity Godellos. Bodegas Gerardo Méndez is one of those small wineries that you can enjoy discovering for the quality of its wines.

I also love Cava and Champagne. Cava is produced by the millions in the Penedès region of Catalonia. They traditionally use a coupage of three different varietals: Xarel-lo, Macabeo and Perallada. Lately we can find cavas produced with Pinot Noir such as Juvè & Camps Pinot Noir Brut Rosé or Gramona Brut Pinot Noir. Gramona also produces Mas Escorpi, a cava using Chardonnay 100%.

Our French neighbors and their Champagne. I really love Champagne. I’ve tasted lots of them, from the mainstream ones to small producers ones. My favorites are Pol Roger Reserve and Bollinger Special Cuvée. Pol Roger is also known because of its relationship with Sir Winston Churchill. Back in his days he was so fond of this winery that he used to store cases of it and he built a strong connection with them. Therefore, they have a special cuvee since then called Pol Roger Sir Winston Churchill Cuvée for an average of 200 euro.

The varietals most used for Champagne are Chardonnay, Pinot Noir and Meunier.

Aitor Trabado

Twitter: @atrabado
Mi Amigo El Vino – www.miamigoelvino.com

My other posts:
Guest blogger, international wine expert Aitor Trabado
Aitor Trabado talks about Cabernet Sauvignon
Aitor Trabado talks about Port

Guest blogger, international wine expert Aitor Trabado talks about Cabernet Sauvignon

red-cabernet-sauvignon-food-520x245

This week we will talk a bit about my favourite grape varietals. There are hundreds of different varietals around the world. As you can imagine, the same grape works in different ways according to where it grows. We can love the Cabernet Sauvignon from Napa and it will be different from a Cab planted in Lebanon. Of course, each varietal has a soul that reflects its own nature but the soil will give the grape its particular character.

Isn’t it good that each varietal has a particular wine region where it gives the best of it? Cabernet Sauvignon in Bordeaux and Napa Valley, Merlot in Bordeaux, Chenin Blanc in the Loire Valley, Tempranillo in Rioja, Tinta Fina in Ribera de Duero, Pinot Noir in Bourgogne and Oregon/Washington, Carmenere in Chile, Cabernet Franc in Argentina, Nebbiolo in Barolo, Sangiovese in Toscana, Sauvignon Blanc in Australia, Riesling in Mosel and Alsace, Chardonnay in Champagne, Syrah in Rhone just to name a few. Does this mean we cannot find a good Tempranillo somewhere else? Absolutely not. But one great thing about wine is that producers find the best varietal for their soil and they explore all its characteristics to make superb wines.

As you go tasting and discovering new wines, you will adjust your palate to it. You will discover which wines you appreciate more and which ones best adapt to your taste. In an ideal world you would be able to find your favorite wines in the same shop at a similar price, but unfortunately this place doesn’t exist. I know there are many websites for you to get those wines, but shipping costs and custom taxes make a bit hard to buy wine in distant countries.

In this ideal world, I would buy my Cabernet Sauvignon from Napa Valley. In the Left Bank of the Garonne River in Bordeaux they make some of the best and most expensive Cabs in the world. Still, I love the Californian ones. The truth is I’ve tasted more from Napa rather than from Bordeaux, and I love the body the Americans give to their wines. One of my favorites comes from Beringer Vineyards. The 1997 was an extremely delicious wine. I still treasure one bottle of that vintage. Some other ones that I love are the Ridge Monte Bello, the Caymus Special Selection and Mayacamas.

Napa also offers a great Zinfandel. And with this varietal there is one king and one king only for me: Turley Vineyards. They produce different Zinfandels across California, but the Dusi Zinfandel is perfection in a bottle for me.

If we talk about Merlot, we can talk about the Right Bank of Bordeaux. The small village of St. Emilion has almost more wineries around than population. Merlot here is found in single varietals or assembled with Cabernet Sauvignon or Cabernet Franc. I recently discovered a good one at an affordable rate, Château Carteau. If you want to invest your long working hours on wineries in the surroundings, you will find Château Le Pin, Château Cheval Blanc or Château Petrus to name a few. But there are more wineries with great wines without needing to assault our bank account.

cab

Outside France I love one Spanish Merlot. Jean Leon Merlot, in Penedès. This is probably the wine I have tasted more different vintages and it is always great. I still remember 2001 as a perfect year. 2004 was also an incredibly great wine.

Being Spanish, I cannot neglect some of the best Spanish wines. We have here 65 different Denominations (DOs). We have so many excellent wines in every one of them. Still, for the wines that I love, I will talk about two of them: Ribera De Duero and Priorat. In both DOs you can find great wines ranging from 6 euro to 1000 euro. But you can enjoy superb wines at affordable prices. In Ribera, I love Pago de los Capellanes, Emilio Moro and Viña Sastre, every wine they produce. There are so many wineries producing highly rated wines that I can recite here, such as Vega Sicilia, Pingus, Hacienda Monasterio or Pago de Carraovejas, and lesser known winemakers such as Teófilo Reyes or Ascension Repiso to mention a few, but the ones I mentioned first offer incredibly sublime wines ranging 15-40 euro. Any of those wines make me look in awe at my glass while I drink them.

In Priorat we can find high-end wines like L’Ermita by Álvaro Palacios, ranging around 800-1000 euro, but also great affordable wines such Finca La Planeta by Pasanau Germans and Les Terrases also by Álvaro Palacios, for less than 30 euro. Clos Martinet or Clos Dominic’s Vinyes Vielles for around 40 or Clos Mogador around 60 euro. Great wines produced with coupages using Grenache, Carignan, Cabernet Sauvignon or Merlot.

In France, besides the ever popular Bordeaux wines assembling Cabernet Sauvignon in the Left Bank and Merlot in the Right Bank with some Cabernet Franc, I’ve become in love with Pinot Noir from Burgundy. I am still beginning exploring the region, but the smoothness of their wines is absolutely great. Again, we can find bottles of wine more expensive than a sports car like the Domaine de la Romanèe Conti, but also great wines for less than 50 euro that will delight our palates. Paul Jaboulet, M. Chapoutier, Bouchard Père e Fills or Louis Jadot produce many different wines from the ample array of Denominations we can find in Bourgogne.

Finally, what to say about Italy? This country deserves many entries in this blog and we will discuss Italian wines in the future. But for now we will mention Nebbiolo from Northern Barolos and Barbarescos, and Sangiovese from Central Tuscan DOs as Brunello Di Montalcino, Super Toscanos and Chianti. I love Italian wines and there are so many of them we can enjoy along with our meals or on their own.

Next week we will talk about white varietals.

Aitor Trabado

Twitter: @atrabado
Mi Amigo El Vino – www.miamigoelvino.com

My other posts:
Guest blogger, international wine expert Aitor Trabado
Aitor Trabado talks about white wine
Aitor Trabado talks about Port