Three years ago I earned the right to use the CFA charter designation. And while 36 months is probably an insufficient time to write an autobiography about - and frankly, I am pretty sure that none of you would want to read it - it does allow me to reflect on the past.
And this is the purpose of this talk. To share with you what I learned: the one thing I'm quite proud of; the one mistake that could have easily been prevented; and the one regret that I hope to correct going forward.
I am proud of the fact that I won the financial balance sheet game. Three years had passed since I sat in for the level 3 exam, and I can now say to you that my financial dreams did come true: there are a lot of numbers in my bank account, much more than I need.
To boast about my financial position is both strange and surprising. Because in the not too distant past, as a matter of fact, while I was studying for the CFA exam, I shared a tiny house with 6 roommates; I worked two jobs for many years: one as an intern at a bank making minimum wage, and the second recycling computer parts where I would disassemble old computers and salvage any metal left.
So for a guy who moved to California with a suitcase ten years ago, who did not know the difference between a stock and a bond or an interest or dividend - I did surprisingly well. But at what price?
This brings me to the second item I wanted to share with you. The mistake that can also be seen as the price I paid to win the financial balance sheet game.
The price I paid was that I failed – I utterly lost - on the social balance sheet. Read: I did not spend time with people I care about; I was cold and distant to colleagues, friends and family members who sought my help. And essentially anything unrelated to the financial balance sheet game was a distraction to me.
During those years, I reminded myself that Machiavelli said that the end justifies the means. And if I was mistreating and taking from others in the present, I would return ten times more sometime in the future. In hindsight, I was rationalizing or making sense of a bad situation I had placed myself in.
It is now known to psychologists that rationalization is a powerful defense mechanism. It is hard for our brain to be in uncomfortable situations, so we make up stories to alleviate them. But this defense mechanism can take you only so far. And it is a matter of time - usually after a major life crisis – that you realize that you can no longer pretend.
To win the financial balance sheet, not only did I neglect the well being of others, but I also neglected myself in the process. The day I got the email from the CFA Institute, congratulating me of passing the third level exam, was the day I stopped advancing my knowledge. It is said that we forget with age. This means that I know today less about investments and financial concepts than I did three years ago. That is tragic. And worrisome because the surest way to become obsolete is to stop growing and to adapt to changes, as Clayton M. Christensen explains in his book the Innovator's Dilemma.
This brings me to the third and final item. My one regret is that looking at the past three years I cannot see where I added value to society. I did deliver alpha in my professional career but between you and me – and please don't tell my employer - I never cared for alpha. I did not spend nights studying for the exam to achieve alpha. I did not fail the level 2 exam for three consecutive years to win alpha. As a matter of fact, before signing up for the CFA journey, if you would have asked what alpha is, I would surely start my answer with, “Well in the primate kingdom the alpha is a member that...”. While alpha was a foreign concept to me, from day one, my goal was to bring value to others as I’ve seen my Dad do as an orthopedic surgeon in Israel.
If you think about it, alpha is just one manifestation of the value-to-others concept. I was lucky for achievingit for my employer. But just as easily I could have failed. And then I would be standing here in front of you telling you that not only do I regret hardly bringing value to others, but that I also did not deliver alpha.
I bring this personal story - of winning the financial balance sheet game at the expense of neglecting others and myself - to leave you with the following three things:
First, winning the financial balance sheet will not give you satisfaction in life. Worse, it will complicate your relationships. For example, mistrust and cynicism may develop. My girlfriend Pegah who is sitting over there will attest to that.
Second, earning the CFA charter today should be your starting point, not your end point. It is a window - or perhaps a better metaphor - a bridge that will allow you to connect with a truly unique group of individuals, as I have come to learn.
And finally it is questionable and somewhat out of our control to achieve alpha. But you do control whether and how much value you will bring to others.
It is my hope that from now on, you will look back at today and be extremely proud of yourself. And bringing value to others is the surest way to achieve that. Thank you.