#123 Marginal Gains - Part 4
“Don’t tell me what you think, tell me what you have in your portfolio.”
– Nassim Nicholas Taleb
Why Should You Care When Stocks Plunge? - Articles - Advisor Perspectives
The article "Why Care When Stocks Plunge?" discusses the psychological and practical implications of stock market downturns. It emphasizes the importance of a long-term perspective and emotional resilience in investing. The author argues that while stock market declines can be emotionally challenging, they are a normal part of the investing cycle and should not prompt panic or rash decisions. The article provides insights on managing emotional responses to market volatility and the strategies that long-term investors should consider.
Key Takeaways
Market Volatility is Normal
Explanation: The article underscores that stock market declines are a natural and inevitable part of the investment landscape. Understanding this helps investors avoid panic and maintain a disciplined approach.
Key Quote: "Stock market declines are a normal part of the investing cycle. Historically, the market has always recovered from downturns and continued to rise over the long term."
Why It Matters: This perspective helps investors stay calm during market turbulence, reducing the likelihood of selling at a loss.
Emotional Resilience is Crucial
Explanation: Managing emotions during market downturns is critical for successful investing. Emotional responses can lead to poor decisions, such as selling at the bottom of a market cycle.
Key Quote: "Emotional resilience is key to long-term investing success. Reacting emotionally to market declines can lead to costly mistakes."
Why It Matters: Emotional resilience helps investors stay the course, which is essential for achieving long-term investment goals.
Long-Term Perspective Matters
Explanation: A long-term view allows investors to see market declines as temporary setbacks rather than catastrophic events. This perspective encourages patience and a focus on long-term goals.
Key Quote: "A long-term perspective helps investors ride out market downturns and focus on their ultimate financial goals."
Why It Matters: A long-term approach helps investors avoid the pitfalls of short-term thinking, which can lead to impulsive decisions.
Diversification and Rebalancing
Explanation: The article advises investors to diversify their portfolios to spread risk and periodically rebalance to maintain their desired asset allocation.
Key Quote: "Diversification and regular rebalancing are effective strategies for managing market volatility and ensuring that your portfolio remains aligned with your investment goals."
Why It Matters: These strategies help mitigate the impact of market declines and keep the portfolio on track with the investor's objectives.
Seeking Professional Advice
Explanation: Consulting with a financial advisor can provide valuable guidance and help investors navigate market volatility with a clearer perspective.
Key Quote: "Working with a financial advisor can provide the expertise and support needed to make informed decisions during market downturns."
Why It Matters: Professional advice can offer reassurance and strategic insights, helping investors stay on course during turbulent times.
Conclusion
The article "Why Care When Stocks Plunge?" offers practical advice and a psychological framework for dealing with stock market declines. By emphasizing the normality of market volatility, the importance of emotional resilience, the value of a long-term perspective, and the effectiveness of diversification and rebalancing, the article provides a roadmap for navigating market turbulence. Seeking professional advice is also highlighted as a beneficial strategy. These insights are crucial for investors aiming to achieve their financial goals despite market fluctuations.
Strategy as a Series of Beliefs - Kellblog
Dave Kellogg's blog post, "Strategy as a Series of Beliefs," explores strategy in the context of enterprise software startups. Drawing inspiration from Richard Rumelt's work, Kellogg proposes a framework incorporating beliefs as a critical component of strategic planning. He argues that understanding and articulating these beliefs can help companies identify and overcome their most significant challenges, thereby driving successful strategies.
Key Takeaways
1. Critique of Traditional Strategy Concepts
Explanation: Kellogg critiques conventional notions of strategy, arguing that aspirations, goals, financial projections, and market analyses are not a strategy. He emphasizes identifying and planning to overcome a company's most important challenges.
Key Quote: "He takes a wrecking ball to the garbage that is often passed off as strategy. Aspirations are not strategy. Goals and OKRs are not strategy. Financial projections and forecasts are not strategy."
Why It Matters: This critique underscores the need for a more focused and practical approach to strategy, moving beyond vague aspirations and financial goals.
2. Rumelt's Framework and Its Limitations
Explanation: Kellogg appreciates Richard Rumelt's framework, which defines strategy as a diagnosis, a guiding policy, and coherent actions. However, he found that the diagnosis alone was insufficient for creating a guiding policy and that beliefs about the future were necessary. A modified framework that looked like this:
Given diagnosis X,
And beliefs Y,
We choose guiding policy Z,
And coherent actions 1-5 to implement it.
Key Quote: "We arrived at a diagnosis fairly easily, but got stuck trying to create a guiding policy. We found that the diagnosis alone wasn’t enough to arrive at a guiding policy. We kept needing to insert a few assumptions (or beliefs) about the future before we could agree on a guiding policy."
Why It Matters: This highlights the importance of incorporating future-oriented beliefs into strategic planning.
3. The Role of Beliefs in Strategy
Explanation: Kellogg introduces the concept of "beliefs" as a crucial element in strategy. He argues that distinguishing between present truths (facts) and future beliefs can facilitate more effective strategic planning.
Key Quote: "More precisely, separate the diagnosis into present truths and future beliefs."
Why It Matters: This distinction helps identify the primary belief that drives the strategy and guides coherent actions.
4. Primary Belief as the Core of Strategy
Explanation: Kellogg suggests that the most impactful strategy can be distilled to a primary belief that resolves the crux issue and drives all subsequent actions.
Key Quote: "I realized I could further distill strategy simply by looking only at beliefs. Not a laundry list of them, but what I call the primary belief, the big one, the one that resolves the crux issue and drives all the rest."
Why It Matters: Focusing on the primary belief simplifies the strategic process and ensures that all actions are aligned with overcoming the company's most significant challenge.
5. Application to Business Objects and Alation
Explanation: Kellogg provides examples from his experience at Business Objects and Alation, illustrating how primary beliefs guided the companies through different eras and drove their success.
Key Quote: "Era 1 (5 years). We believe customers will pay 5x the price of commodity query and reporting (Q&R) tools for an enterprise solution."
Why It Matters: These examples demonstrate the practical application of the primary belief concept and its impact on business growth and strategic direction.
6. Reflecting on the Future
Explanation: Kellogg encourages using a "future look-back" exercise when formulating strategy, where one imagines the company winning in the market ten years from now and then analyzes why.
Key Quote: "I often say that strategy is best analyzed in reflection. Meaning that somehow everything is clearer and simpler when you look back 10 or 20 years to reflect upon what happened."
Why It Matters: This exercise helps identify the primary belief that will drive future success and ensures that the strategy is aligned with long-term goals.
Conclusion
Dave Kellogg's post emphasizes the importance of incorporating beliefs into strategic planning. By distinguishing between present truths and future beliefs, companies can identify the primary belief that drives their strategy and ensure that all actions are aligned with overcoming their most significant challenges. This approach simplifies the strategic process and provides a clear framework for achieving long-term success.
Can This Continue? - A Wealth of Common Sense
In the blog post "Can This Continue?" by Ben Carlson, the author discusses the cyclical nature of markets and the challenges of predicting future trends. Carlson explores several pressing economic and financial issues, questioning whether current trends can continue without significant repercussions. He addresses topics such as U.S. interest costs, large-cap outperformance, the performance of mega-cap stocks, and housing prices. The post emphasizes the importance of understanding market cycles and the potential risks associated with current economic conditions.
Key Takeaways
1. Cyclical Nature of Markets
Explanation: Carlson underscores the dependability of market cycles, highlighting that nothing is more certain in the markets than these cycles. He references John Templeton's famous quote, "The four most dangerous words in investing are 'this time is different.'"
Key Quote: "I do know nothing is more dependable in the markets than cycles."
Why It Matters: Understanding the cyclical nature of markets helps investors prepare for fluctuations and avoid overconfidence in current trends.
2. U.S. Interest Costs
Explanation: Carlson discusses the rising U.S. interest costs, which have reached $3 billion daily. He notes that while this number is lower as a percentage of GDP than historical levels, it is increasing rapidly.
Key Quote: "The U.S. government is paying out $3 billion per day in interest expenses on our debt."
Why It Matters: The rising interest costs have political and economic implications, potentially becoming a significant issue in the future.
3. Large-Cap Outperformance
Explanation: Carlson highlights the dominance of large U.S. corporations over small corporations and foreign counterparts in the past decade. He acknowledges that this trend is cyclical and expects large caps to underperform eventually.
Key Quote: "Everything I’ve studied about markets tells me this is cyclical."
Why It Matters: Recognizing the cyclical nature of large-cap outperformance can help investors diversify their portfolios and prepare for potential changes in market leadership.
4. Mega-Cap Outperformance
Explanation: Carlson discusses the strong performance of mega-cap stocks, noting that the top 10 stocks in the S&P 500 now make up 35% of the total index. He questions whether these companies can continue to perform at such high levels.
Key Quote: "Can they continue to put up such big numbers now that many of these stocks are trillion-dollar corporations?"
Why It Matters: The sustainability of mega-cap outperformance is crucial for investors in these stocks and the broader market.
5. Housing Prices
Explanation: Carlson presents a chart showing the ratio of housing prices to rents, noting that while he does not believe there is a housing bubble, the chart makes him uncomfortable. He questions how long housing prices and costs can remain out of whack with historical norms.
Key Quote: "Does it mean housing prices have to fall? Not necessarily."
Why It Matters: Understanding the dynamics of housing prices and rents can help investors and policymakers prepare for potential market adjustments.
Conclusion
Ben Carlson's post "Can This Continue?" provides insightful commentary on the cyclical nature of markets and the challenges of predicting future trends. By discussing U.S. interest costs, large-cap outperformance, mega-cap stocks, and housing prices, Carlson highlights the importance of understanding market cycles and the potential risks associated with current economic conditions. This perspective is valuable for investors seeking to navigate the complexities of the financial markets and prepare for potential changes in market dynamics.
In the article "Retirement doesn’t just raise financial concerns – it can also mean feeling unmoored and irrelevant," Marianne Janack discusses the non-financial challenges of retirement. Janack, a professor of philosophy at Hamilton College, argues that while most discussions about retirement focus on financial aspects, the deeper issues of meaning, relevance, and identity are more significant for many retirees. The article explores how work shapes one's identity and how retirement can lead to feelings of irrelevance and a loss of purpose.
Key Takeaways
1. Beyond Financial Concerns
Explanation: Janack emphasizes that retirement raises important questions about one’s usefulness and identity, which can be more challenging than financial concerns.
Key Quote: "But this might not be the biggest problem that potential retirees face. The deeper issues of meaning, relevance, and identity that retirement can bring to the fore are more significant to some workers."
Why It Matters: Understanding the non-financial aspects of retirement helps individuals prepare for the emotional and psychological changes they may face.
2. Work and Identity
Explanation: Janack highlights that work has become central to modern American identity, shaping not just financial security but also friendships, self-understanding, and life structure.
Key Quote: "Work has become central to the modern American identity, as journalist Derek Thompson bemoans in The Atlantic. And some theorists have argued that work shapes what we are."
Why It Matters: Recognizing the role of work in identity formation helps retirees anticipate the emotional impact of leaving the workforce.
3. Existentialist Perspective
Explanation: Janack draws on existentialist philosophers like Jean-Paul Sartre and Simone de Beauvoir to argue that "you are what you do," underscoring the profound impact of a career on identity.
Key Quote: "How you spend 40 years of your life, I tell them, for at least 40 hours each week – the time many people spend at their jobs – is not just a financial decision."
Why It Matters: This perspective highlights the importance of considering the existential implications of retirement and the need to redefine one's purpose and identity.
4. Leisure and Human Excellence
Explanation: Janack discusses ancient Greek and Roman philosophers who valued leisure over work, considering it essential for human excellence. However, contemporary retirement often fails to encourage such leisure.
Key Quote: "For Greek and Roman philosophers, leisure was more noble than work. The good life was a life not driven by the necessity of producing goods or making money."
Why It Matters: Understanding the philosophical value of leisure can motivate retirees to engage in activities that foster personal growth and fulfillment.
5. Usefulness and Freedom
Explanation: Janack uses Immanuel Kant's distinction between objects and subjects to argue that contemporary work culture often reduces individuals to their use value, making retirement challenging as it involves giving up this identity.
Key Quote: "And yet, much of contemporary work culture encourages workers to think of themselves and their value in terms of their use value, a change that would have made both Kant and the ancient Greek and Roman philosophers wonder why people didn’t retire as soon as they could."
Why It Matters: Recognizing workers' objectification helps retirees understand the psychological shift required to embrace a new, freer identity in retirement.
6. The Existential Challenge of Retirement
Explanation: Janack discusses how retirement can lead to irrelevance and a loss of identity as individuals struggle to define themselves outside their professional roles.
Key Quote: "‘If I’m not a college professor, then what am I?’ Another friend, who retired at 59, told me that she does not like to describe herself as retired, even though she is. ‘Retired implies useless,’ she said."
Why It Matters: Acknowledging the existential challenges of retirement can help individuals prepare emotionally and find new sources of meaning and identity.
Conclusion
Marianne Janack's article highlights retirement's complex, non-financial aspects, emphasizing the importance of addressing issues of meaning, relevance, and identity. By exploring philosophical perspectives on work and leisure, Janack provides valuable insights into the deeper challenges faced by retirees. Understanding these challenges can help individuals prepare emotionally for retirement and find new sources of purpose and fulfillment beyond their professional identities.
How Eighty-One Dollars Made Lyndon Johnson (substack.com)
The article "How Eighty-One Dollars Made Lyndon Johnson" from Frederik Gieschen's Alchemy of Money blog explores a pivotal moment in the life of future President Lyndon B. Johnson. The story highlights the transformative power of a small amount of money given at the right time, illustrating how an $81 gift from a friend changed Johnson's trajectory. The article underscores the broader concept of money as social energy, emphasizing the impact of shared wealth on personal and societal growth.
Key Takeaways
1. The Transformative Power of Small Amounts of Money
Explanation: The article describes how a small sum of money can significantly impact someone's life when given at the right moment. In 1927, Lyndon B. Johnson was on the verge of dropping out of college due to financial struggles. His friend Ben Crider sent him $81, which allowed Johnson to stay in school and changed the course of his life.
Key Quote:
"Eighty-one dollars!” Lyndon Johnson, reminiscing decades later, would recall. “I was the richest man on the campus! And I took that eighty-one dollars, and I paid all my debts, and I paid my next term’s bill.”
Why It Matters: This story highlights the potential impact of seemingly small acts of generosity. It shows that even modest amounts of money can profoundly affect individuals and, by extension, society.
2. Money as Social Energy
Explanation: The author introduces the concept of money as a form of social energy. Money is not just a medium of exchange but a force that flows when people interact and exchange things of value. This energy lies dormant until it is used to benefit others.
Key Quote:
"Money with a capital ‘M’ — not currency, not coins — is a kind of social energy. It is like a current that only flows when people interact and exchange things of value. Until people use it, its energy lies dormant."
Why It Matters: Understanding money as social energy emphasizes the importance of sharing wealth. It suggests that the most rewarding investments benefit others, highlighting the interconnected nature of personal and societal well-being.
3. The Impact of Support from Others
Explanation: The article underscores the importance of support from friends and community. Ben Crider's decision to send Johnson the money he had saved reflects the power of personal connections and the willingness to help others in need.
Key Quote:
"Crider did what any good friend would do: he spoke to his supervisor and arranged a spot for Johnson. Then he sat down and wrote his reply: 'Well, I can get you a job. Five dollars a day... But I hope you won’t come.'”
Why It Matters: This point emphasizes the role of community and friendship in personal success. It shows that individual achievements are often the result of collective support and that helping others can have long-lasting positive effects.
4. The Unpredictable Good of Sharing Wealth
Explanation: The author discusses the unpredictable nature of the positive outcomes that can result from sharing wealth. By helping Johnson, Crider changed Johnson's life and potentially influenced the course of history.
Key Quote:
"The energy of Money is meant to be shared. You can’t predict what good can come out of it."
Why It Matters: This underscores the idea that acts of generosity can have far-reaching and unforeseen consequences. It encourages sharing and giving, as the positive impacts can extend beyond immediate recipients.
5. The Gratifying Nature of Investing in People
Explanation: The story illustrates that investing in people is one of the most gratifying ways to use money. This can lead to both personal fulfillment and broader societal benefits.
Key Quote:
"But the most rewarding ways to use this energy will be opportunities that benefit others — the most gratifying investments will be the ones in people."
Why It Matters: This point highlights the intrinsic rewards of helping others and the potential for such acts to create a ripple effect of positive change. It suggests that investing in people can be one of the most meaningful uses of financial resources.
Conclusion
The story of how $81 transformed Lyndon Johnson's life underscores the transformative power of small acts of generosity and the concept of money as social energy. It emphasizes the importance of community support, the unpredictable good that can come from sharing wealth, and the gratifying nature of investing in people. By highlighting these themes, the article encourages a mindset of generosity and mutual support, illustrating how individual acts of kindness can have far-reaching and profound impacts.
Great Powers Index 2024: The Most Important Facts and Charts (linkedin.com)
The article "Great Powers Index 2024: The Most Important Facts and Charts" by Ray Dalio provides a comprehensive summary of the findings from the Great Powers Index: 2024 report. The report assesses the status and prospects of the 24 leading countries across several categories, including internal order, world order, debt/money/economic system, forces of nature, and inventiveness. The article highlights the most significant forces shaping the changing world order and provides key insights and charts to illustrate these trends.
Key Takeaways
1. Internal Disorder as the Biggest Immediate Risk
Explanation: The article identifies internal disorder within countries, particularly the United States, as the biggest immediate risk. This is due to increasing conflicts over wealth, values, and power, which have reached historic levels.
Key Quote:
"I put the level of internal disorder first because it appears to be the biggest immediate risk. A few countries, most importantly the US, are experiencing classic big internal conflicts over wealth, values, and power and those conflicts are increasing."
Why It Matters: Internal disorder can significantly impact a country's stability and ability to function effectively. Understanding this risk is crucial for policymakers and investors to make informed decisions.
2. International Great Power Conflict
Explanation: The article highlights the growing international conflict, particularly between the United States and China, as the second greatest risk. This conflict is at its highest level on record, with both countries being the most powerful globally.
Key Quote:
"The international great power conflict risk appears to be the second greatest risk so I put it second. My measures show that the United States and China continue to be the two most powerful countries with high levels of conflict between them."
Why It Matters: The conflict between major powers can have global implications, affecting international relations, trade, and economic stability. Monitoring this risk is essential for understanding the geopolitical landscape.
3. Debt/Money/Economic System
Explanation: The article discusses the high debt levels among major governments, with large deficits and projected debt increases. Central banks hold significant government debt due to inadequate private sector demand.
Key Quote:
"In terms of the debt/money/economy force, all major governments are today more indebted than at any time since the end of World War 2, with large deficits and projected debt increases ahead."
Why It Matters: High debt levels can limit a country's fiscal flexibility and economic growth prospects. Understanding the debt situation is crucial for assessing a country's economic health and prospects.
4. Economic Growth Prospects
Explanation: The article provides projections for economic growth over the next ten years. India is expected to see the strongest real growth, followed by Indonesia, Turkey, China, and Saudi Arabia.
Key Quote:
"Based on my leading indicators India is projected to see the strongest real growth over the next ten years (about 6%), reflecting modest workforce growth (0.7–0.9%), competitive labor, high rates of investment, and favorable culture."
Why It Matters: Economic growth projections help investors and policymakers identify opportunities and risks in different countries. High growth prospects can attract investment and drive economic development.
5. Forces of Nature
Explanation: The article discusses the worsening conditions related to forces of nature, such as droughts, floods, and pandemics. These conditions are expected to continue to worsen, posing significant challenges.
Key Quote:
"Regarding the forces of nature (droughts, floods, and pandemics), clearly conditions are worsening. The world faces a rising trend of average temperatures and more natural disasters arising from them."
Why It Matters: Understanding the impact of natural forces is essential for developing resilience strategies and mitigating risks associated with climate change and other environmental challenges.
6. Inventiveness and Technological Advancements
Explanation: The article highlights the potential of revolutionary technologies, such as AI, to raise understanding and productivity. The United States and China dominate in terms of innovation, but several other countries also matter.
Key Quote:
"Revolutionary new technologies like AI have the potential to greatly raise understanding and productivity in virtually every activity or damage mankind if not handled well. My measure of that force of innovation is shown in the chart below. As shown and one can clearly see in developments such as AI, it is accelerating."
Why It Matters: Technological advancements can drive economic growth and improve living standards. Monitoring innovation trends is crucial for identifying future opportunities and challenges.
7. Health and Happiness Scores
Explanation: The article provides health and happiness scores for the 24 major countries. Most developed countries have similar health scores, with Singapore, Japan, Switzerland, Spain, and Korea scoring the highest. China has closed the health gap with the United States.
Key Quote:
"My health scores are shown below for all 24 major countries. As shown, most of the developed countries except the United States have similar health scores (e.g., most have life expectancies of 83–85). The United States (with an average life expectancy of 78) falls off, and other countries have significantly worse scores."
Why It Matters: Health and happiness indicators provide insights into a country's population's well-being. High scores in these areas can contribute to economic productivity and social stability.
Conclusion
The Great Powers Index 2024 report by Ray Dalio offers a comprehensive assessment of the leading countries' current status and prospects. The report highlights the importance of internal order, international conflict, debt levels, economic growth, natural forces, and technological advancements in shaping the world order. By providing detailed insights and charts, the report helps policymakers, investors, and other stakeholders make informed decisions and navigate the complex geopolitical landscape.
The Four Burners Theory: The Downside of Work-Life Balance (jamesclear.com)
The article "The Four Burners Theory: The Downside of Work-Life Balance" by James Clear explores the concept of work-life balance using the Four Burners Theory. This theory posits that life can be represented by a stove with four burners, each symbolizing a major quadrant of one's life: family, friends, health, and work. The theory suggests that to be successful, one must cut off one burner; to be successful, two burners must be turned off. The article discusses three views on managing these burners: outsourcing, embracing constraints, and dividing life into seasons.
Key Takeaways
1. The Four Burners Theory
Explanation: The Four Burners Theory argues that individuals must prioritize some aspects of their lives over others to achieve success. This means cutting off one or two burners (family, friends, health, work) to focus on the remaining areas.
Key Quote:
"The Four Burners Theory says that 'in order to be successful you have to cut off one of your burners. And in order to be really successful you have to cut off two.'"
Why It Matters: Understanding this theory helps individuals make conscious choices about where to allocate their time and energy, recognizing that trade-offs are inevitable.
2. Outsourcing Burners
Explanation: One strategy to manage the four burners is to outsource certain tasks or responsibilities. For example, entrepreneurs may hire employees to manage daily operations, allowing them to focus on other areas. Similarly, parents may use daycare services to free up time for work or personal pursuits.
Key Quote:
"Outsourcing small portions of your life allows you to save time and spend it elsewhere. Can you apply the same idea to one quadrant of your life and free up time to focus on the other three burners?"
Why It Matters: Outsourcing can help maintain balance by keeping all burners running, albeit with the understanding that outsourced tasks may not be managed as meaningfully as if handled personally.
3. Embracing Constraints
Explanation: Another approach is to embrace the constraints imposed by limited time and maximize available time. This involves focusing on being most effective within given constraints rather than wishing for more time. One of the most frustrating parts of The Four Burners Theory is that it shines a light on your untapped potential. It can be easy to think, “If only I had more time, I could make more money or get in shape or spend more time at home.” One way to manage this problem is to shift your focus from wishing you had more time to maximizing your time. In other words, you embrace your limitations. The question is, “Assuming a particular set of constraints, how can I be as effective as possible?”
Key Quote:
"One way to manage this problem is to shift your focus from wishing you had more time to maximizing the time you have. In other words, you embrace your limitations."
Why It Matters: Embracing constraints helps individuals focus on what they can control and can lead to improved performance and efficiency.
4. The Seasons of Life
Explanation: The third approach divides life into seasons, focusing on a particular area. This means fully committing to one burner for a period, knowing that other burners will take precedence in different seasons of life. The importance of your burners may change throughout life. When you are in your 20s or 30s and don’t have children, getting to the gym and chasing career ambitions can be easier. The health and work burners are on full blast. A few years later, you might start a family, and suddenly, the health burner dips down to a slow simmer while your family burner gets more gas. Another decade passes, and you might revive relationships with old friends or pursue that business idea you had been putting off.
Key Quote:
"A third way to manage your four burners is by breaking your life into seasons. What if, instead of searching for perfect work-life balance at all times, you divided your life into seasons that focused on a particular area?"
Why It Matters: Dividing life into seasons allows for deep focus and commitment to specific areas at different times, acknowledging that balance is not always achievable simultaneously.
Conclusion
The Four Burners Theory underscores the necessity of making trade-offs in life to achieve success. By understanding and applying strategies such as outsourcing, embracing constraints, and dividing life into seasons, individuals can make conscious choices about where to allocate their time and energy. This theory provides a framework for navigating the complexities of work-life balance and highlights the importance of recognizing that every choice has a cost.
