THe "F" Word
/How To Flip Your View on Failure
As I’ve watched the Olympics the past couple of weeks, I’m reminded again and again the fraction of a difference that separates victory from defeat. The concept that intrigues me is how will those that didn’t win a gold medal, or particularly any medal at all, handle their loss? Is their failure going to serve as motivation for improvement or bring fear of future failure into their psyche?
Think about the women’s hockey team. Three and a half minutes from a gold medal with a 2-0 lead, only to give up 2 goals in that time frame and another in overtime to lose. How will they cope with that loss? How do you handle failure? I have to be honest here - I wish I enjoyed it more. I know that sounds strange, but to accomplish anything truly remarkable, I have to get really comfortable with failing. If I’m not failing, then I’m not risking enough. I’m free to fail. I hope you are encouraged by the words of some who have pushed through failures to accomplish great things.
Abraham Lincoln
Lincoln was defeated for the U.S. Senate in 1854. In 1856 he was defeated for the nomination for Vice President and in 1858 defeated once again for U.S. Senate before being elected President in 1860.
"My great concern is not whether you have failed, but whether you are content with your failure." - Abraham Lincoln
Thomas Edison
For 2 years Edison and his team worked on over 3,000 theories to develop the modern light bulb. Edison said "I tested no fewer than 6,000 vegetable growths, and ransacked the world for the most suitable filament material."
"Many of life's failures are people who did not realize how close they were to success when they gave up." - Thomas A. Edison
Steve Jobs
In 1985, after poor sales of the Lisa computer, Jobs lost his position in the company as head of the Macintosh division. He then founded the company NeXT, which flopped.
"I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life." - Steve Jobs
Week that Was: Rates Higher after Fed Minutes
The positive momentum in mortgage rates shifted direction after the release of the Fed Minutes on Wednesday. Investors viewed the Minutes as somewhat positive for stocks and negative for bonds. As a result, mortgage rates ended the week a little higher.
The Minutes from the January 29 Fed Meeting revealed that Fed officials remained very divided as to the appropriate path for future policy. Overall, though, the perception of investors was that the position of the hawks remained solid, while the views of the doves may have weakened a little. As a reminder, "hawks" tend to favor less stimulus to help keep inflation low, while "doves" prefer more stimulus to boost economic growth. The Minutes stated that "a few participants" considered the possibility that it "might be appropriate" to raise the fed funds rate sooner than many expect. The Minutes also reinforced Fed Chair Yellen's recent comments that there is a high hurdle for the Fed to pause in reducing its bond purchase program. The Fed's bond purchases have helped keep mortgage rates low, and the Minutes reduced the likelihood that the program could be stretched out for a longer period of time.
The economic data released this week continued to be affected by the unusually severe weather this winter. In particular, the housing reports all fell short of expectations. January Existing Home Sales declined 5% from December to the lowest level since July 2012. They were 15% below the peak levels seen last summer. On the plus side, total housing inventory available for sale increased. The results for January Housing Starts fell even farther below expectations with a decline of 16% from December. Building Permits declined as well. Finally, the February NAHB/ Wells Fargo Housing Market index showed that builder confidence dropped sharply. Both the National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) attributed the weakness in recent data to a combination of bad weather, limited supply, and tight credit conditions.
Week Ahead
Next week, New Home Sales will be released on Wednesday. Durable Orders, an important indicator of economic activity, will come out on Thursday. Pending Home Sales, Chicago PMI Manufacturing, and revisions to fourth quarter GDP will be released on Friday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.