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Wednesday, 16 July 2014

Specialist versus Generalist

The panda has a specialised diet consisting almost exclusively of bamboo.

So is the just as cute koala bear that survives mainly on a diet of eucalypt leaves.

Now compare them to humans or bears who are omnivores.

We humans eat almost everything! In some countries, humans have diets that include spiders, insects, scorpions, etc. 

Talk about survivability!

In the Corporate world, we commonly start out as "generalist" executives. Over time, we discover what we like or excel in, and we will gravitate towards a specialisation.

We end up as "specialist" managers in Marketing, Human Resource, Finance, Operations, etc.

Guess what? For the elite few, we end up back as "generalist" CEOs or Managing Directors.

When it comes to investing or trading, some agonise over whether to specialise or be a generalist.

Don't ever let others tell you what you should do.

Unless you have a habit of lying to yourself, you know who you are.

If you are a carnivore, you are a trader, a salesman, an entrepreneur, and so on.

If you are a herbivore, you got to be on high alert that you don't end up as the menu when others invite you to join them for dinner. 

(OK, need to make this metaphor clearer as we are dealing with herbivores - be aware that some seminars and talks are actually slaughter houses for the unsuspecting "guests"; and some even pay to join the event!!! And be very aware of that "friend" or "classmate" who is ever so helpful to "share" with you their good fortune and opportunity of a lifetime...)

If you are omnivore, you have headaches! Which is good because you have options!

Sometimes options confuse us. We can choose to be a vegetarian or vegan. We can choose to go for a low carb diet like Atkins diet. 

And we can be very fussy with what we put into our mouth. I have a ex-ang moh colleague who spent 5 years in Singapore without once trying our hawker centre food!!!??? It's only fast food and Western restaurants for him. Know any fellow Singaporeans like him on our travels?

Some omnivores look enviously at herbivores and carnivores, wishing to be more like them - specialists. Well you can! But the decision making part sucks though... What if we make a wrong choice?

Well, if you choose to be a panda or a koala bear, just make sure you don't ever run our of bamboo or eucalypt leaves!



  1. Hi Smol

    It seems that many jobs are meant to be specialist in nature. And if we combine them effectively they might just be greater than one generalist CEO. Still every company needs a CEO to make critical decisions and take responsibility if things go wrong.

    1. B,

      We need to differentiate jobs that are skill specialisation from those jobs that have been "dumbed-down".

      A skilled craftsman can build and assemble a car from A to Z. But after the Industrial Revolution, that work has been split and dumbed-down into several jobs. One worker assembles the steering wheel, another installs the left front door only, for eg.

      Similarly, is an accounts executive a "specialist" just because he handles accounts receivable only?

      Or is the Accountant a "generalist" because he is responsible for the total Financial accounting process?

      Words can both deceive and illuminate ;)

  2. Hi SMOL,

    How about a specialized generalist? =)

    Skillful in a few areas sounds good. Like Thomas Jefferson? LOL

    I am more of a herbivore though and key takeaway for me is to be more aware of carnivores out there. =p

    1. 15 HWW,

      Yes, to add to word play, there are specialised generalists, and general specialists ;)

      Some herbivores stay and graze in a group as there is safety in numbers. Hence we feel more comfortable when others own the same stocks we do, dress the same way, and have the same opinions as us ;)

      Hence it could be good to seek out those who disagree with us to prevent ourselves from falling into Group Think mode...

    2. I was watching some BBC documentary and learnt that those herbivores that tend to stay just outside the group, they are always the target prey. This would mean that staying within the group is safer than trying to stay outside (at least in nature).

    3. ckw-I99,

      There are trade-offs.

      Those that stay outside the group have a better view of the savanna and get first nibble at the juiciest upper part of the grass.

      Those who stay inside the herd can only see the asses of other herbivores (it's OK since they are in follow the others mode anyway), and eat the trampled and half-eaten grass left by those outside the herd.

  3. Hi SMOL,

    I recall an incident that happened when I went for an interview with a tuition centre. The person asked me what subjects I taught to students. I told them that I teach O lvls chem, phy, amath and emath, pri school science, JC's math and poly/uni engineering and business math and finally IB's math. He looked surprised and asked me how come I teach so many subjects? He advised me to specialise in 1 subject, so that I can be more professional, otherwise parents will question.

    I just told him that I'll be bored to tears if I were to teach 1 subject forever and that I'm equally good in the others that I teach. He obviously don't believe me, because I was still asked to specialise in 1 or at most 2 subjects, so that I sounded more professional.

    Really? Professionalism is a specialist career track these days. I wonder how come for students, a good result mean that they must score As for everything but a good teacher can only teach one subject LOL

    1. LP,

      Ironic isn't it?

      Herbivores were encouraged to specialise in a certain field so they can contribute to a planned growth sector. And when the music stops, the same sheep are now encouraged to go for skills retraining?

      Your amusement at being told to specialise in 1 subject is how I felt when I wrote my previous post: English, Mandarin, Dialects ;)

      Who really wants to be a panda or a koala bear if we weren't born as one in the first place?

      Now who wants to specialise in teaching nothing but Literature only?

  4. hello!

    if our sun is situated outside the milkyway, we certainly will not exist. we are about 75% away from the center of our galaxy. thats a habitual zone.

    same to our solar system, we are about 75% away from the burning sun if you exclude all the gas planets!

    where is the best place to be in human society? yes 75% away from the center!

    1. coconut,

      I think I'll join forces with the butterfly and squeeze you in a pincer movement.

      If the universe has no centre, where's 0%?

  5. Hey coconut, where's 100%? 0% is at the center, but where's 100%?

  6. haha you guys are fast to react, i'm still thinking....

    1. i'm referring to the center of the mass to the outer edge, use a little immagination can or not?

      so the best place to be in is about 3 quarter away from the center!

      hey, don't ask me why, ask the creator haha...

    2. my whole point is, this is the special place to be in, so be a specialist!

    3. you know, when i go to a hawker center, i will look for stall that sell only a particular food, those stall that selling many variety of food i usually avoid them, do you know why?

      ofcos it don't work all the time but the probability is there.

  7. Okay, center part i can accept. But move to 75% of what? Usually if people talk about %, must clarify what the base of that % is :) how to go to 75% if you don't know where 100% and 0% is?

    1. hay hay, must ask so in detail one mah?

      measuring the universe sometime can be very subjective, all i can add is the 100% stops where the subject matter stop existing at that point, or the edge but without a boundary and it keep changing.

      for example, the milkyway edge is where no stars can be form at the outer edge, i put it as 100% but still it keep changing....

      ok you can argue there is no 100%!

    2. oh i forgot, LP you are a teacher ain't you?


    3. coconut,

      Don't play play. LP and the oat meal guy both scholars ;)

      Just having fun with you. Boring day mah.

      Got stopped out trying to short STI at 3290 for the 2nd time. LOL! Not every day Sunday ;)

      Win some; lose some.

    4. ya, i should congrateulate on your loser, becos these losing trades will teach you something and keep you in check. i'm not kidding! the winners only makes you more cocky.

      i also lost everyday, but most of the time, the winner out pace the loser.

    5. coconut,

      Yup. The small loss is just my scouting position. It's telling me to be patient with my main body trend following position. Just marking time with range trading currently.

      I guess I'll have to wait till Oct. Meanwhile have to contend with these boring and tiny kopi money...

  8. this is a very good article on fed policies,


    and you know what, we all know the damaging effect on fed policies and the market will pop eventually. but its going to, in my opinion a long time to crack, i'm going long the market (not short)!

    1. coconut,

      I think I'll go for hibernation on Simsci until QE ends this Oct. Hopefully then we can get some volatility?

      We are living in a strange world now. Both US equity and bond markets are in bull markets? Both can't be right.

      Let's see which market breaks first.

    2. i have a strong feeling the interest rate is going to go even lower (hence bond prices going up). too many traders are calling it to go up.

      smol, if you are a trend follower or even a contrarain, you should learn to trade the market where it is going, not where it should be in your opinion. i also think the market will pop one day but meantime to make money, go with the flow!

    3. coconut,

      That's why I am discretionary. A rarity and heresy for Trend followers.

      Small position sizes are scouts getting a feel for the market. I'll scale into size once a trade is trending nicely in the money.

      I like the Trend followers' money management - lose small money on 6 to 7 losing trades, but serious money in 2 to 3 big winning trades will more than compensate for the prior small losses ;)

      Now you are talking big. Go with the flow? Don''t forget how you lost big money in 2007/8...

      Position sizing ;)

      You help me; I help you back.

      I rather you poke me hard hard than try to give me advice. I am not you ;)

  9. Okay, center part i can accept. But move to 75% of what? Usually if people talk about %, must clarify what the base of that % is :) how to go to 75% if you don't know where 100% and 0% is?

  10. I'm not a teacher, a tutor - same same but different. Nah, nothing to do with being a scholar (I'm not). I'm asking to clarify, not to impress.

    Since there's no 100%, there's no 75% also, and so it might be better to describe rather than to give numbers, haha

    1. haha no wonder i write in % form i find it funny too but i thought its a easier way to be understood and i use % all the time on my calculations.

      next time i use example in trading better...

  11. Specialists tend to charge more or collect higher pay.

    1. Fewer people are qualified for the job made someone a specialist. e.g. CEO, CFO, CTO, CXX. No?

    2. CW,

      I think you may have to take a step back and reflect whether CEO, CFO, CTO are "specialists" or "generalists".

      I am of the view the higher we go in Corporate, the more "generalist" we become ;)

      Or look at the super rich people like Li Ka Shing, Bill Gates, Warren Buffet, etc. Any mind-flips?

      OK, maybe its not easy to go beyond the limitation of words... Perhaps we exchange the word "generalist" with "omnivore". Would it be better?

  12. i was watching CNBC last night when the news about MAS broke out and the market start to tank, not becos he feel sorry for the victim but worry of the situation got complicated.

    why on earth did the plane fly over a war zone that have advance weapons, why? i understood that many other airlines also frying around that area, including SIA planes. plain stupid!

    now who are they going to blame?

    1. coconut,

      It's complacency.

      Or we assume nobody in their right mind would shoot down a commercial airline...

      We have short memory. Who still remember in 1983 the former Soviet Union shot down a Korean commercial airline?

      Now all airlines will not fly over conflict areas. For now.

      Until the memory fades again. It's more costly to make a detour. Fuel costs money.... It will be back to bottom-line focus. KPIs over people.

  13. Why only the RUSSIANS? Has any other country done it and get away with it?

    1. So the RUSSIAN UTD is the only World's specialist in this "trade"? Hopefully it remain so.

    2. temperament,

      US and allies dared to "punish" Iraq for invading Kuwait and Libya for killing it's own people. But when it comes to Libya... What made US back down?

      When our neighbour is smaller and nerdier than us, we dare to bang on the door loud loud and complain if their TV too loud.

      But if the neighbour is bigger with "ang kong" all over the body, we cower like mouse to write letter to town council... Anonymous some more!


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