Is your email inbox filled with hundreds of messages? Do you often worry that you may have forgotten about something buried in your inbox? Do you wonder how it would feel to have zero messages in your inbox? Does this sound like an impossible dream? It's not! Follow these simple steps, and you, too, can achieve a "zero inbox." Believe me, it's worth trying at least once just to experience how good it can feel.
 
An empty inbox is one of the principles of performance excellence recommended by organizational gurus David Allen (author of Getting Things Done) and Mark Hurst (author of Bit Literacy).

 

 
Email overload is counterproductive, because it causes people to open and read the same messages again and again. Says David Allen, "Scanning an email and leaving it in your inbox because it's not as important as other emails at the moment creates double reading, double thinking, and double decision-making (not to mention the nagging it creates in the psyche in the meantime)."  

As Mark Hurst says, "Incoming email has the same shelf life as Chinese takeout does in your refrigerator. After a day or two, it starts to get funky... No message belongs in the inbox."
 
What do Allen and Hurst recommend as the best way to counteract email overload? Empty the inbox at least once a day.
 
If that sounds impossible, remember that removing emails from your inbox doesn't mean doing all the work described in them; it just means moving them to the right place, like a to-do list, so you can work on them once the inbox is empty. 
 
No matter how many messages you have in your inbox, getting to zero is always a possibility. (Hurst once helped someone who had 150,000 messages.) Start the induction process by sorting your messages by subject and deleting long series of emails on the same conversation thread. Then, sort by either sender or date. If there's an action associated with an email, file it in a "to do" folder, if there's not, then either delete it (recommended) or file it in a reference folder. When you get to zero, do a victory dance. Trust me, it will feel amazing.
 
Finally, here are two additional strategies you can use to vaccinate yourself against future cases of email overload:
 
1. Target the inflow
 
Are you sure that all of the emails currently landing in your inbox really should still be coming to you? Eliminate as much of the inflow as possible that really doesn't belong, and you'll be better able to sort through what does.
 
2. Use the two-minute rule (one of David Allen's best practices)
 
Do not file an email into your to-do system without at least spending a minimal amount of time to assess if it really needs to go there. Remember, if you can take care of the email in two minutes or less, then don't file it, just do it!

 

 

 

In this economic environment, investors have burned their fingers, or, in more serious cases, burned more than a finger. They stand raw and blistered head to toe, asking, "Which nitwit told me this was a diversified portfolio, and please pass the aloe vera." The problem in the credit crunch was that all correlations went to 1. In fact, the credit crunch exposed two deep flaws in our understanding of risk. The first is how we manage risk using the notion of correlation. The second is our human need for evidence-based assumptions, which cannot be supported in a changing world. Managers seek comfort in the fact that a moment in history supported their view, but does history repeat itself?
 
On the subject of history, correlation can be traced back to the mid 1860s, to Sir Francis Galton (a cousin of Charles Darwin). Like many at the time, he was gripped by Charles Darwin's ideas and assumed evolution resulted in a smooth and constant variation in progeny. Were there traits that determined criminality, perhaps a heavy set brow or a scowling face? Could murderers be categorized by a composite photograph? Indeed his thinking was often borrowed to legitimize political ends. Nevertheless, Galton invented the concept of correlation to capture hereditary effects. He developed correlation after using forearm lengths to match skeletons in a graveyard to particular families. There- I've linked murderers to forearms! The point is correlation came to be easily accepted as a measure of dependency in modern portfolio theory. But is a measure which was developed to understand forearms any good for understanding investments?
 
Despite his brilliance, Galton overlooked the true Mendel structure behind genes. Mendel understood genes to be a paired system, with recessive and dominant genes. Although there are continuous effects from gene mutation, from generation to generation, it is a paired system of genes that determines what properties the next generation will inherit.
 
What I am suggesting is that if Galton had rediscovered Mendel's theory, we might live in a world where portfolios have hidden dimensions, such as risk and return, that interact more like genes. Your portfolio is determined by the response of its genes to the economic environment. News affects risk and return in a non-linear way; assets respond to news, not to each other. 
 
In the real world, dependency can take on shapes like a banana (see below), which  cannot possibly be modeled using traditional correlation, or betas. Far from being outliers, banana distributions and many other exotic shapes can be observed in mainstream assets. Consider this purely illustrative example of how behavioral finance can generate a banana dependency structure between equities and bonds:    

To conclude, dependencies represent only one of our risk challenges; one could argue we need to work a great deal harder to promote diversity in the risk-modeling gene pool.
 
CAMRADATA Analytical Services has launched the Manager Evaluation Tool to help consultants and managers better understand and communicate risk and sensitivities within their products.  
 

Martyn Dorey