More on Economics & Investing
Tanya Aggarwal
3 years ago
What I learned from my experience as a recent graduate working in venture capital
Every week I meet many people interested in VC. Many of them ask me what it's like to be a junior analyst in VC or what I've learned so far.
Looking back, I've learned many things as a junior VC, having gone through an almost-euphoric peak bull market, failed tech IPOs of 2019 including WeWorks' catastrophic fall, and the beginnings of a bearish market.
1. Network, network, network!
VCs spend 80% of their time networking. Junior VCs source deals or manage portfolios. You spend your time bringing startups to your fund or helping existing portfolio companies grow. Knowing stakeholders (corporations, star talent, investors) in your particular areas of investment helps you develop your portfolio.
Networking was one of my strengths. When I first started in the industry, I'd go to startup events and meet 50 people a month. Over time, I realized these relationships were shallow and I was only getting business cards. So I stopped seeing networking as a transaction. VC is a long-term game, so you should work with people you like. Now I know who I click with and can build deeper relationships with them. My network is smaller but more valuable than before.
2. The Most Important Metric Is Founder
People often ask how we pick investments. Why some companies can raise money and others can't is a mystery. The founder is the most important metric for VCs. When a company is young, the product, environment, and team all change, but the founder remains constant. VCs bet on the founder, not the company.
How do we decide which founders are best after 2-3 calls? When looking at a founder's profile, ask why this person can solve this problem. The founders' track record will tell. If the founder is a serial entrepreneur, you know he/she possesses the entrepreneur DNA and will likely succeed again. If it's his/her first startup, focus on industry knowledge to deliver the best solution.
3. A company's fate can be determined by macrotrends.
Macro trends are crucial. A company can have the perfect product, founder, and team, but if it's solving the wrong problem, it won't succeed. I've also seen average companies ride the wave to success. When you're on the right side of a trend, there's so much demand that more companies can get a piece of the pie.
In COVID-19, macro trends made or broke a company. Ed-tech and health-tech companies gained unicorn status and raised funding at inflated valuations due to sudden demand. With the easing of pandemic restrictions and the start of a bear market, many of these companies' valuations are in question.
4. Look for methods to ACTUALLY add value.
You only need to go on VC twitter (read: @vcstartterkit and @vcbrags) for 5 minutes or look at fin-meme accounts on Instagram to see how much VCs claim to add value but how little they actually do. VC is a long-term game, though. Long-term, founders won't work with you if you don't add value.
How can we add value when we're young and have no network? Leaning on my strengths helped me. Instead of viewing my age and limited experience as a disadvantage, I realized that I brought a unique perspective to the table.
As a VC, you invest in companies that will be big in 5-7 years, and millennials and Gen Z will have the most purchasing power. Because you can relate to that market, you can offer insights that most Partners at 40 can't. I added value by helping with hiring because I had direct access to university talent pools and by finding university students for product beta testing.
5. Develop your personal brand.
Generalists or specialists run most funds. This means that funds either invest across industries or have a specific mandate. Most funds are becoming specialists, I've noticed. Top-tier founders don't lack capital, so funds must find other ways to attract them. Why would a founder work with a generalist fund when a specialist can offer better industry connections and partnership opportunities?
Same for fund members. Founders want quality investors. Become a thought leader in your industry to meet founders. Create content and share your thoughts on industry-related social media. When I first started building my brand, I found it helpful to interview industry veterans to create better content than I could on my own. Over time, my content attracted quality founders so I didn't have to look for them.
These are my biggest VC lessons. This list isn't exhaustive, but it's my industry survival guide.
Theresa W. Carey
3 years ago
How Payment for Order Flow (PFOF) Works
What is PFOF?
PFOF is a brokerage firm's compensation for directing orders to different parties for trade execution. The brokerage firm receives fractions of a penny per share for directing the order to a market maker.
Each optionable stock could have thousands of contracts, so market makers dominate options trades. Order flow payments average less than $0.50 per option contract.
Order Flow Payments (PFOF) Explained
The proliferation of exchanges and electronic communication networks has complicated equity and options trading (ECNs) Ironically, Bernard Madoff, the Ponzi schemer, pioneered pay-for-order-flow.
In a December 2000 study on PFOF, the SEC said, "Payment for order flow is a method of transferring trading profits from market making to brokers who route customer orders to specialists for execution."
Given the complexity of trading thousands of stocks on multiple exchanges, market making has grown. Market makers are large firms that specialize in a set of stocks and options, maintaining an inventory of shares and contracts for buyers and sellers. Market makers are paid the bid-ask spread. Spreads have narrowed since 2001, when exchanges switched to decimals. A market maker's ability to play both sides of trades is key to profitability.
Benefits, requirements
A broker receives fees from a third party for order flow, sometimes without a client's knowledge. This invites conflicts of interest and criticism. Regulation NMS from 2005 requires brokers to disclose their policies and financial relationships with market makers.
Your broker must tell you if it's paid to send your orders to specific parties. This must be done at account opening and annually. The firm must disclose whether it participates in payment-for-order-flow and, upon request, every paid order. Brokerage clients can request payment data on specific transactions, but the response takes weeks.
Order flow payments save money. Smaller brokerage firms can benefit from routing orders through market makers and getting paid. This allows brokerage firms to send their orders to another firm to be executed with other orders, reducing costs. The market maker or exchange benefits from additional share volume, so it pays brokerage firms to direct traffic.
Retail investors, who lack bargaining power, may benefit from order-filling competition. Arrangements to steer the business in one direction invite wrongdoing, which can erode investor confidence in financial markets and their players.
Pay-for-order-flow criticism
It has always been controversial. Several firms offering zero-commission trades in the late 1990s routed orders to untrustworthy market makers. During the end of fractional pricing, the smallest stock spread was $0.125. Options spreads widened. Traders found that some of their "free" trades cost them a lot because they weren't getting the best price.
The SEC then studied the issue, focusing on options trades, and nearly decided to ban PFOF. The proliferation of options exchanges narrowed spreads because there was more competition for executing orders. Options market makers said their services provided liquidity. In its conclusion, the report said, "While increased multiple-listing produced immediate economic benefits to investors in the form of narrower quotes and effective spreads, these improvements have been muted with the spread of payment for order flow and internalization."
The SEC allowed payment for order flow to continue to prevent exchanges from gaining monopoly power. What would happen to trades if the practice was outlawed was also unclear. SEC requires brokers to disclose financial arrangements with market makers. Since then, the SEC has watched closely.
2020 Order Flow Payment
Rule 605 and Rule 606 show execution quality and order flow payment statistics on a broker's website. Despite being required by the SEC, these reports can be hard to find. The SEC mandated these reports in 2005, but the format and reporting requirements have changed over the years, most recently in 2018.
Brokers and market makers formed a working group with the Financial Information Forum (FIF) to standardize order execution quality reporting. Only one retail brokerage (Fidelity) and one market maker remain (Two Sigma Securities). FIF notes that the 605/606 reports "do not provide the level of information that allows a retail investor to gauge how well a broker-dealer fills a retail order compared to the NBBO (national best bid or offer’) at the time the order was received by the executing broker-dealer."
In the first quarter of 2020, Rule 606 reporting changed to require brokers to report net payments from market makers for S&P 500 and non-S&P 500 equity trades and options trades. Brokers must disclose payment rates per 100 shares by order type (market orders, marketable limit orders, non-marketable limit orders, and other orders).
Richard Repetto, Managing Director of New York-based Piper Sandler & Co., publishes a report on Rule 606 broker reports. Repetto focused on Charles Schwab, TD Ameritrade, E-TRADE, and Robinhood in Q2 2020. Repetto reported that payment for order flow was higher in the second quarter than the first due to increased trading activity, and that options paid more than equities.
Repetto says PFOF contributions rose overall. Schwab has the lowest options rates, while TD Ameritrade and Robinhood have the highest. Robinhood had the highest equity rating. Repetto assumes Robinhood's ability to charge higher PFOF reflects their order flow profitability and that they receive a fixed rate per spread (vs. a fixed rate per share by the other brokers).
Robinhood's PFOF in equities and options grew the most quarter-over-quarter of the four brokers Piper Sandler analyzed, as did their implied volumes. All four brokers saw higher PFOF rates.
TD Ameritrade took the biggest income hit when cutting trading commissions in fall 2019, and this report shows they're trying to make up the shortfall by routing orders for additional PFOF. Robinhood refuses to disclose trading statistics using the same metrics as the rest of the industry, offering only a vague explanation on their website.
Summary
Payment for order flow has become a major source of revenue as brokers offer no-commission equity (stock and ETF) orders. For retail investors, payment for order flow poses a problem because the brokerage may route orders to a market maker for its own benefit, not the investor's.
Infrequent or small-volume traders may not notice their broker's PFOF practices. Frequent traders and those who trade larger quantities should learn about their broker's order routing system to ensure they're not losing out on price improvement due to a broker prioritizing payment for order flow.
This post is a summary. Read full article here
Wayne Duggan
3 years ago
What An Inverted Yield Curve Means For Investors
The yield spread between 10-year and 2-year US Treasury bonds has fallen below 0.2 percent, its lowest level since March 2020. A flattening or negative yield curve can be a bad sign for the economy.
What Is An Inverted Yield Curve?
In the yield curve, bonds of equal credit quality but different maturities are plotted. The most commonly used yield curve for US investors is a plot of 2-year and 10-year Treasury yields, which have yet to invert.
A typical yield curve has higher interest rates for future maturities. In a flat yield curve, short-term and long-term yields are similar. Inverted yield curves occur when short-term yields exceed long-term yields. Inversions of yield curves have historically occurred during recessions.
Inverted yield curves have preceded each of the past eight US recessions. The good news is they're far leading indicators, meaning a recession is likely not imminent.
Every US recession since 1955 has occurred between six and 24 months after an inversion of the two-year and 10-year Treasury yield curves, according to the San Francisco Fed. So, six months before COVID-19, the yield curve inverted in August 2019.
Looking Ahead
The spread between two-year and 10-year Treasury yields was 0.18 percent on Tuesday, the smallest since before the last US recession. If the graph above continues, a two-year/10-year yield curve inversion could occur within the next few months.
According to Bank of America analyst Stephen Suttmeier, the S&P 500 typically peaks six to seven months after the 2s-10s yield curve inverts, and the US economy enters recession six to seven months later.
Investors appear unconcerned about the flattening yield curve. This is in contrast to the iShares 20+ Year Treasury Bond ETF TLT +2.19% which was down 1% on Tuesday.
Inversion of the yield curve and rising interest rates have historically harmed stocks. Recessions in the US have historically coincided with or followed the end of a Federal Reserve rate hike cycle, not the start.
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Gareth Willey
2 years ago
I've had these five apps on my phone for a long time.
TOP APPS
Who survives spring cleaning?
Relax. Notion is off-limits. This topic is popular.
(I wrote about it 2 years ago, before everyone else did.) So).
These apps are probably new to you. I hope you find a new phone app after reading this.
Outdooractive
ViewRanger is Google Maps for outdoor enthusiasts.
This app has been so important to me as a freedom-loving long-distance walker and hiker.
This app shows nearby trails and right-of-ways on top of an Open Street Map.
Helpful detail and data. Any route's distance,
You can download and follow tons of routes planned by app users.
This has helped me find new routes and places a fellow explorer has tried.
Free with non-intrusive ads. Years passed before I subscribed. Pro costs £2.23/month.
This app is for outdoor lovers.
Google Files
New phones come with bloatware. These rushed apps are frustrating.
We must replace these apps. 2017 was Google's year.
Files is a file manager. It's quick, innovative, and clean. They've given people what they want.
It's easy to organize files, clear space, and clear cache.
I recommend Gallery by Google as a gallery app alternative. It's quick and easy.
Trainline
App for trains, buses, and coaches.
I've used this app for years. It did the basics well when I first used it.
Since then, it's improved. It's constantly adding features to make traveling easier and less stressful.
Split-ticketing helps me save hundreds a year on train fares. This app is only available in the UK and Europe.
This service doesn't link to a third-party site. Their app handles everything.
Not all train and coach companies use this app. All the big names are there, though.
Here's more on the app.
Battlefield: Mobile
Play Store has 478,000 games. Few can turn my phone into a console.
Call of Duty Mobile and Asphalt 8/9 are examples.
Asphalt's loot boxes and ads make it unplayable. Call of Duty opens with a few ads. Close them to play without hassle.
This game uses all your phone's features to provide a high-quality, seamless experience. If my internet connection is good, I never experience lag or glitches.
The gameplay is energizing and intense, just like on consoles. Sometimes I'm too involved. I've thrown my phone in anger. I'm totally absorbed.
Customizability is my favorite. Since phones have limited screen space, we should only have the buttons we need, placed conveniently.
Size, opacity, and position are modifiable. Adjust audio, graphics, and textures. It's customizable.
This game has been on my phone for three years. It began well and has gotten better. When I think the creators can't do more, they do.
If you play, read my tips for winning a Battle Royale.
Lightroom
As a photographer, I believe your best camera is on you. The phone.
2017 was a big year for this app. I've tried many photo-editing apps since then. This always wins.
The app is dull. I've never seen better photo editing on a phone.
Adjusting settings and sliders doesn't damage or compress photos. It's detailed.
This is important for phone photos, which are lower quality than professional ones.
Some tools are behind a £4.49/month paywall. Adobe must charge a subscription fee instead of selling licenses. (I'm still bitter about Creative Cloud's price)
Snapseed is my pick. Lightroom is where I do basic editing before moving to Snapseed. Snapseed review:
These apps are great. They cover basic and complex editing needs while traveling.
Final Reflections
I hope you downloaded one of these. Share your favorite apps. These apps are scarce.
Hannah Elliott
3 years ago
Pebble Beach Auto Auctions Set $469M Record
The world's most prestigious vintage vehicle show included amazing autos and record-breaking sums.
This 1932 Duesenberg J Figoni Sports Torpedo earned Best of Show in 2022.
David Paul Morris (DPM)/Bloomberg
2022 Pebble Beach Concours d'Elegance winner was a pre-war roadster.
Lee Anderson's 1932 Duesenberg J Figoni Sports Torpedo won Best of Show at Pebble Beach Golf Links near Carmel, Calif., on Sunday. First American win since 2013.
Sandra Button, chairperson of the annual concours, said the car, whose chassis and body had been separated for years, "marries American force with European style." "Its resurrection story is passionate."
Pebble Beach Concours d'Elegance Auction
Since 1950, the Pebble Beach Concours d'Elegance has welcomed the world's most costly collectable vehicles for a week of parties, auctions, rallies, and high-roller meetings. The cold, dreary weather highlighted the automobiles' stunning lines and hues.
DPM/Bloomberg
A visitor photographs a 1948 Ferrari 166 MM Touring Barchetta. This is one of 25 Ferraris manufactured in the years after World War II. First shown at the 1948 Turin Salon. Others finished Mille Miglia and Le Mans, which set the tone for Ferrari racing for years.
DPM/Bloomberg
This year's frontrunners were ultra-rare pre-war and post-war automobiles with long and difficult titles, such a 1937 Talbot-Lago T150C-SS Figoni & Falaschi Teardrop Coupe and a 1951 Talbot-Lago T26 Grand Sport Stabilimenti Farina Cabriolet.
The hefty, enormous coaches inspire visions of golden pasts when mysterious saloons swept over the road with otherworldly style, speed, and grace. Only the richest and most powerful people, like Indian maharaja and Hollywood stars, owned such vehicles.
Antonio Chopitea, a Peruvian sugar tycoon, ordered a new Duesenberg in Paris. Hemmings says the two-tone blue beauty was moved to the US and dismantled in the 1960s. Body and chassis were sold separately and rejoined decades later in a three-year, prize-winning restoration.
The concours is the highlight of Monterey Car Week, a five-day Super Bowl for car enthusiasts. Early events included Porsche and Ferrari displays, antique automobile races, and new-vehicle debuts. Many auto executives call Monterey Car Week the "new auto show."
Many visitors were drawn to the record-breaking auctions.
A 1969 Porsche 908/02 auctioned for $4.185 million. Flat-eight air-cooled engine, 90.6-inch wheelbase, 1,320-pound weight. Vic Elford, Richard Attwood, Rudi Lins, Gérard Larrousse, Kurt Ahrens Jr., Masten Gregory, and Pedro Rodriguez drove it, according to Gooding.
DPM/Bloomberg
The 1931 Bentley Eight Liter Sports Tourer doesn't meet its reserve. Gooding & Co., the official auction house of the concours, made more than $105 million and had an 82% sell-through rate. This powerful open-top tourer is one of W.O. Bentley's 100 automobiles. Only 80 remain.
DPM/Bloomberg
The final auction on Aug. 21 brought in $456.1 million, breaking the previous high of $394.48 million established in 2015 in Monterey. “The week put an exclamation point on what has been an exceptional year for the collector automobile market,” Hagerty analyst John Wiley said.
Many cars that go unsold at public auction are sold privately in the days after. After-sales pushed the week's haul to $469 million on Aug. 22, up 18.9% from 2015's record.
In today's currencies, 2015's record sales amount to $490 million, Wiley noted. The dollar is degrading faster than old autos.
Still, 113 million-dollar automobiles sold. The average car sale price was $583,211, up from $446,042 last year, while multimillion-dollar hammer prices made up around 75% of total sales.
Industry insiders and market gurus expected that stock market volatility, the crisis in Ukraine, and the dollar-euro exchange rate wouldn't influence the world's biggest spenders.
Classic.com's CEO said there's no hint of a recession in an e-mail. Big sales and crowds.
Ticket-holders wore huge hats, flowery skirts, and other Kentucky Derby-esque attire. Coffee, beverages, and food are extra.
DPM/Bloomberg
Mercedes-Benz 300 SL Gullwing, 1955. Mercedes produced the two-seat gullwing coupe from 1954–1957 and the roadster from 1957–1963. It was once West Germany's fastest and most powerful automobile. You'd be hard-pressed to locate one for less $1 million.
DPM/Bloomberg
1955 Ferrari 410 Sport sold for $22 million at RM Sotheby's. It sold a 1937 Mercedes-Benz 540K Sindelfingen Roadster for $9.9 million and a 1924 Hispano-Suiza H6C Transformable Torpedo for $9.245 million. The family-run mansion sold $221.7 million with a 90% sell-through rate, up from $147 million in 2021. This year, RM Sotheby's cars averaged $1.3 million.
Not everyone saw such great benefits.
Gooding & Co., the official auction house of the concours, made more than $105 million and had an 82% sell-through rate. 1937 Bugatti Type 57SC Atalante, 1990 Ferrari F40, and 1994 Bugatti EB110 Super Sport were top sellers.
The 1969 Autobianchi A112 Bertone. This idea two-seater became a Hot Wheels toy but was never produced. It has a four-speed manual drive and an inline-four mid-engine arrangement like the Lamborghini Miura.
DPM/Bloomberg
1956 Porsche 356 A Speedster at Gooding & Co. The Porsche 356 is a lightweight, rear-engine, rear-wheel drive vehicle that lacks driving power but is loved for its rounded, Beetle-like hardtop coupé and open-top versions.
DPM/Bloomberg
Mecum sold $50.8 million with a 64% sell-through rate, down from $53.8 million and 77% in 2021. Its top lot, a 1958 Ferrari 250 GT 'Tour de France' Alloy Coupe, sold for $2.86 million, but its average price was $174,016.
Bonhams had $27.8 million in sales with an 88% sell-through rate. The same sell-through generated $35.9 million in 2021.
Gooding & Co. and RM Sotheby's posted all 10 top sales, leaving Bonhams, Mecum, and Hagerty-owned Broad Arrow fighting for leftovers. Six of the top 10 sellers were Ferraris, which remain the gold standard for collectable automobiles. Their prices have grown over decades.
Classic.com's Calle claimed RM Sotheby's "stole the show," but "BroadArrow will be a force to reckon with."
Although pre-war cars were hot, '80s and '90s cars showed the most appreciation and attention. Generational transition and new buyer profile."
2022 Pebble Beach Concours d'Elegance judges inspect 1953 Siata 208. The rounded coupe was introduced at the 1952 Turin Auto Show in Italy and is one of 18 ever produced. It sports a 120hp Fiat engine, five-speed manual transmission, and alloy drum brakes. Owners liked their style, but not their reliability.
DPM/Bloomberg
The Czinger 21 CV Max at Pebble Beach. Monterey Car Week concentrates on historic and classic automobiles, but modern versions like this Czinger hypercar also showed.
DPM/Bloomberg
The 1932 Duesenberg J Figoni Sports Torpedo won Best in Show in 2022. Lee and Penny Anderson of Naples, Fla., own the once-separate-chassis-from-body automobile.
DPM/Bloomberg
Greg Satell
2 years ago
Focus: The Deadly Strategic Idea You've Never Heard Of (But Definitely Need To Know!
Steve Jobs' initial mission at Apple in 1997 was to destroy. He killed the Newton PDA and Macintosh clones. Apple stopped trying to please everyone under Jobs.
Afterward, there were few highly targeted moves. First, the pink iMac. Modest success. The iPod, iPhone, and iPad made Apple the world's most valuable firm. Each maneuver changed the company's center of gravity and won.
That's the idea behind Schwerpunkt, a German military term meaning "focus." Jobs didn't need to win everywhere, just where it mattered, so he focused Apple's resources on a few key goods. Finding your Schwerpunkt is more important than charts and analysis for excellent strategy.
Comparison of Relative Strength and Relative Weakness
The iPod, Apple's first major hit after Jobs' return, didn't damage Microsoft and the PC, but instead focused Apple's emphasis on a fledgling, fragmented market that generated "sucky" products. Apple couldn't have taken on the computer titans at this stage, yet it beat them.
The move into music players used Apple's particular capabilities, especially its ability to build simple, easy-to-use interfaces. Jobs' charisma and stature, along his understanding of intellectual property rights from Pixar, helped him build up iTunes store, which was a quagmire at the time.
In Good Strategy | Bad Strategy, management researcher Richard Rumelt argues that good strategy uses relative strength to counter relative weakness. To discover your main point, determine your abilities and where to effectively use them.
Steve Jobs did that at Apple. Microsoft and Dell, who controlled the computer sector at the time, couldn't enter the music player business. Both sought to produce iPod competitors but failed. Apple's iPod was nobody else's focus.
Finding The Center of Attention
In a military engagement, leaders decide where to focus their efforts by assessing commanders intent, the situation on the ground, the topography, and the enemy's posture on that terrain. Officers spend their careers learning about schwerpunkt.
Business executives must assess internal strengths including personnel, technology, and information, market context, competitive environment, and external partner ecosystems. Steve Jobs was a master at analyzing forces when he returned to Apple.
He believed Apple could integrate technology and design for the iPod and that the digital music player industry sucked. By analyzing competitors' products, he was convinced he could produce a smash by putting 1000 tunes in my pocket.
The only difficulty was there wasn't the necessary technology. External ecosystems were needed. On a trip to Japan to meet with suppliers, a Toshiba engineer claimed the company had produced a tiny memory drive approximately the size of a silver dollar.
Jobs knew the memory drive was his focus. He wrote a $10 million cheque and acquired exclusive technical rights. For a time, none of his competitors would be able to recreate his iPod with the 1000 songs in my pocket.
How to Enter the OODA Loop
John Boyd invented the OODA loop as a pilot to better his own decision-making. First OBSERVE your surroundings, then ORIENT that information using previous knowledge and experiences. Then you DECIDE and ACT, which changes the circumstance you must observe, orient, decide, and act on.
Steve Jobs used the OODA loop to decide to give Toshiba $10 million for a technology it had no use for. He compared the new information with earlier observations about the digital music market.
Then something much more interesting happened. The iPod was an instant hit, changing competition. Other computer businesses that competed in laptops, desktops, and servers created digital music players. Microsoft's Zune came out in 2006, Dell's Digital Jukebox in 2004. Both flopped.
By then, Apple was poised to unveil the iPhone, which would cause its competitors to Observe, Orient, Decide, and Act. Boyd named this OODA Loop infiltration. They couldn't gain the initiative by constantly reacting to Apple.
Microsoft and Dell were titans back then, but it's hard to recall. Apple went from near bankruptcy to crushing its competition via Schwerpunkt.
Rather than a destination, it is a journey
Trying to win everywhere is a strategic blunder. Win significant fights, not trivial skirmishes. Identifying a focal point to direct resources and efforts is the essence of Schwerpunkt.
When Steve Jobs returned to Apple, PC firms were competing, but he focused on digital music players, and the iPod made Apple a player. He launched the iPhone when his competitors were still reacting. When Steve Jobs said, "One more thing," at the end of a product presentation, he had a new focus.
Schwerpunkt isn't static; it's dynamic. Jobs' ability to observe, refocus, and modify the competitive backdrop allowed Apple to innovate consistently. His strategy was tailored to Apple's capabilities, customers, and ecosystem. Microsoft or Dell, better suited for the enterprise sector, couldn't succeed with a comparable approach.
There is no optimal strategy, only ones suited to a given environment, when relative strength might be used against relative weakness. Discovering the center of gravity where you can break through is more of a journey than a destination; it will become evident after you reach.