Top Four Myths About ADA Compliance For Business Owners

Businesses are at their best when they function like a well-oiled machine, which includes abiding by federal and state regulations that protect civil rights. This is especially true when it comes to ADA compliance. Business owners should take extra care to avoid falling victim to misinformation. Here are the top four myths to avoid.

What is ADA?

Signed into law in 1990, the Americans with Disabilities Act (ADA) is one of the more recent pieces of legislation enacted to protect civil rights. Specifically, the law prohibits discrimination on the basis of race, color, religion, sex, or national origin, and section 504 of the Rehabilitation Act of 1973. As a result, the law is designed to ensure equal opportunity for those individuals with disabilities. Owners, who operate within the United States, are mandated to adhere to the tenants of the Americans with Disabilities Act and doing so will make them compliant.

Myth #1: Have to Spend Lots of Money to Be Complicit

This is simply not true. The fact of the matter is that the law only requires businesses to remove architectural barriers in existing facilities that may prevent access for public accommodations such as banks, hotels, stores, and restaurants “without much difficulty or expense.” As a result, it does not require anyone to spend exorbitant amounts of money on construction to make their facilities accessible in order to meet ADA compliance.

Myth #2: Have to Immediately Remove Barriers

False. The truth is that when it comes to ADA compliance, businesses are given much more leeway than that. The law specifically stipulates that businesses are only mandated to do what is readily achievable at that time. As a result, owners are encouraged to make long-term plans to remedy their accessibility issues and/or barrier removal that is deemed commensurate with the availability of resources.

Myth #3: Forced to Hire Unqualified Individuals

Nothing could be further from the truth. Business owners that adhere to ADA compliance are only required to give equal opportunities to individuals who are qualified. In doing so, bosses should not discriminate on the basis of race, color, religion, sex, national origin, and section 504 of the Rehabilitation Act of 1973, which includes those individuals with disabilities.

Myth #4: Hit with Huge Fines If They Are Found in Violation

Again, not true. The civil courts can only impart penalties on businesses for lack of ADA compliance brought by the Justice Department. However, the Justice Department only pursues such penalties when the violation is substantial. As a result, minor infractions due to the delay of barrier removal, for instance, are not pursued nearly as much as cases that may include hostile acts or persisting issues.

These are just four of the most common misconceptions about ADA compliance, and they should not be considered barriers when bringing a business up to speed.

When in need of help with doors that meet ADA compliance, California businesses go to OMG Diversified Services.Screen Shot 2015-09-07 at 9.36.49 AM

Business Can’t Assume They Can Simply Replace Nonprofits And Be More Effective

I’m a big believer that nonprofits should operate using more business principles, which is happening increasingly across the sector. However, on the other side of the coin, there is a prejudice against nonprofit executives by the broader business community.

Not too long ago, I happened to come across words from the former CEO of a major nonprofit, William Novelli, who previously had been a marketer for Unilever. He said that many for-profit CEOs don’t understand nonprofit management, “It goes beyond underappreciated. CEOs are often disdainful of not-for-profit management. They think it’s undisciplined, non-quantified… it’s harder to succeed in the nonprofit world.”

That’s true. I’ve been on both sides. As many of you know, I have been a successful businessman and also founded and grew a nonprofit to over $70 million in revenue.

Why Nonprofits Are Losing Territory To For-Profits

I think there’s a shade of gray that I would like to explore a little in this article. If you see the trends and what’s happening, there are definitely changes happening in the philanthropic sector. Additionally, more and more for-profit businesses are beginning to measure social impact and laws are being changed to accommodate. These laws are making it possible for businesses to also have social impact become a motivating factor in their business results, not just profit. This trend is accelerating in the United States.

I believe there are two key reasons for this: 1) consumers and customers are now demanding more of for-profit companies by way of social responsibility; and, 2) the nonprofit sector has had certain constraints and myths that have made them less competitive. So, now you have an environment where for-profit businesses and funders are thinking that, perhaps, for-profits can do it better.

For a variety of reasons, the nonprofit sector has seemed to take ownership of the “non” profit word and there has been thinking that they should do great amounts of work without any real investment in expansion and sustainability. There has also been a co-dependent relationship between major donors and nonprofits about operating revenue. It’s been a race to the bottom with regard to how little is spent on administrative costs versus direct program costs. Zero percent operating costs began to take hold, and we all know that it’s impossible to run any business-including a nonprofit-without spending on the infrastructure.

What For-Profits Need to Understand About Nonprofit Work

With the loss of credibility that for-profits seem to have for their nonprofit counterparts, there is also a great deal that the former needs to know and understand about the social sector.

Going back to Novelli’s words, which make sense, for-profit businesses are usually very straightforward. They are selling a product or some sort of service. This is not typically the case in the social sector. Nonprofits are trying to make an impact and looking to change behavior.

Take an environmental organization, for instance, they are looking to get their followers and the general public to lower their carbon footprint. A school is looking to get all students to be well educated, particularly in the core areas such as math, science and reading and to have them score well on mandated tests. A cancer organization is perhaps seeking to provide inspiration and hope to those who have the disease and their families. For-profit executives do need to understand this is not cut and dry and often there are many factors playing into success.

The additional issue nonprofits have, and more so today because of the ability to gather vast amounts of data rather inexpensively is impact. When businesses are looking at their metrics, they can see the volume of products or services sold. They can see their profits or losses. Measuring impact is much more difficult. How do you, for example, measure impact for youth service organizations geared toward leadership, for example? How do you accurately measure the impact of schools on education without taking into account the circumstances (e.g. parental, socio-economic) of students, particularly those who live in under-served communities? It’s not that straightforward.

This disconnect can have adverse repercussions with for-profit businesses and donors not being fully vested, frustration about “results” and mistrust.

As more and more for-profit businesses step up their social responsibility programs and initiatives, some consideration needs to be given as to why some of society’s challenges have been so intractable. There needs to be thought around how to integrate what nonprofits know and have learned along the way without thinking you need to throw out the baby with the bath water.

© 2015 Not Your Father’s Charity. All Rights Reserved.

What I Learned Losing a Million Dollars: Interview with Brendan Moynihan

What I Learned Losing a Million Dollars book coverNext on my to-read list is Jim Paul and Brendan Moynihan’s book, What I Learned Losing a Million Dollars. It is the story of one trader’s (Jim Paul) disastrous losing streak and how he (barely) survived it, learning a few key lessons on ego and risk in the process.

As you’ll note from the book’s rather unusual title, What I Learned Losing a Million Dollars is not your typical “trading system-in-a-book”, promising a golden pathway to riches. It deals squarely with losses and how overconfidence and success can lead us to complacency and ruin. So what lessons can we take from another trader’s experience losing large sums of money? 

Tim Ferris recently interviewed the book’s co-author, Brendan Moynihan. Here are some highlights from their discussion:

• While introducing Brendan Moynihan, Tim mentions that he was won over by Nassim Taleb’s recommendation of the book, which he praised for its “non-charlatanic” real-life wisdom. Moynihan says that the interest generated from Taleb’s endorsement spurred them to reprint the book. 

• Moynihan met globetrotting investor, Jim Rogers in Alabama. He learned a bit about finance from Rogers and decided he wanted to get involved with the markets. While working in Chicago, Moynihan met futures trader, Jim Paul and heard the story of his near-washout. He later flew to his home in Chicago to record Paul and transcribe his story into a book. Some amusing stories about Paul and self-publishing in the pre-internet age are included.

• When we lose money, we tend to internalize what should be an external loss. People often equate net worth with self-worth, a fatal mistake.

• There are (according to Moynihan) 5 types of market participants: investors, speculators, traders, bettors, and gamblers. How you behave in the market environment defines you in terms of each class of participant. “You don’t have to be in a casino to gamble. You can gamble in the markets.” Bettors, gamblers, and investors all have different motivations, methods, and decision making processes.

• When emotions become involved in your decision making, you have personalized the issue. Emotions are inherent to our makeup, but emotional decision making in markets can be disastrous. As Gustave Le Bon wrote in The Crowd, a crowd is the single entity that best exhibits the phenomenon of emotional decision making. 

• There are many ways to make money in the markets. There are a few reliable ways (emotional pitfalls) to lose your money. 

• Come up with a trading plan and a written checklist that will guide your buy and sell decisions in the market. Tim Ferris cites another book, The Checklist Manifesto, that outlines the profound changes we see in hospitals when performance and safety guidelines are enforced with written procedural checklists. 

• The best thing you can do as a trader or investor is learn to recognize and cut your losses. Due to our schooling system, we equate being wrong with losing points and esteem (for more on this, see Michael Martin’s book, The Inner Voice of Trading.). In the markets, losing or making money is not about being right or wrong. We need to manage risk and stick with our process.

Check out the full interview with Brendan Moynihan here. 

 

You can learn more about the habits of successful traders vs. losing traders in our related links below. Check them out!

Related posts: 

1. Marty Schwartz speaks at Amherst College.

2. Why traders fail: Mark Minervini interivew. 

3. What makes a great trader? Managing risk.

The Dot-Com Bubble in 1 Chart: InfoSpace

With all the recent talk of a new bubble in the making, thanks in part to the $QQQ $BCOR pic.twitter.com/xjsMk433H7
— David Shvartsman (@FinanceTrends) February 24, 2015

 
For those of you who are a little too young to recall it, this is a chart of InfoSpace at the height of the Nasdaq dot-com bubble in 1999-2001. This fallen angel soared to fantastic heights only to plummet back down to earth as the bubble, and InfoSpace’s shady business plan, turned to rubble.

As detailed in our post, “Round trip stocks: Momentum booms and busts”, InfoSpace rocketed from under $100 a share to over $1,300 a share in less than six months. 

In a pattern common to many parabolic shooting stars, the stock soon peaked and began a “stage four” decline back to its pre-bubble base. In fact, it sank to levels far below that base. Today, Infospace, having re-branded itself as Blucora (BCOR), trades at a 99% discount to its dot-com bubble peak.   

Are there other boom-and-bust candidates that might claim the title of “quintessential Nasdaq bubble stock”? Sure, and if we pool our heads together and think about it for a few moments, I’m sure we can think of a couple. We’ll examine some tech survivors, and tech wrecks, in a follow-up post as we hone in on Nasdaq 5,000 for the first time in 15 years. 

How to “Pull the Trigger” on Your Trading Ideas

In our last post, I quoted hedge fund manager, Jim Leitner on the importance of following up on your investment ideas. 

Today I’d like to follow up and share some thoughts on how you can learn to consistently “pull the trigger” on your best trading setups and investing ideas.

In order to help you do that, we’ll take from the best and offer up key insights from interviews with top traders and trading psychologists like Alan Farley, Brett Steenbarger, and Doug Hirschhorn. 

Now before we get to their key insights on overcoming trading anxiety and pulling the trigger on your trading ideas, let’s remember what Jim Leitner said in his interview:

“Learn to love to listen to people and when you hear something interesting, follow up on it. Don’t just think, “Well that’s an interesting idea” only to find out a year later that the company you could’ve bought shares in is now up 500-fold. You never want to say woulda, coulda, shoulda.”.

The method Leitner stressed to aid us in following up on our investment ideas was taking a small initial position. As I wrote in that post, a small “feeler” position can help us get a toe in the water while keeping our capital risk defined. As the trade goes your way and you begin to see a profit, you can always add to the position (or cut back) in a responsible way. 

Poster via Keep Calm-O-Matic.

What if you’re not sure how to enter a trade (“do I buy a breakout to new highs or buy on a pullback?”). Or what if you’re not exactly able to clearly articulate your reasons for taking a trade? Or maybe you just don’t know if this particular trade will work out in your favor.

Alan Farley addresses these questions in his “Pulling the Trigger Q+A”: 

“You’re really asking the ultimate Zen trading question: How do I know I’m right? 

Zen answer: There is no right and no wrong. You manage risk. Do that well, and you’re right.

Breakouts and breakdowns either go or they don’t go. Most of the time you can’t tell the difference. Some patterns are easier than others to interpret, and certain kinds of setups have a gut feel that tells you the coast is clear. Just control risk the rest of the time and take the trade to its logical conclusion.

Remember the input you have on the position’s outcome. First, you can choose a small position instead of a large one. This keeps your risk small if you’re wrong, but you can still make money if you’re right. Second, you can take your best shot and keep a tight stop-loss. You take the loss and move on if you’re wrong. You add to your position if you’re right.”

Olivier Tischendorf has written about the importance of trading meaningful position sizes. 

However, there are times (in choppy market conditions, or after a tough losing streak) when you may want to enter trades with a position size that is smaller than usual. This will help you to focus on your overall process and prevent you from assigning too much importance to the outcome of a single trade. 

As Olivier summarized it in a recent conversation:  

“Small position sizes allow you to approach the market in a disciplined and non-emotional way. It helps to overcome the paralysis of analysis. 

If you struggle emotionally with trading, you should trade smaller position sizes. You’ll be more process oriented instead of focusing on the outcome of a single trade. This will allow you to “Just Do It” vs. second-guessing yourself on trades.”  

Many times, it seems, the failure to follow up on our investing or trade ideas can be traced back to simple fear. Fear of failure, fear of being wrong, a lack of confidence in our skills, or a poorly vetted trading process may be holding us back in our trading development. 

Tim Bourquin interviewed 3 top trading coaches, Dr. Brett Steenbarger, Dr. Doug Hirschhorn, and Dr. Gary Dayton, about these fears and the performance anxieties we often face as traders. 

They offered up some helpful ideas and exercises in, “Overcoming Your Fear of “Pulling the Trigger””:  


“A lot of traders haven’t gone through that kind of developmental process where they first practice their setups then they trade them small, and then they trade them larger.

They’re too eager to get right in there and jump right in and trade. And as a result, they don’t have the battle test experience. They don’t have the confidence in their setups and it can show up as hesitancy and problems in pulling the trigger.” – Brett Steenbarger


“Trade in smaller sizes. That’s how you practice the skill. Get yourself comfortable with actually putting the risk on and putting the trade on. Because once you can do it with small size and the only differential is changing the default on the size.” – Doug Hirschhorn


“What matters to a trader? Well, identifying trades, taking trades, managing sound trades setups and managing them to completion. And if it’s only 10 shares, then it’s only 10 shares, but that’s still taking a step in the direction of what’s most important. 

And then be mindful about it as you’re doing it. Note what thoughts and feelings you’re having. And just pull back from them and accept them as thoughts and feeling that pass that come and go” – Gary Dayton

So whether you’re an experienced trader or a newbie investor, I hope you’ll come back and reference this post whenever you need encouragement to pull the trigger and act on your research and investing ideas. I hope some of this material helps you as much as it has helped me (even as I researched and wrote this entry).

Thanks for reading and sharing. Keep up with us on Twitter for more trading ideas and real-time updates.  

Jim Leitner quote: Follow up on your investment ideas

Global macro investor, Jim Leitner of Falcon Management was interviewed for Steven Drobny’s book, Inside the House of Money. I’ve included one of my favorite quotes, on the importance of following up on investing ideas, below.

“Learn to love to listen to people and when you hear something interesting, follow up on it. Don’t just think, “Well that’s an interesting idea” only to find out a year later that the company you could’ve bought shares in is now up 500-fold. You never want to say woulda, coulda, shoulda.” 

Jim Leitner Falcon hedge fund manager quote investing

This is an especially relevant quote, as I’ve struggled with regrets over missed opportunities after I failed to pull the trigger on some of my best investing ideas (click through for more on this trading phenomenon). 

During the course of this bull market, I’ve also made errors of omission when it came to following up on unique investing and trading ideas gleaned from other smart traders. Maybe you’ve faced the same issues in your trading and investing journey. So what steps can we take to change and seize the opportunities that we uncover?

The important thing to take away from Leitner’s quote is the importance of following up on ideas, even if it’s just by taking a small starter position (“a tiny amount of money”). 

If you reduce the size of your initial commitment (say, 20 shares vs. your usual 200 or 1000 shares) it will allow you to have a small “feeler” position that can be increased as the investment works out or goes your way. That way, you can step up your position size as you begin to see a profit. Conversely, you will limit your initial losses to a small portion of your overall capital if the trade should go against you.

Tech stocks chart roundup: GOOG, AMZN, PCLN, AAPL, BABA, GPRO

Earlier today I tweeted about Alibaba (BABA) and the stock’s plunge after its 3Q earnings update.

Since we’ll also see earnings from Google (GOOG) and Amazon (AMZN) after the close today, it’s a good time to review some leading tech stock charts and follow up on some of my past posts and recent tweets.

1) BABA. As I mentioned this morning, BABA’s plunge came after weeks of decline. Despite a few rallies, BABA has been making lower highs and lower lows since peaking at $120 in November. Today’s move down was the second consecutive day lower on above avg. volume, and the stock sank through the psychologically important $100 level. 

While there may be an upcoming relief rally, I am avoiding BABA as a long trade until the stock can find support and put in a strong base to move higher. For now, the stock remains in a downtrend. 

BABA stock price chart Alibaba


2) AMZN. Amazon, America’s great e-commerce giant (and provider of hosting, e-payments, etc.). Last time we checked in with AMZN, the stock was sailing towards new highs above the $350 level. It then peaked above $400 in early 2014 and has edged lower for the past year.

AMZN will report earnings after the close. Bulls will be hoping for a strong quarter to help turn around its recent EPS losing streak. Prior lows near $283 may provide some support, but the stock is still trending lower and could easily violate these levels. A move above this recent downtrend line and back above the $340 level might signal a change in trend.



3) GOOG. Google will also report earnings after the close. Like AMZN, it peaked out in early 2014 and has drifted lower since. 

While betting against Google has never been a good long-term strategy, the intermediate trend remains weak. GOOG is currently trading below its 50 and 200 day moving averages (see daily chart).

Google stock price chart


4) PCLN. Priceline will report earnings next month. Just wanted to point out another high-dollar tech leader that’s drifted lower off its early 2014 highs. See a pattern with this group?

Potential support at the $780 – $800 level may come into play if the stock continues lower.


5) AAPL. Apple is the one consumer tech leader that is showing strength here. After a blowout quarter and the usual gushing over the piles of cash Apple makes, it’s clear the notion that “Apple’s best days are behind them (post-Jobs)” are being put to rest.

I will consider AAPL as a long trade in the coming days. Probably should have acted on the bullish turnaround view earlier (May 2014 tweet).


6). GPRO. GoPro is down considerably from its October 2014 highs near $98. 

Hopes for a big Christmas rally in GPRO shares did not materialize, and the stock is trading below its 20 and 50 day moving averages. While the pattern of lower highs and lower lows persists, I will not go long GPRO. Note: GPRO reports earnings next week.


To sum up, much of the current action in these tech leaders is bearish. The exception being AAPL, trading near an all-time high. With earnings season volatility upon us, it’s best to be highly selective and manage your risk. 

Disclosure: Watch list review. No positions in stocks mentioned at this time. May initiate positions any time after, do your own due diligence.

Crash at ASPS and OCN: early warning signs

Altisource (ASPS) and Ocwen Financial (OCN) are on the rocks. 

What were the early warning signs? We’ll examine the stock charts of these two mortgage finance companies to see what went wrong. First, let’s provide a little background on the firms and the lead-up to this recent mess.

Here’s a quick summary from Housing Wire on the how and why of this interrelated financial unraveling:

“To say that Ocwen Financial (OCN) took a beating on Wall Street Tuesday would be the understatement of the century…Ocwen’s stock closed Tuesday at $7.78, a loss of more than 36% for the day. One year ago today, Ocwen’s stock was trading at $55.20.

…Ocwen was under fire for most of last year, especially from the New York Department of Financial Services, which reached a settlement with Ocwen last month for failures in its mortgage servicing practices.
As part of the settlement, the NYDFS forced Erbey to resign from his position as chairman of the board of directors of Ocwen, and each of its four related companies: Altisource Portfolio Solutions S.A. (ASPS), Altisource Residential Corporation (RESI), Altisource Asset Management Corporation (AAMC), and Home Loan Servicing Solutions, Ltd. (HLSS), over allegations into Ocwen’s servicing practices and its relationships with its affiliated companies.”

Just over a year ago, Bill Erbey’s mortgage finance empire was the subject of flattering profiles in the financial press. Today OCN and ASPS both closed down over 36% and RESI is one of the few REITs starting the year off in negative territory. What a difference a year makes. 

Here are the weekly charts of ASPS and OCN, shared earlier today on Twitter. I’ll include some expanded charts below.

 
While the deteriorating price action on the weekly charts may now seem obvious in hindsight, let’s take note of some major clues (click charts to expand).

ASPS stock price chart
OCN stock price chart


If you’ll review the chart annotations, you’ll see that ASPS and OCN both suffered a sharp multi-week sell-off on above average volume in early 2014. These sharp down moves resulted in breaks of ASPS and OCN’s newly-formed 200 day moving averages, which could be seen in real-time on their daily charts. Later, a break below the weekly MAs would be evident in the weekly charts above.

Neither stock could successfully reclaim its previous highs and both continued to trade at new lows. OCN and ASPS continued to trade below their weekly moving averages for the remainder of 2014. You can clearly the see the pattern of lower highs and lower lows that took over. Each successive plunge to new lows came on high volume, a bearish sign indeed. Investors and institutions were saying, “get me out!”.

Another late clue: as stronger stocks bottomed in October 2014 and went on to make new highs, ASPS and OCN both continued lower. Even at that late date, ASPS was trading near $50, while OCN traded above $21 through November.

A related stock, AAMC, popped up on my radar via manual daily stock scans in the summer and fall of 2014. While the price action looked bearish, I quickly scratched it as a short candidate; AAMC was a $600 stock that traded an average of just 20,000 shares a day.

AAMC stock price chart


To protect yourself from steep losses in stocks like ASPS and OCN (or any stock), remember: every big drop starts as distribution and a small decline. Watch for signs of topping or distribution and a change of trend. It’s up to us to as traders and investors to manage our risk and decide beforehand where we will cut our losses.

Disclosure: I have no long or short positions in any of the stocks mentioned at this time.

You’ll learn more from your losing trades than your winners

After a series of poor trades, I recently went back and read this Dan Zanger quote:

“You’ll learn more from your losers than your winners will ever provide.”

Now I believe in studying success and I also think you can learn a lot from your best trades and life decisions. In fact, I sometimes think that people put too much emphasis on the value of learning from one’s mistakes instead of studying what went right (and the reasons why). 

Having said that, I’m a big believer in journaling your trades and taking the time to honestly examine your results. That includes our missteps, the less than optimal trades, and those flat out wrong or near-disastrous moves that take big chunks of money out of our accounts.

So if you’ve hit a rough patch in your trading or your investing returns aren’t all they could be, maybe it’s time to take a good, hard look at your records and figure out what you can learn from your losing trades. You may just improve your long-term results.

Dan Zanger trading quote losers winners learn

   

Admit when you’re wrong… and profit (Jesse Livermore)

In trading, it’s best to quickly admit when you’re wrong. 

If you can keep your losses to a minimum, you will be able to preserve your trading capital (along with your mental capital) and improve your odds of profiting from future opportunities.

As Jesse Livermore once said, “I have long since learned, as all should learn, not to make excuses when wrong. Just admit it and try to profit from it.“

Can you think of a time when admitting you were wrong saved you from prolonged agony or bigger trading losses? Did you ever turn the situation around or even go on to profit from it? Share your story with us in the comments and on Twitter.