How to remember anything: lessons from a memory champion byPiper Weiss, Shine Staff, on Thu Mar 10, 2011 1:28pm PST 187 CommentsPost a CommentRead More from This Author »Report AbuseEmail PrintJoshua Foer keeps a Post-it note above his computer that says "Don't forget to remember." The author ofthe new book "Moonwalking with Einstein: The Art and Science of Remembering Everything" went from aman with an average memory to the official U.S. Memory Champ in 2006 by immersing himself in theworld of professional memorizing. After studying the skills to learn entire dictionaries, he becameconvinced that anyone could have an exceptional memory. You just need to know certain memorytechniques. Here are six secrets from his book to becoming a savant. Build a "memory palace" : "Housing" a list of things you need to memorize is essential. "The idea is to create a space in the mind's eye, a place that you know well and can easily visualize and then populate that imagined place with images representing whatever you want to remember," writes Foer. It's a method used all the way back in Ancient Rome, when orators needed to commit their speeches to memory and when books hadn't yet become the main method of storytelling. The memory
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palace should be a place you know inherently, like the home you grew up in, or the route you take to work
every day. Then take the ten things you need to remember, like a grocery list, and plant each item in a
different place in your memory palace.
For example, put "paper towels" in your parent's old mailbox, then walk inside your old home and put
"garlic cloves" on the kitchen counter. When you need to recall those items at the grocery store, instead
of remembering the words, walk through your childhood home and find each item where you mentally
placed it. It may seem like a lot of effort, but it's a process of embedding one kind of memory into another
memory. Foer explains: "Humans are good at using spatial memory to structure and store information
whose order comes less naturally." So a list of numbers or words may be hard to remember but if you
embed them in a memory that naturally unfolds, like the blueprint of your old apartment, they'll live longer
and be easier to retrieve.
Get creative: When you're "dropping off" those grocery list items in your "memory palace" it helps to
engage all of your senses. Remembering what the garlic smells like, or how the garlic skin crumbles in
your hand before you place it on your mentally rendered kitchen counter, will help solidify where you put
it. It makes sense in literal life. You're less likely to forget where you put your keys when you focus on
their texture in your hand as you're laying them down on a table. When you need to remember where youput them, you'll remember how your hand felt as you put them down and the image of the table will
simultaneously appear. As Foer found, engaging a sense in your memory helps solidify it.
Get colorful: "Things that grab our attention are more memorable," explains Foer. "The funnier, lewder,
and more bizarre, the better." When he was memorizing a grocery list by placing each item in his
"memory palace", Foer was advised to get surreal in his thinking. "Paint the mind a scene unlike any that
has been seen before so that it cannot be forgotten," Foer's memory coach advised. As he memorized his
first grocery list by using the "memory palace" technique" he committed "salmon" to memory by imagining
it flopping under the strings of a piano. "The general idea with most memory techniques is to change
whatever boring thing is being inputted into your memory into something that is so colorful, so exciting
and so different from anything you've seen before that you can't possibly forget it," he writes.
Try "chunking": "Chunking is a way to decrease the number of items you have to remember by
increasing the size of each item," explains Foer. It's the reason phone numbers are broken up into three
sections or why remembering a sentence is easier than remembering each letter in the sentence. If you
are given a series of digits to remember, just break them up into parts. It also helps to assign meaning to
them. Separating them into three sections as if they were a date and then remembering that specific date
(take 021411 and rethink it as 02/14/11 or Valentine's Day), will help solidify the memory.
Practice makes perfect: Foer made it to the memory championships not simply by learning these
techniques but by replacing them with web surfing or even reading. He'd memorize numbers up to four
hours a day before the big championship. But for the rest of us, all it takes is about an hour a day of
practicing memory techniques to get our brains working like humming hard drives.
Wear earmuffs: We live in a world of distraction, now more than ever. In some ways those distractions
serve as our exterior memory banks. Writes Foer: “With our blogs and tweets, digital cameras, and
unlimited-gigabyte e-mail archives, participation in the online culture now means creating a trail of always
present, ever-searchable, unforgetting external memories that only grows as one ages.”
But those same blogs, tweets and instant messages with their pinging noises and flashing colors, make it
impossible to focus on one task at hand, like memorizing a poem. "No matter how crude, colorful and
explicit the images one paints in one's memory palaces, one can only look at pages of random numbers
for so long before beginning to wonder if there isn't something more interesting going on in another
room." Foer found that an oversize pair of earmuffs worked to block out exterior noise and helped his
brain zoom in on one task, like memorizing a series of numbers. But more subtle ear plugs would work
just as well.
How to Profit From InflationThe Scourge of Rising Prices Hasn't Hit Home Yet, but the Underlying Signs Point toTrouble Ahead. Here's What You Should Do Now
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By BEN LEVISOHN and JANE J. KIM
Inflation,long a sleeping giant, is finally awakening. And that could present problems—along with
opportunities—for investors.
A quick glance at the overall inflation numbers might suggest there is little reason to worry. The most
recent U.S. Consumer Price Index was up just 1.5% over the past year. Not only was that lower than
the historical average of about 3%, but it was uncomfortably low for Federal Reserve Chairman Ben
Bernanke, who prefers to see inflation at about 2%.
Even some developed economies are seeing rising prices. Inflation in the U.K. surged to 3.7% in
December, while the euro zone's rate climbed to 2.4% in January, the fastest rise since 2008.
Much of the uptick has been driven by commodity prices. During the past six months, oil has jumped
9%, copper has gained 36% and silver has shot up 56%. Agricultural products have soared as well:Cotton, wheat and soybeans have risen 100%, 24% and 42%, respectively. That's a problem because
rising input prices "work their way down the food chain to CPI," says Alan Ruskin, global head of G-10
foreign-exchange strategy at Deutsche Bank.
Of course, the main inflation driver is usually wages—and that isn't a factor in the U.S., where high
unemployment has kept a lid on pay for three years.
Yet there isn't a historical blueprint for the inflation scenario that seems to be unfolding now. Not only
has the global economy changed drastically since the last big inflationary run during the 1970s, but thelingering effects of the recent debt crisis remain a wild card.
For investors, that means traditional inflation busters such as real estate and gold might not work as
expected, while other strategies might perform better.
So how should you position your portfolio? The best approach, say advisers, is to tweak asset
allocations rather than overhaul them. That involves dialing back on some kinds of bonds, stocks and
commodities and increasing holdings of others. Here's a guide:
What to Sell
• Bonds. The price of a bond moves in the opposite direction of its yield. When inflation kicks up,
interest rates usually move higher, pressuring bond prices. Even buy-and-hold investors get hurt,
because higher inflation erodes the real value of the interest payments you receive and the principal
you get back when the bond matures.
'There is no historical blueprint for the inflation scenario that seems to beunfolding now.'
The drop is usually most extreme in longer-dated bonds, because low yields are locked in for a longerperiod of time. So inflation-wary investors should shorten the maturities of their bonds, say advisers.
The safest bonds, especially Treasurys, are usually hardest hit, because those are the most influenced
by changes in rates—unlike corporate bonds, whose prices also move based on credit quality. From
September 1986 through September 1987, for example, as inflation moved higher, Treasurys dropped
therefore can pass through higher rates quickly. In an extreme example, money funds posted yie lds
over 15% during the inflation-ravaged 1970s and early 1980s, says Pete Crane of Crane Data, which
tracks the funds.
A growing number of inflation-linked savings products are cropping up as well. Incapital LLC, aChicago investment bank, says it has seen a pickup recently in issuances of certificates of deposit
designed for a rising-rate environment. Savers, for example, can invest in a 12-year CD whose rate
starts at 3% then gradually steps up to 4.25% starting in 2015, and peaks at 5.5% starting at 2019 until
the CD's maturity in 2023.
A caveat: If inflation eases and rates fall, investors could get burned, since the issuer may call the CDs
and investors would lose out on the higher rates at maturity.
• Bonds. One way to reduce the impact of rising inflation on bond holdings is to build a bond ladder—buying bonds that mature in, say, two, four, six, eight and 10 years. As the shorter-term bonds mature,
investors can reinvest the proceeds into longer-term bonds at higher rates.
"A bond ladder is best for someone who doesn't mind holding them for up to 10 years," says Jeff
Feldman, an adviser in Rochester, N.Y.
Highly cautious investors might prefer the I Bond, a U.S. savings bond that earns interest based on a
twice-yearly CPI adjustment. Although the current yield on I Bonds is only 0.74%, that yield is likely to
move higher on May 1, the next time the rate is adjusted. I Bonds aren't as volatile as TIPS and appeal
to conservative, buy-and-hold investors. The interest may also be tax-free for some families for
education expenses.
25%
Amount gold may be overpriced based on its relationship to the money supply.
More adventurous types might consider the inflation-protected government debt of other nations, which
carry higher yields along with greater risks. The SPDR DB International Government Inflation-
Protected Bond Fund is an international inflation-protected bond exchange-traded fund designed to do
well if inflation in overseas countries moves higher. The fund returned about 6.8% in 2010 and 18.5%
in 2009, according to Morningstar Inc.
• Bank-loan funds. Another way to exploit rising inflation is through mutual funds that buy adjustable-
rate bank loans, many of which are used to finance leveraged corporate buyouts. So-called floating-
rate funds are structured so that if interest rates rise, they collect more money. During periods of rising
rates, floating-rate funds usually outperform other bond-fund categories. In 2003, for example, as
investors anticipated higher interest rates and a stronger economy, bank-loan funds gained 10.4%
while short-term bond funds gained 2.5%.
Now, amid expectations of rising inflation, investors are once again flocking to these funds, pouring inabout $7.6 billion into loan funds in the fourth quarter of last year, according to Lipper Inc.—more than
double the previous quarterly record set in 2007. The pace has accelerated this year, with investors
putting in about $3.4 billion thus far.
After gaining almost 10% last year, the funds shouldn't be counted on for much price appreciation,
says Craig Russ, who co-manages $22.7 billion of floating-rate investments across three floating-rate
funds and other accounts at Eaton Vance Corp., including the Eaton Vance Floating Rate Fund. But
the funds generate plenty of income, yielding about 4% to 5% now, according to Morningstar.
Price Increases
From Aug. 2, 2010 through Feb. 4, 2011:
Cotton: +100%
Silver: +50%
Soybeans: + 42%
Copper: +36%
Wheat: +24%
Be warned: Floating-rate funds can get creamed when investors fear the underlying loans are too risky.
In 2008, for example, bank-loan funds lost 29.7%, although they zoomed 41.8% in 2009, according to
Morningstar. What's more, banks are beginning to make riskier "covenant-light" loans that carry fewer
stipulations for corporate borrowers—a sign of frothier trends in the market.
Given the potential for volatility, floating-rate funds are best viewed as a complement to—not a
replacement for—investors' core bond holdings. Among Morningstar's picks in this category is
the Fidelity Floating Rate High-Income Fund, among the more conservative in the category.
• Commodities. Materials that are more closely tied to industrial or food production seem better
positioned now than gold, say advisers. The trick is to find the best investment vehicle.
The easiest way for small investors to gain exposure to most commodities is through exchange-traded
funds, many of which use futures contracts. But such funds can be dangerous because they often face
"contango"—when the price for a future delivery is higher than the current price. The result: The ETFs
lose money as they buy new contracts, even when prices are rising.
The losses can be extreme. In 2009, for instance, while the price of natural gas rose 3.4%, theUnited
States Natural Gas Fund lost 56.5% as a result of rolling over futures contracts.
Some firms have rolled out ETFs that aim to address the problem. One of Morningstar's picks is
the U.S. Commodity Index Fund, run by U.S. Commodity Funds LLC. The portfolio buys the sevencommodities that are most "backwardated"—the opposite of "contango," so rolling contracts should
result in a profit—along with the seven commodities with the most price momentum.
"USCI provides an outlet for investors who want broad commodities exposure but don't want to worry
about the daily dynamics," says Tim Strauts, a Morningstar analyst.
Other funds play inflation by holding many different assets to protect against rising prices no matter
where they show up. The IQ Real Return ETF, launched in 2009 by IndexIQ, aims to provide a return
equal to the CPI plus 2% to 3% over a two- to three-year period. To get there, it invests across a dozenor so inflation-sensitive assets—including currencies and commodities.
• Stocks. One corner of the market tends to do better when prices rise suddenly: small-company value
stocks. "Because value and small stocks tend to be fairly highly [indebted] companies, inflation
reduces their liabilities," says William Bernstein of Efficient Frontier Advisors LLC, an investment-
advisory firm in Eastford, Conn.
From January 1965 through December 1980, for example, inflation averaged 6.6% a year. The
Ibbotson Small-Cap Value Index posted average annual returns of 14.4%, according to Morningstar's
Ibbotson Associates, double the S&P 500's 7.1% gain.
Morningstar's picks in the small-cap value fund category include Allianz NFJ Small Cap
Value,Diamond Hill Small Cap, Perkins Small Cap Value and Schneider Small Cap Value. Just be
warned: Small value stocks have had a good run recently, returning 134%, on average, since March 6,
2009.
In the end, the particulars of any inflation-fighting plan may not be as important as developing a plan in
the first place.
"The real problem you run into with any kind of inflation hedges," says Jay Hutchins, a financial adviser
in Lebanon, N.H., "is that if you don't already have them when inflation is around the corner, you've