HEXAGRAM 22: ORIGINAL, INTERPRETATION AND CASES

HEXAGRAM 22 – Pi - Grace

Above KEN KEEPING STILL, MOUNTAIN

Below Li THE CLINGING, FIRE

This hexagram shows a fire that

· breaks out of the secret depths of the earth and, blazing up,

· illuminates and beautifies the mountain, the heavenly heights.

· Grace - beauty of form - is necessary in any union

· it is to be

o well ordered and pleasing

· rather than

o disordered and chaotic.

THE JUDGMENT

GRACE has success.

In small matters

It is favorable to undertake something.

Grace brings success.

However,

· it is not the essential or fundamental thing;

· it is only the ornament and must therefore be used

o sparingly and

o only in little things.

1. In the lower trigram of fire

a yielding line

· comes between two strong lines and

· makes them beautiful,

but

· the strong lines are the essential content and

· the weak line is the beautifying form.

2. In the upper trigram of the mountain,

the strong line

· takes the lead, so that here again

· the strong element must be regarded as the decisive factor.

3. In nature we see in the sky the strong light of the sun;

the life of the world depends on it.

But this strong, essential thing is

· changed and

· given pleasing variety by the moon and the stars.

4. In human affairs,

aesthetic form comes into being when

traditions exist that, strong and abiding like mountains, are made pleasing

by a lucid beauty.

5. By contemplating the forms existing in the heavens

we come to understand time and its changing demands.

6. Through contemplation of the forms existing in human society

it becomes possible to shape the world. 1

THE IMAGE

Fire at the foot of the mountain: The image of GRACE.

Thus does

· the superior man proceed When clearing up current affairs.

But

· he dare not decide controversial issues in this way.

· The fire, whose light illuminates the mountain and makes it pleasing,

o does not shine far;

in the same way,

· beautiful form suffices to brighten and to throw light upon matters of lesser moment,

o but important questions cannot be decided in this way.

They require greater earnestness.

THE LINES

Nine at the beginning means:

· lends grace to his toes,

· leaves the carriage, and

· walks.

A beginner in a subordinate place must take upon himself the labor of advancing.

· There might be an opportunity of surreptitiously easing the way - symbolized by the carriage - but

o a self-contained man scorns help gained in a dubious fashion.

· He thinks it more graceful

o to go on foot than

o to drive in a carriage under false pretenses.

0 Six in the second place means:

He lends grace to the beard on his chin.

· The beard is not an independent thing;

o it moves only with the chin.

· The image therefore means that form is to be considered

o only as a result and attribute of content.

· The beard is a superfluous ornament.

· To devote care to it for its own sake,

o without regard for the inner content of which it is an ornament,

o would bespeak a certain vanity.

Nine in the third place means:

· Graceful and

· moist.

Constant perseverance brings good fortune.

This represents a very charming life situation.

One is under the spell of

· grace and

· the mellow mood induced by wine.

This grace can adorn, but

it can also swamp us.

Hence the warning

· not to sink into convivial indolence but

· to remain constant in perseverance.

Good fortune depends on this.

Six in the fourth place means:

Grace or simplicity?

A white horse comes as if on wings.

· He is not a robber,

· He will woo at the right time.

An individual is in a situation in which doubts arise as to which is better –

· to pursue the grace of external brilliance, or

· to return to simplicity.

The doubt itself implies the answer.

· Confirmation comes from the outside;

· it comes like a white winged horse.

The white color indicates simplicity.

At first

· it may be disappointing to renounce comforts that might have been obtained,

yet

· one finds peace of mind in a true relationship with the friend who courts him.

The winged horse is the symbol of the thoughts that transcend all limits of space and time.

Six in the fifth place means:

Grace in hills and gardens.

The roll of silk is meager and small.

Humiliation, but in the end good fortune.

A man withdraws from contact with people of the lowlands,

who seek nothing but magnificence and luxury,

into the solitude of the heights.

There

he finds an individual to look up to, whom

he would like to have as a friend.

But the gifts he has to offer are poor and few,

so that he feels ashamed.

However,

it is not the material gifts that count, but

sincerity of feeling

and so all goes well in the end.

0 Nine at the top means:

Simple grace. No blame.

Here at the highest stage of development all ornament is discarded.

Form

· no longer conceals content but

· brings out its value to the full.

Perfect grace consists

· not in exterior ornamentation of the substance, but

· in the simple fitness of its form.

1. This hexagram shows

· tranquil beauty-clarity within,

· quiet without.

This is the tranquility of pure contemplation.

When

· desire is silenced and

· the will comes to rest,

the world-as-idea becomes manifest.

In this aspect the world is beautiful and removed from the struggle for existence.

This is the world of art.

However,

contemplation alone will not put the will to rest absolutely.

It will awaken again, and then

all the beauty of form will appear to have been only a brief moment of exaltation.

Hence

this is still not the true way of redemption.

For this reason

Confucius felt very uncomfortable when once, on consulting the oracle,

he obtained the hexagram of GRACE.

22 GRACE

MANAGERIAL ISSUE:

The superficial CEO – managing the graceful and beautiful but superficial rather than the fundamental.

Hexagram 22 focuses on the CEO’s need to manage with the fundamental rather than the graceful or superficial. The I Ching describes a CEO who might not be the type who will make a deep analysis of the corporation’s main issues; therefore, is rarely in a position to decide, correct or guide. His focusing on the corporate image, the graceful and the ornamental, not matter how beautiful the superficial might be, leads him to make serious mistakes. It is of no use to focus on the lipstick on the pig. One can easily envision the Emperor worrying about the formalities of the court while the Mongol Army or while the Japanese Army was invading China. Or what about Stan O’Neal playing golf or Jimmy Cayne smoking pot and playing bridge while their respective corporations (Merrill Lynch and Bear Sterns) were going down the toilet?

MANAGERIAL LESSON:

The I Ching warns the CEO that dealing with the superficial is acceptable provided the corporation is very successful. Otherwise, the CEO should always stay focused on the most relevant issues that affect the corporation or on matters that require immediate attention. Even though there might be a small spot in the corporation for the artificial and the trivial, the Superior CEO knows success comes from emphasizing the really fundamental matters.

INVESTMENT ADVICE:

For the investor, the Grace (Ornamental) is in general an unfavorable Time-Space to invest.

The investor should keep in mind that, even though this corporation appears very attractive, it could be only an ornamental façade both in terms of its image without substance and in terms of superficial corporate thinking.

By itself (no lines) the Hexagram is positive because it points to success provided the CEO undertakes something.

GRACE has success.

In small matters

It is favorable to undertake something.

Grace brings success. However, it is not the essential or fundamental thing; it is only the ornament and must therefore be used sparingly and only in little things. In the lower trigram of fire a yielding line comes between two strong lines and makes them beautiful, but the strong lines are the essential content and the weak line is the beautifying form. In the upper trigram of the mountain, the strong line takes the lead, so that here again the strong element must be regarded as the decisive factor. In nature we see in the sky the strong light of the sun; the life of the world depends on it. But this strong, essential thing is changed and given pleasing variety by the moon and the stars. In human affairs, aesthetic form comes into being when traditions exist that, strong and abiding like mountains, are made pleasing by a lucid beauty. By contemplating the forms existing in the heavens we come to understand time and its changing demands. Through contemplation of the forms existing in human society it becomes possible to shape the world. 1

1. This hexagram shows tranquil beauty-clarity within, quiet without. This is the tranquility of pure contemplation. When desire is silenced and the will comes to rest, the world-as-idea becomes manifest. In this aspect the world is beautiful and removed from the struggle for existence. This is the world of art. However, contemplation alone will not put the will to rest absolutely. It will awaken again, and then all the beauty of form will appear to have been only a brief moment of exaltation. Hence this is still not the true way of redemption. For this reason Confucius felt very uncomfortable when once, on consulting the Oracle, he obtained the hexagram of GRACE.

Only the third and the fifth (conditionally) lines point to Good Fortune.

The following cases are those of corporations under the GRACE Time-Space.

· O'Reilly Automotive Inc. ORLY under CEO Gregory Henslee

THE LINES

NINE IN THE FIRST PLACE

Managerial Issue: The superficial CEO – managing the graceful, and beautiful but superficial rather than the fundamental - needing humility to face reality.

Managerial Lesson: Be true/real.

Managerial Warning: At the first stage of the Grace (Ornamental) Time-Space, the I Ching warns the CEO that only an inferior CEO would reach his goals in a sneaky manner using the help of questionable assistants and applying questionable methods. Such inferior CEO will be tempted to “put some lipstick on the corporate pig”; that is, to doctor up the balance sheet or to create a positive impression of the corporation’s difficulties.

Managerial Advice: The Superior CEO never cuts corners. He seeks and embraces the truth rather than adorn what is bad. He refuses to work under false pretenses.

Investment Advice: Do not invest

SIX IN THE SECOND PLACE

Managerial Issue: The superficial CEO – managing the graceful, and beautiful but superficial rather than the fundamental – distracted by superficial issues.

Managerial Lesson: Be modest.

Managerial Warning: At the second stage of the Grace (Ornamental) Time-Space, the inferior CEO is vain and only concerned with superficial issues. These actions will have disastrous consequences for the corporation. There is no way out for his delusion.

Managerial Advice: The Superior CEO is modest. He focuses on content, on the fundamentals, and on what is real.

Investment Advice: Do not invest.

NINE IN THE THIRD PLACE

Managerial Issue: The superficial CEO – managing the graceful, and beautiful but superficial rather than the fundamental – superficiality as a strategy.

Managerial Lesson: Be focused.

Managerial Warning: At the third stage of the Grace (Ornamental) Time-Space, the inferior CEO is fascinated and intoxicated by the superficial or ornamental. Superficial adornment will overwhelm him and lead him to procrastination.

Managerial Advice: The Superior CEO is faithful to his principles. He will remain focused on the fundamentals. The superficial will not overwhelm him.

Investment Advice: Invest.

SIX IN THE FOURTH PLACE

Managerial Issue: The superficial CEO – managing the graceful, and beautiful but superficial rather than the fundamental– choosing between the superficial and the fundamental.

Managerial Lesson: Be transcendent.

Managerial Warning: At the fourth stage of the Grace (Ornamental) Time-Space, the inferior CEO is hesitant and undecided. He will not know whether to continue giving emphasis to the superficial issues or to deal with the more profound and real issues confronting the corporation. When choosing, he will be tempted to choose the superficial and ornamental.

Managerial Advice: The Superior CEO:

1. Faces the agony of deciding. The experience is positive because it implies he is on his way to solving the problem.

2. Finds the will to decide by:

a. Relying on the help of an external advisor, and

b. Transcending beyond whatever surrounds him. This, he knows must be done by a personal transformation brought about by a through and deep self-analysis. Only then will he be able to see and choose properly.

3. Gives up the superficial in spite of the benefits and personal pleasures this implies and chooses to deal with the truth.

Investment Advice: Invest.

SIX IN THE FIFTH PLACE

Managerial Issue: The superficial CEO – managing the graceful, and beautiful but superficial rather than the fundamental – transforming himself with the help of new advisors.

Managerial Lesson: Be sincere.

Managerial Warning: At the fifth stage of the Grace (Ornamental) Time-Space, the inferior CEO:

1. Rejects the superficial and parts from those executives in the corporation who only think of the superficial rather than of what could truly improve the corporation.

2. Finds the proper advisors who reject the ornamental. He will attempt to bring them into the corporation by material offerings but is rejected and feels humiliated.

Managerial Advice: The Superior CEO:

· Needs not fear their rejection.

· Realizes the proper offering to win them over is spiritual rather than material.

· Will be successful because of his humility in accepting the need for change and his strategic parting from all those who look for the superficial.

Investment Advice: Invest.

NINE IN THE SIXTH PLACE

Managerial Issue: The superficial CEO – managing the graceful, and beautiful but superficial rather than the fundamental – successfully changing the corporation’s thinking from the superficial to the fundamental.

Managerial Lesson: Be revolutionary.

Managerial Warning: At the sixth stage of the Grace (Ornamental) Time-Space, the CEO must change the corporation’s managers and its philosophy from the superficial to something more profound. In this way the corporation will find its character, redefine its mission and be successful.

Managerial Advice: The Superior CEO knows that:

· the more he knows his corporation, the more realistic he will be about its objectives, and the faster he will discard the ornamental.

· the faster he will convince the employees to support the goals based on the fundamentals, the faster the corporation will succeed.

Investment Advice: Invest.

MANAGERIAL CASES

O'Reilly Automotive Inc. ORLY under CEO Gregory Henslee

Gregory L. Henslee’s Performance: ROI= 134.15% Annualized Return= 14.10%

SPY performance ROI= ( 1.11%) Annualized Return= ( 0.17%)

Gregory L. Henslee became CEO of O'Reilly Automotive Inc. on February 24, 2005.

The line: It would be interesting to have the CEO interpret the meaning of the fifth line.

The judgment: Humiliation, but in the end good fortune. is a bit easier to interpret:

· Humiliation – when he became CEO, the price level was $24.92. For the next three years, the price level remained either at the same level or below. For a CEO must be humiliating to see the price level remain stagnant.

· In the end good fortune - from 2009, when the SPY began its recovery, he began to outperform the SPY. That would be the good fortune in the end.

Points the investor should consider:

1) THE HEXAGRAM

HEXAGRAM 22 – Pi - Grace

This hexagram shows a fire that breaks out of the secret depths of the earth and, blazing up, illuminates and beautifies the mountain, the heavenly heights. Grace - beauty of form - is necessary in any union if it is to be well ordered and pleasing rather than disordered and chaotic.

THE JUDGMENT

GRACE has success.

In small matters

It is favorable to undertake something.

2) THE ADVICE

Fire at the foot of the mountain: The image of GRACE.

Thus does the superior man proceed

When clearing up current affairs.

But he dare not decide controversial issues in this way.

The fire, whose light illuminates the mountain and makes it pleasing, does not shine far; in the same way, beautiful form suffices to brighten and to throw light upon matters of lesser moment, but important questions cannot be decided in this way. They require greater earnestness.

3) THE LINES:

Six in the fifth place means:

Grace in hills and gardens.

The roll of silk is meager and small.

Humiliation, but in the end

good fortune.

A man withdraws from contact with people of the lowlands, who seek nothing but magnificence and luxury, into the solitude of the heights. There he finds an individual to look up to, whom he would like to have as a friend. But the gifts he has to offer are poor and few, so that he feels ashamed. However, it is not the material gifts that count, but sincerity of feeling and so all goes well in the end.

4) THE MOVING HEXAGRAM

HEXAGRAM 37 - Chia Jen - The Family (The Clan)

This hexagram represents the laws obtaining within the family. The strong line at the top represents the father, the lowest the son. The strong, line in the fifth place represents the husband, the yielding second line the wife. On the other hand, the two strong lines in the fifth and the third place represent two brothers, and the two weak lines correlated with them in the fourth and the second place stand for their respective wives. Thus all the connections and relationships within the family find their appropriate expression. Each individual line has the character according with its place. The fact that a strong line occupies the sixth place -where a weak line might be expected - indicates very clearly the strong leadership that must come from the head of the family. The line is to be considered here not in its quality as the sixth but in its quality as the top line. THE FAMILY shows the laws operative within the household that, transferred to outside life, keep the state and the world in order. The influence that goes out from within the family is represented by the symbol of the wind created by fire.

THE JUDGMENT

THE FAMILY

The perseverance of the woman furthers.

The foundation of the family is the relationship between husband and wife. The tie that holds the family together lies in the loyalty and perseverance of the wife. Her place is within (second line), while that of the husband is without (fifth line). It is in accord with the great laws of nature that husband and wife take their proper places. Within the family a strong authority is needed; this is represented by the parents. If the father is really a father and the son a son, if the elder brother fulfills his position, and the younger fulfills his, if the husband is really a husband and the wife a wife, then the family is in order. When the family is in order, all the social relationships of mankind will be in order.

Three of the five social relationships are to be found within the family - that between father and son, which is the relation of love, that between husband and wife, which is the relation of chaste conduct, and that between elder and younger brother, which is the relation of correctness. The loving reverence of the son is then carried over to the prince in the form of faithfulness to duty; the affection and correctness of behavior existing between the two brothers are extended to a friend in the form of loyalty, and to a person of superior rank in the form of deference. The family is society in embryo; it is the native soil on which performance of moral duty is made easy through natural affection, so that within a small circle a basis of moral practice is created, and this is later widened to include human relationships in general.

THE IMAGE

Wind comes forth from fire: The image Of THE FAMILY.

Thus the superior man has substance in his words

And duration in his way of life.

Heat creates energy: this is signified by the wind stirred up by the fire and issuing forth from it. This represents influence working from within outward. The same thing is needed in the regulation of the family. Here too the influence on others must proceed from one's own person. In order to be capable of producing such an influence, one's words must have power, and this they can have only if they are based on something real, just as flame depends on its fuel. Words have influence only when they are pertinent and clearly related to definite circumstances. General discourses and admonitions have no effect whatsoever. Furthermore, the words must be supported by one's entire conduct, just as the wind is made effective by its duration. Only firm and consistent conduct will make such an impression on others that they can adapt and conform to it. If words and conduct are not in accord and not consistent, they will have no effect.