HEXAGRAM 25: ORIGINAL, INTERPRETATION AND CASES

HEXAGRAM 25 - Wu Wang - Innocence (The Unexpected)

Above CH'IEN THE CREATIVE, HEAVEN

Below CHEN THE AROUSING, THUNDER

· Ch'ien, heaven, is above;

· Chen, movement, is below.

The lower trigram Chen is under the influence of the strong line

it has received from above, from heaven.

When, in accord with this,

· movement follows the law of heaven,

· man is

o innocent and

o without guile.

His mind is

· natural and true,

· unshadowed by reflection or ulterior designs.

For

· wherever conscious purpose is to be seen,

· there the truth and innocence of nature have been lost.

Nature that is not directed by the spirit is

· not true

· but degenerate nature.

Starting out with the idea of the natural,

· the train of thought in part goes somewhat further and thus

· the hexagram includes also the idea of the unintentional or unexpected.

THE JUDGMENT

INNOCENCE. Supreme success.

Perseverance furthers.

If someone is not as he should be,

· He has misfortune,

And

· it does not further him To undertake anything.

Man has received from heaven a nature innately good,

to guide him in all his movements.

By devotion to this divine spirit within himself,

he attains an unsullied innocence that leads him to do right

· with instinctive sureness and

· without any ulterior thought of reward and personal advantage.

This instinctive certainty

· brings about supreme success and

· "furthers through perseverance."

However,

· not everything instinctive is nature in this higher sense of the word,

· but only that which is right and in accord with the will of heaven.

Without this quality of rightness,

an unreflecting, instinctive way of acting brings only misfortune.

Confucius says about this:

· "He who departs from innocence,

o what does he come to?

· Heaven's will and blessing

o do not go with his deeds."

THE IMAGE

Under heaven thunder rolls: All things attain the natural state of innocence.

Thus the kings of old,

· rich in virtue, and

· in harmony with the time,

Fostered and nourished all beings.

In springtime

when thunder, life energy, begins to move again under the heavens,

· everything sprouts and grows, and

· all beings receive from the creative activity of nature

the childlike innocence of their original state.

So it is with the good rulers of mankind:

drawing on the spiritual wealth at their command,

they

· take care of all forms of life and all forms of culture and

· do everything to further them, and at the proper time.

THE LINES

0 Nine at the beginning means:

Innocent behavior brings good fortune.

The original impulses of the heart are always good,

so that

· may follow them confidently,

· assured of good fortune and achievement of our aims.

Six in the second place means:

If one

does not count

· on the harvest while plowing,

· Nor on the use of the ground while clearing it,

It furthers one to undertake something.

We should do every task

· for its own sake as time and place demand and

· not with an eye to the result.

Then

· each task turns out well, and

· anything we undertake succeeds.

Six in the third place means:

Undeserved misfortune.

The cow that was tethered by someone

· the wanderer's gain,

· the citizen's loss.

Sometimes

undeserved misfortune befalls a man at the hands of another,

as for instance when someone

· passes by and

· takes a tethered cow along with him.

His gain is the owner's loss.

In all transactions, no matter how innocent,

we must

· accommodate ourselves to the demands of the time,

· otherwise unexpected misfortune overtakes us.

Nine in the fourth place means:

He who

· can be persevering

· Remains without blame.

We cannot lose what really belongs to us, even if

we throw it away.

Therefore

we need have no anxiety.

All that need concern us is that

we should

· remain true to our own natures and

· not listen to others.

0 Nine in the fifth place means:

Use no medicine in an illness

Incurred through no fault of your own.

It will pass of itself.

An unexpected evil may come accidentally from without.

If it

· does not originate in one's own nature or

· have a foothold there,

one

· should not resort to external means to eradicate it,

· but should quietly let nature take its course.

Then improvement will come of itself.

Nine at the top means:

Innocent action brings misfortune.

Nothing furthers.

When, in a given situation,

the time is not ripe for further progress,

the best thing to do is to wait quietly, without ulterior designs.

If one

· acts thoughtlessly and

· tries to push ahead in opposition to fate,

success will not be achieved.

25 INNOCENCE

(THE UNEXPECTED)

MANAGERIAL ISSUE:

The CEO – managing the personal and the corporate INNOCENCE.

Hexagram 25 represents the INNOCENCE Time-Space where the Superior CEO must focus on keeping a parallel between his innocent personal nature and the innocent corporate nature.

By the Law of Correspondence,

just as

· Heaven makes man “originally innocent and without guile with a mind natural and true, unshadowed by reflection or ulterior designs”,

so does

· Heaven makes the vision of the corporation. “originally innocent and without guile with a mind natural and true, unshadowed by reflection or ulterior designs”.

Just as

· Heaven makes man interiorly good for the good of mankind,

so does

· Heaven makes corporations intrinsically good for the good of mankind.

A corporation that acts in the detriment of mankind such as a tobacco company, has a distorted view of its original INNOCENCE (has turned evil) and its CEO betrays his own spiritual INNOCENCE.

When Heaven sends the CEO an original vision to create or transform a corporation, it will send it in the only way Heaven sends visions - in an innocent or pure form. This vision will, in turn, inspire the CEO to give it material form. However, it will inspire him only if he is in contact with the same original innocence or purity within his heart with which Heaven created him. The YANG from Heaven (without his spirit) must touch the YIN from Earth (within his spirit).

WARNING: SHOULD HE BETRAY THE INNOCENCE, HEAVEN WILL PUNISH HIM WITH THE UNEXPECTED.

MANAGERIAL LESSON:

The Superior CEO is true to both his own INNOCENT nature as well as to the INNOCENT nature of the corporation. He does not allow any distortion of the INNOCENT nature of his being or of the corporate spirit. Fidelity to the INNOCENCE of both is above personal gain or short term corporate profit. Success is guaranteed as long as the CEO is true to such original INNOCENCE. The Superior CEO acts (does not re-act) according to the mandates of his heart and in accordance with a clear and good faith. .

Confucius says about this:

· "He who departs from innocence, what does he come to?

· Heaven's will and blessing do not go with his deeds."

Ben Franklin used to say: “Think innocently and justly” -

WHAT DOES GOLDMAN SACHS SAYS? “Let us wrap ourselves around the face of humanity, like a great vampire squid, to relentlessly jam our blood funnel into anything that smells like money.”

The more the CEO of Goldman Sachs departs from the original corporate INNOCENCE (to do good), the more Heaven will punish him with the unexpected.

INVESTMENT ADVICE:

For the investor, the INNOCENCE Time-Space in general is not propitious for investing.

By itself (no lines) the Hexagram is positive (Supreme success) provided the CEO maintains his own Innocence as well as the corporation’s Innocence (the original one):

INNOCENCE. Supreme success.

Perseverance furthers.

If someone is not as he should be,

He has misfortune,

And it does not further him

To undertake anything.

Man has received from heaven a nature innately good, to guide him in all his movements. By devotion to this divine spirit within himself, he attains an unsullied innocence that leads him to do right with instinctive sureness and without any ulterior thought of reward and personal advantage. This instinctive certainty brings about supreme success and "furthers through perseverance." However, not everything instinctive is nature in this higher sense of the word, but only that which is right and in accord with the will of heaven. Without this quality of rightness, an unreflecting, instinctive way of acting brings only misfortune.

Confucius says about this:

"He who departs from innocence, what does he come to? Heaven's will and blessing do not go with his deeds."

There is only one really good investment opportunity (Good Fortune in the First Line). The rest of the lines are made up either of unexpected events which are harmful to the corporation or the CEO fails to keep the personal or the corporate INNOCENCE.

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

· Hewlett-Packard Company HPQ under CEO Leo Apotheker

· First Solar, Inc. FSLR under CEO Robert J. Gillette

· Automatic Data Processing, Inc. ADP under CEO Gary C. Butler

THE LINES:

NINE IN THE FIRST PLACE

Managerial Issue: The CEO – managing the personal and the corporate INNOCENCE – acting innocently, succeeding from the start.

Managerial Lesson: Be honest.

Managerial Warning: At the first stage of the INNOCENCE Time-Space, the CEO acts with humility and in accordance with his personal as well as the corporate INNOCENCE.

Managerial Advice: The Superior CEO knows “the original impulses of the heart are always good; therefore he follows them confidently, assured of good fortune and achievement of his aims.” This no doubt brings success to the corporation.

Investment Advice: Invest.

SIX IN THE SECOND PLACE

Managerial Issue: The CEO – managing the personal and the corporate INNOCENCE – being innocent for innocence’s sake.

Managerial Lesson: Be focused.

Managerial Warning: At the second stage of the INNOCENCE Time-Space, the CEO risk failing by thinking of the gains before the work has been done.

Managerial Advice: The Superior CEO acts with humility according to his original instincts without thought of personal gain and only for the sake of seeing the INNOCENT corporate spirit become a reality. He focuses on maintaining the spirit of INNOCENCE without thought of personal gain and therefore, in the end, the spirit of INNOCENCE will make him wealthy upon the completion of the task. He does not count the chickens before they hatch and thereby he ensures success.

Investment Advice: Invest.

SIX IN THE THIRD PLACE

Managerial Issue: The CEO – managing the personal and the corporate INNOCENCE - not taking precautions when the unexpected occurs (Murphy visits the corporation)

Managerial Lesson: Be prepared.

Managerial Warning: At the third stage of the INNOCENCE Time-Space, the CEO must face the unexpected. Murphy’s Law causes corporate losses. This is neither the CEO’s nor anybody’s fault.

Managerial Advice: The Superior CEO knows not matter how much he acts in good faith during the INNOCENCE Time-Space, he must always take precautions for all kinds of unexpected events. There is a way out however, and that is to be true to the original spirit of the INNOCENCE.

Investment Advice: Do not invest.

NINE IN THE FOURTH PLACE

Managerial Issue: The CEO – managing the personal and the corporate INNOCENCE – remaining true to his own nature in spite of unexpected adverse events.

Managerial Lesson: Be persevering.

Managerial Warning: At the fourth stage of the INNOCENCE Time-Space, the Superior CEO acts humbly and in accordance with the spirit of INNOCENCE but he runs into difficulties.

Managerial Advice: The Superior CEO is persevering, truthful and committed to the spirit of INNOCENCE. This assures his triumph. No matter how many difficulties the CEO runs into while carrying out the INNOCENCE Time-Space, INNOCENCE will always be his because it was Heaven sent. Thus the Superior CEO needs not be afraid the spirit of INNOCENCE will leave him. He may betray the Spirit, but the Spirit will never betray him. All the Superior CEO has to do is keep his own counsel, and keep the faith in the spirit of INNOCENCE.

The I Ching advices the Superior CEO:

· He cannot lose what really belongs to him, even if he throws it away.

· He needs have no anxiety.

· He should remain true to his own nature and not listen to others.

Investment Advice: Do not invest

NINE IN THE FIFTH PLACE

Managerial Issue: The CEO – managing the personal and the corporate INNOCENCE - running into difficulties due to unexpected events not of his own making.

Managerial Lesson: Be still.

Managerial Warning: At the fifth stage of the INNOCENCE Time-Space, the CEO faces an unexpected external event threatening the corporation.

Managerial Advice: The Superior CEO quietly lets nature take its course. He acts according to his personal INNOCENCE as well as according to the corporate INNOCENCE because he knows the way out lies in being humble and letting things come to their own proper conclusions. A Superior CEO knows that sometimes it is better not to act but rather to allow things to reach their own final conclusions by themselves. Only then will he find the answer. He does not need external advisors from other corporations to provide him with the answers.

Investment Advice: Do not invest.

SIX IN THE SIXTH PLACE

Managerial Issue: The CEO – managing the personal and the corporate INNOCENCE - running into difficulties related to the natural cyclical movements.

Managerial Lesson: Be seasonal.

Managerial Warning: At the sixth stage of the INNOCENCE Time-Space, the CEO faces unexpected events which are part of a natural cycle.

Managerial Advice: The Superior CEO recognizes the cyclical movements – the times to act and the times to remain quiet. This is a time to stand still and let the problem work itself out. “The time is not ripe for further progress, the best thing to do is to wait quietly, without ulterior designs.”

Investment Advice: Do not invest

MANAGERIAL CASES

Hewlett-Packard Company HPQ under CEO Leo Apotheker

Leo Apotheker’s Performance: ROI= (42.59%) Annualized Return= (49.67%)

SPY performance ROI= (6.40%) Annualized Return= (7.85%)

Leo Apotheker became CEO of Hewlett-Packard in November of 2010. During his short stay, he substantially underperformed the SPY. Had he drawn the Hexagram with only the first line (Innocent behavior brings good fortune.), his performance might have been much better; however, the other two lines pointed to his future difficulties as CEO. He was fired because he never understood the Innocent (original) spirit of Hewlett Packard as shown by his strategy of selling the PC division (Use no medicine in an illness Incurred through no fault of your own. It will pass of itself.). All he had to do was sit tight and wait for the illness to pass all by itself.

What was even more alarming was the MOVING HEXAGRAM (HEXAGRAM 23 – Po - Splitting Apart) which pointed to an extremely difficult time.

Points the investor should consider:

1) THE HEXAGRAM

HEXAGRAM 25 - Wu Wang - Innocence (The Unexpected)

Ch'ien, heaven, is above; Chen, movement, is below. The lower trigram Chen is under the influence of the strong line it has received from above, from heaven. When, in accord with this, movement follows the law of heaven, man is innocent and without guile. His mind is natural and true, unshadowed by reflection or ulterior designs. For wherever conscious purpose is to be seen, there the truth and innocence of nature have been lost. Nature that is not directed by the spirit is not true but degenerate nature. Starting out with the idea of the natural, the train of thought in part goes somewhat further and thus the hexagram includes also the idea of the unintentional or unexpected.

THE JUDGMENT

INNOCENCE. Supreme success.

Perseverance furthers.

If someone is not as he should be,

He has misfortune,

And it does not further him

To undertake anything.

Confucius says about this:

"He who departs from innocence, what does he come to? Heaven's will and blessing do not go with his deeds."

2) THE ADVICE

Under heaven thunder rolls: All things attain the natural state of innocence.

Thus the kings of old, rich in virtue, and in harmony with the time,

Fostered and nourished all beings.

In springtime when thunder, life energy, begins to move again under the heavens, everything sprouts and grows, and all beings receive from the creative activity of nature the childlike innocence of their original state. So it is with the good rulers of mankind: drawing on the spiritual wealth at their command, they take care of all forms of life and all forms of culture and do everything to further them, and at the proper time.

3) THE LINES:

0 Nine at the beginning means:

Innocent behavior brings good fortune.

The original impulses of the heart are always good, so that we may follow them confidently, assured of good fortune and achievement of our aims.

Nine in the fourth place means:

He who can be persevering

Remains without blame.

We cannot lose what really belongs to us, even if we throw it away. Therefore we need have no anxiety. All that need concern us is that we should remain true to our own natures and not listen to others.

0 Nine in the fifth place means:

Use no medicine in an illness

Incurred through no fault of your own.

It will pass of itself.

An unexpected evil may come accidentally from without. If it does not originate in one's own nature or have a foothold there, one should not resort to external means to eradicate it, but should quietly let nature take its course. Then improvement will come of itself.

4) THE MOVING HEXAGRAM

HEXAGRAM 23 – Po - Splitting Apart

The dark lines are about to mount upward and overthrow the last firm, light line by exerting a disintegrating influence on it. The inferior, dark forces overcome what is superior and strong, not by direct means, but by undermining it gradually and imperceptibly, so that it finally collapses.

The lines of the hexagram present the image of a house, the top line being tile roof, and because the roof is being shattered the house collapses. The hexagram belongs to the ninth month (October-November). The yin power pushes up ever more powerfully and is about to supplant the yang power altogether.

THE JUDGMENT

SPLITTING APART.

It does not further one

To go anywhere.

This pictures a time when inferior people are pushing forward and are about to crowd out the few remaining strong and superior men. Under these circumstances, which are due to the time, it is not favorable for the superior man to undertake anything.

The right behavior in such adverse times is to be deduced from the images and their attributes. The lower trigram stands for the earth, whose attributes are docility and devotion. The upper trigram stands for the mountain, whose attribute is stillness. This suggests that one should submit to the bad time and remain quiet. For it is a question not of man's doing but of time conditions, which, according to the laws of heaven, show an alternation of increase and decrease, fullness and emptiness. It is impossible to counteract these conditions of the time. Hence it is not cowardice but wisdom to submit and avoid action.

THE IMAGE

The mountain rests on the earth: The image of SPLITTING APART.

Thus those above can ensure their position

Only by giving generously to those below.

The mountain rests on the earth. When it is steep and narrow, lacking a broad base, it must topple over. Its position is strong only when it rises out of the earth broad and great, not proud and steep. So likewise those who rule rest on the broad foundation of the people. They too should be generous and benevolent, like the earth that carries all. Then they will make their position as secure as a mountain is in its tranquility.

First Solar, Inc. FSLR under CEO Robert J. Gillette

Robert J. Gillette’s Performance: ROI= (30.65%) Annualized Return= (17.91%)

SPY performance ROI= 14.09% Annualized Return= 7.37%

Robert J. Gillette became CEO of First Solar in October 2009. Since then, he has substantially underperformed the SPY. His Hexagram has a very negative moving line which points to his poor performance: Nine at the top means: Innocent action brings misfortune. Nothing furthers.

Points the investor should consider:

1) THE HEXAGRAM

(Same as Above).

2) THE ADVICE

(Same as Above).

3) THE LINES:

Nine at the top means:

Innocent action brings misfortune.

Nothing furthers.

When, in a given situation, the time is not ripe for further progress, the best thing to do is to wait quietly, without ulterior designs. If one acts thoughtlessly and tries to push ahead in opposition to fate, success will not be achieved.

4) THE MOVING HEXAGRAM

HEXAGRAM 17 – Sui - Following

The trigram Tui, the Joyous, whose attribute is gladness, is above; Chen, the Arousing, which has the attribute of movement, is below. Joy in movement induces following. The Joyous is the youngest daughter, while the Arousing is the eldest son. An older man defers to a young girl and shows her consideration. By this he moves her to follow him.

THE JUDGMENT

FOLLOWING has supreme success.

Perseverance furthers.

No blame.

In order to obtain a following one must first know how to adapt oneself. If a man would rule he must first learn to serve, for only in this way does he secure from those below him the joyous assent that is necessary if they are to follow him. If he has to obtain a following by force or cunning, by conspiracy or by creating factions, he invariably arouses resistance, which obstructs willing adherence. But even joyous movement can lead to evil consequences, hence the added stipulation, "Perseverance furthers"-that is, consistency in doing right - together with "No blame." Just as we should not ask others to follow us unless this condition is fulfilled, so it is only under this condition that we can in turn follow others without coming to harm.

The thought of obtaining a following through adaptation to the demands of the time is a great and significant idea; this is why the appended judgment is so favorable.

THE IMAGE

Thunder in the middle of the lake: The image of FOLLOWING.

Thus the superior man at nightfall

Goes indoors for rest and recuperation.

In the autumn electricity withdraws into the earth again and rests. Here it is the thunder in the middle of the lake that serves as the image - thunder in its winter rest, not thunder in motion. The idea of following in the sense of adaptation to the demands of the time grows out of this image.

Thunder in the middle of the lake indicates times of darkness and rest. Similarly, a superior man, after being tirelessly active all day, allows himself rest and recuperation at night. No situation can become favorable until one is able to adapt to it and does not wear himself out with mistaken resistance.

Automatic Data Processing, Inc. ADP under CEO Gary C. Butler

Gary C. Butler’s Performance: ROI= (2.50%) Annualized Return= (0.51%)

SPY performance ROI= (10.61%) Annualized Return= (2.24%)

Gary C. Butler became CEO of ADP in August 2006. Since then, his performance has been mediocre, not being able to substantially outperform the SPY. His Hexagram has three moving lines which might not be extremely negative, but they are negative.

Points the investor should consider:

1) THE HEXAGRAM

(Same as Above).

2) THE ADVICE

(Same as Above).

3) THE LINES:

Six in the second place means:

If one does not count on the harvest while plowing,

Nor on the use of the ground while clearing it,

It furthers one to undertake something.

We should do every task for its own sake as time and place demand and not with an eye to the result. Then each task turns out well, and anything we undertake succeeds.

Six in the third place means:

Undeserved misfortune.

The cow that was tethered by someone

Is the wanderer's gain, the citizen's loss.

Sometimes undeserved misfortune befalls a man at the hands of another, as for instance when someone passes by and takes a tethered cow along with him. His gain is the owner's loss. In all transactions, no matter how innocent, we must accommodate ourselves to the demands of the time, otherwise unexpected misfortune overtakes us.

Nine in the fourth place means:

He who can be persevering

Remains without blame.

4) THE MOVING HEXAGRAM

HEXAGRAM 09 - Hsiao Ch'u - The Taming Power of the Small

This hexagram means the force of the small - the power of the shadowy - that restrains, tames, impedes. A weak line in the fourth place, that of the minister, 1 holds the five strong lines in check. In the Image it is the wind blowing across the sky. The wind restrains the clouds, the rising breath of the Creative, and makes them grow dense, but as yet is not strong enough to turn them to rain.

The hexagram presents a configuration of circumstances in which a strong element is temporarily held in leash by a weak element. It is only through gentleness that this can have a successful outcome.

THE JUDGMENT

THE TAMING POWER, OF THE SMALL

Has success.

Dense clouds, no rain from our western region.

This image refers to the state of affairs in China at the time when King Wen, who came originally from the west, was in the east at the court of the reigning tyrant Chou Hsin. The moment for action on a large scale has not yet arrived. King Wen could only keep the tyrant somewhat in check by friendly persuasion. Hence the image of many clouds, promising moisture and blessing to the land, although as yet no rain falls. The situation is not unfavorable; there is a prospect of ultimate success, but there are still obstacles in the way, and we can merely take preparatory measures.

Only through the small means of friendly persuasion can we exert any influence. The time has not yet come for sweeping measures. However, we may be able, to a limited extent, to act as a restraining and subduing influence. To carry out our purpose we need firm determination within and gentleness and adaptability in external relations.

THE IMAGE

The wind drives across heaven: The image of THE TAMING POWER OF THE SMALL.

Thus the superior man

Refines the outward aspect of his nature.

The wind can indeed drive the clouds together in the sky; yet, being nothing but air, without solid body, it does not produce great or lasting effects. So also an individual, in times when he can produce no great effect in the outer world, can do nothing except refine the expression of his nature in small ways.