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The One and Only Secret to a Successful Marriage?

Saturday, November 17, 2018

Delray Beach, FL.- Andy and I were in our late 20s and beginning our careers in journalism. Elka was in her late 30s, working part-time as an accountant for our small publishing company.

She was beautiful and elegant and spoke with an East European accent that was hard enough to mean business but musical enough to make everything she said sound like it was being channeled from above.

We knew that she and her husband were struggling financially. Yet, though she occasionally mentioned their problems, it was always with a smile. She had nothing but good things to say about her personal life. We never heard her complain.

We were crazily infatuated with her.

One day, and I can’t remember how the conversation took this direction, Andy and I were telling her how much we admired her. We were especially impressed, we said, that despite their many challenges, she and her husband seemed to have such a happy marriage.

“Please share your secrets,” we begged.

“There is only one,” she said.

We leaned in.

“The man must love the woman more than the woman loves the man.”

Because it was Elka, I wanted to believe it. But my rational brain knew it was fundamentally romantic nonsense. Good and long-lasting marriages are based on more practical things like compromise, communication, and reasonable expectations.

Still, in the 40 years that have gone by since Elka told us her “secret,” I have not been able to forget it.

Since then, I have read dozens of books on marriage and observed a hundred marital relationships – friends and colleagues and family members. And although I’ve seen plenty of evidence to support the rational view, I’ve also noticed that in many of the best long-term marriages, Elka’s simple maxim proved true.

Today’s Word: brouhaha (noun) – A brouhaha (BROO-ha-ha) is an uproar, a noisy and overexcited response or reaction to something. As used by the British writer Tom Hodgkinson: “Truly, the bench is a boon to idlers. Whoever first came up with the idea is a genius: free public resting places where you can take time out from the bustle and brouhaha of the city, and simply sit and watch and reflect.”

Did You Know?: In traditional Japan culture, saying “no” directly is considered rude.

Worth Quoting: “Without that element of uncertainty, the bringing off of even the greatest business triumph would be dull, routine, and eminently unsatisfying.” – J. Paul Getty

Check It Out

On October 16, I told you about the premiere of Off the Rails, a coming-of-age movie that my friends and I wrote and produced. It tracked a few years of our lives back in the rocking 1970s. Here’s a look at the new poster we’ll be featuring in March at the US premiere in Miami. Notice those laurel leaves on the bottom. Looking good!

And here’s a link to the trailer for the movie: https://www.offtherailsfilm.com

 

[Working Title] Breaking Big: How My Ready-Fire-Aim Strategy Took One Company From $8 Million to More Than $1 Billion

Thursday, November 15, 2018

Chapter 1, Part 1

The 5 Stages of Entrepreneurial Business Growth

Delray Beach, FL.- For the first half of my business career, I spent almost all of my time doing. I was an incessant innovator and that required a lot of practical thinking. But I eschewed the theoretic. My M.O. was experimentation: Begin with a hypothesis about how to make something new or better. Test it to a reliable degree. Then make adjustments.

Since I knew very little about business, I had the advantage of testing theories that were outside the box of recognized business truths. This taught me two things: Traditional practices are usually there for a good reason. And when new ideas work, they can work big.

In the year 2000, I began to write a blog (called Early to Rise) about what I had learned about business. It forced me to think more abstractly about my experience, and gave me an opportunity to step back and see patterns. And after doing that on a daily basis for five or six years, I was able to see patterns in the patterns.

One of the great pleasures of writing those daily essays was knowing that I was refuting some long-held beliefs and introducing (what seemed to me to be) new ideas about how to launch and grow businesses in the digital age.

It was then that I got the urge to host a very special, very high-priced seminar where I could explain my insights to smart and successful entrepreneurs who wanted to grow their businesses.

[NOTE: When I began writing about business in 2000, I had already put in 30 years as an entrepreneur, which included starting and growing several dozen multimillion-dollar enterprises. Six or seven of them had revenues that exceeded $10 million. Three or four exceeded the $25 million mark. One reached $135 million before it was sold. (Which was when I retired for the first time.) And one – an ongoing business – hit $270 million the year before I hosted the seminar. (Several years ago, it broke the billion-dollar mark, which you’ll read about later in this series.)]

The goal was not financial. I could have charged little or nothing to attend. But I wanted to attract serious people, entrepreneurs with enough success in business to challenge my ideas if they didn’t make sense.

It was a four-day event and the fee was $10,000. Since this was the first time I would be charging this kind of money for my expertise, I was more than a little worried.

But I told myself that I would be okay. All around me, self- proclaimed business experts were charging $1,000 to $5,000 for seminars and getting plenty of eager people to pay up. I knew many of those experts. And most of them, in my humble opinion, were one-trick ponies – zero-down real estate gurus, direct-marketing pundits, or motivational speakers. Few of them, I knew for a fact, had my depth or breadth of experience. If they could get away with charging as much as $5,000, I reasoned, I should be able to charge $10,000.

So I spoke to MaryEllen Tribby, the woman that was running Early to Rise at the time, and she helped me put it together. Three months later, she had everything set up and 30 tickets sold.

[Marketing Tip: The easiest way to create profits in your business is to sell your best customers a higher-level version of something they have already bought. MaryEllen’s marketers did that by sending out a special invitation to a limited number of Early to Rise subscribers who had already spent $2,000 on a three-day conference with various business writers. My seminar was positioned as more (four days) and better (with me only). And it sold out in a matter of weeks.]

The only thing left was to come up with an agenda that would justify an investment of $10,000 by each attendee. When I reviewed the credentials of the 30 people who had signed up, doubt once again gripped me. What could I do for them that would be worth what they had paid? The saying “Pride comes before the fall” haunted me.

Aside from the fact that all 30 had achieved a great deal in their careers, each had a different sort of business. Some were beginning new businesses. Many were growing modest-sized companies. And some had well-established $10 million to $25 million enterprises.

And if that were not challenging enough, their businesses ranged from professional services to publishing to manufacturing. Even to restaurants!

On the one hand, I had, by that time, such wide experience in business that I felt confident I could be helpful in some way to each of them individually. But this was a group event. And we had limited time.

I certainly could not dumb down the discussion to the basics of entrepreneurial success. Most of these people were well beyond that. I had to create a program that was both high level and fundamental, with ideas that were universal to all entrepreneurial businesses but also specific enough to satisfy each and every attendee.

I thought about it for several days, but I could not come up with a satisfactory approach. I called in two colleagues – senior writer Charlie Byrne and contributing business management expert Richard Schefren (both superstars in their domains) – and I explained my problem to them.

The specific question I posed was:

Read More[Working Title] Breaking Big: How My Ready-Fire-Aim Strategy Took One Company From $8 Million to More Than $1 Billion

Today’s Word: Schadenfreude (noun) – Schadenfreude (SCHA-den-froy-duh), a German word, is a feeling of pleasure or satisfaction when something bad happens to someone else. As used by investment manager James Chanos: “I’ll always understand the Schadenfreude aspect to short-selling. I get that no one will always like it. I’m also convinced to the deepest part of my bones that short-selling plays the role of real-time financial watchdog. It’s one of the few checks and balances in the market.”

Did You Know?: People recall smells with 65% accuracy after a year but visual recall sinks to 50% after only 3 months.

Worth Quoting: “We are all born unfree and unequal, subject to our physical and psychological heredity, and to the customs and traditions of our group, diversely endowed in health and strength, in mental capacity and qualities of characters.” – Will and Ariel Durant

Recommended Reading

Lake Success

By Gary Shteyngart

2018, 352 pages

Lake Success is the story of Barry Cohen, a wealthy hedge fund manager who likes to believe his wealth is deserved, despite the fact that his funds have all gone belly up. You might think of him as Willy Loman selling hedge funds… or a Jewish Jay Gatsby before he comes to West Egg.

Lake Success is Shteyngart’s attempt to step beyond the realm of social satire – a genre of literary fiction that he brilliantly mastered with Super Sad True Love Story– and into Great American Novel territory. And Lake Success has all the requirements: The background is America, the protagonist is flawed, and through his journey to find himself, the reader discovers something important about the culture of the country.

Ultimately, though, I see it as a failed novel. And that’s because it lacks the one thing all GANs have: the author’s deeply felt sympathy for his protagonist.

That said, a strong recommendation from me. A failed Shteyngart novel is still a very worthy and very enjoyable read.

 

Principles of Wealth #22*

Tuesday, November 13, 2018

The efficient market hypothesis is bogus. The stock market, its sectors, and its individual stocks are often mispriced. But that doesn’t mean speculating on those errors makes sense.

Speculation is at best an intellectual form of gambling, like playing blackjack rather than roulette or craps. But all forms of speculation are likely to decrease one’s wealth over time. And every experienced speculator, in his heart, knows this to be true.

Selling speculations is not speculating. It is a form of business. And for some, it is a very profitable business.

 The prudent wealth builder that speculates treats his speculations as spending.

Delray Beach, FL.- In an essay published in Investopedia, Tim Parker writes: “Whether speculation has a place in the portfolios of investors is the subject of much debate. Proponents of the efficient market hypothesis believe the market is always fairly priced, making speculation an unreliable and unwise road to profits. Speculators believe that the market overreacts to a host of variables. These variables present an opportunity for capital growth.”

The argument Parker attributes to speculators is correct. The stock market is often inappropriately priced. And sectors within the stock market are badly priced even more often. Not infrequently, market sectors are grossly mispriced. The same is true for individual stocks.

I am always astounded when I think of how quickly and widely accepted the thesis of the efficient marketplace came to be. The logic, simply put, is that the big financial players – including institutional investors, hedge funds, and the like – have, through internet communications and computer technology, access to all of the key financial data they need to value stocks. They even have access to indices of public sentiment. With all that knowledge available and updated in nanoseconds, the price of any stock, any sector, and even the market itself will of necessity reflect the correct pricing.

This doesn’t make sense on several levels. For one thing, it is impossible to measure consumer sentiment or to predict its ebb and flow. More importantly, raw data (such as history of earnings, revenue growth, P/E ratios, etc.) cannot possibly give a reliable view as to the value of a company in the future.

I cannot tell you with any accuracy the true value of the equity of any of the companies I own and control. And I certainly could not predict what the value will be in six months or a year. So how could these data-crunching investment behemoths know?

But forget about the logic. Take a look at any 20-year period of stock market valuations and you will find moments when the market “corrected” itself, sometimes with a fall of 10% or more. What is happening there? There can be only one answer: irrational exuberance. And as I have already pointed out: You cannot measure accurately, let alone predict, the fluctuations of investor sentiment.

But that doesn’t mean that speculating is a reasonable way to accumulate wealth.

(Note: Hedging and arbitrage are not necessarily speculating. If done properly, they are the opposite. We will talk about them another time. This is about speculating and only that.)

What is speculating? John Maynard Keynes said it is acting as if one “knows the future of the market better than the market itself.” I like that definition because it emphasizes the core problem with speculating. It is fundamentally a bet on the future. And betting on the future is betting on something that is largely unknowable. Why bet on future possibilities when you can make good money investing in the known facts, the realities, of the present?

Professional speculators use sophisticated strategies such as swing trading, pairs trading, and hedging along with fundamental analysis of companies/industries and macro analysis of economics/politics to place their bets.

Just think about what I just said. The best speculators are crunching numbers from all these realms and using complex, technical strategies to make their decisions. And it is all done in the hope of getting way-above-average ROIs. It’s a whole lot of work. And at the end of the day, success depends on thousands of uncontrollable and even unknowable details. Where is the reasonableness in that?

John Bogle, bestselling author and founder of the Vanguard Fund, wrote a book called The Clash of Cultures: Investment vs. Speculation. In it, he demonstrated that individual investors almost always lose big when they speculate. He says that speculating is an “unwise” strategy for ordinary people whose goal is to safely accumulate funds for retirement.

“The internet and financial media may encourage speculation,” he says. “But that doesn’t mean you should follow the herd.”

Indeed. The reason the financial media and the brokerage community promote speculation is because they benefit from the fact that most speculators lose and lose big. And all those losses end up in the pockets of the brokers and the bankers and also the prudent investors that would rather invest their money safely for reasonable gains than gamble for big wins.

* In this series of essays, I’m trying to make a book about wealth building that is based on the discoveries and observations I’ve made over the years: What wealth is, what it’s not, how it can be acquired, and how it is usually lost.

Today’s Word: sibilant (adjective) – Sibilant (SIB-uh-lunt) describes a soft hissing sound. As used by Walt Whitman in Leaves of Grass: “This face is a dog’s snout sniffing for garbage, snakes nest in that mouth, I hear the sibilant threat.”

Did You Know?: Walt Disney named Mickey Mouse after Mickey Rooney, whose mother he dated for some time.

Worth Quoting: “Gambling is a sure way of getting nothing from something.” – Wilson Mizner.

Watch This

Great little video that shows you how to make a rocking chair out of aa stump of wood without using any power tools. It may inspire you to try something similar. It had a different effect on me. It made me realize how great it is to be able to afford to buy handmade stuff.

 

How Never to Begin a Blog Post, or… The Most Important Secret of Storytelling

Sunday, November 11, 2018

Delray Beach, Florida.- Should I tell him? Will he listen? Will he feel I’m butting in?

I had just read a company blog post from a colleague. It was an important post. And he was making an important point. I wanted every employee to read it.

But the problem… well…

One of the best ways to begin a blog post (or a speech or an essay) is with a story.

A well-told story will instantly grab the reader’s attention and hold him tight while he discovers (indirectly and without resistance) the idea you want to convey.

This is true only of well-told stories. Badly told stories are perhaps the worst way to begin.

So what is the difference between a well-told and a badly told story?

There are about a dozen. But the first and most important – by far – is that a well-told story begins in the middle.

The above-mentioned blog post began like this:

 I first met David and his wife Jenny in Panama in 2007.

David was from upstate New York but moved to Philadelphia shortly after marrying Jenny over 30 years ago. Other than a business trip to Toronto, he had never been out of the country before.

They were both attending International Living’s “Ultimate Event,” which I was helping run. This was our monster event, gathering all our country experts in one place to help the hundreds of attendees figure out the best places to retire or invest overseas.

We got to chatting over a drink at the welcome cocktail reception, and I soon discovered they were nearing retirement and wanted to know the best country to move to…

 I’m reading it and I’m wondering, “Where is this going?”

If it had been written by someone else, someone I didn’t know, I’d have already put it down. But since it was a colleague and since I knew he wanted to improve his writing skills, I continued reading. And reading. And reading. And wondering when he would get to the point!

Six or seven hundred words later, he wrote:

Knowing your customers is extremely important and seems so obvious….It can help you develop your products and services and craft the right messages to appeal to those customers. It provides a sense of empathy…

Wow! What a long and winding way to get to this idea.

I wrote him this note:

“If you are going to tell a story, begin in the middle, which usually means in the middle of the conflict. (Aristotle called it in medias res.) Give the reader a reason to want to keep reading.

“This is a story meant to illustrate a point you are making about the usefulness of attending live events. So you need to create some conflict around that. You want the reader to know what’s at stake. So he’ll care about it.

“Does this make sense?”

And then I thought I should give him an example of what I meant. I came up with this:

She told me he never attends industry events – especially those where you’re expected to “mingle” with potential customers.

 “I’m running a big business,” she said proudly. “I’ve got deadlines to meet. I’ve got a bottom line worry about. I don’t have time to waste on cocktail parties, making small talk with customers.”

 She seemed very sure of herself and I was her guest so I didn’t want to argue with her. Instead, I put on a sympathetic, non-committal face. 

 When, three years later, her business failed, I was not surprised…

I was hoping he would see how much stronger this is. Not because I’m a better writer. I’m not. But stronger because of the way I started my story.

I didn’t start at the dull beginning with preliminary information the reader might eventually want or need to know. I started with the conflict – in this case, with the protagonist being challenged by a woman making a statement he knows is wrong.

When you begin your story at a scene that represents a core conflict, you accomplish two things:

* You allow your reader to get to the point faster. (In this case, in 90 words rather than 600.) And…

* Even more importantly, you let the reader experience the truth of your idea emotionally before you give him the argument for it rationally.

And did my critique work?

He didn’t respond immediately, so I was a little worried. But the next morning, I received a friendly thank-you. “I’m not going to read Aristotle,” he said. “But, yes, I can see how much stronger it is to begin in medias res.”

Today’s Word: mawkish (adjective) – Mawkish (MAWK-ish) means overly sentimental; emotional in a silly and embarrassing way. As used by H.L. Mencken: “One of the most mawkish of human delusions is the notion that friendship should be eternal, or, at all events, life-long, and that any act which puts a term to it is somehow discreditable.”

Did You Know?: The world is inhabited by 1.4 million species of animals and 500,000 species of plants.

Worth Quoting: “For every path you choose there is another you must abandon, usually forever.” – Joan D. Vinge

Watch This

This guy is an impressive dancer. But do you see how he is trying to “out-dance” his partner? This is very bad form. He’s drawing attention to himself when he should be making his partner the primary focus. (And she, by the way, is dancing impeccably.) Also notice how he holds his hands… and his head. More athletic than elegant. He’s great… but he’s no Fred Astaire.

 

More on Micro-Cultures, Financial Success, and the “Nature vs. Nurture” Question

Friday, November 9, 2018

Delray Beach, Florida.- On October 18, I posted an essay www.markford.net/success-in-life-its-all-about-micro-culture about the relationship between success in life and something I call “micro-culture.”

The main points I made in that essay:

* What matters most in human development is not one’s macro-culture but one’s micro-culture. Let’s call that the 40 or 50 people that surround you from birth to age, say, 16.

* Let’s make it 49 people, bringing in the social biological concept of the 7-person limit of influence. (7 x 7 = 49)

* Micro-cultures that value hard work, intelligence/education, and financial success produce financially successful adults. Micro-cultures that lack these values produce adults that struggle or fail financially.

Since then, I’ve had some further thoughts:

* Culture is not just about values but also about expectation. It’s not just that certain micro-cultures value hard work, intelligence/education, and financial success, it’s that their members are expected to live those values.

* Another factor in determining success is an individual one. I call it self-sorting (for lack of a better word). The idea is that within any environment – academic, social, or business – people tend to sort themselves along a line from the back end to the front end. This is their pecking-order comfort zone. They do this regardless of how active or competitive the environment is.

* I am not sure whether one’s pecking-order comfort zone is solely determined by individual circumstance or whether it may be one of the values of the micro-culture. I’ve got to do a bit of research on that. But it’s possible that it is a cultural value. And if it is, that’s interesting, right?

I’m still working on this. But the more I think about it, the more I think it is the seed of an idea that I should develop into a monograph. Maybe even a book.

Hmmm. Stay tuned…