MarkFord
“All paths lead to the same goal: to convey to others what we are.” – Pablo Neruda
5 Easy Theses is the promising title of a serious book by a man (James M. Stone) who has academic, government, and business credentials. But it was too dense and difficult to read. I gave up after the first thesis and skimmed the rest.
Stone’s idea for the book, though, is good: sensible ways to solve five big problems – the budget deficit (and federal debt), inequality, education, health care, and financial sector reform.
His solution for the budget deficit (the one I read) is to somehow force Congress not to enact projects or programs they can’t fund, to cease unnecessary tax deductions for big businesses (the gas industry, the farming industry, etc.), to get the Social Security Administration to stop expanding its coverage as the average mortality increases, and to repeal all corporate and personal deductions for taxes on debt.
Look at This: Pace and timing are two critical components of comedy. If this were 15 seconds longer, it might not have worked, but it does… or did… for me.
How to Maintain (or Regain) Control of Your Growing Business
If you are in the fortunate position of seeing your business grow to the point where you have more than 50 employees, there’s a good chance the grip you thought you had on it will begin to slip away.
There is a good reason for this.
It has to do with the human capacity for attention. Experts say it’s basically impossible to manage more than seven or eight people. I can attest to that. There have been times when I’ve had more than a dozen people reporting to me — and it was problematic. I was not able to stay on top of their work, and they knew it.
What you may do is spend more time with some of the people who report directly to you and ignore the others for long periods of time.
If your top people are ignored, you are not doing the best job of managing them. You are not provoking them enough, not keeping a close enough eye on their performance, and not giving them the feedback and support they need to be successful.
But even if you do limit your direct reports to, say, seven, you can still lose control when the payroll exceeds 50. Here’s what happens:
Your seven direct reports understand you and your vision. Their subordinates report to them and not you, but the size of your company is still small enough that they see and hear from you all the time. They know what you want even if their boss has different ideas.
But when your company grows to the point where the subordinates of your top people have their own subordinates, the connection to you is all but lost. So what do you do when you have 50 (or 100 or more) employees and you feel like things are falling apart?
First, you should open your mind to the possibility that you aren’t the manager you think you are. In fact, it’s possible that your business isn’t being managed at all.
As an entrepreneur, your attention has been correctly focused on growth and profitability, not management. Your style of leadership might have been formal or casual. Your frequency of communication might have been regular or impromptu. You might have been a nice boss or a bastard. It hasn’t mattered because the seven that reported directly to you adjusted themselves successfully.
Their subordinates made dual adjustments: to their bosses and to you. But now that there are so many employees, you have to find a way to make sure they all understand your business goals and your expectations of them.
For all you know, they are getting bad ideas and directions from their bosses. You can’t see it, because those managers don’t report to you.
So you were right to focus on growth and profits. But now your business is in a different stage. Now you have to introduce some level of formal management throughout the business… which may mean that you have to become a more formal manager yourself. That would entail focusing on three things:
- Controlling growth operations
- Managing maintenance operations
- Communicating your vision
Controlling Growth Operations
Every good-sized business is sure to have multiple operating parts – marketing, sales, accounting, customer service, product development and fulfillment, data collection, etc.
When your business was small, you could give short shrift to some of them. Now they are all important. None can be neglected. So which do you take on personally, and which do you trust to someone else? READ MORE
Degustation (noun) – Degustation (dee-gus-TAY-shun) is the act of tasting or savoring, especially with care or relish. As used by Liane Moriarty in Nine Perfect Strangers: “There would be no alcohol, sugar, caffeine, gluten, or dairy – but as she’d just had the degustation menu at the Four Seasons, she was stuffed full of alcohol, sugar, caffeine, gluten, and dairy, and the thought of giving them up didn’t seem that big a deal.”
The word“news” comes from north, east, west, and south – not the plural of new.
“Every day, you reinvent yourself. You’re always in motion. But you decide every day: forward or backward.” – James Altucher
“Shtisel” (Netflix): An engaging and heartwarming series about the lives of a Haredi family living in Jerusalem’s Geula neighborhood. The show was created by two writers with Haredi roots. It gives you an inside view of what it might be like to live within a religiously ultra-Orthodox community where there are rules against so many things we take for granted, including appearing in public without all the required clothing and watching TV. It was produced several years ago and gained a surprising wide viewership (including some ultra-Orthodox viewers who aren’t supposed to watch TV) and won a number of awards. I noticed it a month ago on Netflix and relished the first two seasons. I hope there is a third.
An amazing display of craftsmanship…
The Stock Market Is Getting Dicey -Here’s What I’m Doing About It
The US stock market gave investors a good scare late last year, with the DOW dropping from a high of 26,562 on September 24 to a low of 22,445 on December 18. The newspapers were full of good reasons. On the top of the list were rising interest rates and the fear of a trade war with China.
But by the end of the year, it had climbed to 23,327, ending the year with a loss of 5.63%.
Thousands of investors abandoned stocks during that last quarter. Dominick and I did not. Our investment philosophy is long-term, big-cap, and value-based, so we look at price drops as buying opportunities. And we took advantage of the drop to buy some additional shares (of PG, IBM, BUD, MSFT, GOOG, AMZN, AAPL, MMM, ORCL) with the cash I’d accumulated from dividends in 2018.
Of course, ending the year with a loss never feels good. And that was especially true for us since my portfolio had made a ton of money in 2017 and good profits consistently since setting it up in 2012 (even in 2015, when the DOW closed down 2.23%).
This year, the DOW is up about 9%, as is the Legacy Portfolio. So you’d think I’d be feeling good about staying in the market. But I don’t feel good. I feel nervous.
There are lots of reasons to be concerned about not just another dip but a crash. And not just an ordinary crash but one that could last for a long time.
One reason: Half of all investment-grade debt is “teetering on the edge of becoming junk,” a colleague pointed out recently. “And more of these risky loans are being owned by mutual funds than ever before.”
Worst of all, he said, “They’re being held mostly by your average mom and pop investor. When these risky companies become unable to pay their debt obligations, it will send shockwaves throughout the debt market, then the stock market. And it will be disastrous for most individual investors.”
And then, of course, there’s that ever-growing elephant in the room: the national debt. In 2,000, it stood at $5.6 trillion. Today, it’s estimated to be $22.7 trillion.
But those aren’t the scariest numbers. The scariest numbers are ratios – the debt as a percentage of our country’s gross domestic product. (Think of it in terms of personal debt compared to personal income.) In 2000, that $5.6 trillion in debt represented 55% of our GDP. Today’s $22.7 trillion represents 108% of our GDP.
And it’s not expected to get better.
Younger investors today tend to be optimistic because they haven’t had the benefit of living through a period of high inflation. And their only experience with a serious recession was in 2009, which has been followed by this long bull market.
Young investors may, therefore, keep investing.
Older investors may take the opposite course. They may get out of the market in part or in whole and wait for good weather.
I’m nervous because I feel like we are in for a drop and possibly a sustained drop. But I’m not going to change my investing strategy because it was designed for the long-term and because I can wait it out.
I can wait it out because (1) I never fully retired (i.e., gave up my active income), (2) I have multiple passive streams of income from different asset classes, and (3) my stock portfolio represents only about 20% of my net worth. So if the DOW drops by, say, 50% for 10 years, I’ll be okay.
I’m not saying this to boast, but to explain that the only way you can possibly avoid being devastated by a stock market crash and a long recovery is to take a comprehensive approach to wealth building – one that includes multiple streams of income, stores of wealth in at least a half-dozen asset classes, and “plan B” strategies for limiting losses.