Spend the Time to Show You Care

July 8th, 2019

Last week, I got together with two of my oldest friends.  I met one when I was 5 and we played on the same flag football team.  The other moved to my town when he was in 7th grade.  We’ve stayed in close touch over the years with the help of technology as we went through different stages of our lives and moved around the country. 

Our conversation started with the usual banter – reminiscing, updates, and of course, the obligatory put downs.  But we quickly got into much deeper subjects regarding health, families, and careers – the stuff that really matters.  We spent a couple of hours in very serious conversations.  Those deeper conversations would have never happened over the phone or via email or text. 

Technology gives us opportunities to communicate with each other but nothing replaces an in person conversation.  Staying in touch with your clients via email and phone calls is important.  In person visits are priceless.  That’s how you find out what is really going on with your clients.  If you want to stand out against your competitors, take the time to visit someone.  That’s how you show you care. 

Remember the Real Reason Behind July 4th?

July 1st, 2019

Every year around this time, an email circulates about the signers of the Declaration of Independence.  It has slight variations but the message’s focus is on the sacrifices the signers of the Declaration of Independence made.  Historians have questioned the accuracy of some of the signers’ fates.  A popular version, “The Price They Paid,” is posted on the website of singer Michael W. Smith.  A link to the Snopes response is included as well. 

Regardless of the details, the signers took significant personal risk by signing the Declaration.  We think we have political division in our country today.  Imagine the 1700s.  Half the country wanted to remain a colony of England.  Half wanted to leave.  Both sides were willing to fight for their way.  

As you enjoy your cookouts and fireworks, take a moment to read the Declaration of Independence.  Take a moment to be grateful for our Founding Fathers.  Take a moment to cherish our right to disagree.  Never forget we are all Americans. 




Do You Help Your Customers When Something Goes Wrong?

June 24th, 2019

I had a fun weekend with my credit cards.  I have two main credit cards I use.  Early Saturday, I got a text from one of my credit card companies suspecting fraud.  Someone used my credit card fraudulently.  Later that day, I got a text from my other credit card company suspecting fraud.  Sure enough, that card was compromised as well. 

Both companies asked if I had the cards in my possession.  I did.  Both canceled the cards immediately.  However, the second company’s representative said, “Mr. Gale, I know it’s the weekend.  The earliest we can get you a replacement card is Tuesday.  I can keep your card active for in-person purchases.  Would that help you?”  I charge virtually every purchase I make.  Not having either credit card for the weekend, while not the end of the world, was an inconvenience.  Guess which company is going to get most of my business going forward? 

Problems happen in every business.  For the credit card company that kept my account open for in person purchases, they clearly approached the situation with an attitude of, “It’s not my fault but it’s my problem.”  They made my life easier and in turn will benefit from me using their card this weekend.  When a customer has a problem, come up with a solution that makes his life easier.  You will be rewarded. 

The U.S. Government is Spending like Drunken Sailors. What Will a Recession Bring?

June 17th, 2019

Last week, the U.S. Treasury Department issued its “Monthly Treasury Statement.”  https://www.fiscal.treasury.gov/files/reports-statements/mts/mts0519.pdf

The federal government ran a $208 billion deficit in May 2019, a record deficit amount. I will note the Treasury Department did put in bold that May normally runs a deficit because of a lack of taxes due, but this amount was a record for May.  For the 2019 government fiscal year, which runs from October 1, 2018 to September 30, 2019, the deficit is $739 billion.  The big tax month of April has passed, so expect this deficit number to do nothing but climb for the rest of fiscal 2019 (and beyond). 

I didn’t hear nary a peep from any republicans about spending.  Is anyone talking about spending cuts?  Oh, wait, that only happens when a Democrat is president. 

Keynesian economic theory posits that governments should run deficits during challenging economic times and pay down debt during good times.  In oversimplified terms, the government should stimulate demand during a recession and moderate its spending when a recovery occurs.  They’ve got the spending part down well; I don’t think anyone in Washington D.C. understands the term “moderate” in either its noun or verb form.

I don’t know why or when, but the sugar high will end.  This time is not different.  To paraphrase Margaret Thatcher, “Unlimited spending is great until you run out of other people’s money.”  The US has a huge benefit because the dollar is the reserve currency in the world.  Southeast Asian countries are talking about banding together and creating their own currency.  While that currency might not work, any threat or perceived threat to the dollar as a reserve currency could hinder the US’s ability to borrow.  If that happens, a recession is not far behind. 

(Non-paid endorsement:  This blog was inspired by Grant’s Interest Rate Observer.  A link to the free service is attached.  If you like economics and markets, this is a must read, as is the subscription service.     https://www.grantspub.com/resources/commentary.cfm.  Unlike Joe Biden, I try to properly source my materials.) 

Bizarro World Continues

June 10th, 2019

Last week, our commander in chief commemorated the 75th anniversary of D-Day by giving a relatively good speech.  While still in Normandy, he got in a twitter war with Bette Midler.  He also took time to criticize the special counsel and the Speaker of the House.  Every time he has a moment to act presidential, he decides to revert back to reality TV star.

Numerous investigations into big technology companies were announced.  Apple, Facebook, and Google all face government inquiries regarding their business practices.  There is a growing movement to break up large tech companies. 

On Friday, the Labor Department released the May jobs’ report and indicated job creation has slowed.  Pundits immediately started talking about the Federal Reserve cutting interest rates sooner rather than later.  Not only did May’s job creation miss the estimate, March and April numbers were revised downward.  The economy has clearly slowed.  Remember, all of these figures were tabulated before President Twitter threatened tariffs on Mexico.  As I’ve written in the past, uncertainty does not help economic growth.  https://www.cnbc.com/2019/06/07/nonfarm-payrolls-unemployment-rate-may-2019.html

Despite all this noise, the stock market had its best week of the year, albeit after several weeks of declines.  All other things equal, the stock market goes up when interest rates go down.  Right now, the stock market is pricing in an interest rate cut.    

Focus on the important news: the economy has slowed.  I have no idea if this data is a precursor to a recession or just a short term blip.  Now is the time to evaluate what you are doing and figure out how to prosper in a slow or negative growth environment.       

Is FedEx the First of Many Trade War Casualties?

June 3rd, 2019

Late last week, China announced it was launching an investigation into FedEx, alleging that FedEx had “not made deliveries according to the name and address” of the intended recipients of packages FedEx handled.  As a result, China said companies that shipped and companies that were supposed to receive packages suffered damages.  You give me tariffs, I’ll raise you by investigating your companies.  (https://www.bloomberg.com/news/articles/2019-06-01/china-launches-investigation-into-fedex-xinhua

Perhaps most interestingly, at least two packages that were not delivered properly were sent from Huawei, the telecom technology company whose products the US has essentially banned from being used.  The packages were destined for Japan but somehow got routed to the US.  The packages were then returned to Huawei.  FedEx apologized for the “delivery errors.”  This situation has all the makings of a good Tom Clancy book. 

Analysts are already speculating about which company China will investigate next.  Businesses and financial markets do not like uncertainty.  China understands that and will continue to fight the trade war by creating uncertainty for US companies.  US companies will respond by tempering their investments both at home and abroad.  Less investment means less growth.  Less growth means less jobs.  President Tweet better be careful or he’ll become a casualty of the trade war. 

We’re More the Same Than We Think

May 27th, 2019

We recently got a new car.  My father in law is the consummate car guy.  He literally spent his life working on cars.  Now into his seventies, he is currently restoring or building at least 3 cars.  I lost count. 

I took him for a ride in the car, just the two of us.  He’s normally a pretty reserved guy.  Something about our journey caused him to open up.  He started reminiscing about his high school years.  He is among the first baby boomers and grew up in the 1950s and early 1960s car culture.  He said, “I’d go to the local burger joint and rev my engine.  Before it stopped, there were three guys lined up that wanted to race.  We’d go race on the streets.  We’d have someone look for the cops.  That was dumb; we could all outrun the cops in our cars.”  He chuckled as he said that.  He continued for a while, describing different engines they modified and where they raced.  He then concluded, “Boy, were we stupid.  If my kids ever did anything that stupid, I would have killed them.”

At that point, I smiled.  I wanted to say, “I’ve known your daughter a long time.  We’ve done some stupid things.”  Thankfully, common sense or lack of chutzpah stopped me (definitely the latter). 

After he left, I thought about our conversation.  Our son has entered his teenage years and clearly is looking to test his boundaries.  It’s part of growing up.  I pray he does it safely.  I also thought about the reminders of generational and political differences we hear incessantly from the media.  We’re really not that different.   In the spirit of remembering those that died for us and what they believed to be the greater good, let us focus on our commonalities, not our differences.  The world will be a much better place if we do. 

Take a Step Back

May 20th, 2019

After a rainy and dreary month of April, it appears that spring has finally sprung.  I’ve been able to grill outside multiple times in the last few weeks without fear of the food getting soaked. 

I recently went out to uncover the grill.  I noticed the thermometer read over 200 degrees.  It was a sunny day and the area where our grill sits gets a lot of sun.  The grill felt hot but not 200 degrees hot.  Still, it concerned me.  I grilled our food and shut the grill off.  I waited a while to cover it.  The thermometer read around 200 degrees.  It didn’t feel that hot but I got concerned.  I convinced myself I smelled gas, even though the grill had been off for a while.  I shut the gas off and started to look for a leak.  I told my wife I thought I had a leak in a burner and I’d add it to the projects I needed to complete or outsource.  (I’ll be honest; she’d probably have to complete it or I’d continually turn the gas on and off for the foreseeable future.)

I went in the house and forgot about the grill, or so I thought.  About an hour later, I had one of those “You’re such an idiot” conversations with myself.  I went back out and looked at the thermometer.  It still read the grill temperature was in excess of 200 degrees.  The grill was cool to the touch.  Sure enough, my thermometer was broken.  The replacement part is on its way.

The human mind is pretty good at convincing itself the first thing it thinks of is the answer.  Life isn’t always black and white.  Walking away from a situation is a good way to clear your head and examine alternatives. 

Chaos Theory and the President: Be Prepared for Unexpected Outcomes

May 15th, 2019

To greatly over simplify, chaos theory states the behavior of dynamic systems is greatly dependent on initial conditions.  (Read more: https://en.wikipedia.org/wiki/Chaos_theory)  The classic example used to explain this complex mathematical theory to us mere mortals is a butterfly flapping its wings can create the impetus for a hurricane somewhere else in the world. 

To say we have never had a president like Donald Trump is an insult to the phrase stating the obvious.  One thing about President Twitter I am just starting to truly understand is he thrives on chaos.  In general, humans like order.  We like when the world works as we expect.  If I do “X”, I get “Y” is how most of us expect and want the world to operate.  When that does not happen, we get nervous.  There is a segment of the human population that likes chaos.  They are entrepreneurs.  They are commissioned based sales people.  They are the people whose performance reviews say “not a team player.” 

Donald Trump is one of those people that thrives on chaos. 

Over the last week or so, Trump has escalated the trade war with China.  He has threatened war with Iran and moved ships to the Persian Gulf.  He has threatened military action in Venezuela.  I’m sure I missed a few other potentially major things he has threatened to do or has done, but you get the point.  The political class is in an uproar.  Volatility has returned to the financial markets.  Ships are being attacked in the Middle East.  The world is indeed chaotic. 

I am concerned that we have a person who likes chaos have control of nuclear missiles.  I pray he and his advisors have the sense to not embrace too much chaos.  If Trump can keep himself (and the world) from going over the edge, his embrace of chaos just might lead to positive results. 

Technology and Human Interaction: It’s a Balancing Act

May 7th, 2019

Yesterday, I went into a local Starbucks.  It was after lunch and the store was not busy.  I was the only person in line.  I ordered my drink (a simple iced tea) and waited.  And waited. And waited.  Fortunately, I was not in a hurry.  I counted five workers behind the counter.  Two were engaged in banter with each other on their headsets.  They appeared to be having fun.  One was feverishly typing on her phone.  I couldn’t figure out what the other two were doing.  After I stood there for what seemed to be an eternity (it was probably 3 minutes), one of the Starbucks employees asked me what I ordered.  I told her and she quickly made my drink.   She handed me my drink and apologized for the delay.   

I frequently use the app when I order from Starbucks; I chose to not use it yesterday because I was meeting someone in the store for a meeting.  This experience made me think:

  1. Starbucks wants me to avoid human contact and exclusively use the app. 
  2. Starbucks’ employees are not properly trained.
  3. A combination of A & B.

A business like Starbucks that gets a premium for the “experience” it offers customers is in a challenging position.  Technology can make interactions more efficient but it can also take away the personal experience.  Limited resources make it difficult to both invest in technology and train people, especially on soft skills that a bean counter cannot measure.   An old business axiom says you can only choose to offer two out of three attributes: fast, cheap, or good.  That axiom remains the same, regardless of what technology brings to the table.