Saturday Cup of Joe from Detroit

181.

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Week 181. I started the Saturday Cup of Joe during my first week in Detroit. I had so many questions about moving to Detroit and being inside Quicken Loans that it was easier to send an email to everyone that asked all at once. Since that first week, I’ve send thoughts or comments every Saturday morning.

Between philosophy, industry, art, religion, politics and history, I have found people, ideas and (more) questions.

Some weeks more reflective, some more practical, I still get a little excited to find something or write something that I hadn’t considered or realized. Something to make me think. Or laugh. Or dream.

Sometimes the headline alone is worth the link.

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Other times, it is the story or the experience from the week.

Check out Sir John Suckling.

This is the story on the back of the cribbage board my Dad and I used earlier this week. Sometime in the 1600s, Sir John handed out playing cards, marked so he could recognize them, to all the local leaders and gentry. Then came back later in the year to gamble and to beat them. Winning the equivalent of $7M in today’s money, he planned and executed the long game.

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I honestly don’t know if I believe it, but I don’t really care. It’s a good story.

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And,

Thank you, as always, for reading Saturday Cup of Joe. I hope it remains valuable and insightful.

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“Compartmentalization of intellectual life is bad.” — Robert Shiller

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Carpe Diem: Exploit versus Explore. Scott Young wrote about this decision-making framework in a compelling and helpful way. His theory goes like this: when making a decision we really have some version of two choices. We can select a choice that we’ve chosen before and enjoyed “exploiting” the information we already have to ensure the highest likelihood of enjoyment. I’ve been to this restaurant before and I had a dish I really liked so going back and having it again means it’s probably going to be good again. If we do not exploit, we explore. In this choice, we are selecting a new choice and “exploring” new experiences. I’ve never been to this restaurant or heard anything about it, so I have no idea whether it will be good or not.

All choices are some combination of these and I find it helpful to think about choices this way.

For instance, I could select a restaurant I’ve been to before (exploiting) but choose a dish I’ve never had before (exploring). I like how exploit versus explore also requires a candid approach to risk. What type of decision will this be and how risk adverse am I?

If you are looking to explore more, Scott also writes about how to do that. Financial stability with available free time (and trusted relationships) seem to be keys to healthy exploring. Either way, I can see myself using this exploit versus explore model as I evaluate my options.

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Personal finance: I’ve been spending a lot of time thinking about how to convert renters to homeowners. One major obstacle is that it is difficult to give renters credit for paying rent. Landlords are not often using documented, record-keeping systems. Few landlords report to the credit bureaus. Some people pay checks creating some documentation but in general it’s all over the place. So the mortgage industry cannot standardize rental history as a source of verification for mortgage approvals.

Enter paying your rent with a credit card.

Terrible idea, you say? But the rewards, think of the rewards.

This probably-sponsored-by-Chase Business Insider post suggests that you could receive cash back and other benefits by paying rent with a credit card.

Yea, terrible idea.

Fees through third party platforms like RentShare or PayPal make it unlikely to be an option. Mortgage investors have yet to change guidelines allowing for rent analysis.

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Speaking of personal finance: McKinsey issued a report this week warning banks to innovate or risk becoming irrelevant. In fact, the top 20% of global banks have captured almost 100% of the upside added by banks to the market. Not unlike your company, 20% of the participants do almost 100% of the work.

Banks, good ones, should relish the challenge. Companies should always be adding value regardless of whether your product or service is legally required (like car insurance) or practically impossible to function without (like a checking account). Constantly focusing on customer and shareholder value will ensure that your industry remains relevant and your company is chosen among your competition.

Be about the value or get passed by.

Game on.

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Casual Friday on the Campaign Trail. Seems like business casual for men in DC means removing the necktie. Whoa, look out. These guys put their Nats jersey on OVER the dress shirt for the ball game. Classic. Dressing to impress is not just a question on the campaign trail but in the office too. How do I balance my comfort with oth ers expectations and my brand? The old saying “dress for the job you want” is not really applicable anymore. If it’s tough for men, it’s downright impossible for women. I know, even as I’m typing this, that I don’t know the half of it.

FastCompany published this brief history of the pants suit and how women politicians have not been able to escape scrutiny since 1917 when Jeanette Rankin was elected to Congress. I suspect it is just as tough for women in the office as it is for the women profiled in this article.

Understanding we have many discriminatory issues to address, perhaps this is one where we can agree and move on?

Ok, that was not very compelling was it? Hey everyone, Saturday Cup of Joe just asked if we could move on from arbitrarily and awkwardly commenting on women’s pants suits and style choices, so I guess that solves it. I know it doesn’t.

What might help, though, is catching ourselves when we think it? Remembering to flag and change those thoughts. If you hear your inner monologue commenting on Senator Harris’s pink pants or Senator Warren’s blue blazer, there is a moment to intervene. Notice and interrupt (even if its just your own inner monologue).

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Lack of housing stock is the thing. Seriously. I attended “Building for a New Age” hosted by The Atlantic and Genworth Financial where Redfin’s Chief Economist Daryl Fairweather presented on housing, Millennials and real estate trends. The search for affordable homes continue drive the increase in home values. Homebuyers are moving from expensive, high-rent areas for affordable metros and as a result, there are fewer and fewer homes for sale in more affordable parts of the country.

In fact, though Millennials are delaying homeownership, those that are buying are buying traditional single-family homes. Unfortunately, these trends continue to put pressure on the remaining reasonably priced single-family homes still available.

So, I guess, to them, good luck.

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Who is to blame for certain decisions? Tech IPOs fueled by venture capital covert VC investment to public stock. Is it the stockholders fault the tech company ultimately fails? Vice wrote a back-and-forth piece simultaneously pointing out the problems with private tech companies while blaming the companies for the public investment.

“The idea behind venture capital is simple: raise capital from institutional investors (pensions, endowments, etc.), buy equity stakes in a multitude of start-ups, then oversee operations until the start-ups go public or are sold to a bigger company and investors can cash out.”

Yes, an exit strategy is part of the VC arrangement. But doesn’t that illuminate the risk of the IPO investor too? The direct line (drawn by the author) from VC investment to the public at large getting screwed is not clear to me.

SoftBank pumping money into WeWork, for example, does not automatically mean “the public at large gets screwed.” Sure, I can see the author’s point that startups being private can create an illegitimate narrative that isn’t clear to future (public) investors. Seems to me that startups can only be so-responsible for investors irrational belief that their stock will be the next Amazon or whatever.

Consider, then, how the author goes a step further. Not only is the IPO investor not to blame for the initial investment but society at large is not responsible for believing in the messianic qualities of tech companies. The author writes, “We have allowed venture capital to concentrate power in ways that dictate how our cities work, how our technology is developed, how labor operates, and how we relate to each other.”

I think the piece misses the key — We have allowed.

We have allowed.

Isn’t that really the point here? Blaming tech startups. Blaming VC. Nope.

We have allowed. We’re responsible.

End of story.

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“Imperfection is beauty, madness is genius and it’s better to be absolutely ridiculous than absolutely boring.” — Marilyn Monroe

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Bonus content: The First Partner of California, Jennifer Siebel Newsom, wrote this reminder to the men of married couples: pick up half the load. It is not just personal, though it is, it is public too. Thanks for the article link, Meredith. This article really hit home after last week when Meredith and I tried to handle a sick kid, a school break and a business trip. Phew. It’s no joke.

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Continued success and continue to answer well,

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

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