I’D RATHER BE SMART THAN LUCKY, BUT I’D PREFER TO BE LUCKY AND SMART

8/28/19

I wrote this letter to the Wall Street Journal at the end of July in response to a weekend edition Opinion piece.   The letter wasn’t published.  Since its subject matter is timeless, it’s not too late to share it with my readers.

7/27/19

I agree with Frayda Levin’s exasperation at the attribution, so prevalent in today’s increasingly simple-minded society, of success to luck.   (“Lady Luck Didn’t Make Me Successful,” Opinion, 7/27-7/28/19)   Such attribution simply feeds the wrong-headed envy that leads to idiotic policy and furthers the social division on which politicians thrive.  However, I would be a little more nuanced, and a little less cocksure, about the role of luck and point out that luck is a necessary, but not sufficient, condition for success.

In the many years I have spent working, and simply living, I have seen those who rely exclusively or largely on luck fail miserably.   At the same time, I have seen many people who work diligently, intelligently, and nearly incessantly and still fail to achieve success.   There was something that wasn’t working for them.   Call it luck, serendipity, or even blessing, though the last would involve ascribing motivations to the Almighty that are baffling and far beyond the scope of this subject.   In any case, these people, who had worked as hard as anybody, still failed to achieve success.   They were simply unlucky.

I have also noticed over the course of a long life the positive relationship between the amount of luck from which a person has benefited and the intensity of his insistence that luck had nothing to do with his success.

THE MARKETS ALSO WORK IN WONDROUS WAYS THEIR MIRACLES TO ACHIEVE

8/28/19

The Wall Street Journal ran the below letter, in edited form, on Monday, 8/26, and I think my readers might enjoy it in its unedited original glory.  I wrote this missive in response to an editorial piece the Journal ran on the brouhaha regarding the Business Roundtable CEOs blathering on about how corporations exist to serve all stakeholders rather than “merely” serving the shareholders who hired these deep thinkers in the first place.   Apparently, in their desire to achieve the pinnacle of political propriety, and cater to the next occupant of the White House, these esteemed ones have forgotten the lessons they learned in their finance and economics classes, i.e., markets work, often to achieve goals that appear ancillary to those who prefer feeling to thinking.   

8/20/19

The Business Roundtable CEOs who insist on serving a broad range of stakeholders rather than focusing on shareholders make a distinction that lacks a difference.  (“The ‘Stakeholder’ CEOs,” Review and Outlook, 8/20/19) No company is going to be profitable beyond the very shortest of time frames if it abuses its customers, takes advantage of its employees, mistreats its suppliers, and incurs the wrath of the communities in which it operates and sells.   Those stakeholders have a limited tolerance for such treatment and, at least for now, our free market system provides them plenty of opportunities to express their distaste by taking their business, or pursuing their livelihoods, elsewhere.  

At the same time, stocks remain a near perfect mechanism for discounting future cash flows.   Since future cash flows would be imperiled by the type of bad behavior these self-perceived rock star CEOs correctly abhor, a focus on the price of the stocks of the companies these executives were hired to run acts as a mechanism to discourage bad, and reward virtuous, behavior.

To put is simply, stocks discount future cash flows.   Future cash flows are enhanced by behavior the Business Roundtable CEOs, and, perhaps not by coincidence, certain Democratic presidential candidates, are trying to encourage.   Therefore, focusing on stock prices achieves socially meritorious goals especially effectively by putting the force of self-interest behind the efforts to achieve such goals.   One would think that these CEOs would have learned this in the Finance classes they took long before they got consumed with their press coverage.

MANY HAVE SAID THAT PRESIDENT TRUMP HAS LED THE COUNTRY INTO THE TWILIGHT ZONE, BUT NOBODY HAS BEEN THIS SPECIFIC

8/28/19

Robert Feder, the long-time gold standard of Chicago media columnists, runs a blog that I read nearly daily and enjoy.    I often find myself commenting on the observations of Mr. Feder or of the many who read his observations.   A few days ago, Mr. Feder ran the story of former Congressman Joe Walsh, currently a talk show host in Chicago, launching a quixotic bid to wrest the 2020 GOP nomination from President Trump.   While reading this story, I was suddenly struck, albeit in a far from Damascene fashion, with a perfect analogy for the Trump administration.    This analogy was doubtless helped in its efforts to come to the fore of my mind by Mr. Trump’s then fresh “orders” to business leaders to modify their supply chains, his observation that we might be better off without the Chinese (a comment that could be dangerously misconstrued by people who speak a radically different language and are heavily armed with nuclear weapons), and Mr. Trump’s proclamation that he is the “chosen one.”   At any rate, I wrote the below comment on Mr. Feder’s blog.  I think it also appeared on my Facebook page because, when one comments on Mr. Feder’s blog (or when I post on  my blog) and checks the appropriate box, that comment also appears on Facebook.   But I can’t be sure of that because I am not a Facebook aficionado and rarely, if ever, go directly to my page.

Bear in mind as you read my comment that I voted for Mr. Trump…even in the primary.   If I have now been dissuaded from my prior propensity by the man’s antics, what does that say about Mr. Trump’s re-election prospects?  But then I, and doubtless millions like me, look at what the Democrats apparently will have on offer and conclude that four more years of going down the Trumpian rabbit hole might be the preferable of the two alternatives.   I suppose I could resort to my usual post-1980 practice of voting Libertarian, but, as I grow older, wiser, and more cognizant of human nature and the ongoing deterioration of our society, I find myself far less attracted to libertarian ideas.  But I digress; my major point in writing the following comment is that the country is in, as they used to say, a whole heap of trouble:

Trump's presidency is starting to resemble the Twilight Zone classic "It's a Good Life," in which Billy Mumy, as a young monster named Anthony, controls an entire town, and maybe the entire world, with his childish mind. No one in town has the guts to stand up to him; instead, the town becomes a babbling gaggle of sycophants who can do little more than repeat "That's good, Anthony; that's real good" as the six-year-old destroys whatever in the town does not please him. I have to give Joe Walsh credit for standing up to the increasingly troubling, and seemingly unhinged, Mr. Trump, but, clearly, Mr. Walsh is not the guy to mount a real challenge to Trump for the sake of conservatism and, far more importantly, for the country.