You Bet Your Life

By Lloyd Graff

Fifteen years ago, I was in Las Vegas for a business conference in late March and ran into a used machinery dealer from Chicago named Earl Elman.  Earl was a contemporary of my Dad. I knew his wife had a fatal illness, and he was a starched collar, grey suit kind of guy—not a gambler.

“Hey, Earl, what are you doing out in Vegas?” I asked. “Lloyd, it’s March Madness. I come every year for the basketball games. I love it.”

It struck me as so unlike what I thought Earl did when he was not brokering Bridgeports, but then I thought to myself, why not? We all make bets with our money and our lives, every day. He put his dough on the Spartans or the Gophers.

This memory came back today because of the calendar and my daily scan of The Wall Street Journal. It’s March Madness time again. Intel is paying $15 billion for Mobileye, a young Israeli company with $300 million in sales. Tesla used Mobileye’s technology in its car that had the first fatality using artificial vision and blamed it on Mobileye’s software.

Intel is in a pickle at the moment because it missed the Smartphone and Cloud booms while focusing on the declining market of chips for personal computers.

The company still has plenty of cash and credit, and decided to make a big bet on vision systems for autonomous cars. Its arch competitor QUALCOMM recently made a $40 billion bet on NXP Semiconductors, an automotive chipmaker. These are massive business wagers that are by no means sure things.

Is Intel caught up in billion-dollar March Madness? Don’t ask David Ackman, the hedge fund gambler who just took his medicine on Valeant to the tune of $5 billion. Valeant is the company whose brilliant strategy was to buy drug franchises like EpiPen and raise the price ten-fold. It worked for a while until people started dying because they could not afford the drugs they had been buying for decades. The name “Valeant” has became equated with “predator.” Ackman lost 95% of his “investment.”

I wonder if the Wall Street wizard, Ackman, might want to make a career change like the son of a business associate of mine. He had the best education you could get in England, graduating from Oxford with a mathematics specialty. Rather than going into academia or the family machine tool business, he followed his passion for football (soccer) and gambling by joining a London firm that bets its own money on games around the world using “big data” and a little moxie. I think they are doing better than Bill Ackman these days.

Groucho Marx on “You Bet Your Life”

We all make bets each day. When you pick fresh strawberries out of the case, you are betting on their texture, sweetness and incipient mold. When you go to the doctor, you gamble that the tests she sends you to are interpreted correctly. Medicare just released a study showing that patients who spend more on tests and scans do no better than those who are unscanned.

My fascination with bets began as a child as I listened to my father’s stories about machinery deals. I think he only told me about the good deals, not the ones that went sour, because as a kid I thought his judgement was infallible.

I used to play poker in high school with neighborhood friends, which was a good lesson in losing. I graduated to Bridge in high school and usually lost. I think it cured me of depending on the luck of the draw to place my bets, but the used machinery business was a different game because I had my personal big data of a thousand deals done, in my head. I had my Dad’s experience etched into my cerebral context and I had pounds and pounds of green and yellow cards with the records of used machinery transactions of yesteryear.

In my decades of buying all sorts of imperfect used goods I have learned that making successful bets is hard, and the hardest part is continuing to bet on your own judgement when you have just screwed up big. When you lose your own confidence the percentages swing strongly against you.

The hardest part of business is staying in the game when the game turns against you.

In that light, I admire the leaders at Intel. They have been playing a losing game in the PC market since the iPad came out.

On the face of it, Mobileye is ridiculously expensive, but if an Intel just keeps doing what it has been doing it will become Sears Roebuck.

Life is a gamble. Business is a gamble. Spin the dice. Squeeze the oranges. And hope.

Question: What is the over-under on Donald Trump’s time in office?

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18 thoughts on “You Bet Your Life

  1. avatarGordo

    Betting he gets a second term
    Once he gets the economy going without massive stimulus and stupid spending, even the goons marching against him will start to get it.
    Heck, they might even get a job and move out of their parents basements. Ok, went too far.

     
    1. avatarDoug

      Gordo, I hate to tell you that is their job, half the marching goons are paid agitators and bussed from one location to another. the other half are just the useful idiots who thought it a good reason to leave their parents basements. Suffice it to say, you did not go too far, but I may have.

       
  2. avatarBen

    He’ll do one term, ending with a huge liberal groundswell that will make B.O. and H.C. look moderate. Both sides can play the Executive Order game.

     
  3. avatarLloyd Graff

    I will rephrase the question. Will Donald Trump last more or less than 3 years (36 months) in the Presidency. The over-under is 36 months. Which side would you bet on?

     
  4. avatarJoe O'Toole

    Lloyd, you are getting ridiculous! What an ignorant question to pose about the duly elected US President. Shame,shame, shame on you.

     
  5. avatarLloyd Graff

    Joe, I don’t think it is an ignorant question. And it s not a personal statement about Trump. I like some of the stuff he has done. Other things like immgration I thnk are dead wrong.
    The question refers to the legitimate possibility that he quits, is impeached or dies or is incapacitated within 3 years. Many people are currently organizing an impeachment attempt on Trump. I am interested in whether our readers think he will last 36 months, more, a second term. What do you think.

     
    1. avatarJoe O'Toole

      Lloyd, you use the word “impeachment” and attempt to deflect it on “others.” I stand by my above statement. I think that the snowflakes will melt soon.

       
    2. avatarTerry

      LLoyd, he was elected by the people , these airheads rioting are just a trend and will finally tire of it, more than likely and Clinton/Obama/Soros thing anyway.
      I believe he will get a second term, as for the
      ‘ immigration policy he is trying to put in place , it’s about time, come into our country properly and go by our constitution or stay where they come from and make their country great.

       
    3. avatarallen

      Is it an ignorant question if it springs from ignorance?

      Unless you know something the rest of us don’t, that Trump has a case of Congolese Pharphalonus of the Blowhole and will die in three years, that he’s Vlad Putin’s boy toy or that Bob Lee Swagger has a bone to pick with Trump, the question isn’t informed by, well, much of anything. It’s a hope, probably not yours based on past columns, couched in terms of a question.

      President Trump appears to be as healthy as a horse and in view of the fact that his father died at 94 is set to be around for a while.

      Given what Bill Clinton did, and avoided impeachment, that route to a premature end to Trump’s presidency seems a faint hope. Maybe “hysterical” ought to replace “faint” but it’s not a bet someone with any regard for the odds would take.

      I won’t give the third possibility any consideration beyond mentioning that those who look to violence to undo the results of a legitimate election are contemptible no matter how feverishly they’re certain they’re right. Anger tempts me to vulgarity so I’ll just end, on that subject, here.

      As for the bulk of the column, pure gambling i.e. with little scope for the exercise of intellect nor acquisition of knowledge, is generally seen as pretty dumb. That’s why so many sports columnists and sports books find employment.

      Everybody wants an edge and in the used machinery business that edge comes from experience and smarts. More of one can offset, within limits, less of the other.

      In the craps “business” the only edge is being smart enough to walk away when the dice have beaten you up enough.

       
  6. avatarGordo

    I wouldn’t worry too much about him not completing his term, there was an effort to impeach Obama too which never really got anywhere.

    On the immigration, are you addressing legal immigration or people showing up in the country expecting welfare. I would classify these as 2 different subjects. I had 4 grandparents who immigrated from Sweden in the 20’s, and they went through a lot of work to become a citizen. You cant class that with someone hopping a fence and having a baby here and assuming lifetime welfare.

    Incapacitation could be a possibility. I know running a business can be pretty stressful at times, like when your insurance premium goes from 66k a year to 257k a year with less coverage. Being the president and dealing with many of the people he has to deal with is so far over my head I cant even understand why anyone would want to take it on.

    When Trump ran, he came to impart some change. It is going to be darn near impossible, but at least he has the stones to try. Our government with its spending and regulations has gotten so bad it is hard to believe it can be fixed any more.

    But it can. And, I for one don’t think Hillary’s goal was to fix it.

     
  7. avatarDonnie Kratzberg

    He builds the wall or gets it started where completion is in sight and we give him 4 more years. 1st president that I can remember that took office and started doing what he said he would do when he was campaigning. If he didn’t have twitter he would be a genius.

     
  8. avatarRobert Arthur

    It is refreshing to hear someone in office who isn’t always trying to say what he thinks we want to hear. The political system is “broken” because politicians are more concerned about their own personal agenda, rather than representing the people.

     
  9. avatarEmily

    Lloyd, It’s interesting to me how everyone assumes you’re a typical liberal. Knowing for a fact that you’re not makes me think about how far right the Republican Party has moved. If you don’t agree with Ann Coulter and Rush these days you’re immediately dismissed as a snowflake, stupid, and un-American. Hopefully the conservative ideological pendulum will start swinging back the other way soon, because the New Republicans are an angry fearful bunch that are morally deficient. It’s especially ironic to those of us on the outside as we watch them filter into church on Sunday and spew nastiness on Monday. Something’s really off.

     

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