Category Archives: Current Events

Trade Wars

July 31, 2019 • 11 Replies

By Lloyd Graff

Today is the last day of the Major League Baseball trading season. I am a nutty baseball fan, Chicago Cubs variety, who follows such folly with a fanatic’s intensity.

Maybe it’s the machinery dealer in me, but I love the trading. Every team is looking for that player who with change of scenery turns into a butterfly from a caterpillar. Other times non-contending teams will trade a star at the end of his contract for a potential star at the beginning of his career. The classic case of this was in 2016 when the Cubs traded their best young minor league player, Gleyber Torres, for the services of Aroldis Chapman, the hardest throwing relief pitcher in the game who was at the tail end of his contract. Chapman, who could throw 105 mph, helped the Cubs win the World Series in 2016. Gleyber Torres was an All-Star this year for the Yankees. Chapman left the Cubs after 2016 and re-signed with the Yankees.

These “deadline deals” can be transformative for a team. The Cubs made a great deal with the Texas Rangers in 2012 trading Ryan Dempster, a once great relief pitcher, and a decent catcher, Geovany Soto, for pitcher Kyle Hendricks, then a minor league pitcher out of Dartmouth who had a fastball that could not break the proverbial “pane of glass.” In a little less than a year Hendricks had become one of the best pitchers in the game, and Dempster had retired.

As I was preparing to write this piece I had a heretical thought for a baseball fan. Does the act of trading a player make him a kind of high-priced slave? The player usually has no say on where he might be sent. He has to uproot himself and maybe his family on a moment’s notice. He immediately has to acquaint himself with an entirely new group of teammates, some of whom may be hostile because he threatens their position.

The NBA players are pushing back on the notion of easily trading players. Star players like LeBron James, Kawhi Leonard, and Anthony Davis can almost call their own landing places and influence whom they would like to play with. In football the Le’Veon Bell holdout at Pittsburgh is a precedent for important players to command more leverage in their employment, though the NFL seems to be very hardline in resistance.

I don’t know exactly how things will play out, but the players are destined to get a say.

Question: What are the best or worst sports trades in history for you?

At the Track Every Day

July 24, 2019 • 8 Replies

By Lloyd Graff

Trading in used machinery is sophisticated gambling. Some people find it strange that I am utterly indifferent about sports gambling. It has no allure for me. I once lost $25 playing 21 at a casino in Vegas and felt stupid – not for losing, but just for walking into the smoke-filled room. Yeah, it was a long time ago.

And now, after such a long, long time in the screw machine trading and refurbishing business, we have the exhilarating and scary opportunity to reinvent a new business by finding a new cohort of machines to gamble on. I’m finding it exciting, even enthralling at times, and pretty damn scary, too.

A very smart guy once told me that “if you don’t feel ‘it’ in the pit of your stomach, you aren’t bidding enough to get a deal.” He was right, but that doesn’t mean fear guarantees your success. It only guarantees doubt and restless sleep.

In our machinery business, we are confronted with the wrenching reality that our traditional customers are not very interested in buying what we’ve always sold. It’s a bit like a car dealer specializing in sedans and convertibles in a pickup truck and SUV world. Not much action. The obvious path is to switch to pickups and SUVs, but the downside is that almost everybody else has done the same thing. For a used machinery dealer, the analog is to jump into the used Haas lathe and vertical machining center market. But that is awfully boring and terribly competitive. There is an auction every Tuesday and Thursday with Haases in it. The only sleepers are in sofa beds.

Our strategy has been to go to Outer Mongolia searching for bargains and hauling them back to civilization. My son Noah likes to travel to Outer and Inner Mongolia so he wants to try this approach.

I also want to search for the guavas and jackfruit in the produce department, the exotics that only the people with weird tastes dare to inhabit? This is a long jaunt from the Acmes and New Britains of my youth that we once sold by the truckload.

Our real niche seems to be in the European descendants of the Acmes and New Britains, the CNC multi-spindles like Index and Schutte that are so darn complicated and daunting that they confuse even people who have grown up with their simpler, now often discarded, cousins.

When you place bets on machinery you don’t know like family, you are going to lose some of the time. Try to tell your banker, “Well, I bought that washer, that robot, that Hydromat thing, to experiment.” They may get the intellectual gambit, but they get rather annoyed about losses. They think you are always supposed to win in business. This is when resilience and being part of a team that understands the value of defeat as an educational tool, one that realizes that business is a continuum, are so vital. To succeed in the long game of business you have to build in defeat cushions. If you are going to gamble you are going to lose. If losing is “unacceptable,” which seems to be the position of football coaches like Urban Meyer and Jim Harbaugh, you are going to end up desperately needing a shrink or a sabbatical.

I hate losing or being wrong, but I also love the action of being in business and trying really hard to win every day, knowing that setbacks are inevitable, and dealing with change is maddening.

I think about the option of leaving the game. Noah often asks me, “Dad, was it always this hard?”

Honestly, I can’t even remember, Noah. Let’s just get it on.

Question: Do you view business as gambling?

Better With Age?

July 17, 2019 • 5 Replies

By Lloyd Graff

I watched one of the greatest tennis matches ever played on Sunday. I suppose you are thinking, who cares about tennis on the TMW site, but give me a chance on this.

Roger Federer, perhaps the greatest tennis player of all time with 20 Grand Slam titles, dueled Novak Djokovic, perhaps the greatest tennis player of all time with 15 Grand Slam titles (at the time). It was Wimbledon, in London, England, the biggest tournament of the year, perfect weather, playing on a grass court. Both players had their parents attending. Federer’s wife and their four kids were in the family box seats, and Djokovic’s parents were with his son.

It had all the ingredients of a classic. These guys have played each other almost fifty times. They respect each other, but they don’t really like each other. They are lions in the tennis jungle. The biggest of rivals, these matches are what they live for. They are wars. The winners have the most endurance, focus, and luck.

Sunday they played 5 sets and were tied 12 games each in the 5^th when a newly installed tiebreaker rule went into effect. Federer and Djokovic are old men as singles tennis players go. They are 70 years old between the two men. Federer has been playing major tournaments for 20 years, Djokovic 15 years.

The point is that age is overrated today. In business, the arts, politics, sports, talent is what counts. If you can do it, you do it. If you can’t, get out, but don’t let “them” tell you when you are finished.

The crowd Sunday was almost entirely for “Rah Jah, Rah Jah,” as they indicated by chanting between many of the points. Novak said after the match that he attempted to hear the crowd chants as “No Vak, No Vak.” He said it worked most of the time. Djokovic is used to being the hated favorite and has learned how to use it for himself rather than an excuse to lose. There is a lesson for us all in his toughmindedness in the biggest matches with everybody against him. He would glance at his family box to see his parents, sometimes holding his young son, cheering avidly for him.

These men are “all in” regarding training, fitness, nutrition, and the mental game. They know their bodies. Between matches they use intravenous hyperalimentation to get the extra nutrients to recover from the previous match and be in top shape for the next one. Sunday, after five hours of the most grueling exertion, they were both hitting 120 mph serves on the lines, playing long rallies, and going to the net and racing back for lobs. Their concentration was immaculate—and astounding.

A match like Federer-Djokovic is an inspiration. It says to me that just because other folks are retiring or cutting back it does not mean I have to. Just because I had a heart attack 11 years ago it doesn’t mean I can’t be active now, at 74. It also tells me that if I am serious about business or fitness I have to be committed to it.

Will Roger and Novak eventually be supplanted by great new players? Yes, but nobody appears to be ready to beat them now.

They aren’t going to make it easy, either.

Question: Have you gotten better with age?

The Journal Deserves a Medal

May 29, 2019 • 6 Replies

If you are interested in women’s soccer, obscure foods, and the tortured lives of Congressional Medal of Honor winners, last weekend’s Wall Street Journal provided hours of Gatorade for your thirst for quality content.

As a writer I appreciate a well-researched and written piece. As a former magazine editor, I know what it takes to put together a readable monthly publication. I can only applaud the editors of the Journal who produce a superb publication five days a week and an absolutely brilliant one on the weekend.

As the supposed competition, The New York Times and Washington Post, have deteriorated into political rags and the TV competition from the networks plus NPR are now biased jokes, the Journal shines like a ruby. On the financial side, Bloomberg is a legitimate challenger, but only on the business news.

I decided to read the WSJ weekend issue cover to cover over the recent holiday and was blown away by the quality and variety of articles. Let me give you a brief review of just a fraction of this one issue.

On Page One was a photo of Dakota Meyer, a recent Congressional Medal of Honor winner, under the caption “Medal of Honor’s Heavy Burden.” It directed you to the “C” section for the piece by Michael Phillips, so appropriate for Memorial Day weekend. Phillips’ article was a 2000-word series of interviews with CMH recipients beginning with 71-year-old Gary Beikirch who received the Medal in 1973 for his actions in Vietnam. Beikirch’s captioned quote was, “it is harder to live with the Medal that it was to earn it.” He was a Green Beret medic whose unit was attacked by North Vietnamese at a Special Forces outpost on the Laotian border. He was badly wounded but continued to treat his comrades while he was carried on the shoulders of two Vietnamese aides.

When Gary arrived home, “filled with rage and racked by guilt,” he decided to head for New Hampshire and live in a cave in the White Mountains, looking for “the peace and contentment he had lost in the jungle.” He took classes at a local seminary, and a few weeks after moving he found a note in the local post office instructing him to call the Pentagon. He called and found out about the CMH award and that he had an appointment to visit President Nixon. He met Nixon, who fitted the star-spangled blue choker and wreathed medal around his neck. A couple days later he returned to the cave with the Medal in his duffle bag. He did not take it out for seven years.

Phillips’ soulful article continued with interviews with Ron Shurer, Flo Groberg, and Dakota Meyer, all of whom were wounded heroes who saw their comrades die. They are all living with the hell of the day that won them the CMH. They all wish that day, that brought them personal fame and honor, had never occurred. Dakota Meyer says “it represents the worst day of my life.”

* * * *

I read at least a dozen more memorable articles in this one newspaper. There was a long, thoroughly researched piece on Huawei Technologies, the Chinese electronics firm which epitomizes the America-China discord regarding intellectual property theft, and competition between the two countries. Five Journal writers had the byline on this article, detailing how Huawei plays the game of business. It was a damning article, but one written without an obvious editorial edge. It chronicled numerous lawsuits filed by electronics firms, large and small, illuminating Huawei’s ruthless pursuit of technical knowledge by any means available, including copying competitor Cisco’s products so closely that bugs deliberately left by Cisco and typos in the manuals were in Huawei products. A comprehensive, beautifully researched Journal piece.

Next to the Huawei article was one on Novartis attaining approval for a gene therapy cure that treats an inherited disease called spinal muscular atrophy which kills most babies it afflicts by the time they are two years old.

There was also a fascinating feature about the hunt for the next “superfood,” mostly in obscure locations in West Africa. Entrepreneurs like Phillip Teverow are looking for the next quinoa and kale. He was pushing “fonio,” which looks a lot like golden sand, at Whole Foods in Brooklyn trying to get adventurous eaters to give it a try. The writer, Jessica Donati, also discussed moringa, a chewy green “energy plant” and baobab fruit from the biblical “tree of life.”

Also on the front page of the weekend Journal was the beginning of an in-depth article on Tesla and what its falling stock price was all about. Written by Charley Grant, it was a thorough piece about Elon Musk’s challenge to establish Tesla before the rush of electric car competitors start to really challenge the company and before their cash runs out. Elon Musk is probably the most interesting and gutsy entrepreneur in the world. This article told us how close to the edge he continues to run.

Another piece tucked in the back of the “Off Duty” section by their auto writer, Don Neil, reviewed the new Audi e-tron and compared it to Tesla Model X. According to Neil it fell short of the Tesla in several significant ways.

I could keep going about the two hundred different unique articles in this one issue. But one that will stay with me is an op-ed piece by Burgess Owens, a former NFL player for the Oakland Raiders and today a writer and entrepreneur.

His great, great, great grandfather came to America shackled in a slave ship. He was sold at an auction in Charleston, South Carolina, but eventually escaped with others via the Underground Railroad to Texas and ultimately became the owner of 102 acres of farmland and an entrepreneur.

In the article, Owens decried the notion of reparations for African Americans as divisive and demeaning for whites and blacks. “The idea of reparations demeans America’s founding ideals. A culturally Marxist idea promoted by socialists, reparations denies the promise granted by God that we are truly equal.” He called it a cynical ideology promoted by an elitist class to divide us.

The Wall Street Journal is a consistent masterpiece of variegated content. Last weekend’s issue was truly remarkable.

Question: What are you reading these days? What have you given up?

Machining the Fair Way

April 16, 2019 • 6 Replies

Francesco Molinari, the Italian professional golfer who has entered the top tier of pros who are factors in every major tournament, led by two strokes going into the final round of the Masters Sunday.

I have followed Molinari with more than a casual interest of late because he has used a putter made by a 90-person job shop just down the road from Graff-Pinkert in Tinley Park, Illinois. I met the owner, Bob Bettinardi, at IMTS. We were both resting our bones for a few minutes next to the Universal Robots exhibit, and we talked a bit about CNC mills and his putters business, which has evolved from the job shop that was its origin.

Bettinardi had a golf shirt on with Bettindari Golf’s logo. He has built a product with worldwide reach out of a small Haas mill shop. This is the dream of so many independent entrepreneurs in our machining world who long for the margins and stature that come from a world-renowned product.

Bettinardi’s branded putters sell for $300-$400 for a club similar to the stick Molinari used to win the British Open at Carnoustie last year. He also makes an $800 putter with a copper insert.

For a shop running VF-3 Haases with less than 100 employees, Bettinardi is playing in the big leagues with Callaway Golf and Mizuno dominant in the golf club world. It appears Callaway lured Francesco Molinari away from Bettinardi this year though Matt Kuchar, still a prominent pro, and many other up-and-comers are still using the Tinley Park shop’s putter.

Francesco Molinari’s former Bettinardi Putter

A Bettinardi faces a daunting challenge going up against the Callaways of the golf world. They have enormous marketing budgets, and a putter’s design can be easily copied. I do not believe Bettinardi has a patented putter. He has to make a product that pro golfers adore, convince them to stay with it for years, and hope his devotees win big tournaments to popularize his sticks. A company doing maybe $20 million a year in sales can do the golf shows and hit the big retailers, but it is always an uphill battle against the Callaways who have constant exposure in the equipment market and have their name on half the golf bags on the pro tour.

This is why small, closely held family businesses like Bettinardi Golf sell out to the behemoths. I do not know if Bob will sell out or if Callaway, with a market cap of $1.6 billion, will eventually crush him by stealing away all the Molinaris of the golf world when they get hot.

As an independent observer and former mediocre golfer, I hope he keeps milling fantastic, elegant putters in Tinley Park, Illinois, and selling them direct on Amazon for $399 a pop. I’d like to see him buy a dozen more Haas mills and put “Made in USA” on every lovely club he makes.

Maybe today Francesco Molinari will wonder if he could have beaten Tiger Woods at the 2019 Masters if he had had the Bettinardi in his bag.

Questions:

Is there an even playing field in the machining business?

Has Haas helped even the playing field?

Hoops Heaven

April 2, 2019 • 2 Replies

I have just completed an indolent weekend of imbibing sports on TV: NCAA basketball winnowing 16 terrific college teams down to the Final Four and the Chicago Cubs opening the season with the Texas Rangers. Just for the added whipped cream I watched the Miami Pro Tennis Tournament that Roger Federer won, the 101st significant tournament victory of his career.

I thought about business a bit, responded to emails, ruminated about blog topics, changed my travel plans to the Precision Machining Technology Show in Cleveland this week, and did a rigorous work out, but mostly I relished some superb basketball and suffered through deplorable relief pitching by the Cubs. At least I could share my pain with my son-in-law, Scott, via text to ameliorate some of the
agony. And it’s only April. Six months more of baseball trauma.

I have not followed college basketball much this year, and I don’t bet on sporting events, but I studied up a bit before the Tournament and listened to Charles Barkley and Kenny Smith enough to quickly pick up the 2019 narrative.

Duke did finally lose by one point to Michigan State on Sunday, 69-68. Tom Izzo of MSU has a group of solid college players, none of whom may make it in the NBA. They are led by Cassius Winston, a shrewd, savvy guard who makes big plays but does not stun you with any single facet of his game.

The Final Four this year will be made up of Michigan State, Auburn, Texas Tech, and Virginia. None of these four teams have a Top Ten prospect, except possibly Jarrett Culver of Texas Tech, who is probably a 15-20 pick if he forgoes his final two years of eligibility.

Auburn’s top player, Chuma Okeke, tore his ACL in the Elite Eight game victory over number one seed, North Carolina, yet Auburn, a five seed, still beat a Kentucky team of High School All Americans to reach the Final Four.

The only top seed to reach the Final Four is Virginia, who should have lost, but with two seconds left on the clock and losing by three points made a one-in-a- hundred play against Purdue. Purdue had deliberately fouled so Virginia would not get a chance at a three-point field goal to tie the game. The free throw shooter got only two shots. Everybody knew that if he made the first free throw he would attempt to miss the second, hoping for a rebound off the rim that a Virginia player could catch and then shoot successfully to tie the game. I have seen this attempted many times, but I have never seen it work. But on Saturday a blond African kid, yes, from Guinea, Mamadi Diakite, plucked the rebound and hit the tying shot with the ball in the air when the buzzer went off. Virginia then went on to win in overtime over the Boilermakers.

I have been watching the NCAA college tournament since 1965 when I went to Portland, Oregon, with the Michigan team and saw Bill Bradley score 56 points in a runner-up game and then Gail Goodrich score 43 to propel UCLA over the Wolverines for the title.

I know the bad stuff about college basketball. The players are exploited by the coaches and the NCAA who make billions of dollars off the TV contract. Some players rarely go to class like Derrick Rose at Memphis, but Rose and his coach, John Calipari, knew what they were doing. Memphis won the NCAA that year, but scandal took it away from them. Rose got his $50 million NBA contract
despite hobbling knee injuries, and Calipari nailed perhaps the second-best coaching job in college basketball, after Duke, with Kentucky.

I know college basketball and football are a mockery of amateurism. Nike, Adidas, and Under Armour give under-the-table money to coaches and players. I still love to watch it.

It is such a different game than when I watched it in the 1960s, when Adolph Rupp of Kentucky put only white
boys on the court. African American players dominate the sport, but there are players from all over the world in the NCAA tournament. Gonzaga, a little Jesuit school in Spokane, was a top seed this year, and their best player, Rui Hachimura, was from Japan.

The Finals will be played this coming weekend. If you were a betting person you could have gotten 70-1 odds on Auburn two weeks ago. None of the Final Four are clear favorites. And that is a wonderful thing. I’ll be watching. Will you?

Question: Do you care whether college basketball mocks the amateur ideal?

Michelle and I on Euclid Avenue

February 27, 2019 • 13 Replies

I’ve been listening to Michelle Obama’s wonderful autobiography, Becoming, with rapt attention. She is a brilliant writer and a terrific storyteller. What makes the book especially fascinating for me is her references to her birthplace and longtime home at 74th and Euclid in Chicago, 7 short blocks from my home growing up at 67th and Euclid. I’m 19 years older than Michelle, but we share similar memories of growing up on the South Side of Chicago. Yet many of our memories are quite different because of race, ethnicity, and the times.

Michelle Robinson came from a lower middle-class family, but they were rich with togetherness and their parents’ commitment to upward mobility for the two children. Michelle’s dad, Fraser, worked for the Chicago Water Department, checking filtration meters constantly at the enormous Navy Pier facility. It was a safe union job with the city. Fraser was also a Precinct Captain in his neighborhood, making sure everybody voted for Richard Daley and the Democratic machine.

Michelle’s mother, Marian, was a mostly stay-at-home mom who was home at lunch to make sandwiches for Michelle and her friends, and an emotional rock for the whole family, both then and now. She also lived in the White House during Barack’s time in the Oval Office, making sure the Obama daughters had all the love and guidance Michelle and her brother Craig had.

Seven blocks away from the Robinsons, my mom stayed home to watch over me, my sister, and brother, making all of our meals and lending constant support. Like the Robinsons, who went to all of Craig’s basketball games (he played Division 1 in college), my parents always went to my basketball and baseball games. Several years earlier, I played baseball in the gravel schoolyard at Bryn Mawr Elementary, which Michelle attended, before I went to Hebrew school, three days a week. During the summer, I played Little League and Pony League at Rosenbloom Park, which bordered the Robinson house.

Despite our proximity and similar interests and outlooks, our childhoods did differ. Growing up on the South Side of Chicago Michelle and Craig Robinson constantly dealt with racism, not the overt type that kids encountered where my wife Risa grew up in Charlotte, North Carolina, but a type of debilitating racism stemming from diminished opportunities, low expectations, and schools with low-achieving classmates.

I went to an elementary school two decades earlier that had similarities to Bryn Mawr. There were black kids in my class, but the school’s Irish teachers treated white kids, who made up about 2/3 of the class, with respect and had high expectations for our success. The black kids, with a few exceptions, were treated as second-class. The 48 kids in our class were segregated by test scores, which dictated which row of eight we sat in. I was conscious of the unfairness and unkindness inherent in the seating arrangement, but the idea of complaining about it was not in my vocabulary at the age of 10 or 11.

Michelle Robinson graduated from Bryn Mawr and attended Whitney Young High School, a racially diverse, elite magnet public school attended by many of Chicago’s most affluent African Americans. This was the alternative to attending South Shore High, which was 98% black but a couple of blocks from her home. Whitney Young was an hour and a half bus ride on two Chicago buses for her, and the kids paid their own bus fare.

I would have gone to Hyde Park High School, which was also 98% black, but I got into the prestigious University of Chicago Laboratory School, a private school a few miles away, though I usually received a ride from my mom or dad in the morning. My classmates were an amalgam of kids from U of C parents, Jewish kids from the South Side, and commuters from around the city. About 20% were black.

Michelle writes vividly about friends she had growing up, especially one of the daughters of Jesse Jackson, who lived in a beautiful stone house a few blocks from me, although I did not know it at the time.

Michelle graduated from Whitney Young high school and went on to Princeton in 1981, as had her brother Craig, two years earlier. After Princeton, she earned a degree from Harvard Law School and a position at probably the most prestigious law firm in Chicago, Sidley Austin LLP. Nineteen years earlier, I attended the University of Michigan, then joined the Illinois National Guard, and later started peddling screw machines in an office on the South Side of Chicago in 1969.

Michelle eventually made it to the White House with Barack, whom she helped recruit for an internship at Sidley Austin. But both of us will always share Euclid Ave.

Question: Do you ever go back to where you grew up? How does it feel?