Betting on Yourself

I think I can learn something from anybody. I think there is a lot to be learned from James Holzhauer who has won $1,691,000 on Jeopardy and is still going strong.

I don’t watch the program, but I have seen it on occasion and remember Rosie Perez in the movie White Men Can’t Jump prep for the show like her life depended on it, hoping for her chance to make a big score. It is a quiz show competition with a betting component which is the perfect combination for James Holzhauer, a 35-year-old Chicagoan who is a trivia champion, math whiz, fast-twitch buzzer, and professional sports better.  He is the archetype of the Jeopardy savant that Rosie Perez dreamt of becoming.

His winning approach naturally depends on his breadth of knowledge and quick-twitch ability, but what sets him apart is his aggressive and unconventional strategy. James starts with the most difficult questions, trolls for Daily Doubles, and bets boldly, often risking his earnings in an effort to quickly put away his opponents.  He knows he is on a streak and so do most of his opponents, which gives him a big psychological edge.

His mantra is “all I have to lose is money,” and he knows he’s the smartest dude on the block, so he continually overwhelms his tentative opponents no matter how skilled they are.

I think there is a lot to be learned from Holzhauer.

I love his confidence and boldness. He believes in himself and that is vital to be a consistent winner. Intimidation can be a huge factor in sports and business. It does not have to go with obnoxiousness. You know when your opponent knows in their heart of hearts that they are going to win.

What really sets James Holzhauer apart is his audacity, his calculated chances in the betting.

In my own business career I have usually been cautious. My son Noah delights in questioning most of my business decisions, often challenging me for hedging my bets. Having seen a million things go wrong in my long business career I have good reason to be cautious, but I know I can learn from the aberrant tack that Holzhauer takes to bet big when he thinks he has superior knowledge.  This is how you win in sports betting and Jeopardy and probably in business over time.

A fascinating complement to the James Holzhauer story is the spotlight on Alex Trebek, the host of Jeopardy since its inception.  He is battling pancreatic cancer at the same time he is hosting the show and pulling in big ratings. Alex is showing supreme confidence in himself as he does five shows in a taping session while dealing with chemotherapy.

My hope is that he and James keep charging boldly into the dark nights of uncertainty.

Question: What is the best bet you’ve ever made?

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Swarfcast Ep. 38 – Connecting on Cobots: James Persenaire of FANUC

By Noah Graff

On today’s podcast I spoke with James Persenaire, a district manager at FANUC America Corporation. James gave insight into the strengths and weaknesses of collaborative robots and how Fanuc’s collaborative robots differ from competitors such as Universal Robot. He also addressed misconceptions about traditional robots that they are expensive and dangerous. He emphasized that the integration of the robot is the primary factor in both its cost and safety.

Listen to the podcast beneath the video.

Question: Have you brought robots into your machining operation?

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Mayday Mayday

Around the world May 1 is May Day, a holiday celebrated by Labor as a demonstration of its power and determination.

In the United States it is another work day and essentially forgotten as is the organized labor movement except by government workers and teachers. The industrial labor movement in America still has its vestiges in the United Auto Workers and Steelworkers and electricians, but it is a withering movement in the small- and medium-sized businesses I deal with.

Retail is a wasteland for organized labor. UPS is organized, but FedEx is not. Uber and Lyft are totally nonunion. McDonald’s and Starbucks are almost completely nonunion. Amazon is non-union.

Politically, the alliance of organized labor and the Democratic Party was significantly devalued by Donald Trump in 2016. He won Ohio, Pennsylvania, and Wisconsin with the votes of union and nonunion labor, and the Democrats were devastated and angry.  Even in the recent Chicago mayoral race, Toni Preckwinkel, who built her power in Chicago with the support of the Teachers Union, was humiliated by Lori Lightfoot, managing partner of one of the most powerful corporate law firms in Chicago.

What happened to labor unions in America?

Haymarket Riot in Chicago, May 1st, 1886

Haymarket Riot in Chicago, May 1st, 1886

A lot can be attributed to Richard Nixon and Henry Kissinger’s rapprochement with China in the early 1970s.  They saw it as a way to blunt the power of Russia, but it also set the stage for the development of China as an economic rival for America.  Our increasingly open trade policies and China’s incredibly successful combination of capitalism and communism captured millions of U.S. jobs and gave corporate America an easy option to combat organized labor.  Self-serving labor leadership in big unions like the Teamsters hurt it.  The opening of the South to big corporations badly wounded unions like the UAW.  Independent steel companies like Nucor opened plants in small towns and gave bonuses for production which whiplashed unions like the United Steelworkers.

To most young people today union membership is barely interesting unless they have a connection to get into a locally strong organization like Chicago’s electricians union, which has connections with big developers who have valuable relationships with key politicians.  This union style is not apt to draw big crowds to demonstrate on May Day.

It’s an insider’s game now.  If that approach continues organized labor will soon be seen as a relic of Depression days to be occasionally studied in American history classes.

Question: Would you want to be in a union?

 

 

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To Spray or Not To Spray?

By Lloyd Graff

I am in the process of making a lot of changes in my surroundings. The axiom used to be that as you get older it gets harder to change, but I don’t find that to be true. Seeing friends and associates get sick and die makes it easier because I want to sandwich more stuff into my life while I still can. If I have the energy and the money to replace the old appliances in the house and sand the floors and paint the walls I want to do it now.

The redo in my house has nothing to do with enhancing its value. Where I live home prices have stagnated for 30 years. Whatever money I’ve spent is an investment in happiness, not appreciation. Maybe that is the ultimate value play, anyway.

This year I’m spraying the apple trees on the Graff-Pinkert property. They have a fungus on the bark, and last year we lost the entire crop. This year I hope to see a big crop of tasty, red Jonathan apples in September. Is it an economic judgment to spray? Hardly. It is all about the fun of picking and eating the fruit.

I think of all the money I have sunk into my warehouse over 35 years. Recently I spent $10,000 to remediate moldy walls and drywall. It was an investment in health, but it really brought me no joy. Of all the investments I have made in the property the one that undoubtedly has brought me the most pleasure is paying a young artist, Mike Eisenwasser, 15 years ago to paint a mural on the side of a 40-foot container next to my warehouse. I see it every time I drive onto the property and every evening when I leave. I look out on it during the day. It is colorful and symbolic. It tells a story that gives meaning to my life and work, of connecting people through commerce and writing. It gives a visual voice to how I feel about my work.

used machine business graff pinkert with apple treesI think the value of art and storytelling is really undervalued in manufacturing businesses. People like to work in pleasant surroundings. I think customers often want context for what they are buying, whether that is in a story on the website, a sales person embodying the product, the packaging of the material, the voice that answers the phone, or the follow-up or apology for mistakes or delays.

The people who think everything in business is by the numbers are wrong. Decisions often are not clear cut in business. If it is a close call the winner is usually the one who is considered the most reliable or easy to work with or caring.

I imagine lots of folks are bewildered that Noah and I spend so much time on stuff that may seem frivolous and frothy to the community we serve. From a financial standpoint Today’s Machining World and the podcast are hardly great investments in time and energy. But Noah and I view ourselves as storytellers and artists. We do this work because our creative souls long for expression. It gives us joy to reach out to the thousands of people who connect with us frequently or once in a while.

I think the connections we make do ultimately bring us customers but that is not the purpose of this investment. We do it because we love to do it. We do it because we almost have to do it.

Question: Can you justify epoxying a factory floor?

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Swarfcast Ep. 37 – Finding Purpose in Your Work with Brent Robertson

By Noah and Lloyd Graff

Have you ever asked yourself what your purpose is when you go to work in the morning? Sometimes I wonder if I’m spending enough time making an important impact on the world, or if I’m too wrapped up in the mechanics of making deals on machine tools.

In this week’s podcast we interviewed Brent Robertson of Fathom. Brent is a business philosopher and consultant. His mission is help people discover what their purpose is, beyond just making money. He has found that if he can give people purpose in what they do, it inspires those they work with and their clients as well.

Listen to the podcast below the video.

Question: Is making money purpose enough for you?

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Machining the Fair Way

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

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?

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Swarfcast Ep. 36 – Ben York on Taking the Art Out of Machining

By Noah Graff

In today’s podcast I interviewed Ben York, an inventor and consultant for machining companies. I met him at the 2019 Precision Machining Technology Show where his company, Theory 168, was presenting his Perfect Zero Alignment system. The system uses a camera installed in a CNC machine to set work coordinates and align and set tooling (see demonstration video below).

Ben said his mission is to “take the art out of machining.” He wants machining to be easy enough so people can do it even if they don’t know the “tricks of the trade.” In the podcast Ben talks about his process of inventing his new product and starting a company in the machining field.

Listen to the podcast below the video.

Question: Is machining an art form?

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Machining Show Business

I attended PMTS, the exhibition put on by the Precision Products Association last week, not really to sell screw machines, but to learn and connect. Accomplishing this goal gave me a satisfaction and closure that I’ve never felt before at a show. Here’s the crux of what I learned.

This was the happiest crowd I’ve ever seen at an event of this type. The endless mope of the last recession finally has drifted away.  Nobody mentioned losing work to China which was a theme for so long. The prevailing vibe was that big companies are finding China a scary place to make large bets. Costs are converging with America finally, and production mistakes and logistical headaches make China a wash as far as costs go. The Trump tariffs cut both ways as far as competitiveness is concerned, but they do emphasize the uncertainties of depending on a competitor for crucial production. “I’ll make it in China,” used to be an automatic response by large corporations to a production requirement. Today it isn’t. This does not mean a torrent of work is coming back, but it is more than a trickle. The major point is that the gutting of American manufacturing has ended, and the mood of suppliers has changed to positive.

Another nonissue for PMTS participants was the worker shortage. In three days of connecting with participants I never heard it mentioned. My sense is that owners and companies are adjusting to the employee scarcity. Interest in robots is keen for the dumb jobs that used to require thoughtless loading and unloading. Robotics programming and training is a hot category. Recycling 5- to 10-year-old refugee robots is getting to be an important business category.

Lloyd, Noah, and Rex at the PMTS 2019 Graff-Pinkert Booth

Lloyd, Noah, & Rex at the PMTS 2019 Graff-Pinkert Booth

The large number of young people attending makes me think they are starting to get intrigued by interesting factory work and becoming disenchanted with piling up debt in four-year collegiate programs. I also saw more women who have moved into shop floor work and supervision. It is still a piddling percentage, but growing.

I found it odd that the machine tool behemoths like Mazak, DMG-MORI, Okuma, and Doosan chose not to display. They seemingly blow millions of bucks on IMTS and then claim poverty for off-year shows like PMTS. This leaves the field open for specialty builders to make a big pitch for capex budgets.

Davenport made a splash with their CNC multi-spindle. Many old Davenport folk gasped at the $345,000 price tag, but compared to European 20mm multis the price looked provocative. They sold two the first day.

All of the Swiss CNC folks showed except Tornos. The field is crowded, with Citizen, Star, and Tsugami hogging most of the market.  Citizen folk were beaming as they were coming off their best year ever, their fiscal year having ended just a few days before in March.

Reflecting the boom in Swiss sales, Kevin Meehan of Edge was ebullient about his past year, selling record numbers of FMB and Taiwanese bar loaders and hiring the staff needed to get them out the door and install them.

Yet this was not a crowd of people jumping for joy and putting up new factories. The folks I talked to were pleased but not complacent. Nobody wanted to talk politics, which was not the case during the later Obama years. OSHA was never mentioned.  People wanted to buy stuff, update, improve, but not add square footage. They wanted to buy shops to get customers and employees, not bricks and roofing. It was a Midwestern crowd, an increase over previous years in Columbus, Ohio. I think that was not an indictment of Columbus, but a reflection of happier times and greater convenience.

Hopefully the 2021 PMTS will show similar trends and even greater optimism.

Question: Do you still go to trade shows? Why?

 

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Swarfcast Ep. 35 – Graeme Sinclair on Precision Machining in Australia

By Noah and Lloyd Graff

In today’s podcast we interviewed Graeme Sinclair, owner of Parish Engineering, a prominent precision machining shop in Australia. Graeme has been in the machining business for 60 years, since he served his apprenticeship at age 14.

In the interview Graeme discussed the challenges faced by machine shops in Australia verses the rest of the world, his eclectic taste in CNC machines, and his passion for the game of squash. Sinclair explained that one reason he has many different types of equipment is that automotive companies have shut down their operations in Australia, meaning a lot of high volume work has disappeared.

Question: Would you like to move to Australia?

Listen to the podcast on the player below.

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Hoops Heaven

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.

NCAA Basketballs await this year's Final FourThe 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?

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