octubre 20, 2004

The new business - FSBOAustinTX.com

I haven't written nearly as much about the launching of the new business as I had planned. I just didn't feel like it was very interesting to talk about the details of getting started. However, FSBO Austin TX has now launched. FSBO = For Sale By Owner.

The internet has allowed people to take control over their real estate purchases. Previously, a seller had to contract with a realtor to sell their home and pay them thousands of dollars (generally 3% of the selling price). But the internet offers the opportunity for exposure without paying a real estate agent to get an MLS listing. For $200 (although we are giving away free listings right now), a FSBO seller can list for 6 months and have the exposure necessary to sell their house.

There are several national FSBO chains that generally don't appear to have been very successful. That's no surprise -- you don't want to list with a national website when you want visitors targeted to your area. Several local, targeted sites like FSBOMadison.com in Wisconsin have been a huge success.

Cutting out the real estate agent middleman also lets buyers and sellers increase their control over the process. In the biz blog world, Michele Miller has written about how frustrating it can be to search for real estate:
With the mantra, "Good things come to those who wait," my husband and I spent three years searching for a new house in Arizona. We put thousands of miles on the car and went through realtors like numbers at a New York deli counter. Armed with the real estate section of the local paper, each and every weekend was spent on the hunt for the "Open House" signs that matched the ads we'd circled in red ink.

That's what I love about this. Because of technology, people don't have to depend on an agent anymore, they can do it themselves and save money. FSBO isn't for everyone; some people don't have the time. But for sellers and buyers who want to save money and not surrender control, we're a good alternative.

We've got a fancy FSBO Austin TX yard sign too.

octubre 19, 2004


The Astros have won 3 in a row to lead the Cards 3-2 in the NLCS. Last night the game was scoreless until the bottom of the 9th, when Jeff Kent hit a walkoff 3 run homer.

There was talk about Clemens taking the mound for Game 6, but manager Phil Garner decided to give the nod to Pete Munro.

A wise move. Pitchers throw much much better on an extra day of rest. Clemens is over 40 years old, so the extra day of rest will be good for him. If the Astros win game 6, then Clemens can start Game 1 of the Series. And if they lose game 6, is there anyone you'd rather have on the mound for game 7?

Heinz CEO

The New York Times has an interesting interview with Heinz CEO William Johnson.

Among other things, he claims:
1. The Atkins fad never hurt sales.
2. The Kerry -- Heinz connection hasn't hurt at all. He hasn't tried W ketchup.
Interesting. I don't know if I buy it.

(link via Bainbridge)

Are people born lucky? Are some people luckier than others?

From Robert Rubin's memoir In an Uncertain World:
Anyone who is honest about having done well will acknowledge the enormous role played by chance.

I agree. I think some people are born lucky. Some people are luckier than others.

I don't actually believe that people are inherently luckier than others, but by virtue of a small sample size some people end up luckier than others.

How many decisions in life really matter? Sure every decision you make steers you towards some decisions and away from others, but only a few are really life changing.

For example, take standardized tests like the LSAT, which selective law schools prefer that you only take once. Once you get to a certain level, three or four questions can make the difference between acceptance to Harvard Law and getting rejected from Penn Law. Anyone who has taken a few LSATs will tell you that your score can easily fluctuate five questions on any given day.

Or to take a more egregious example, some people get rich due to winning the lottery. Over the long run, playing the lottery is a ridiculously negative expected value at almost any level -- especially once taxes are figured in (of course, even in the lottery there are often ways to give yourself a small edge). But some people get lucky.

This isn't to say that I think successful people got there due to luck. I think most successful (measured in financial terms) people are successful because of hard work. Even most rich kids don't have as much of an edge as one might intuit, as the rich kids' parents I know aren't willing to give them money. They'll pay for nice schooling, but after that they're on their own.

There are alot of factors in financial success of course. For example, career choice. Anyone who is smart enough and willing to work hard enough can go to law school and make a few million being an ambulance chaser.

This was very disjointed. Maybe someday I'll take these thoughts and organize them into an essay.

octubre 17, 2004

How Meriweather created loyalty

Meriwether obviously did a fantastic job of creating loyalty among his team. They were furious when Salomon sacked him, so they eventually jumped at the chance to join him at LTCM.

1. Brought in his own people. By being the first person to hire academics, Meriwether not only brought in the best in the business, but they were his people. Until Meriwether, they were academics who studied the issue. Then Meriwether gave them the opportunity to put their ideas into action and make a few million bucks.

2. Chose his traders over the firm. Salomon did a china service lunch for its partners, but Meriwether chose to eat with his traders. So every day a waiter would bring Meriwether a bologna sandwich, a TAB soda, and two apples under a silver dome. Every day Meriwether would give one of the apples to one of his traders as an "attaboy." The traders were soon competing hard for the apple.

3. Didn't make people work when they didn't need to. One of the great things about Salomon's group is that they didn't need to make every trade, just find a few very good trades. So they would take the time to leisurely discuss the merits of a certain position. Or they would gamble.

4. Encouraged gambling. As bestselling Moneyball author Michael Lewis wrote in Liar's Poker, the group played liar's poker constantly, both at work and not at work. When the group went out to dinner, they'd play liar's poker to see who picked up the check.

Of course, this was a good way to keep his trader's instincts sharp. What do you do in gambling? Assemble information, analyze it, figure out the odds, and pull the trigger. Same thing as in trading.

5. Group outings to compete. His group would frequently go -- and were expected to attend -- compete against each other. They'd go to the horse track together and place wagers. They'd go to Antigua with their families for yearly vacations. Day trips to Atlantic City. Betting on elections, sports. They bought a resort in Ireland to play golf. In Ireland, they devised elaborate betting pools on their scores.