Happy Thanksgiving!! Every thanksgiving it's the same conversation over the menu with the family chef... "Absolutely Mom, serving biscuits, stuffing, sweet and mashed potatoes make perfect sense, why wouldn't it?" If I run 10 miles each day for a week I should be even-steveo.
I thought I would share the post below as I am sure you are battling the same mind over mid-section dilemma. This post has nothing to do with physically overeating however it does have everything to do with the maniacal ways we mentally overeat with repsect to how we run our business. Don't get stuck in these trenches.
11 Ways To Be The Biggest Loser
1. Quit Taking Risks
It doesn’t take long for things to grind to a halt if you simply reduce risk to zero.
2. Be Inflexible
Inflexibility is one of the fastest ways to lose both customers and employees. That’s what happened at Coke for years as company leaders came to think of the drink and the green bottle as a single unit.
3. Isolate Yourself
Isolating yourself is fun. If possible, build your own Taj Mahal in the corner office.
4. Assume Infallability
To start, never admit a mistake. If you assume infallibility, then you can blame others for whatever goes wrong. Letters to shareholders are wonderful examples of this.
5. Leave Folks Wondering If They Got a Fair Deal
Play the game close to the foul line and it’s easy.
6. Dont Take Time To Think
When you make a decision without taking time to think, you’ll enjoy the gravity of bankruptcy combined with the thrill of a carjacking.
7. Rely on Experts and Outside Consultants
Top to bottom, your people will feel trusted and valuable. Plus, having consultants on board allows you to take your eye off the real business.
8. Love Your Bureaucracy
If you want to get nothing done, make sure administrative concerns come first.
9. Send Mixed Messages
It’s so boring when you say the same thing over and over.
10. Fear Tomorrow
Chicken Little is one smart bird. By staying focused on looming failure, you can almost guarantee it.
11. Lose Your Passion for Work & Life
Bonus item! Forget about the pursuit of happiness. Your keywords here: Be realistic.
—Adapted from The Ten Commandments for BusinessFailure, Donald R. Keough, Portfolio. Executive Leadership Vol.24 No.12 Dec. 2009
See you in the trenches - vmsteveo
Showing posts with label Leadership. Show all posts
Showing posts with label Leadership. Show all posts
Tuesday, November 24, 2009
Tuesday, November 11, 2008
Cloud Computing - A well done perspective on its evolution
Randy Newman said it best...
"Want some whiskey in your water?
Sugar in your tea?
What's all these crazy questions they're askin me?
This is the craziest party that could ever be
Don't turn on the lights 'cause I dont want to see..."
Companies like Amazon, Google, Cisco and VMWARE are leading the charge in this new space of cloud computing. What is it you ask? It's the next evolution in IT that is being adopted by major technology companies across the globe. The following article gives a good summation of its history and future from the "end point's" or device perspective.
On the periphery
Oct 23rd 2008
From The Economist print edition
The cloud’s communications with its clients will become ever more intelligent and interactive
IT WILL take something with a lot more bang to replace a medium that is thousands of years old. That was the prevailing reaction when Amazon last November announced the launch of Kindle, an electronic book reader the size of a paperback that can store more than 200 volumes. Yet by the end of this year Amazon will have sold nearly 380,000 Kindles, says Mark Mahaney, an analyst with Citigroup, a bank. “Turns out the Kindle is becoming the iPod of the book world,” he recently wrote in a note to clients, in a reference to Apple’s iconic music player.
It is certainly not the Kindle’s looks that explain its success. Compared with the iPod, its design looks very last century. Software and battery life, too, leave a lot to be desired. The chief attraction of the device is the ease with which it can be used to buy books and other content. Equipped with a mobile-phone modem, the Kindle can simply pull new reading material out of the air. Users do not even have to have a wireless service contract. “Our vision is to have every book that has ever been in print available in less than 60 seconds,” explains Jeff Bezos, Amazon’s boss.
It remains to be seen whether the Kindle will become a cultural phenomenon like the iPod, of which around 160m have been sold so far. Amazon, for its part, is downplaying the Kindle’s success and will not confirm any sales estimates. But it is safe to say that, once the next generation of wireless networks is up and running, hundreds of millions of devices will come, like the Kindle, with built-in radio connectivity (see chart 5). Digital cameras will automatically upload pictures. Smart meters will send readings of how much electricity a house consumes. All kinds of sensors will be able to send messages, even things like dipsticks when tanks of liquid are low. The relationship of these devices to cloud computing may not be obvious. But if huge data centres and applications make up the cloud itself, then all the hardware and software through which it connects and communicates with the real world are its periphery. In IT speak, this is known as the “front end” or “client side”.
As the Kindle and other examples show, this layer does not have much to do with the user interface or client device of old. It will do a lot of computing itself. It will come in all shapes and sizes, depending on what the user wants to do. And it will not just distribute information, as the web does, but collect it as well. The analogy that springs to mind here is a theatre performance with audience participation: the electronic cloud will adapt to whatever it engulfs.
As you like it
Just like computing itself, the dominant user interface has evolved continually. In the days of the mainframe, when computers and their peripherals filled entire rooms, people communicated with these machines first via punch cards and then via green-glowing monitors, which were simply dumb terminals. Only with the rise of personal computers did the user interface become more intelligent, responsive and graphical.
The first version of the web was thus a brief step backward. To be sure, browsers brought colour and graphics to the hitherto text-based internet, but they were as dumb as the mainframe terminal. This has changed only in recent years. A bundle of web-development techniques dubbed AJAX and multimedia software such as Adobe’s Flash and Microsoft’s Silverlight now allow programmers to write what are called “rich internet applications” (RIA).
Whatever the buzzword, the principle is much the same. Servers no longer dish up simple hypertext markup language (HTML), the web’s early lingua franca. Increasingly, web pages are bona fide pieces of software that are executed in the browser. Users of Web 2.0 sites who venture into menu items such as “view source” in their browsers can sometimes see thousands of lines of code.
In recent months the browser has become even more of a platform for other programs, akin to an operating system such as Windows. The main driver of this trend is Google, with its huge strength in distribution that can only gain from more and more software being offered as a service. In May 2007 the Silicon Valley firm launched Gears, a program that allows web applications to be used offline, and in September this year it released a new browser called Chrome. Its most important feature is that it can execute several sophisticated web applications at once.
Although for now the internet browser will remain the main vehicle for people to interact with the cloud, other forms are coming to the fore. One is the “widget”, a snippet of code that often lives on a PC’s desktop and allows the user to get a quick personalised view of a set of data. The idea is that a salesperson, for instance, should not have to fire up an entire application for customer-relationship management to find out which leads to follow up.
More importantly, there is now a greater variety of hardware through which to access the cloud. Already, desktop and laptop computers are starting to lose their monopoly for surfing the web as smaller devices such as smart mobile phones and various forms of portable computers start to compete with them.
Asus, a Taiwanese computer-maker, started the trend when it launched a small, cheap laptop called “Eee” a year ago. Now there are dozens of these devices. Gartner reckons that 5.2m of these “mini-notebooks” will be sold this year, 8m next and as many as 50m in 2012.
Perhaps the best indicator of things to come is Intel, a huge chipmaker. It made a fortune selling processors for servers, personal computers and laptops. In June the firm launched a new line of chips called Atom, designed to power what it calls “netbooks” and “mobile internet devices” (MIDs), mainly intended for surfing the web. Intel is also the driving force behind WiMAX, a technology for wireless broadband access to the internet. It wants to put a WiMAX radio chip into as many devices as possible, from portable computers to specialised gadgets such as the Kindle.
Apple’s iPhone and its App Store, which allows iPhone and iPod owners to download applications, also provide a foretaste of how important wireless devices will be for the cloud. Apple launched App Store only in July. Two months later it had already tallied 100m downloads, meaning that it took off much faster than Apple’s highly successful iTunes music store. Many of the programs on offer connect to the cloud, including news feeds, multi-player games and a service that keeps track of the latest polls for America’s presidential election.
You can take it with you
The plethora of devices wirelessly connected to the internet will speed up a shift that is already under way: from a “device-centric” to an “information-centric” world, in the words of VMware’s Paul Maritz. Up in the cloud there will be a body of data for each individual that will accompany them through life, he explains, and it will not be tied to any particular device, as it is today.
Again, what will make this possible is virtualisation—this time of client devices, not servers. With the help of software from VMware and others, some firms have already virtualised their employees’ desktop computers, which allows them to be managed centrally. Operating systems and applications will no longer run only on the employee’s PC but on a virtual machine in a data centre that can be accessed remotely, theoretically from any PC in the world. Sooner or later mobile devices will also become virtualised. Users will be able to use their applications and data on whichever gadget they have at hand.
Yet the cloud’s interface is designed not merely to provide information but to gather it as well. The future belongs to services that respond in real time to information provided either by their users or by non-human sensors, predicts Tim O’Reilly, the founder of O’Reilly Media, a publisher of technology books who coined the term “Web 2.0”. Such “live applications”, he says, will get better the more data they are able to collect—and there will be plenty as the cloud expands.
One of the first examples of such a service was Google. What originally put the search service ahead of the competition when it was launched a decade ago was its way of harvesting the information provided by web users in linking to other sites: the more links point to a page, the more useful it must be. These days most links are generated by computers, so the original form of this “page rank” algorithm has long since been scrapped. But Google’s approach is still the same: mining information provided by web users, such as their search histories, to provide more relevant search results and more effective and targeted advertising.
The direct link to users also allows firms such as Google continuously to improve their interface, something traditional software-makers were not able to do. At any given time Google is running dozens of tests to optimise the look and feel of its offerings. This makes web applications far less technology-driven and much more user-oriented, says IBM’s Mr Wladawsky-Berger. “They are much more inspired by what goes on in the real world.”
A raft of start-ups is also trying to build a business by observing its users, in effect turning them into human sensors. One is Wesabe (in which Mr O’Reilly has invested). At first sight it looks much like any personal-finance site that allows users to see their bank account and credit-card information in one place. But behind the scenes the service is also sifting through its members’ anonymised data to find patterns and to offer recommendations for future transactions based, for instance, on how much a particular customer regularly spends in a supermarket. Wireless devices, too, will increasingly become sensors that feed into the cloud and adapt to new information.
Nokia, for its part, is planning to build all kinds of sensors into mobile phones to monitor things like movement, barometric pressure or even the owner’s health, which many experts expect to become a big new trend. Sensors could also be used to record people’s activities, creating what some already term a “lifelog”—raising all kinds of privacy concerns.
As wireless technology gets better and cheaper, more and more different kinds of objects will connect directly to the cloud. SAP, the German software-maker, has launched a research project called “The Internet of Things” to see what can be done with the resulting information. As part of that project, an initiative called the “Future Factory” is now under way to investigate how intelligent tags can make manufacturing more adaptive and efficient.
More and more data get you only so far, however. In the end, Google’s search results and its text-based online advertisements are relevant to users only because the firm has devised clever ways to sift through them, says Hal Varian, the firm’s chief economist. The big challenge of the cloud will be to connect the myriad data in it and make them profitable.
Copyright © 2008 The Economist Newspaper and The Economist Group. All rights reserved.
See you in the trenches - vmsteveo
Thursday, October 2, 2008
CNBC Interview with Warren Buffet
Adapted from a post by Alan Crippen
Audio recording at http://www.cnbc.com/id/26867866
On September 24th, Warren Buffet was interviewed via telephone on CNBC's Squalk Box regarding his $5 billion investment in Goldman Sachs. The full transcript of their conversation is posted below which gives insight of a leaders decision making prowess in these uncertain times. Since then, on October 1st, Warren Buffett had announced that he invested another $3 billion in General Electric. Talk about a guy with Sach!! So is he insane or a savvy opportunist? Read on...
BECKY QUICK: We know you get all kinds of deals, all kinds of people who come knocking asking you to jump in. You've said no to everything to this point. Why is this the right deal at the right time?
WARREN BUFFETT: Well, I can't tell you it's exactly the right time. I don't try to time things, but I do try to price things. And I've got a formula that says bet on brains, and bet of them when it's the right type of deal. And in this case, there's no better firm on Wall Street. We've done business with them for years, with Goldman, and the price was
right, the terms were right, the people were right. I decided to write a check.
BECKY: Does the backdrop of the Federal government potentially getting involved with
a massive bailout plan for Wall Street, does that have anything to do with this deal?
BUFFETT: Well, I would say this. If I didn't think the government was going to act, I
would not be doing anything this week. I might be trying to undo things this week. I am, to some extent, betting on the fact that the government will do the rational thing here and act promptly. It would be a mistake to be buying anything now if the government was going to walk away from the Paulson proposal.
BECKY: Why would that be a mistake? Because the institutions would collapse, or because you could get a better price?
BUFFETT: Well, there's just no telling what would happen. Last week we were at the brink of something that would have made anything that's happened in financial history look pale. We were very, very close to a system that was totally dysfunctional and would have not only gummed up the financial markets, but gummed up the economy in a way that would take us years and years to repair. We've got enough problems to deal with anyway. I'm not saying the Paulson plan eliminates those problems. But it was absolutely, and is absolutely necessary, in my view, to really avoid going over the precipice.
CARL QUINTANILLA: Warren, we can almost hear you measuring your words as you speak, because what we're talking about has such gravity. There are people out there who either don't, or are unwilling, to acknowledge what exactly, how serious the situation was last week. And I'm hearing you say is that, was it the most frightening experience you've had in your lifetime, in terms of evaluating where this economy stands?
BUFFETT: Yeah, well, both the economy and the financial markets, but there're so intertwined that what happens, they're joined at the hip. And it doesn't pay to get into horror stories in terms of naming institutions or anything. But I will tell you that the market could not have, in my view, could not have taken another week like what was developing last week. And setting forth the Paulson plan, it was the last thing, I think, that Hank Paulson wanted to do. there's no Plan B for this.
BECKY: Warren, you mentioned that Wall Street could not have taken another week like that. But what does that mean to the American taxpayer who's sitting at home saying, 'Why is this my problem?'
BUFFETT: Yeah, well, it's everybody's problem. Unfortunately, the economy is a little like a bathtub. You can't have cold water in the front and hot water in the back. And what was happening on Wall Street was going to immerse that bathtub very, very quickly in terms of business. Look, right now business is having trouble throughout the economy. But a collapse of the kind of institutions that were threatened last week, and their inability to fund, would have caused industry and retail and everything else to grind to something close to a halt. It was, and still is, a very, very dangerous situation. No plan is going to be perfect, but thanks heavens that Paulson had the imagination to step up with something that is of the scope that can really do something about it. And what he did with the money market funds, that was not an idea that I had, but as soon as I heard about it, that was an important stroke. Because the money, pulling out of the money market funds and going to Treasuries, and driving Treasury yields down to zero. That -- a few more days of that and people would have been reading about lots and lots of troubles.
JOE KERNEN: People listen, Warren, when you speak. And I don't know if you watched the hearings yesterday ...
BUFFETT: I got to watch some of them.
JOE: But when the more dire it looked, in terms of communicating, with some of these Senators, the three-month or one-month bill, again, started acting similar to what was happening on Thursday. Now we averted that disaster on Thursday, but it's already been three or four days. It's almost as if these guys already forgot about the position that we were in. Do you think that accounted -- we're still susceptible to that happening again if it looked like they're not going to go through with this?
BUFFETT: No, it would get worse. Last week will look like Nirvana (laughs) if they don't do something. I think they will. I understand where they're very mad about what's happened in the past, but this isn't the time to vent your spleen about that. This is the time to do something that gets this country back on the right track. What you have, Joe, you have all the major institutions in the world trying to deleverage. And we want them to deleverage, but they're trying to deleverage at the same time. Well, if huge institutions are trying to deleverage, you need someone in the world that's willing to leverage up. And there's no one that can leverage up except the United States government. And what they're talking about is leveraging up to the tune of 700 billion, to in effect, offset the deleveraging that's going on through all the financial institutions. And I might add, if they do it right, and I think they will do it reasonably right, they won't do it perfectly right, I think they'll make a lot of money. Because if they don't -- they shouldn't buy these debt instruments at what the institutions paid. They shouldn't buy them at what they're carrying, what the carrying value is, necessarily. They should buy them at the kind of prices that are available in the market. People who are buying these instruments in the market are expecting to make 15 to 20 percent on those instruments. If the government makes anything over its cost of borrowing, this deal will come out with a profit. And I would bet it will come out with a profit, actually.
BECKY: Are you buying instruments like these in the market?
BUFFETT: Well, I don't want to leverage up. No one wants to leverage up in this thing. So, if I could buy a hundred billion of these kinds of instruments at today's prices, and borrow non-recourse 90 billion, which I can't, but if I could do that, I would do that with the expectation of significant profit.
JOE: But the government can do that. You can't. And that's why the private sector can't, even you, can't save the system.
BUFFETT: I can't come close to it. But they have the ability to borrow. They can borrow much cheaper than I can borrow. They can borrow unlimited. They don't have covenants. They don't have -- I mean, they are in the ideal position. So, for example, if I were hiring advisers, as I talked about doing to buy these things, I would tell those advisers, 'Look it! People are buying these instruments to make 15 percent. So if you're going to charge me any fees, I'm going to defer those fees until I get rid of these instruments later on. If I don't make at least ten percent on my assets, you know, your fee goes down the drain. Because it should be a lead-pipe cinch to make 10 percent at the kind of prices that exist now. I wouldn't try to write that into the legislation. I don't think you should -- I think they should punish, in many cases, the people -- I would think they might insist on the directors of the institutions that participate in this program waiving all director's fees for a couple of years. They should, maybe, eliminate bonues. They may wish to do some of those things. I don't think you should try to write it into the instrument, though. I think that gets so damn complicated and ties people's hands. But if I were administering the program, I think I'd be fairly tough about some of those things, and I'd make sure that the advisers earned me a return that was well above my cost of borrowing before they got paid a dime.
BECKY: Would you administer the program?
JOE: Yeah, can you be on the oversight board? (Buffett laughs.) Can you be on the oversight board?
BUFFETT: I'd love to administer (laughs). I'd love to administer it for nothing, but I would really love to administer and get some kind of an override in terms of the profits, which is naturally the way Wall Street thinks. No, it's not my game to do that, but I will tell you that the buyers of the instruments these days are going to do better than the sellers. And the big buyer, if they -- they shouldn't pay any attention to the cost of these instruments to the selling institutions. They shouldn't pay any attention to the carrying value. In fact, one thing you might do, is if someone wants to sell a hundred billion of these instruments to the Treasury, let them sell two or three billion in the market and then have the Treasury match that, for what they pay. You don't want the Treasury to be a patsy. But I'll tell you, with Hank Paulson on top of it, you couldn't have any better guy to do that. The important thing is that if this program extends into the next administration is to have somebody in the next administration that has similar market savvy.
CARL QUINTANILLA: Separate from the bailout, Warren, people obviously this morning want to look at the Goldman deal, I guess on top of Mitsubishi-Morgan, which happened yesterday and wasn't nearly as popular, at least from a market point of view. But they want to point to you as the 'canary in the coal mine.' Is that fair? Do you have a problem with that?
WARREN BUFFETT: Well, as long as the canary lives, I'm fine. (Laughs.)
CARL: I'm guessing you're going to live. At least, you're guessing you're going to live?
BUFFETT: Yeah, I think so. (Laughs.) This is, you know, from our standpoint, we've had a lot of cash. And we now are seeing things that, you know, give us a chance to use that cash sensibly. And this was a five billion dollar opportunity to, I think, deploy cash sensibly. I understand, incidentally, that there will be another five billion. In other words, they mentioned 2-1/2 billion, but I think they're going to allocate it down to five billion additional. So Goldman will have ten billion, I believe, of new money coming in.
BECKY: In that capital offering. In the release, they said 2-1/2 billion (of common stock would be offered in addition to Buffett's investment.) You're saying you understand it's five billion?
BUFFETT: Yeah, I think they have quite an outpouring of orders, so I think -- They'll be allocating it down, but I think from all over the world. So I think there will be five billion of additional common stock sold. That will be determined and announced, I believe, before the opening.
JOE: How much do you know about AIG and their books right now, Warren?
BUFFETT: Well, I think I know a fair amount, but I don't think anybody knew what they needed to know, including the management. The troubles there were in the subsidiary, AIG Financial Products, and they had hundreds of thousands, I'm sure, hundreds and thousands of derivative contracts. And I think that top management did not have their mind around what was involved with those contracts. And you can do a lot of damage on Wall Street with a pen and a piece of paper.
JOE: How many of those units are going to end up under the Berkshire umbrella?
BUFFETT: Well, we would have an interest in a couple of 'em. And actually over that weekend I expressed an interest in one or two, but the pressures were such, and the hole was deep enough, that they simply couldn't get it worked out. And some of those units, most of those units, I believe, will be for sale over the next year or two. And we would be interested in a couple of them. I think they'll probably do a pretty intelligent job of selling them, which means we won't be as good a buyer.
BECKY: You know, Warren, we've been trying to figure out -- I have to admit that I was shocked when I heard the news yesterday about this deal with Goldman, because you haven't put any money into an investment bank since 1987, Salomon. And that was a deal you had to get personally involved with later in 1991 when you went to run the company for almost a year. It was a very difficult experience. I'm shocked that you would get back in with another investment bank. Why do it?
BUFFETT: (Laughs.) Well, the pain has worn off. That won't be happening with Goldman, but I -- That was a very unfortunate experience, and it was actually caused by just a couple of people out of a workforce of 8000 that got the company into big trouble. And I had the help of a lot of people at Salomon in getting out of it. But I don't think this experience will be similar. Goldman has been extremely well run. My experience with Goldman goes back, when I was nine or ten years old my parents took me back to the New York World's Fair, and by an odd chance I got to sit down with Sidney Weinberg, who was the dean of Wall Street then, and he talked to me as if I was a grown-up for 45 minutes. I've never forgotten the experience. Gus Levy (who later ran Goldman in the 1970s) was a good friend of mine when I worked in Wall Street. In 1955, we only had four wires to Wall Street firms and one of them was to Goldman Sachs and Gus was on the other end of the phone. So I've had a long experience with Goldman and they've done a lot of things for me recently.
JOE: I just assume you know what was going on at all of these firms because I know everybody probably came to you and you made your decisions one-by-one on what to do. When you look at the way some of these assets were marked, could you tell that, for example, Lehman still wasn't facing reality and perhaps Merrill Lynch was more in the real world?
BUFFETT: Well, I think that turned out to be the case. I was approached on Lehman back in, I think, maybe it was April or March. But the first round of financing when they raised the four billion, and, yeah, it looked to me like it was pretty unrealistic where they were marking things. I feel good about the Goldman marks, incidentally, that's one of the discussions I've had. And -- You can be pretty fanciful in marking positions in Wall Street, particularly when things aren't trading. The one thing you want to make sure, when the Treasury is buying things, is the marks they have don't make any difference. Like I said, it wouldn't be a bad idea, if you're buying ten billion of a security and you're the Treasury, to have them sell five-hundred million, or something like that into the market, so you find out what the real market price is and then buy the other 9-1/2 billion at that price. I really think, I really think the Treasury will make -- I think they'll pay back the 700 billion and make a considerable amount of money, if they approach it in that manner. But I don't believe in trying to write that into some legislation. I think it gets so unworkable. I think you have a smart person in charge, and have them treat it like it's their own money, and the taxpayers' money, in terms of behavior, and I think it will work out very well. I think it's not comparable to the RTC.
CARL: A lot of people who are watching us Warren, and even people who have just started watching us over the past week or two, look at the stock market every day and are confused. They want to use it as a metric for how we're doing, or at least the progress we're making on big issues. I'm guessing you don't think it's reflective of anything that's based in reality right now?
BUFFETT: Well, the stock market in the short -- my old boss Ben Graham said that in the short-run the stock market is a voting machine, in the long-run it's a weighing machine. As a voting machine, it responds to people's emotions. There's no literacy test for voting. You vote according to how much money you have, not according to how smart you (are.) So the stock market does some very silly things in the short-run. Over the long-run, it behaves quite rationally. And, you know, five years from now, ten years from now, we'll look back on this period and we'll see that you could have made some extraordinary buys. That doesn't mean it won't get more extraordinary a week or a month from now. I have no idea what the stock market is going to do next month or six months from now. I do know that the American economy, over a period of time, will do very well, and people who own a piece of it will do well. But they shouldn't own it on leverage. That's what people have learned in this period, that you've got to be able to play out your hand and it's a big mistake to let somebody else be in a position where they can sell you out.
BECKY: Warren, when you first invested back in '87 in Salomon, I believe your partner, Charile Munger, was not as enthusiastic about the idea as you were. Is that true?
BUFFETT: That's true. Of course, he's never as enthusiastic about my ideas as I am. But I would say he was even less enthusiastic. (Laughs.)
BECKY: How does he feel about the Goldman deal?
BUFFETT: Well, I'm glad you asked because I, (laughs), didn't tell him about it until after it was done. (Laughs.)
CARL: How rude!
BUFFETT: (Laughs.) Yeah, it is kind of rude. But Charlie's wife had a bad fall and he's (inaudible) and I called him last night about an hour after I committed it, or something, and I called kinda like a little boy ... (laughs) ... bringing into the house something he was a little worried about. But, Charlie's all for it. (Laughs.)
BECKY: He's all for it.
BUFFETT: Yeah. Now I'm really worried.
BECKY: Uh-oh. For the last nine months, Berkshire has spent a lot of that cash it's been hoarding over the last several years.
BUFFETT: That's right.
BECKY: I was trying to figure it out. I think it's about 24 billion dollars you've spent in the last nine months?
BUFFETT: Yeah, we've spent a lot of money. The money, the money we've spent, you know, we've found things we like to do. It's nice to have a lot of money, but you don't want to keep it around forever. I prefer buying things. Otherwise it's a little like saving up sex for your old age. (Laughs.) At some point, you've got to use it. (Laughter.)
JOE: Uh-oh.
BECKY: Twenty-four billion dollars. Is that a right guess and how much cash do you have left?
BUFFETT: You know, it would be 6-1/2 for the Mars deal, there's five for this, there's five for Constellation, there's a couple of other things. So, yeah, your addition is fine, Becky.
BECKY: How much cash do you have left?
BUFFETT: Well, I've got enough. (Laughs.) I don't really look at it every day. I look for opportunities every day, and then if I find opportunities, I see if I've got enough cash around to take care of them.
JOE: Well, by my calculation, if you lever that up thirty times, Warren, you can really get serious here. (Laughter.) Maybe you don't want to do that, I don't know. (Laughter.) What about, how are we going to deal with this looming 50 -- we just had (New York State Insurance Commissioner) Eric Dinallo on, I don't know if you were watching, Mr. Buffett. He talked about, he can, maybe New York and his unit can look at the twelve billion, or trillion, jeez, we've got to add a T. I'm finally getting used to Bs, now we have to add a T. But what we are going to do with that 50 trillion and how, having that still around, all these credit default swaps, how serious is that, and how are we going to unwind it and deal with it?
BUFFETT: Yeah, well, it goes beyond credit default swaps into all forms of derivatives. But the derivative genie got out of the bottle, and it's a huge genie, and it will never get back into the bottle. It is a terribly tough problem because they are not homogeneous items. It's one thing to have a clearing house for the futures in Chicago, or something, and every morning have everybody post to market and that's a very efficient system. It's very hard to do that with derivatives where you can derivatives based on the New Zealand money supply or the number of babies born in Japan, and all kinds of things as the variables. And they're often very complicated. I applaud Dinallo. He is an outstanding insurance comimssioner. But getting regulation around the entire derivatives market is really tough. I've thought a lot about it. But it's important. Derivatives have been an important part of the problem in financial markets. And they continue to be part of it. And in AIG's case -- AIG would be doing fine now, I think, if they'd never heard of the word derivative.
BECKY QUICK: Mr. Buffett, the front page of the Wall Street Journal and other media organizations around the globe have been picking this up, your move yesterday into Goldman Sachs, as a vote of confidence in the banking institutions across the globe. Is that fair?
BUFFETT: Well, I'm not buying a cross-section of banking institutions. But I certainly have confidence in Goldman. And you can say it's a vote of confidence in the Congress to do the right thing with something that's being debated before them right now.
CARL QUINTANILLA: You know, Warren, some might say, 'OK, we know Buffett is a pure capitalist. he's in this to make money and nothing else.' But also you're a philanthropist, you have interests in seeing the country do well over time. Some might say he's doing this, he's timed this to help get the package through. Is there anything -- is that even close to reality?
BUFFETT: No. I timed this because Goldman Sachs yesterday came up with something that made sense to me. I'm not brave enough, to try and influence the Congress. The other way around, they influence me. And I am betting on the Congress doing the right thing for the American public by passing this bill and not trying to doctor it up with a hundred things that, you know, emotionally they feel should be on the bill but as a practical matter will gum things up.
CARL: When do you think, Warren -- I don't know if you even have an answer to this question -- When is the absolute deadline by which you think this needs to happen? Is it this weekend? Can you be that specific? Or if this thing were to bleed into next week, or if they had to reconvene a special session, would that be disastrous?
BUFFETT: Well, I think anything that makes it look like it's in doubt is what causes the problem. So if they said on Friday we're absolutely having a vote on Monday, or something of the sort, I don't think that would be a problem. But if they went home on Friday and there was doubt about whether they were going to do something on Monday, I think you'd see some things you don't want to see in the markets and they would have some effects on the economy.
JOE: You were watching yesterday, and I don't know, maybe I don't know the ways of Washington. Maybe they say one thing and maybe they're really planning -- you know, they have to look good for their constituents. But I wasn't convinced they really understood the seriousness of the situation, Warren, and that was after they said, look, Greenspan says we need this, Volcker says we need this, Bernanke, Paulson. Now we have you. I don't know. Do you think they get it?
BUFFETT: Well, I think they will get it. I think enough of them will get it. You know, it's not like Pearl Harbor where you could look at what happened with your own eyes and decide you had to do something that day. But this is sort of an economic Pearl Harbor we're going through. And I think most of them will get it. And I do believe they will do what's right for the country. They may vent their spleen a little bit by getting mad about the people that brought us into that, and I don't blame them for that. I might do that privately, too. But in the end, you know, Republican, Democrat, I think they've got the interest of the country at heart and I think they will do the right thing. But I hope they do it soon. (Laughs.)
BECKY: Warren, how long were you talking to Goldman Sachs and how significantly did they have to change the terms of the deal to get you interested?
BUFFETT: Well, what they -- they had talked with me -- almost every financial institution has talked with me, that you read about, over the past few weeks. But, but, they were serious yesterday about doing something. They said, in effect said, 'What would you do? What would Berkshire do? And I laid out something. And they said, 'That makes sense to us.' And we had a deal. It doesn't take long.
JOE: You were kidding Becky when you said that you did this just 'cause you knew we were going to ask you when you were going to do something in financials again and you wanted to have an answer.
BUFFETT: Joe, Joe, I was not -- you know, I was trembling with the thought of you asking me again, 'When are you finally going to do something?' (Laughs.) So this was definitely an attempt to get you off my back.
JOE: It was a cheap way, a mere five billion, so you'd have something to show us this time.
BUFFETT: That's right. I mean, your withering questioning is just too tough for me. (Laughs.)
BECKY: You know, you mentioned earlier, in the grand scheme of things, it's going to matter who the next Treasury Secretary is going to be. Are there names of people you think would be sound in either administration.
BUFFETT: Becky, if I were running things, Republican or Democrat, I would ask Hank to stay on. I mean, you don't get talent like that very often in any administrative job. And the guy pays an enormous price to do it. He's probably sleeping three or four hours a night. He knows the market. He's got the interests of the country at heart. So I think if I were either Barack Obama or John McCain and found myself in the White House in January, I would go down there and say, 'Hank, do me a favor, stick around another year.'
CARL: And Warren, if you believe, as a lot of people do, that we are in for several years of this unwinding process, the government's going to play a huge role. If you were called to do something on the public side, would you do it?
BUFFETT: Well, I would certainly be glad to help in any way that I could. You know, I would be looked at as having conflicts-of-interest, I'm sure. But anytime I can be helpful on something -- For example, in terms of what you might do with institutions that participated in this program, I think the Treasury can, they can lay down some terms for these people. I don't think they should be in the legislation, but I think -- And if anybody wants my opinion on it, I'd be glad to help them out.
BECKY: Warren, if ...
BUFFETT: They can make money on this deal. I can tell you this. I would love to have 700-billion at Treasury rates to be able to buy fixed-income securities now that they're in distress. There's a lot of money to be made.
JOE: It's just that, you know, they want these details, Warren. They said -- Paulson says there's the hold-to-maturity price and there's the firesale price. We're going to go somewhere in between, get a much better price but still leave enough for the people that are buying it to make some money. That can be done in principle? There's a way to do that, do you think?
BUFFETT: I think what I would be looking for -- I heard that hold-to-maturity price. I'm not as excited about that. I basically like a market, or something very close to a market-related price. And there are ways to determine that and I don't think that Uncle Sam should be in the business of paying somebody a whole lot more than it's worth in the market today. And if the guy that bought it doesn't like it, he doesn't have to sell it, and it was his problem, he bought it in the first place. I think a market price will enable people to be leveraged. The problem they have now is that some of the institutions, they're loaded with this stuff, they're having trouble funding, and they're worried about being able to sell a ton of it. But take the Merrill Lynch deal. Merrill Lynch had to take back 75 percent of the sales price. Well, they didn't want to take back that 75 percent. I would let 'em sell it for the same price, but I'd pay them the whole thing in cash. So they'd be a lot better off if they could have sold the whole thing at that same price but gotten paid a hundred percent in cash instead of having to take back 75 percent. And I see the government fulfilling that kind of a function.
JOE: All the outrage we're seeing in these comments from viewers, and obviously the senators are hearing from constituents. If we take your word for it, that the government could even break-even, or only lose 50 billion, that 700 billion dollar number is out there in the public, and people think that we're spending that.
BUFFETT: Yeah, they think that, yeah.
JOE: It seems crucially important to get the point across that, in your view, we could, the government could actually end up making money and saving the taxpayer from much worse, a much worse outcome if we didn't do this.
BUFFETT: The government is getting 700 billion worth of assets, assuming they spend the 700 billion, they're getting 700 billion of assets at what I regard as attractive prices. And they've got the staying power to hold those things. If I could get 700 billion, if I could borrow 700 billion on the government's terms and buy these assets I'd be doing it myself. But unfortunately I'm tapped out. (Laughs.)
BECKY: And yet, Warren, Mayor Mike Bloomberg, I heard him making comments this morning, and he's someone I know you've spoken very highly of ..
BUFFETT: I admire him.
BECKY: You admire him. he says this morning we should not be giving a blank check to have something passed in the dead of night. How dire is this situation?
BUFFETT: Well, I'm sure we didn't want to go to war on December 7, 1941, maybe, in the dead of night, or whenever we did it, in the middle of the afternoon actually. But there are time when events force timetables on you, and force action, and you have to be -- You know, it's just like in my business. I might like to think over buying something for a month, I'm not that type anyway. But in the end, if somebody offers me something that makes sense, I better decide whether to act or not. And if it makes sense to me, I usually don't attach unnecessary conditions, you know. It would be nice to have the luxury of thinking about this for three months. But I will tell you, if you think about this for three months, you're going to have a situation where -- If you think about it for three weeks, you're going to be facing a situation that's far different, and far more difficult, than if you do something now.
See you in the trenches - vmsteveo
Audio recording at http://www.cnbc.com/id/26867866
On September 24th, Warren Buffet was interviewed via telephone on CNBC's Squalk Box regarding his $5 billion investment in Goldman Sachs. The full transcript of their conversation is posted below which gives insight of a leaders decision making prowess in these uncertain times. Since then, on October 1st, Warren Buffett had announced that he invested another $3 billion in General Electric. Talk about a guy with Sach!! So is he insane or a savvy opportunist? Read on...
BECKY QUICK: We know you get all kinds of deals, all kinds of people who come knocking asking you to jump in. You've said no to everything to this point. Why is this the right deal at the right time?
WARREN BUFFETT: Well, I can't tell you it's exactly the right time. I don't try to time things, but I do try to price things. And I've got a formula that says bet on brains, and bet of them when it's the right type of deal. And in this case, there's no better firm on Wall Street. We've done business with them for years, with Goldman, and the price was
right, the terms were right, the people were right. I decided to write a check.
BECKY: Does the backdrop of the Federal government potentially getting involved with
a massive bailout plan for Wall Street, does that have anything to do with this deal?
BUFFETT: Well, I would say this. If I didn't think the government was going to act, I
would not be doing anything this week. I might be trying to undo things this week. I am, to some extent, betting on the fact that the government will do the rational thing here and act promptly. It would be a mistake to be buying anything now if the government was going to walk away from the Paulson proposal.
BECKY: Why would that be a mistake? Because the institutions would collapse, or because you could get a better price?
BUFFETT: Well, there's just no telling what would happen. Last week we were at the brink of something that would have made anything that's happened in financial history look pale. We were very, very close to a system that was totally dysfunctional and would have not only gummed up the financial markets, but gummed up the economy in a way that would take us years and years to repair. We've got enough problems to deal with anyway. I'm not saying the Paulson plan eliminates those problems. But it was absolutely, and is absolutely necessary, in my view, to really avoid going over the precipice.
CARL QUINTANILLA: Warren, we can almost hear you measuring your words as you speak, because what we're talking about has such gravity. There are people out there who either don't, or are unwilling, to acknowledge what exactly, how serious the situation was last week. And I'm hearing you say is that, was it the most frightening experience you've had in your lifetime, in terms of evaluating where this economy stands?
BUFFETT: Yeah, well, both the economy and the financial markets, but there're so intertwined that what happens, they're joined at the hip. And it doesn't pay to get into horror stories in terms of naming institutions or anything. But I will tell you that the market could not have, in my view, could not have taken another week like what was developing last week. And setting forth the Paulson plan, it was the last thing, I think, that Hank Paulson wanted to do. there's no Plan B for this.
BECKY: Warren, you mentioned that Wall Street could not have taken another week like that. But what does that mean to the American taxpayer who's sitting at home saying, 'Why is this my problem?'
BUFFETT: Yeah, well, it's everybody's problem. Unfortunately, the economy is a little like a bathtub. You can't have cold water in the front and hot water in the back. And what was happening on Wall Street was going to immerse that bathtub very, very quickly in terms of business. Look, right now business is having trouble throughout the economy. But a collapse of the kind of institutions that were threatened last week, and their inability to fund, would have caused industry and retail and everything else to grind to something close to a halt. It was, and still is, a very, very dangerous situation. No plan is going to be perfect, but thanks heavens that Paulson had the imagination to step up with something that is of the scope that can really do something about it. And what he did with the money market funds, that was not an idea that I had, but as soon as I heard about it, that was an important stroke. Because the money, pulling out of the money market funds and going to Treasuries, and driving Treasury yields down to zero. That -- a few more days of that and people would have been reading about lots and lots of troubles.
JOE KERNEN: People listen, Warren, when you speak. And I don't know if you watched the hearings yesterday ...
BUFFETT: I got to watch some of them.
JOE: But when the more dire it looked, in terms of communicating, with some of these Senators, the three-month or one-month bill, again, started acting similar to what was happening on Thursday. Now we averted that disaster on Thursday, but it's already been three or four days. It's almost as if these guys already forgot about the position that we were in. Do you think that accounted -- we're still susceptible to that happening again if it looked like they're not going to go through with this?
BUFFETT: No, it would get worse. Last week will look like Nirvana (laughs) if they don't do something. I think they will. I understand where they're very mad about what's happened in the past, but this isn't the time to vent your spleen about that. This is the time to do something that gets this country back on the right track. What you have, Joe, you have all the major institutions in the world trying to deleverage. And we want them to deleverage, but they're trying to deleverage at the same time. Well, if huge institutions are trying to deleverage, you need someone in the world that's willing to leverage up. And there's no one that can leverage up except the United States government. And what they're talking about is leveraging up to the tune of 700 billion, to in effect, offset the deleveraging that's going on through all the financial institutions. And I might add, if they do it right, and I think they will do it reasonably right, they won't do it perfectly right, I think they'll make a lot of money. Because if they don't -- they shouldn't buy these debt instruments at what the institutions paid. They shouldn't buy them at what they're carrying, what the carrying value is, necessarily. They should buy them at the kind of prices that are available in the market. People who are buying these instruments in the market are expecting to make 15 to 20 percent on those instruments. If the government makes anything over its cost of borrowing, this deal will come out with a profit. And I would bet it will come out with a profit, actually.
BECKY: Are you buying instruments like these in the market?
BUFFETT: Well, I don't want to leverage up. No one wants to leverage up in this thing. So, if I could buy a hundred billion of these kinds of instruments at today's prices, and borrow non-recourse 90 billion, which I can't, but if I could do that, I would do that with the expectation of significant profit.
JOE: But the government can do that. You can't. And that's why the private sector can't, even you, can't save the system.
BUFFETT: I can't come close to it. But they have the ability to borrow. They can borrow much cheaper than I can borrow. They can borrow unlimited. They don't have covenants. They don't have -- I mean, they are in the ideal position. So, for example, if I were hiring advisers, as I talked about doing to buy these things, I would tell those advisers, 'Look it! People are buying these instruments to make 15 percent. So if you're going to charge me any fees, I'm going to defer those fees until I get rid of these instruments later on. If I don't make at least ten percent on my assets, you know, your fee goes down the drain. Because it should be a lead-pipe cinch to make 10 percent at the kind of prices that exist now. I wouldn't try to write that into the legislation. I don't think you should -- I think they should punish, in many cases, the people -- I would think they might insist on the directors of the institutions that participate in this program waiving all director's fees for a couple of years. They should, maybe, eliminate bonues. They may wish to do some of those things. I don't think you should try to write it into the instrument, though. I think that gets so damn complicated and ties people's hands. But if I were administering the program, I think I'd be fairly tough about some of those things, and I'd make sure that the advisers earned me a return that was well above my cost of borrowing before they got paid a dime.
BECKY: Would you administer the program?
JOE: Yeah, can you be on the oversight board? (Buffett laughs.) Can you be on the oversight board?
BUFFETT: I'd love to administer (laughs). I'd love to administer it for nothing, but I would really love to administer and get some kind of an override in terms of the profits, which is naturally the way Wall Street thinks. No, it's not my game to do that, but I will tell you that the buyers of the instruments these days are going to do better than the sellers. And the big buyer, if they -- they shouldn't pay any attention to the cost of these instruments to the selling institutions. They shouldn't pay any attention to the carrying value. In fact, one thing you might do, is if someone wants to sell a hundred billion of these instruments to the Treasury, let them sell two or three billion in the market and then have the Treasury match that, for what they pay. You don't want the Treasury to be a patsy. But I'll tell you, with Hank Paulson on top of it, you couldn't have any better guy to do that. The important thing is that if this program extends into the next administration is to have somebody in the next administration that has similar market savvy.
CARL QUINTANILLA: Separate from the bailout, Warren, people obviously this morning want to look at the Goldman deal, I guess on top of Mitsubishi-Morgan, which happened yesterday and wasn't nearly as popular, at least from a market point of view. But they want to point to you as the 'canary in the coal mine.' Is that fair? Do you have a problem with that?
WARREN BUFFETT: Well, as long as the canary lives, I'm fine. (Laughs.)
CARL: I'm guessing you're going to live. At least, you're guessing you're going to live?
BUFFETT: Yeah, I think so. (Laughs.) This is, you know, from our standpoint, we've had a lot of cash. And we now are seeing things that, you know, give us a chance to use that cash sensibly. And this was a five billion dollar opportunity to, I think, deploy cash sensibly. I understand, incidentally, that there will be another five billion. In other words, they mentioned 2-1/2 billion, but I think they're going to allocate it down to five billion additional. So Goldman will have ten billion, I believe, of new money coming in.
BECKY: In that capital offering. In the release, they said 2-1/2 billion (of common stock would be offered in addition to Buffett's investment.) You're saying you understand it's five billion?
BUFFETT: Yeah, I think they have quite an outpouring of orders, so I think -- They'll be allocating it down, but I think from all over the world. So I think there will be five billion of additional common stock sold. That will be determined and announced, I believe, before the opening.
JOE: How much do you know about AIG and their books right now, Warren?
BUFFETT: Well, I think I know a fair amount, but I don't think anybody knew what they needed to know, including the management. The troubles there were in the subsidiary, AIG Financial Products, and they had hundreds of thousands, I'm sure, hundreds and thousands of derivative contracts. And I think that top management did not have their mind around what was involved with those contracts. And you can do a lot of damage on Wall Street with a pen and a piece of paper.
JOE: How many of those units are going to end up under the Berkshire umbrella?
BUFFETT: Well, we would have an interest in a couple of 'em. And actually over that weekend I expressed an interest in one or two, but the pressures were such, and the hole was deep enough, that they simply couldn't get it worked out. And some of those units, most of those units, I believe, will be for sale over the next year or two. And we would be interested in a couple of them. I think they'll probably do a pretty intelligent job of selling them, which means we won't be as good a buyer.
BECKY: You know, Warren, we've been trying to figure out -- I have to admit that I was shocked when I heard the news yesterday about this deal with Goldman, because you haven't put any money into an investment bank since 1987, Salomon. And that was a deal you had to get personally involved with later in 1991 when you went to run the company for almost a year. It was a very difficult experience. I'm shocked that you would get back in with another investment bank. Why do it?
BUFFETT: (Laughs.) Well, the pain has worn off. That won't be happening with Goldman, but I -- That was a very unfortunate experience, and it was actually caused by just a couple of people out of a workforce of 8000 that got the company into big trouble. And I had the help of a lot of people at Salomon in getting out of it. But I don't think this experience will be similar. Goldman has been extremely well run. My experience with Goldman goes back, when I was nine or ten years old my parents took me back to the New York World's Fair, and by an odd chance I got to sit down with Sidney Weinberg, who was the dean of Wall Street then, and he talked to me as if I was a grown-up for 45 minutes. I've never forgotten the experience. Gus Levy (who later ran Goldman in the 1970s) was a good friend of mine when I worked in Wall Street. In 1955, we only had four wires to Wall Street firms and one of them was to Goldman Sachs and Gus was on the other end of the phone. So I've had a long experience with Goldman and they've done a lot of things for me recently.
JOE: I just assume you know what was going on at all of these firms because I know everybody probably came to you and you made your decisions one-by-one on what to do. When you look at the way some of these assets were marked, could you tell that, for example, Lehman still wasn't facing reality and perhaps Merrill Lynch was more in the real world?
BUFFETT: Well, I think that turned out to be the case. I was approached on Lehman back in, I think, maybe it was April or March. But the first round of financing when they raised the four billion, and, yeah, it looked to me like it was pretty unrealistic where they were marking things. I feel good about the Goldman marks, incidentally, that's one of the discussions I've had. And -- You can be pretty fanciful in marking positions in Wall Street, particularly when things aren't trading. The one thing you want to make sure, when the Treasury is buying things, is the marks they have don't make any difference. Like I said, it wouldn't be a bad idea, if you're buying ten billion of a security and you're the Treasury, to have them sell five-hundred million, or something like that into the market, so you find out what the real market price is and then buy the other 9-1/2 billion at that price. I really think, I really think the Treasury will make -- I think they'll pay back the 700 billion and make a considerable amount of money, if they approach it in that manner. But I don't believe in trying to write that into some legislation. I think it gets so unworkable. I think you have a smart person in charge, and have them treat it like it's their own money, and the taxpayers' money, in terms of behavior, and I think it will work out very well. I think it's not comparable to the RTC.
CARL: A lot of people who are watching us Warren, and even people who have just started watching us over the past week or two, look at the stock market every day and are confused. They want to use it as a metric for how we're doing, or at least the progress we're making on big issues. I'm guessing you don't think it's reflective of anything that's based in reality right now?
BUFFETT: Well, the stock market in the short -- my old boss Ben Graham said that in the short-run the stock market is a voting machine, in the long-run it's a weighing machine. As a voting machine, it responds to people's emotions. There's no literacy test for voting. You vote according to how much money you have, not according to how smart you (are.) So the stock market does some very silly things in the short-run. Over the long-run, it behaves quite rationally. And, you know, five years from now, ten years from now, we'll look back on this period and we'll see that you could have made some extraordinary buys. That doesn't mean it won't get more extraordinary a week or a month from now. I have no idea what the stock market is going to do next month or six months from now. I do know that the American economy, over a period of time, will do very well, and people who own a piece of it will do well. But they shouldn't own it on leverage. That's what people have learned in this period, that you've got to be able to play out your hand and it's a big mistake to let somebody else be in a position where they can sell you out.
BECKY: Warren, when you first invested back in '87 in Salomon, I believe your partner, Charile Munger, was not as enthusiastic about the idea as you were. Is that true?
BUFFETT: That's true. Of course, he's never as enthusiastic about my ideas as I am. But I would say he was even less enthusiastic. (Laughs.)
BECKY: How does he feel about the Goldman deal?
BUFFETT: Well, I'm glad you asked because I, (laughs), didn't tell him about it until after it was done. (Laughs.)
CARL: How rude!
BUFFETT: (Laughs.) Yeah, it is kind of rude. But Charlie's wife had a bad fall and he's (inaudible) and I called him last night about an hour after I committed it, or something, and I called kinda like a little boy ... (laughs) ... bringing into the house something he was a little worried about. But, Charlie's all for it. (Laughs.)
BECKY: He's all for it.
BUFFETT: Yeah. Now I'm really worried.
BECKY: Uh-oh. For the last nine months, Berkshire has spent a lot of that cash it's been hoarding over the last several years.
BUFFETT: That's right.
BECKY: I was trying to figure it out. I think it's about 24 billion dollars you've spent in the last nine months?
BUFFETT: Yeah, we've spent a lot of money. The money, the money we've spent, you know, we've found things we like to do. It's nice to have a lot of money, but you don't want to keep it around forever. I prefer buying things. Otherwise it's a little like saving up sex for your old age. (Laughs.) At some point, you've got to use it. (Laughter.)
JOE: Uh-oh.
BECKY: Twenty-four billion dollars. Is that a right guess and how much cash do you have left?
BUFFETT: You know, it would be 6-1/2 for the Mars deal, there's five for this, there's five for Constellation, there's a couple of other things. So, yeah, your addition is fine, Becky.
BECKY: How much cash do you have left?
BUFFETT: Well, I've got enough. (Laughs.) I don't really look at it every day. I look for opportunities every day, and then if I find opportunities, I see if I've got enough cash around to take care of them.
JOE: Well, by my calculation, if you lever that up thirty times, Warren, you can really get serious here. (Laughter.) Maybe you don't want to do that, I don't know. (Laughter.) What about, how are we going to deal with this looming 50 -- we just had (New York State Insurance Commissioner) Eric Dinallo on, I don't know if you were watching, Mr. Buffett. He talked about, he can, maybe New York and his unit can look at the twelve billion, or trillion, jeez, we've got to add a T. I'm finally getting used to Bs, now we have to add a T. But what we are going to do with that 50 trillion and how, having that still around, all these credit default swaps, how serious is that, and how are we going to unwind it and deal with it?
BUFFETT: Yeah, well, it goes beyond credit default swaps into all forms of derivatives. But the derivative genie got out of the bottle, and it's a huge genie, and it will never get back into the bottle. It is a terribly tough problem because they are not homogeneous items. It's one thing to have a clearing house for the futures in Chicago, or something, and every morning have everybody post to market and that's a very efficient system. It's very hard to do that with derivatives where you can derivatives based on the New Zealand money supply or the number of babies born in Japan, and all kinds of things as the variables. And they're often very complicated. I applaud Dinallo. He is an outstanding insurance comimssioner. But getting regulation around the entire derivatives market is really tough. I've thought a lot about it. But it's important. Derivatives have been an important part of the problem in financial markets. And they continue to be part of it. And in AIG's case -- AIG would be doing fine now, I think, if they'd never heard of the word derivative.
BECKY QUICK: Mr. Buffett, the front page of the Wall Street Journal and other media organizations around the globe have been picking this up, your move yesterday into Goldman Sachs, as a vote of confidence in the banking institutions across the globe. Is that fair?
BUFFETT: Well, I'm not buying a cross-section of banking institutions. But I certainly have confidence in Goldman. And you can say it's a vote of confidence in the Congress to do the right thing with something that's being debated before them right now.
CARL QUINTANILLA: You know, Warren, some might say, 'OK, we know Buffett is a pure capitalist. he's in this to make money and nothing else.' But also you're a philanthropist, you have interests in seeing the country do well over time. Some might say he's doing this, he's timed this to help get the package through. Is there anything -- is that even close to reality?
BUFFETT: No. I timed this because Goldman Sachs yesterday came up with something that made sense to me. I'm not brave enough, to try and influence the Congress. The other way around, they influence me. And I am betting on the Congress doing the right thing for the American public by passing this bill and not trying to doctor it up with a hundred things that, you know, emotionally they feel should be on the bill but as a practical matter will gum things up.
CARL: When do you think, Warren -- I don't know if you even have an answer to this question -- When is the absolute deadline by which you think this needs to happen? Is it this weekend? Can you be that specific? Or if this thing were to bleed into next week, or if they had to reconvene a special session, would that be disastrous?
BUFFETT: Well, I think anything that makes it look like it's in doubt is what causes the problem. So if they said on Friday we're absolutely having a vote on Monday, or something of the sort, I don't think that would be a problem. But if they went home on Friday and there was doubt about whether they were going to do something on Monday, I think you'd see some things you don't want to see in the markets and they would have some effects on the economy.
JOE: You were watching yesterday, and I don't know, maybe I don't know the ways of Washington. Maybe they say one thing and maybe they're really planning -- you know, they have to look good for their constituents. But I wasn't convinced they really understood the seriousness of the situation, Warren, and that was after they said, look, Greenspan says we need this, Volcker says we need this, Bernanke, Paulson. Now we have you. I don't know. Do you think they get it?
BUFFETT: Well, I think they will get it. I think enough of them will get it. You know, it's not like Pearl Harbor where you could look at what happened with your own eyes and decide you had to do something that day. But this is sort of an economic Pearl Harbor we're going through. And I think most of them will get it. And I do believe they will do what's right for the country. They may vent their spleen a little bit by getting mad about the people that brought us into that, and I don't blame them for that. I might do that privately, too. But in the end, you know, Republican, Democrat, I think they've got the interest of the country at heart and I think they will do the right thing. But I hope they do it soon. (Laughs.)
BECKY: Warren, how long were you talking to Goldman Sachs and how significantly did they have to change the terms of the deal to get you interested?
BUFFETT: Well, what they -- they had talked with me -- almost every financial institution has talked with me, that you read about, over the past few weeks. But, but, they were serious yesterday about doing something. They said, in effect said, 'What would you do? What would Berkshire do? And I laid out something. And they said, 'That makes sense to us.' And we had a deal. It doesn't take long.
JOE: You were kidding Becky when you said that you did this just 'cause you knew we were going to ask you when you were going to do something in financials again and you wanted to have an answer.
BUFFETT: Joe, Joe, I was not -- you know, I was trembling with the thought of you asking me again, 'When are you finally going to do something?' (Laughs.) So this was definitely an attempt to get you off my back.
JOE: It was a cheap way, a mere five billion, so you'd have something to show us this time.
BUFFETT: That's right. I mean, your withering questioning is just too tough for me. (Laughs.)
BECKY: You know, you mentioned earlier, in the grand scheme of things, it's going to matter who the next Treasury Secretary is going to be. Are there names of people you think would be sound in either administration.
BUFFETT: Becky, if I were running things, Republican or Democrat, I would ask Hank to stay on. I mean, you don't get talent like that very often in any administrative job. And the guy pays an enormous price to do it. He's probably sleeping three or four hours a night. He knows the market. He's got the interests of the country at heart. So I think if I were either Barack Obama or John McCain and found myself in the White House in January, I would go down there and say, 'Hank, do me a favor, stick around another year.'
CARL: And Warren, if you believe, as a lot of people do, that we are in for several years of this unwinding process, the government's going to play a huge role. If you were called to do something on the public side, would you do it?
BUFFETT: Well, I would certainly be glad to help in any way that I could. You know, I would be looked at as having conflicts-of-interest, I'm sure. But anytime I can be helpful on something -- For example, in terms of what you might do with institutions that participated in this program, I think the Treasury can, they can lay down some terms for these people. I don't think they should be in the legislation, but I think -- And if anybody wants my opinion on it, I'd be glad to help them out.
BECKY: Warren, if ...
BUFFETT: They can make money on this deal. I can tell you this. I would love to have 700-billion at Treasury rates to be able to buy fixed-income securities now that they're in distress. There's a lot of money to be made.
JOE: It's just that, you know, they want these details, Warren. They said -- Paulson says there's the hold-to-maturity price and there's the firesale price. We're going to go somewhere in between, get a much better price but still leave enough for the people that are buying it to make some money. That can be done in principle? There's a way to do that, do you think?
BUFFETT: I think what I would be looking for -- I heard that hold-to-maturity price. I'm not as excited about that. I basically like a market, or something very close to a market-related price. And there are ways to determine that and I don't think that Uncle Sam should be in the business of paying somebody a whole lot more than it's worth in the market today. And if the guy that bought it doesn't like it, he doesn't have to sell it, and it was his problem, he bought it in the first place. I think a market price will enable people to be leveraged. The problem they have now is that some of the institutions, they're loaded with this stuff, they're having trouble funding, and they're worried about being able to sell a ton of it. But take the Merrill Lynch deal. Merrill Lynch had to take back 75 percent of the sales price. Well, they didn't want to take back that 75 percent. I would let 'em sell it for the same price, but I'd pay them the whole thing in cash. So they'd be a lot better off if they could have sold the whole thing at that same price but gotten paid a hundred percent in cash instead of having to take back 75 percent. And I see the government fulfilling that kind of a function.
JOE: All the outrage we're seeing in these comments from viewers, and obviously the senators are hearing from constituents. If we take your word for it, that the government could even break-even, or only lose 50 billion, that 700 billion dollar number is out there in the public, and people think that we're spending that.
BUFFETT: Yeah, they think that, yeah.
JOE: It seems crucially important to get the point across that, in your view, we could, the government could actually end up making money and saving the taxpayer from much worse, a much worse outcome if we didn't do this.
BUFFETT: The government is getting 700 billion worth of assets, assuming they spend the 700 billion, they're getting 700 billion of assets at what I regard as attractive prices. And they've got the staying power to hold those things. If I could get 700 billion, if I could borrow 700 billion on the government's terms and buy these assets I'd be doing it myself. But unfortunately I'm tapped out. (Laughs.)
BECKY: And yet, Warren, Mayor Mike Bloomberg, I heard him making comments this morning, and he's someone I know you've spoken very highly of ..
BUFFETT: I admire him.
BECKY: You admire him. he says this morning we should not be giving a blank check to have something passed in the dead of night. How dire is this situation?
BUFFETT: Well, I'm sure we didn't want to go to war on December 7, 1941, maybe, in the dead of night, or whenever we did it, in the middle of the afternoon actually. But there are time when events force timetables on you, and force action, and you have to be -- You know, it's just like in my business. I might like to think over buying something for a month, I'm not that type anyway. But in the end, if somebody offers me something that makes sense, I better decide whether to act or not. And if it makes sense to me, I usually don't attach unnecessary conditions, you know. It would be nice to have the luxury of thinking about this for three months. But I will tell you, if you think about this for three months, you're going to have a situation where -- If you think about it for three weeks, you're going to be facing a situation that's far different, and far more difficult, than if you do something now.
See you in the trenches - vmsteveo
Friday, September 5, 2008
Leadership & Self-Deception - getting out of the box
So the kids are back to school and I am back on track with the book reviews. I apologize to our readers that haven’t had much fresh content lately and I promise that will change in the coming last months of 2008 and well into 2009. On with the review….
Leadership & Self Deception, getting out of the box
by the authors of The Arbinger Institute
review by vmsteveo
Leadership & Self Deception, getting out of the box
by the authors of The Arbinger Institute
review by vmsteveo
What a jerk! How can he be so selfish? Does he realize how much of a problem he is causing? How can she say I am non-committed when I am the one doing all the work? If he goes over my head one more time!!...
Leadership and Self-Deception is yet another paradigm shift into understanding a problem that your coworkers, employees, direct reports, boss, spouse and kids all know that you have. The problem is you don’t have any idea what it is or how to fix it. After all, how can you fix something that you are unaware you have? Confused? Read on Kemo Sabe!
Leadership & Self-Deception, Getting Out of the Box teaches you to understand self deception behaviors that come as a result of betraying an action or feeling that you know is the right thing to do.
Example: You have a new born child, its 2 AM and she starts to cry. Your thought is to get up and tend to your new born to allow your spouse to get some needed rest (I might have been here a few times in my life). You now are faced with two choices:
1. Honor the action and tend to your newborn
2. Betray the action even though you know it’s the right thing to do and fake that you are sleeping nudging your spouse to get out of bed to tend to your newborn (oh yea, I’ve been there).
If we honor the action we are outside of the box of self-deception and allowing ourselves to run true to our thoughts, actions, and feelings. If however we choose to self-betray, a slew of repercussions and self justifying behavior occurs. Welcome to “The Box” of self-deception. Thoughts literally domino on how you perceive the other person based upon your own betrayal:
Lack of commitment
Lack of engagement
Trouble maker
Conflict
Lack of motivation
Stress
Poor teamwork
Backbiting
Misalignment
Lack of trust
Lack of accountability
Communication problems
The interesting concept here is your investment in justifying your decision not to honor the action which creates the above issues. These issues you created project upon you from the other parties’ perspective. Instead of the intended person or party being the one with the above problems, not honoring your action has a completely opposite effect as you are now percieved as the one with the above issues. Hence we have self-deception. Think about it. These aren’t truly or at least aren’t as drastic as you now perceive the other person to be and actually werent there at all until the point you decided to betray yourself. You’re in the box! Your reality is now completely sku’d based upon your inability to honor what you knew was the right thing to do in the first place.
Do you think the other person had any investment in you or your decision at that moment of you honoring or betraying an action? No, of course not! If you honored the decision you were doing it because it was the right thing to do. But what is the investment of the other person if you self-betray the action? Hint, look at the above list.
The author gives both personal and business examples that clarify this concept of recognizing when you are inside the box of self deception and how to get out. They also explain that we carry boxes with us and apply as necessary to specific situations which indicate that we can be inside and outside of the box depending on the situation at that moment. The good news is there is always a way out of the box but it takes a commitment to honor those actions that you know are true.
In summary, when outside of the box, decisions to do the right thing are easy and perceptions of situations and people remain clear. Stress is taken away because you are honoring what you know is the right thing to do vs. supporting a decision of self betrayal.
See you in the trenches - vmsteveo
Thursday, June 12, 2008
A Push for Q2 Close
As Q2 quickly comes to a close, I am sure most of you are being asked to push it to the limit to close out yet another quarter (weren’t we just closing Q1?). From one hard driver to another I thought you would enjoy the following to encourage you to swing for the fences for the remainder of Q2 and eliminate all potential Bill Buckner moments.
Red Sox Win World Series
It took 86 years, included insufferable losses to the hated New York Yankees and monumental gaffes seemingly replayed constantly, but the Fenway Park faithful finally danced in the streets when their beloved Boston Red Sox won the 2004 World Series in a sweep of the St. Louis Cardinals. Manny Ramirez, David Ortiz, Curt Schilling, et al., ended the agony that tormented Ted Williams, Carl Yastrzemski, Luis Tiant, et al.
Ripken breaks record
On Sept. 6, 1995, with President Clinton in attendance, Oriole Park at Camden Yards rocked when native son Cal Ripken Jr. broke the ironman record of 2,130 consecutive games played set by the Iron Horse, Lou Gehrig. With a home run for good measure, and a midgame romp around the field, Ripken helped restore luster to a sport torn apart by the 1994-95 players strike and subsequent owners lockout. The streak of 2.632 consecutive games played ran from May 30, 1982 to Sept. 19, 1998. Ripken entered the Hall of Fame on July 29, 2007.
Tiger wins first Masters
In the Deep South, at a club whose members do not look like him, on a hallowed course where legends Jones, Hogan, Nicklaus and Palmer carved out shots for history, Tiger Woods earned a victory “for the ages” in winning the green jacket in 1997 at The Masters in Augusta, Ga. The game of golf has not looked the same since.
Villanova upsets Georgetown
The No. 1-seeded Georgetown Hoyas were overwhelming favorites to successfully defend their 1984 NCAA men’s basketball title when they met No. 8-seeded Villanova on April Fools’ Day. The Hoyas’ senior superstar center, Patrick Ewing, only months later would become the first pick of the NBA draft. But Ed Pinckney, Dwayne McClain, Harold Pressley, Harold Jensen, Gary McLain and teammates hit 79% of their shots, including 90% in the second half, under the direction of animated coach Rollie Massimino. The Wildcats won 66-64.
N.C. State upsets Houston
Jim Valvano in a daze, trying to find someone to hug, is as unforgettable an image as Lorenzo Charles, moments earlier, dunking after grabbing Dereck Whittenburg’s desperation heave to give North Carolina State the 1983 NCAA men’s basketball title. How improbable was it? N.C. State was the first champion with 10 losses, had lost six of eight in one stretch of the regular season and only qualified for the NCAA tournament by winning the ACC tournament. But the Wolfpack never gave up.
Nicklaus, at 46, wins ’86 Masters
He had missed the cut in three of seven tournaments, withdrew from another and hadn’t won a tournament in two years. His last major title was in 1980. But with an 18th (and final) major in sight, the Golden Bear sank a 12-foot putt for eagle at No. 15 in the final round. That brought a smile even to the stoic Nicklaus, whose son Jack was his caddie. “It’s about the only television event (that) when I see it come on television, I actually stop and watch a little bit of it,” Nicklaus says.
Doug Flutie’s Hail Mary pass
Six seconds to go. Forty-eight yards to a touchdown. Team trailing 45-41 at Miami’s Orange Bowl. That’s what faced the 5-9 quarterback for Boston College on Nov. 23, 1984, when he scrambled and tossed up a prayer. Three receivers and three defenders begin converging toward the end zone, with BC’s Gerard Phelan snagging the catch, cradling the ball as if it were “my firstborn.” Flutie won the Heisman Trophy, and played professionally in the USFL, CFL and NFL until retiring in 2006.
Kirk Gibson walk-off homer
Two outs, bottom of the ninth, man on first for the Los Angeles Dodgers, future Hall of Famer Dennis Eckersley on the mound for the Oakland Athletics. Gibson, soon to be named NL MVP, is summoned to pinch-hit despite hamstring and knee problems. He works the count to 3-2. Jack Buck makes the TV call: “Gibson swings, and a fly ball to deep right field. This is gonna be a home run! Unbelievable! A home run for Gibson! And the Dodgers have won the game 5-4. I don’t believe what I just saw. I don’t believe what I just saw.” Gibson’s only at-bat of the Series sends the Dodgers on their way to winning the championship.
U.S. women win ’99 World Cup
Before 90,185 at the Rose Bowl, the largest crowd to witness a women’s sporting event, Brandi Chastain beats China goalkeeper Gao Hong for a 5-4 edge in penalty kicks to break the overtime tie and give the USA the soccer title after two hours of play under a broiling sun. Chastain flings off her white uniform jersey, sparkling confetti envelops the field, U.S. players hug and dance and the Chinese graciously applaud the victors. TV ratings were 2 points higher than for the ’99 NBA Finals.
Bill Buckner error
If only Boston relievers could have held the 5-3 advantage with two outs in the bottom of the 10th inning of Game 6, the 1986 World Series would have been over and the Red Sox would have had their first title since 1918. But Calvin Schiraldi gave up three consecutive singles to make it 5-4. Bob Stanley relieved and threw a wild pitch, allowing in the tying run. Few remember all that. What is remembered: Mookie Wilson’s soft grounder down the first-base line that went underneath the glove and through the legs of sore-ankled Buckner, allowing Ray Knight to score the winning run for the New York Mets, who go on to win and take Game 7. Thus are born endless references to having a “Bill Buckner moment.”
Christian Laettner jumper sends Duke into ’92 NCAA Final Four
Grant Hill throws the ball three-quarters of the way upcourt. Laettner, at the free throw line, makes the catch, pivots, takes one dribble, fakes right to clear his defender, spins left and shoots the fadeaway — all in less than 2.1 seconds to beat the final buzzer. The 17-foot jumper caps an overtime thriller as Duke beats Kentucky 104-103 in the East Regional final and goes on to successfully defend its ’91 NCAA title.
Armstrong wins seven consecutive Tours de France
In 1996, Lance Armstrong was the top-ranked cyclist in the world when he was diagnosed with testicular cancer that had spread to his brain and lungs. Aggressive chemotherapy worked, and in 1999 he began his Tour de France title run that ended in 2005 only by retirement.
Gretzky sets NHL scoring record
The Great One, who holds virtually every major offensive record in the NHL, became the all-time leading scorer Oct. 15, 1989, passing Gordie Howe’s 1,850 points as a member of the Los Angeles Kings. Gretzky played nine more seasons, ending with 2,857 points in a 20-year NHL playing career. Gretzky was the leading scorer in 10 seasons, nine times was the MVP and twice the playoff MVP and made 18 consecutive All-Star Game appearances. (Adapted from Glory, Heartbreak, Infamy USA Today 6/11/2007)
See you in the trenches - vmsteveo
Red Sox Win World Series
It took 86 years, included insufferable losses to the hated New York Yankees and monumental gaffes seemingly replayed constantly, but the Fenway Park faithful finally danced in the streets when their beloved Boston Red Sox won the 2004 World Series in a sweep of the St. Louis Cardinals. Manny Ramirez, David Ortiz, Curt Schilling, et al., ended the agony that tormented Ted Williams, Carl Yastrzemski, Luis Tiant, et al.
Ripken breaks record
On Sept. 6, 1995, with President Clinton in attendance, Oriole Park at Camden Yards rocked when native son Cal Ripken Jr. broke the ironman record of 2,130 consecutive games played set by the Iron Horse, Lou Gehrig. With a home run for good measure, and a midgame romp around the field, Ripken helped restore luster to a sport torn apart by the 1994-95 players strike and subsequent owners lockout. The streak of 2.632 consecutive games played ran from May 30, 1982 to Sept. 19, 1998. Ripken entered the Hall of Fame on July 29, 2007.
Tiger wins first Masters
In the Deep South, at a club whose members do not look like him, on a hallowed course where legends Jones, Hogan, Nicklaus and Palmer carved out shots for history, Tiger Woods earned a victory “for the ages” in winning the green jacket in 1997 at The Masters in Augusta, Ga. The game of golf has not looked the same since.
Villanova upsets Georgetown
The No. 1-seeded Georgetown Hoyas were overwhelming favorites to successfully defend their 1984 NCAA men’s basketball title when they met No. 8-seeded Villanova on April Fools’ Day. The Hoyas’ senior superstar center, Patrick Ewing, only months later would become the first pick of the NBA draft. But Ed Pinckney, Dwayne McClain, Harold Pressley, Harold Jensen, Gary McLain and teammates hit 79% of their shots, including 90% in the second half, under the direction of animated coach Rollie Massimino. The Wildcats won 66-64.
N.C. State upsets Houston
Jim Valvano in a daze, trying to find someone to hug, is as unforgettable an image as Lorenzo Charles, moments earlier, dunking after grabbing Dereck Whittenburg’s desperation heave to give North Carolina State the 1983 NCAA men’s basketball title. How improbable was it? N.C. State was the first champion with 10 losses, had lost six of eight in one stretch of the regular season and only qualified for the NCAA tournament by winning the ACC tournament. But the Wolfpack never gave up.
Nicklaus, at 46, wins ’86 Masters
He had missed the cut in three of seven tournaments, withdrew from another and hadn’t won a tournament in two years. His last major title was in 1980. But with an 18th (and final) major in sight, the Golden Bear sank a 12-foot putt for eagle at No. 15 in the final round. That brought a smile even to the stoic Nicklaus, whose son Jack was his caddie. “It’s about the only television event (that) when I see it come on television, I actually stop and watch a little bit of it,” Nicklaus says.
Doug Flutie’s Hail Mary pass
Six seconds to go. Forty-eight yards to a touchdown. Team trailing 45-41 at Miami’s Orange Bowl. That’s what faced the 5-9 quarterback for Boston College on Nov. 23, 1984, when he scrambled and tossed up a prayer. Three receivers and three defenders begin converging toward the end zone, with BC’s Gerard Phelan snagging the catch, cradling the ball as if it were “my firstborn.” Flutie won the Heisman Trophy, and played professionally in the USFL, CFL and NFL until retiring in 2006.
Kirk Gibson walk-off homer
Two outs, bottom of the ninth, man on first for the Los Angeles Dodgers, future Hall of Famer Dennis Eckersley on the mound for the Oakland Athletics. Gibson, soon to be named NL MVP, is summoned to pinch-hit despite hamstring and knee problems. He works the count to 3-2. Jack Buck makes the TV call: “Gibson swings, and a fly ball to deep right field. This is gonna be a home run! Unbelievable! A home run for Gibson! And the Dodgers have won the game 5-4. I don’t believe what I just saw. I don’t believe what I just saw.” Gibson’s only at-bat of the Series sends the Dodgers on their way to winning the championship.
U.S. women win ’99 World Cup
Before 90,185 at the Rose Bowl, the largest crowd to witness a women’s sporting event, Brandi Chastain beats China goalkeeper Gao Hong for a 5-4 edge in penalty kicks to break the overtime tie and give the USA the soccer title after two hours of play under a broiling sun. Chastain flings off her white uniform jersey, sparkling confetti envelops the field, U.S. players hug and dance and the Chinese graciously applaud the victors. TV ratings were 2 points higher than for the ’99 NBA Finals.
Bill Buckner error
If only Boston relievers could have held the 5-3 advantage with two outs in the bottom of the 10th inning of Game 6, the 1986 World Series would have been over and the Red Sox would have had their first title since 1918. But Calvin Schiraldi gave up three consecutive singles to make it 5-4. Bob Stanley relieved and threw a wild pitch, allowing in the tying run. Few remember all that. What is remembered: Mookie Wilson’s soft grounder down the first-base line that went underneath the glove and through the legs of sore-ankled Buckner, allowing Ray Knight to score the winning run for the New York Mets, who go on to win and take Game 7. Thus are born endless references to having a “Bill Buckner moment.”
Christian Laettner jumper sends Duke into ’92 NCAA Final Four
Grant Hill throws the ball three-quarters of the way upcourt. Laettner, at the free throw line, makes the catch, pivots, takes one dribble, fakes right to clear his defender, spins left and shoots the fadeaway — all in less than 2.1 seconds to beat the final buzzer. The 17-foot jumper caps an overtime thriller as Duke beats Kentucky 104-103 in the East Regional final and goes on to successfully defend its ’91 NCAA title.
Armstrong wins seven consecutive Tours de France
In 1996, Lance Armstrong was the top-ranked cyclist in the world when he was diagnosed with testicular cancer that had spread to his brain and lungs. Aggressive chemotherapy worked, and in 1999 he began his Tour de France title run that ended in 2005 only by retirement.
Gretzky sets NHL scoring record
The Great One, who holds virtually every major offensive record in the NHL, became the all-time leading scorer Oct. 15, 1989, passing Gordie Howe’s 1,850 points as a member of the Los Angeles Kings. Gretzky played nine more seasons, ending with 2,857 points in a 20-year NHL playing career. Gretzky was the leading scorer in 10 seasons, nine times was the MVP and twice the playoff MVP and made 18 consecutive All-Star Game appearances. (Adapted from Glory, Heartbreak, Infamy USA Today 6/11/2007)
See you in the trenches - vmsteveo
Monday, May 12, 2008
George Washington's 7 Habits
George Washington’s ‘7 habits’
Who are we to argue with the assertion that America’s greatest leader was its first? It’s all true: George Washington ran two major start-ups—the army and the presidency—in addition to his farm and other businesses. Not to mention the Constitutional Convention, which he chaired.
In a nutshell, here’s how Washington worked:
He adapted. When he saw that his tobacco crop wasn’t making the grade, he tried something new, exchanging high-status tobacco for more diversified crops, including alfalfa, buckwheat and hemp.
He guarded the troops. Even without modern-day knowledge of germs and sanitation, Washington kept a sharp-eye out to ensure strict sanitation in army latrines. He also threatened
his men with court-martial for any unsanitary behavior.
He valued intelligence. He always sent scouts to observe and report on the enemy, eventually developing a network of spies.
He deferred to experts. Washington’s artillery commander, Henry Knox, had little experience but knew the history of heavy weapons. Knox added an artillery company to every brigade of infantry, an innovation that made the army more formidable.
He went with the flow. Washington wanted the French fleet, headed by Rochambeau, to help him take back New York. Instead, Rochambeau ignored him and sailed south to Yorktown, eventually winning the war. Washington basically said: OK.
He believed. In 1783, with a desperate, unpaid army on his hands, Washington so believed a turnaround was possible that he convinced his officers of it.
He gave second chances. President Washington named as ambassador to France an out-of-control smart aleck. The president had to discipline his ambassador but also expressed the
“fullest confidence” in his ability to improve. He did.
—Article from Executive Leadership and adapted from George Washington on Leadership,
Richard Brookhiser, Basic Books.
See you in the trenches - vmsteveo
Who are we to argue with the assertion that America’s greatest leader was its first? It’s all true: George Washington ran two major start-ups—the army and the presidency—in addition to his farm and other businesses. Not to mention the Constitutional Convention, which he chaired.
In a nutshell, here’s how Washington worked:
He adapted. When he saw that his tobacco crop wasn’t making the grade, he tried something new, exchanging high-status tobacco for more diversified crops, including alfalfa, buckwheat and hemp.
He guarded the troops. Even without modern-day knowledge of germs and sanitation, Washington kept a sharp-eye out to ensure strict sanitation in army latrines. He also threatened
his men with court-martial for any unsanitary behavior.
He valued intelligence. He always sent scouts to observe and report on the enemy, eventually developing a network of spies.
He deferred to experts. Washington’s artillery commander, Henry Knox, had little experience but knew the history of heavy weapons. Knox added an artillery company to every brigade of infantry, an innovation that made the army more formidable.
He went with the flow. Washington wanted the French fleet, headed by Rochambeau, to help him take back New York. Instead, Rochambeau ignored him and sailed south to Yorktown, eventually winning the war. Washington basically said: OK.
He believed. In 1783, with a desperate, unpaid army on his hands, Washington so believed a turnaround was possible that he convinced his officers of it.
He gave second chances. President Washington named as ambassador to France an out-of-control smart aleck. The president had to discipline his ambassador but also expressed the
“fullest confidence” in his ability to improve. He did.
—Article from Executive Leadership and adapted from George Washington on Leadership,
Richard Brookhiser, Basic Books.
See you in the trenches - vmsteveo
Monday, May 5, 2008
Excerpts from Coach John Wooden To His Team
Born October 14th, 1910, Coach John Wooden is one of the most thought provoking and inspirational people in sports. I received this from a friend and wanted to share. I would enjoy hearing your feedback.
DO NOT CAUSE YOUR OWN FAILURE
1969 Preseason Letter to the Team
“Recorded history shows us that the underlying reason for the failure of every civilization or cause has been a breakdown from within, and I deeply believe that most potentially great teams that did not measure up to what seemed possible and logical failed to do so because of friction in one way or another from within. Let us not be victimized in such a manner”.
HOT TO INFLUENCE THE FUTURE
1972 Preseason Letter to the Team (following his eighth national title)
“I must caution you that you cannot live in the past. The 1971-1972 season is now history, and we must look toward the future. The past cannot change what is to come. The work that you do each and every day is the only true way to improve and prepare yourself for what is to come. You cannot change the past, and you can influence the future ONLY BY WHAT YOU DO TODAY”.
Adapted from excerpts on http://www.coachjohnwooden.com/
See you in the trenches - vmsteveo
DO NOT CAUSE YOUR OWN FAILURE
1969 Preseason Letter to the Team
“Recorded history shows us that the underlying reason for the failure of every civilization or cause has been a breakdown from within, and I deeply believe that most potentially great teams that did not measure up to what seemed possible and logical failed to do so because of friction in one way or another from within. Let us not be victimized in such a manner”.
HOT TO INFLUENCE THE FUTURE
1972 Preseason Letter to the Team (following his eighth national title)
“I must caution you that you cannot live in the past. The 1971-1972 season is now history, and we must look toward the future. The past cannot change what is to come. The work that you do each and every day is the only true way to improve and prepare yourself for what is to come. You cannot change the past, and you can influence the future ONLY BY WHAT YOU DO TODAY”.
Adapted from excerpts on http://www.coachjohnwooden.com/
See you in the trenches - vmsteveo
Saturday, May 3, 2008
Executive Coaching
12 traits you need at the top
Executive coach Debra Benton urges her CEO clients to pay special attention to these traits:
1. Attitude - Good leaders stay positive and do not waver.
2. Tenacity - Nothing is ever accomplished with just one letter, one telephone call or one request.
3. Risk tolerance - Mistakes help you and others learn.
4. Active honesty - Carelessness with facts kills your credibility.
5. Prudence - Thinking before you speak helps build your purpose.
6. Originality - People like to sense that with you they are breaking new ground.
7. Modesty - It’s better to have other people recognize your ability than to point it out yourself.
8. Style - It’s not about your clothes, but about what you do while you are in your clothes.
9. Willingness to admit mistakes - If you are error-free, you are probably effort-free.
10. Downward loyalty - Leaders protect their people.
11. Straightforwardness - People support what is simple and direct.
12. Inquisitiveness - Curiosity leads any organization into new areas.
Executive Leadership, May 2008 — Adapted from How to Think Like a CEO, Debra Benton, Warner
See you in the trenches - vmsteveo
Executive coach Debra Benton urges her CEO clients to pay special attention to these traits:
1. Attitude - Good leaders stay positive and do not waver.
2. Tenacity - Nothing is ever accomplished with just one letter, one telephone call or one request.
3. Risk tolerance - Mistakes help you and others learn.
4. Active honesty - Carelessness with facts kills your credibility.
5. Prudence - Thinking before you speak helps build your purpose.
6. Originality - People like to sense that with you they are breaking new ground.
7. Modesty - It’s better to have other people recognize your ability than to point it out yourself.
8. Style - It’s not about your clothes, but about what you do while you are in your clothes.
9. Willingness to admit mistakes - If you are error-free, you are probably effort-free.
10. Downward loyalty - Leaders protect their people.
11. Straightforwardness - People support what is simple and direct.
12. Inquisitiveness - Curiosity leads any organization into new areas.
Executive Leadership, May 2008 — Adapted from How to Think Like a CEO, Debra Benton, Warner
See you in the trenches - vmsteveo
Monday, April 28, 2008
Are You Too Trusting?
Are You Too Trusting?
To succeed in business - especially at the executive level - it's imperative that you are able to discern whom you can trust and whom you can't. Watch out for people with the six most dangerous character flaws:
1. People who rarely do what they say they will do.
2. People who push their work on to you.
3. People who are late and dont apologize.
4. People who tell you "I am too busy."
5. People who reject your ideas out of hand.
6. People who won't let you off the hook when you're in a jam.
Source: Executive Leadership; Staying Street Smart in an Internet Age, Mark H.McCormack, Viking (Penguin)
See you in the trenches - vmsteveo
To succeed in business - especially at the executive level - it's imperative that you are able to discern whom you can trust and whom you can't. Watch out for people with the six most dangerous character flaws:
1. People who rarely do what they say they will do.
2. People who push their work on to you.
3. People who are late and dont apologize.
4. People who tell you "I am too busy."
5. People who reject your ideas out of hand.
6. People who won't let you off the hook when you're in a jam.
Source: Executive Leadership; Staying Street Smart in an Internet Age, Mark H.McCormack, Viking (Penguin)
See you in the trenches - vmsteveo
Saturday, April 26, 2008
The Speed of Trust - The One Thing That Changes Everything
The Speed of Trust – The One Thing That Changes Everything
By Stephen M.R. Covey with Rebecca R. Merrill
review by vmsteveo
This is a shout out to all you Covey freaks! Stephen M.R. Covey is following in his fathers footsteps with his first book "The Speed of Trust". If you don’t know who Stephen M.R. Covey is, he was the "Green and Clean" son from his fathers book "The Seven Habits of Highly Effective People". That great story of his sons stewardship of the family yard and his trials and tribulations with self management and accountability has stuck with me for the past 17 years!
Anyway, Stephen M.R. Covey hit a home run dialing into one of the most important yet overlooked aspects of any personal or business relationship, trust. Covey sets the stage with an abundance of data citing various publications that point toward an ever growing lack of trust in today's society from corporate scandals to broken personal relationships and everything in between. He begins by simply breaking the cause and effect of trust down to the essence of a mathematical formula:
Covey explains when trust is non-existent, speed of the transaction goes down and costs go up.
6Trust = 6Speed 5Cost
In comparison, when trust is present, speed of the transaction goes up and costs go down.
5Trust = 5Speed 6Cost
He continues to explain that a well thought out strategy (S) is important as well as the method of execution (E) which equals the end goal or result (R):
S x E = R
Add the multiple of trust (T) and the "true" result can vary greatly depending on if it’s a trust tax (low or no trust) or a trust dividend (high trust). Coveys formula is expanded by a trust multiple:
(S x E)+/-T = R
For example, if your business plan has a go to market strategy rating of 10 (on a scale from 1-10) and your method of execution a 10 the result equals 100:
(Strategy (10) X Execution (10)) = 100
But, if we take into consideration the lack of trust, then we have to include a trust tax of 40:
(Strategy (10) X Execution (10)) - Trust Tax (40) = 60
In comparison, if the relationship has a positive trust factor, then we have a trust dividend of 20:
(Strategy (10) X Execution (10)) + Trust Div (20) = 120
Definitions of the trust multiples are explained in detail and can be inserted into the above equations.
Next, Stephen explains the 5 waves of trust:
Self – The confidence we have in ourselves. Under the Self wave there are 4 Cores on Credibility:
1. Integrity – Walking your talk
2. Intent – Our motives, agendas and resulting behavior
3. Capabilities – talents, skill sets
4. Results – Track record, performance
Relationship – Creating “trust accounts” with others. This section beaks out 13 chapters for the following behaviors that drive successful relationships:
Behavior #1: Talk Straight – Be honest
Behavior #2: Demonstrate Respect – Care for others
Behavior #3: Create Transparency – Tell the truth in a way people can verify
Behavior #4: Right Wrongs – Make things right when your wrong
Behavior #5: Show Loyalty – Give credit freely
Behavior #6: Deliver Results – Establish a track record
Behavior #7: Get Better – Continuously improve
Behavior #8: Confront Reality – Address the tough stuff directly
Behavior #9: Clarify Expectations – Disclose and reveal expectations
Behavior #10: Practice Accountability – Hold yourself accountable
Behavior #11: Listen First – Listen before you speak
Behavior #12: Keep Commitments – Say what you do, then do what you say
Behavior #13: Extend Trust – Demonstrate a propensity to trust
Organizational – Spanning trust across all kinds of organizations, non profit, governmental
Market – Your company brand being trustworthy
Societal – Creating trust for society at large
In summary, The Speed of Trust is packed with great advice on increasing trust on a personal and organizational level. Like most of the Covey books, this one comes equipped with worksheets, matrices and exercises to enable you to determine and improve your trust factor.
So I leave you with one thought provoking question: What can you do today to increase your personal and professional trust factor? I would enjoy hearing your comments.
See you in the trenches - vmsteveo
Thursday, April 24, 2008
the dip - Seth Godin
The Dip – A Little Book That Teaches You When To Quit (And When To Stick)
By Seth Godin
book review by vmsteveo
“the dip” is definitely my kind of read as it’s a smaller book in size compared to your average business book and is only eighty-eight pages. However, don’t let this fool you as it is packed with great advice about when to throw in the towel and when to suck it up and press on with that one endeavor or endeavors you are having second thoughts about. As I have said in some of my past reviews I am from the school of thought that says work hard and your efforts will be recognized and rewarded. This ideal would be true if you were the only one who believed this, but….your not. Enter the dip or the barrier to entry to anything worthwhile and where most people give up. It’s the area or cycle of an endeavor where things get really, really, really tough for most to say “screw it, I’m outta here!” or to settle into mediocrity. Only a mere few push through this “dip” and come out the other end as extraordinary.
The concept of the dip comes into play after the honeymoon or newness of the endeavor (ie new job, workout regime) passes and you truly begin to understand the complexity and quality of the work that needs to be achieved by you to get through the dip. The reality of the dip is the guys and gals that have gone through the dip and are at the top are betting on your failure through the dip, in fact they count on it. There are tough obstacles that they set up that only the few can hurdle and accomplish. They know you are going to quit which allows them to remain number one for a longer period of time.
Think about it. My local YMCA in Davidson can’t possibly hold the number of members that they sign up during a given year. If all of them showed up, guess what? No one would be able to get to the equipment. It would be chaos. It’s sad to say, but they are betting on a good chunk of those members will quit soon after they sign up. Now if the majority quits, who benefits? First and foremost, the YMCA profits from members that have paid their fees and don’t use the facility but also the remaining members benefit from easy access to the equipment and lower membership fees, right? What a concept!!!
Let’s face it; everyone has been through the dip and quit mid way through it. It can be a sucky place to be if you let it get the best of you or an area filled with opportunity as you lean into the dip with everything you’ve got. I am convinced that those people that choose not to let the dip get the best of them end up on the other side as extraordinary.
Next Seth sizes up what scenarios within the curve to stick with and those to run like hell in the opposite direction:
The dip is a situation to evaluate and determine if the work involved to go through the dip is worth the prize on the other side. A good place to be.
The Cul de Sac as the French define as “dead-end” reflects an endeavor that is neither moving forward or backward. Get out, leave, reevaluate, and redefine.
The Cliff is a scenario where you are so afraid of quitting this endeavor that it overpowers any judgment you might have. This scenario screams, run like hell in the opposite direction. Bad.
The problem with the Cul de Sac and the Cliff is that they both lead to one thing… failure. Quit immediately if you sense one of your endeavors are in either of these two categories. So in summary, the safest place to be is the dip.
So you’ve made the conscious decision that a given endeavor is worth the dip that you must go through to be extraordinary, now what? How do you level set yourself to get through the dip knowing it’s going to be very long and hard journey?
To answer, this should be easy as you have already made the decision that the benefits of the other side far outweigh the pain of the dip. That commitment/decision to yourself will help you along the way. Once you make the commitment, stick to it, do it with vigor, enthusiasm, and a little bit of anger and never, never, ever give up.
Finally Seth gives us three questions to ask yourself in the event you are thinking about quitting any endeavor:
Am I panicing?
Who am I trying to influence?
What sort of measurable progress am I making?
So I ask you:
Which endeavors will you remove to make your remaining endeavors extraordinary?
Which endeavor will you pursue until you are #1?
I would enjoy hearing your comments.
See you in the trenches - vmsteveo
Sunday, March 30, 2008
Change The Way You See Everything Through Asset-Based Thinking
Change The Way You See Everything Through Asset-Based Thinking
by Kathryn D. Cramer, Ph.D & Hank Wasiak
book review by vmsteveo
Change the Way You See Everything is a collection of three thought provoking sections that encourage its readers to change their perspective from deficit-based to asset-based thinking. The book takes the reader past the proverbial glass half-full, positive thinking techniques and gives them a step by step, easy to follow guide with end of chapter go-do’s that can stimulate even the most determined pessimists. Before we get into discussing the book, let's define asset and deficit based thinking:
Deficit-Based Thinking (DBT) – “Concentrates on personal gaps and weaknesses, what is bothersome and irritating about others, and what is not working , problematic and holding us back.”
Asset-Based Thinking (ABT) – “Equips you with a special way of viewing everyday life that yield maximum returns on your investment of attention and effort.”
Section I, Change the Way You See Yourself, teaches to be less critical of the self through identifying and expanding your successes, positive experiences, and what makes you at peace; leaving perceived faults, non supportive people and negative experiences behind you.
Section II, Change the Way You See Other People encourages readers to set aside personal biases of other people by knocking it down a gear and taking a deep breath to search for the truth within that person. This can greatly change your understanding of what matters most to that co-worker, client or opponent.
Section III, Change the Way You See Situations coaches the reader to take a stressful situation and analyzing it in slow motion. I especially like the Laws of Attraction as it explains the importance of projecting outward your commitment, support and dedication to the person or task at hand. Doing the opposite can kill a sale or permanently damage a relationship.
Change the Way You See Everything includes exercises at the end of each section and has an area to jot down your thoughts. This book also comes equipped with detachable 3x5 cards with Asset-Based phrases used to remind you of what matters most and to get away from dwelling on those negative thoughts that seem to creep in every now and then. Lastly, the authors leave you with several sources to continue your deep dive into Asset Based Thinking. I leave you with one righteous, thought provoking quote from the book:
“In everyone’s life, at some time, our inner fire goes out. It is then burst into flame by an encounter with another human being. We should all be thankful for those people who rekindle the human spirit.”
- Albert Schweitzer
See you in the trenches - vmsteveo
by Kathryn D. Cramer, Ph.D & Hank Wasiak
book review by vmsteveo
Change the Way You See Everything is a collection of three thought provoking sections that encourage its readers to change their perspective from deficit-based to asset-based thinking. The book takes the reader past the proverbial glass half-full, positive thinking techniques and gives them a step by step, easy to follow guide with end of chapter go-do’s that can stimulate even the most determined pessimists. Before we get into discussing the book, let's define asset and deficit based thinking:
Deficit-Based Thinking (DBT) – “Concentrates on personal gaps and weaknesses, what is bothersome and irritating about others, and what is not working , problematic and holding us back.”
Asset-Based Thinking (ABT) – “Equips you with a special way of viewing everyday life that yield maximum returns on your investment of attention and effort.”
Section I, Change the Way You See Yourself, teaches to be less critical of the self through identifying and expanding your successes, positive experiences, and what makes you at peace; leaving perceived faults, non supportive people and negative experiences behind you.
Section II, Change the Way You See Other People encourages readers to set aside personal biases of other people by knocking it down a gear and taking a deep breath to search for the truth within that person. This can greatly change your understanding of what matters most to that co-worker, client or opponent.
Section III, Change the Way You See Situations coaches the reader to take a stressful situation and analyzing it in slow motion. I especially like the Laws of Attraction as it explains the importance of projecting outward your commitment, support and dedication to the person or task at hand. Doing the opposite can kill a sale or permanently damage a relationship.
Change the Way You See Everything includes exercises at the end of each section and has an area to jot down your thoughts. This book also comes equipped with detachable 3x5 cards with Asset-Based phrases used to remind you of what matters most and to get away from dwelling on those negative thoughts that seem to creep in every now and then. Lastly, the authors leave you with several sources to continue your deep dive into Asset Based Thinking. I leave you with one righteous, thought provoking quote from the book:
“In everyone’s life, at some time, our inner fire goes out. It is then burst into flame by an encounter with another human being. We should all be thankful for those people who rekindle the human spirit.”
- Albert Schweitzer
See you in the trenches - vmsteveo
Tuesday, March 25, 2008
After rough start, Bob McKillop is at home at little Davidson
This is a very inspirational article for any level of management and comes directly from my home town.
See you in the trenches - vmsteveo
After rough start, Bob McKillop is at home at little Davidson
By MIKE CRANSTON, AP Sports Writer Mar 19, 2:07 pm EDT
DAVIDSON, N.C. (AP)—Bob McKillop arrived 19 years ago from New York and planned a short stay. He thought it would take about four years to turn around the Davidson basketball program. Then he’d move on to that bigger coaching job he was convinced he deserved.
“Arrogant, abrasive, cocky high school coach,” McKillop said in describing himself then. “Thought he could come in and wave a magic wand, not realizing the challenges of Division I basketball.”
McKillop, who starred at Hofstra before becoming a decorated high school coach on Long Island, saw his plan shattered when Davidson went 4-24, 10-19 and 11-17 his first three seasons.
His job on the line, McKillop realized he had to change.
I had to get brought to my knees with a very humbling experience before I learned what the real importance in coaching is,” McKillop said. “That’s teaching young men to be responsible, to be accountable and to work as a team.”
While he stubbornly clings to his New York accent, every other part of that young and grating coach is gone, as the 57-year-old McKillop prepares to lead Davidson (26-6) against Gonzaga on Friday in the first round of the NCAA tournament.
Now 337-224 in 19 seasons, McKillop has not only turned Davidson into a mid-major power, he’s become a fixture and father figure at this tiny liberal arts college. He lives in a house that sits across the street from campus in this quaint town 20 miles north of Charlotte. You can sometimes see him chatting with neighbors on the sidewalk. Both of his sons have played for him, including Brendan, a freshman on this year’s team.
“When I came, Bob was still learning about the culture at Davidson and it’s not an easy task,” said athletic director Jim Murphy, who arrived as McKillop started his seventh season in 1995. “But I think each year he assimilated a greater sense of the community and a greater feeling for the intricacies of the Davidson College community.” McKillop has led the Wildcats to four straight 20-win seasons and three straight NCAA tournaments, but this year’s team is his best.
Davidson has won 22 straight games, the longest streak in the nation. Seeded 10th in the Midwest Region, the Wildcats have their best chance to win their first NCAA tournament game since Lefty Driesell put this school on the basketball map with two Elite Eight appearances in the 1960s.
“He’s done a great job there,” said Driesell, still considered royalty around town. “I love his team. I think he could win a couple of games in the NCAA and I’m pulling for them.”
Like Driesell, McKillop has overcome rigid academic standards at this school of 1,700 students with a unique recruiting philosophy. Davidson’s roster has players from Canada, France, England, Turkey and Nigeria.
But McKillop didn’t have to venture far to get the best player to wear a Wildcats uniform in decades. McKillop eagerly went after Charlotte’s Stephen Curry when the big schools shied away because of his size. Curry, the son of former NBA player Dell Curry, has since grown four inches to 6-foot-3. With a lightning-quick release, the sophomore has scored 1,533 points in less than two seasons under McKillop’s guidance. “You see his decision-making has improved quite significantly,” said McKillop, who clearly relishes coaching such a talented player. “His defense, his rebounding have improved significantly.” But Curry isn’t immune from McKillop’s demanding style. Neither is senior point guard Jason Richards, who leads the country in assists per game.
The self-proclaimed “tough guy from Queens” gets on everybody. Thomas Sander caught McKillop’s wrath at practice on Monday, when the senior forward was sluggish after staying up most of the night before finishing a paper. “He came up to me afterward and said, ‘Thomas, I’m not that kind of coach. I’m going to be on you no matter what time of the year it is. If you want a different coach, go someplace else,”’ Sander said.
“I said, ‘Coach, I’m a senior. Where am I going to go?”’ It’s clear McKillop no longer plans to go elsewhere. “There is no doubt in my mind that Bob could be very successful at any number of Division I college basketball programs,” Murphy said. “It’s just a question of how much would he enjoy his success at those programs. I’ve heard him say, ‘How many Division I coaches can say they’ve raised three children in the same house?”’
A house that allows McKillop to walk to work, while running into excited residents who think Davidson can become this year’s big NCAA tournament surprise. “Sometimes when you put your eyes on your next job rather than put your eyes on what’s in front of you, which is your team, you fall into that trap very easily,” McKillop said. “I’ve been fortunate that my family has been afforded the opportunity to grow up here.”
See you in the trenches - vmsteveo
After rough start, Bob McKillop is at home at little Davidson
By MIKE CRANSTON, AP Sports Writer Mar 19, 2:07 pm EDT
DAVIDSON, N.C. (AP)—Bob McKillop arrived 19 years ago from New York and planned a short stay. He thought it would take about four years to turn around the Davidson basketball program. Then he’d move on to that bigger coaching job he was convinced he deserved.
“Arrogant, abrasive, cocky high school coach,” McKillop said in describing himself then. “Thought he could come in and wave a magic wand, not realizing the challenges of Division I basketball.”
McKillop, who starred at Hofstra before becoming a decorated high school coach on Long Island, saw his plan shattered when Davidson went 4-24, 10-19 and 11-17 his first three seasons.
His job on the line, McKillop realized he had to change.
I had to get brought to my knees with a very humbling experience before I learned what the real importance in coaching is,” McKillop said. “That’s teaching young men to be responsible, to be accountable and to work as a team.”
While he stubbornly clings to his New York accent, every other part of that young and grating coach is gone, as the 57-year-old McKillop prepares to lead Davidson (26-6) against Gonzaga on Friday in the first round of the NCAA tournament.
Now 337-224 in 19 seasons, McKillop has not only turned Davidson into a mid-major power, he’s become a fixture and father figure at this tiny liberal arts college. He lives in a house that sits across the street from campus in this quaint town 20 miles north of Charlotte. You can sometimes see him chatting with neighbors on the sidewalk. Both of his sons have played for him, including Brendan, a freshman on this year’s team.
“When I came, Bob was still learning about the culture at Davidson and it’s not an easy task,” said athletic director Jim Murphy, who arrived as McKillop started his seventh season in 1995. “But I think each year he assimilated a greater sense of the community and a greater feeling for the intricacies of the Davidson College community.” McKillop has led the Wildcats to four straight 20-win seasons and three straight NCAA tournaments, but this year’s team is his best.
Davidson has won 22 straight games, the longest streak in the nation. Seeded 10th in the Midwest Region, the Wildcats have their best chance to win their first NCAA tournament game since Lefty Driesell put this school on the basketball map with two Elite Eight appearances in the 1960s.
“He’s done a great job there,” said Driesell, still considered royalty around town. “I love his team. I think he could win a couple of games in the NCAA and I’m pulling for them.”
Like Driesell, McKillop has overcome rigid academic standards at this school of 1,700 students with a unique recruiting philosophy. Davidson’s roster has players from Canada, France, England, Turkey and Nigeria.
But McKillop didn’t have to venture far to get the best player to wear a Wildcats uniform in decades. McKillop eagerly went after Charlotte’s Stephen Curry when the big schools shied away because of his size. Curry, the son of former NBA player Dell Curry, has since grown four inches to 6-foot-3. With a lightning-quick release, the sophomore has scored 1,533 points in less than two seasons under McKillop’s guidance. “You see his decision-making has improved quite significantly,” said McKillop, who clearly relishes coaching such a talented player. “His defense, his rebounding have improved significantly.” But Curry isn’t immune from McKillop’s demanding style. Neither is senior point guard Jason Richards, who leads the country in assists per game.
The self-proclaimed “tough guy from Queens” gets on everybody. Thomas Sander caught McKillop’s wrath at practice on Monday, when the senior forward was sluggish after staying up most of the night before finishing a paper. “He came up to me afterward and said, ‘Thomas, I’m not that kind of coach. I’m going to be on you no matter what time of the year it is. If you want a different coach, go someplace else,”’ Sander said.
“I said, ‘Coach, I’m a senior. Where am I going to go?”’ It’s clear McKillop no longer plans to go elsewhere. “There is no doubt in my mind that Bob could be very successful at any number of Division I college basketball programs,” Murphy said. “It’s just a question of how much would he enjoy his success at those programs. I’ve heard him say, ‘How many Division I coaches can say they’ve raised three children in the same house?”’
A house that allows McKillop to walk to work, while running into excited residents who think Davidson can become this year’s big NCAA tournament surprise. “Sometimes when you put your eyes on your next job rather than put your eyes on what’s in front of you, which is your team, you fall into that trap very easily,” McKillop said. “I’ve been fortunate that my family has been afforded the opportunity to grow up here.”
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