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“Every revolution evaporates and leaves behind only the slime of a new bureaucracy.” – Kafka
Ponder for a moment an important story as we prime to spend $886.7 Billion+ this holiday season. You have a choice.
Today in 10 minutes or less, you’ll get:
- Codie has a new superpower (facial expression dehumanization)
- Skin in the game and why it matters
- Black Friday’s black history
Speaking of Black Friday, we'd like to welcome and shoutout the 150+ of you who joined our premium Cashflow community during our Anti-Black Friday week. They chose to dedicate time and resources to learning how to have their money, make them more money. Like Matt, who after doing 1 deal inside Cashflow, is working on his next acquisition in the 7 figure range. Rockstar. Join the crew?
MENTAL MODEL
Unchecked emotional escalation
You’re at the ticket counter at an airline and you have a carry-on that you know will fit in the bin. You’ve flown a thousand times with it. But this day, your airline ticket-checker is having none of it. He won’t let you try.
He escalates his emotional language as you ask questions until he says, “Speak to me like a human. You are dehumanizing me!”
You haven’t raised your voice. You’ve only done the unforgivable, question his authority.
He responds, “You need to check your privilege and treat me with respect!”
You ask what you’ve said inappropriately?
He responds, “Your face! Your facial expressions are dehumanizing!”
Dear sweet baby Jesus. Facial expressions. By now you realize this is a real story that I had on an airplane encounter with, funnily enough, a rather excitable white man. Privilege, what a joke. An aluminum sword held by those too weak to get into the arena.
The part I found fascinating was the completely unchecked emotional escalation. To a customer who had paid a pretty penny to “their” company. When this happens, I usually assume someone immediately prior to me kicked this guy’s dog and stole his lover. IDK. It really didn’t faze me. I was completely unsurprised. Why?
When did you last have an incredible encounter with someone who checks people in at the airport? Like ever? My husband’s mom was one for 10+ years. She’s a great human.
What is the problem, then?
They have zero skin in the game to balance the difficulties of their job with enough reward to handle it. They are so far removed from you as a customer paying for their salary that they forget. A front-line worker couldn’t give AF. Why would they? Losing a customer, no negative outcome. Gaining a customer, no positive outcome. What led to this?
Skin in the game
Those four words spell out the first sentence in the book on freedom. We forget them at our expense. We excel with them properly aligned.
There’s a favorite quote of mine from Nicholas Nassim Taleb;
“Don’t tell me what you think, tell me what’s in your portfolio.”
Investors yell their opinions from the technicolor screens of CNBC. They pound their gavels, Buy! Sell! Buy! But wouldn’t you rather just see where their money sits? People lie with tongues, not bank accounts.
We, as a global society, have progressed incredibly far. But in one critical area, we slid backward down a mountainside. We have become a nation of renters owned by an elite group of owners. We have handed over the reins of our lives to the few who tell us we must be protected—not protectors.
“You will own nothing and be happy about it.”
Let those words echo in your ears. No worse curse has been uttered. No threat more profound. I remember hearing the words predicted by the WEF and feeling deep terror.
Why do we hate the word slave? Because to be owned by another is a fate worse than death. To give our individual ownership to a few makes us a nation of slaves. Worse yet to give our individual ownership over to a collective.
An owner has skin in the game. They care about the thing they own at a more visceral level than someone who doesn’t.
Our actions are defined by our incentives. Our incentives can be boiled down to four words… skin in the game.
Do you have it? Then you are aligned with the outcome.
Do you not have it? Then your opinion should mean so much less.
Humans, how have we forgotten this?
This is a lesson as old as time. The Bible told us the tale of two women who were fighting over who was the mother of a baby and would get to keep it. The women each present their case to King Solomon. Not able to decide who lied and who spoke the truth, he pondered the women’s claims and said, “Since we cannot decide on who is the baby’s mother, we will have to kill it, so no one takes the infant unfairly.” One woman screams and pleads to keep the baby alive no matter who takes it home. The other is silent and agrees to the idea. A mother with the ultimate skin in the game cares, a pretender cares not.
Yet in today’s world, as we become more interconnected, we become more centralized. Bureaucracy breeds in the centralized.
Our banking system – centralized
Our government – centralized
Our stock market – centralized
Our tax system – centralized
Our corporations – increasingly centralized
Our institutions – increasingly centralized
When systems cannot feel the effects of their actions, when they become centralized, they become bureaucracies and bureaucracies care little for you. The most insidious thing in our growing government is not those on high. It is the lifers slowly growing in the underbelly, their only incentive to continue reaping power. We focus on the one head of the hydra while the smaller heads hide underneath. They’re not necessarily evil, they’re unaligned clingers.
Unions. Lack of pay incentives. Monopoly industry control. No customer optionality. Absolute power. No negative outcomes based on their performance.
The perfect cocktail for lack of skin in the game. We humans were meant to be local, tribal groups where our day-to-day activities were directly felt. Now we hardly know our neighbors. We buy from companies we know no one at. We work for companies too big to feel our work matters.
Decision + feedback = better decisions
You make poor decisions when you do not have to be responsible for the actions of those decisions. If you could eat all the cake you want and make someone else fat, we as a society would send calories to our neighbors. We are not our brother's keeper. A harsh truth.
The answer to all of this?
Decentralize. Build small. Buy small. Take back our local tribe. Stop giving ownership to the few on high. Why do you think we preach Main St over Wall St? How much harder are 30,000,000 small business owners to control and overtax than the Fortune 500? How much more does the small business owner care about your business than the CEO of Amazon who has never set foot in your town and never will?
We must ask ourselves, “Do you make money just by giving advice? What happens when you’re wrong?” Nothing? Ok, next.
“When I spend with you do you benefit? Do you have a cost when I pull my spend?” No repercussions? Next.
The question is really, when I give my time, attention, money, and belief to you and you are right do we both win? And when you are wrong, do we both lose?
If the answer is heads I win, tails you lose, you are playing Russian roulette with a gun to your head, but another is taking your spins.
We are doers here
We know we will feel each decision we make deep in our skin. If we buy a business and it’s a bad deal, we will regret it. If we take work that doesn’t pay, we’ll know it, fast.
I want your hands dirty, calloused, and rough.
I want your work to mean something.
I want you to be a builder in a world of users.
I want you to be one of the few who do, not the many who talk.
We do the work that everyone needs, but no one appreciates. We wake up before the sun and we keep going after it's set. That's what it means to be an owner. To have skin in the game.
So do me and your community a favor. Be in your community. Go small. Meet that owner. Shake hands with a neighbor. Buy from a local store. Vote for a politician you live by. Attend that park cleanup meeting. Take back the power locally.
There’s a reason we give give give all this information for free. We don’t want our kids to grow up in a world where we own nothing and we’re happy about it.
No one else is coming to help. So few people care. What if you’re all we got? Will you answer the call?
I think you, just you, you’re enough.
Psst, remember: Main Street > Wall Street
TAKE A TRIP BACK IN TIME
Black Friday’s Black History
Before we jump straight from turkeys to trees let’s take a pause. Do you want to know Black Friday’s real history?
Black Friday saw 155 million shoppers in 2021. $8.9 Billion was spent online. But:
“The best way to save money is to not buy sh*t you don’t need.” – Ben Franklin, probably
The origins of Black Friday are fittingly foreboding and very American.
Let’s dive in:
1869 - The name “Black Friday” comes from the gold market crash. Two Wall Street bros of the time bought up most of the US gold to artificially drive up prices (FTX who?). Bonus - creepy 1800s meme about the scandal:
1950s - Philadelphia started the annual Army/Navy football game the Saturday after Thanksgiving. The day before the game, crowds started flocking to the city to spend a sh*t ton of $$$ on Christmas shopping. ‘Merica.
1966 - Retail stores in the Philly area played up the crazy shopping with huge sales. The whole ordeal became a huge headache for local police. They officially started calling the day “Black Friday” in hopes it would spook people out of shopping. (Didn't work.)
1980s - Retailers reclaimed “Black Friday”. The name had caught on in the 50s, but retailers didn’t love it. A little too… harbinger-of-death sounding. But by the ‘80s, the term got a makeover. Stores made up this successful myth about the origins of the name:
Thus, Black Friday became the national holiday we all know and hate. But the story far from ends here…
THE SALES
The conspiracy theorist in me wants to say retail jacks up prices in early Nov so the sales look extra good. May or may not actually be true. When you add up all the killer sales and total rip-offs… Black Friday savings average out to somewhere around 12%.
THE CONSUMERS
In-person Black Friday shopping dropped 28% in 2021 from 2019 pre-pandemic levels. But you can bet your Amazon Prime account it’s been made up for in online revenue:
On top of that:
• 60% of Black Friday shoppers say they regretted their purchase
• Men’s regretful buys cost 2x those of women
• Gen Z are the guiltiest shoppers at 67%
THE MAYHEM
Black Friday brawls: great for media.
Not quite as common as you'd think.
(But if you're in the mood to lose all hope for humanity: blackfridaydeathcount.com)
Still concerned about a fractured skull over new AirPods?
Steer clear of these states:
THE CONCLUSION
Mindless consumerism isn’t cute. What if we spent the time and money on cash-flowing investments instead of bad Christmas presents...?
This holiday season: Invest.
• Invest in skills
• Invest in education
• Invest in yourself.
When the time is right, invest in your own business. JUST WAIT UNTIL YOU SEE OUR OWN GIFT GUIDE NEXT WEEK.
Happy Holidays, Contrarians.
Codie & The Contrarians
Written by Codie Sanchez, Edited by Rananda Rich and the Contrarian Team
CONTRARIAN FINDS
Contrarian Finds – F mainstream media, read this instead:
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CONTRARIAN EXTRAS
The Not So Boring Section:
🚽 Black Friday or Brown Friday? Find out why it’s the busiest day of the year for plumbers
💸 So did we or didn’t we? Break a new record for BF sales…
☑ Blue check or not blue check? Whether ‘tis nobler to be grey or gold or eventually back to blue aga
What Did You Think of This Week's Newsletter?
💲💲💲💲💲F*cking Killer
💲💲💲Meh
💲Do Better
Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.
