Diving for Pearls

Unlocking secret value, choosing love by another's eyes, and a love's labour lost.

In 2019, my father was diagnosed with Alzheimer’s disease. The decline had come swiftly. A week later, my mom fell and broke her femur bone—the biggest bone in the body. 

She called me at 8:00 a.m. on a Thursday morning while she was lying on the floor of their home in Grand Rapids, MI. When I received the call, I was at my house in Washington (DC), making breakfast and preparing to go to the university to teach my 9:40 a.m. class to about 140 undergraduate students. 

Fortunately, my dad was cognizant enough to call an ambulance right away and ride with my mom to the hospital. But things were about to get choppy.

My mom is my dad’s caretaker, and she was now going to need a lot of caretaking herself. Since I’m an only child, the buck stops at me. I needed to get home fast. 

After I hung up the phone, I immediately booked a flight that departed at noon the same day. I went to the university to teach my class (greatly distracted), then straight to the airport. 

I arrived in Grand Rapids by early afternoon as my mom was on her way into surgery. Since there wasn’t much I could do at the hospital until she got out of the operating room, I stopped by the house (my childhood home) to check on my dad.

As I mentioned, my dad had gone with her in the ambulance that same morning. But once they had arrived at the hospital and the nurses took my mom to a separate room for x-rays, he had forgotten what he was doing there and decided to go back home to watch some golf on TV. (These things don’t normally seem funny at the time—but I’ve come to realize that a good sense of humor is one of the best ways to deal with some of the more can’t-make-this-shit-up affairs.)

“Luke!” he said when I walked in the door. “Where you been, guy? Where’s mom?” He had been sitting on the couch smoking a cigar and watching the Golf Channel. “I think something happened this morning,” he said, “but I can’t remember what. I’m sorry. My memory isn’t what it used to be.”

“I know, dad, it’s okay,” I said. I hugged him.

We packed up and went to the hospital. The surgery had been a success. We visited my mom in post-op and hung out with her for about an hour until she prodded us to go home so she could get some rest for the night.

When we got home, my dad was more confused than ever. “Where’s mom?” he kept asking me.

My parents have been married for nearly forty-three years. They rarely spend any time apart these days. So the absence of my mother in the house is something my father notices immediately. He knows something’s not right.

After I’d answered the question “Where’s mom?” at least a hundred times, I took my dad out for a beer at the neighborhood bar/restaurant. If I was going to keep answering the same question, I would at least do it over a cold pint (or two, or three) of Founders Backwoods Bastard. 

Plus, there was yet another major issue to address: the store.

About twenty years ago, after my dad retired from truck-driving, my parents bought what we call in the Midwest a party store. I think most people call it a “convenience” store. We say “party store” because the only things sold at our party store are beer, wine, liquor, cigarettes, chips, Cheetos, and other snacks—all the stuff you need for a good party. 

I had only recently learned that over the past year the store had fallen into a death spiral that my parents (and apparently their accountant) were in denial about. Everyone had painted a pretty picture for me when I had asked about it. The truth was that my dad couldn’t manage the place properly anymore, so the employees started stealing ungodly amounts of money. Vendors overstocked it with products that didn’t sell. Slimy salespeople started hovering around trying to get my dad to sign things which involved him paying a lot of money for services he didn’t need. More often than not, he signed. The building was falling apart for want of the necessary maintenance. 

The store was what I had learned on Wall Street to call a “distressed asset.” (Which I find odd, because the assets aren’t distressed at all—only the people who own them are.)

My dad had always told my mom that the store would be their nest egg. He’d have no problem selling it for a good amount of money, he would say. He may have even been right. 

But that was before the disease. 

The business was going down like a sinking ship and draining my parent’s bank account along with it. The vultures were circling.

As I sat there with my dad drinking a beer, I learned from one of the regulars in the bar that another employee at our store had just quit. (I grew up in the kind of neighborhood where everyone knows everyone else’s business.) With an absentee owner, the kid had gotten fed up with how much work he had to do. These young employees are candyasses these days, the man who told me said.

I knew I needed to sell the place—and extremely quickly. But how do you sell something that nobody wants? Something most people wouldn’t touch with a ten-foot pole?

This is not something they teach you in business school—at least not the one I went to. After fifteen years of making complex investments and starting businesses of my own, selling this little corner store would be one of the hardest things I ever had to do. 

It turned out that the principles of human psychology depicted in Shakespeare, Fyodor Dostoevsky, and Milan Kundera would prove to be better sources of wisdom in this predicament than those utterly “practical” individuals whose first instinct was to devise a financial plan or put together a better sales brochure. 

Nothing matters in sales more than a model.

How do you make something desirable that people instinctively think is undesirable? Give them a model: someone, just one person, who appears to see value that nobody else sees. You show them someone who wants it.

In one of the most memorable scenes from Mark Twain’s classic novel The Adventures of Tom Sawyer, Tom is ruefully whitewashing a fence. His friend Ben Rogers walks by on his way to go swimming. When Ben asks Tom if he wishes he could go swimming, too, Tom pretends to love performing his task. “But of course, you’d ruther work—wouldn’t you?” 

“What do you call work?” Tom says. 

“Why, ain’t that work?” Ben says. 

“Well, maybe it is, and maybe it ain’t. All I know, is, it suits Tom Sawyer.”

“Oh come, now,” Ben says, “you don’t mean to let on that you like it?”

“Like it? Well, I don’t see why I oughtn’t to like it. Does a boy get a chance to whitewash a fence every day?”

Ben’s predicament is that he was in the grips of a mimetic model. “That put the thing in a new light,” Twain tells us. “Ben stopped nibbling his apple. Tom swept his brush daintily back and forth—stepped back to note the effect—added a touch here and there—criticized the effect again—Ben watching every move and getting more and more interested, more and more absorbed.” 

Tom Sawyer provided a model of desire for the fence: himself. And that changed everything.

Danny Ocean Strategy

The first person to find value somewhere rightfully deserves a higher share of the reward than others who come later. But that doesn’t always happen. The first person, as a model, always attracts others to the value that he discovered. And if he hasn’t found a way to capture a large share of that value for himself before others do, the value is lost to him.

Some people are expert value signalers, but terrible value capturers. (Think about the people who wrote about Bitcoin in the early days but failed to buy any.) Other people succeed at both. (Elon Musk signals value for many investments for which he is poised to capture a lot of value.)

Everyone relies on models of desire. Amateur investors want to borrow Elon Musk’s eyes and his brain because they do not trust what they are seeing and thinking themselves. In the popular imagination, Elon Musk sees and knows things before anyone else does. But if Musk is not our model, someone else most likely is.

"O, hell! to choose love by another's eyes," says Hermia to Lysander in A Midsummer Night’s Dream. We choose much more than simply love by another’s eyes—we choose stocks, dishes on menus, clothes, books, vacation destinations, and (lucky for me) even business opportunities by other people’s eyes.

It only takes one person. And then, suddenly—if you communicate that desire effectively—you’ll find that a second person, and then a third person, want the same thing. 

Back to the store.

I needed to find one person who saw something in the store that nobody else saw. But in my present circumstances, I had more pressing problems to solve than the mimetic positioning of the store. 

When I walked into the kitchen the next morning, my dad was back on the couch. “Luke! You’re home! When did you get here?” The dishwasher was overflowing with soap suds, my mom was calling from the hospital, and something in the microwave was on fire. 

I’ll share the next chapter in this story in a future edition of this newsletter. Thank you, as always, for reading.