Solving Problems

My mom used to say, "When you point at someone else, you have three fingers pointing back at you." That's the best argument for an internal locus of control I've ever heard.

This post originally appeared on the Hermit Haus Redevelopment website on 2018-06-23.

Do you ever feel that the universe is conspiring against you? No matter what happens, something goes wrong so that it doesn't work out the way you want?

Every now and then, we all encounter situations like this. How we react to them is usually based on what psychologists call "locus of control."

People with a strongly internal locus of control:

• Believe they are fully in charge of their destiny
• Take responsibility for their actions and mistakes
• Actively take corrective actions

People with a strongly external locus of control believe that their fate is in the hands of fate (or something else). The events in their lives "just happen to them."

Most of us fall somewhere along the line between these two extremes.

Right now, we have a contractor we are having a lot of trouble getting paid. Our goal is to pay our contractors fairly and quickly on completion of the job. We've sent two checks to this contractor, both of which have gotten lost in the mail. (He's in a distant city, and the work was done on one of our investment properties there.) He did his work promptly and well. We tried to pay quickly, but....

Last night we tried to wire the money to him, but his bank rejected the transfer. We have verified all of the information twice, even three or four times now.

I have a very internal locus of control, but I'm starting to feel that this situation is out of my hands.

What would you do to resolve this problem?

The Waiting Game

When you’re not confident the market will continue to rise, it’s better to be cautious about acquisitions. What do you think the future holds?

This post originally appeared on the Hermit Haus Redevelopment website on 2018-06-18.

I’m back.

I haven’t posted anything for a while, mainly because I haven’t felt like I had anything constructive to say. You see, we’ve been selling off our inventory, as Suna and been talking about. But we haven’t been buying anything. Not since December.

Other people were buying things, but we kept walking away without buying or letting other people out bid us. That made me feel as if it were my fault. I must have been doing something wrong.

But I wasn’t.

You see, the only thing worse than no deal is a bad deal, and bad deals are all we’ve been encountering for the past few months. And I’m not the only one.

According to Sovereignman, Warren Buffet has been going through the same dry spell.

So… here is the most successful investor in modern history who:

1. Didn’t buy anything in 2017;
2. Is stockpiling a mountain of cash;
3. Is now selling an asset that he would typically hold forever, because another company made an absurdly high offer for the business

...[I]t seems pretty clear from Buffett’s actions that it might be a good time to take some money off the table and wait patiently for the compelling opportunities yet to come.

Buffet himself has noted that he walks away from more than 100 “opportunities” for each deal he closes.

That got me thinking about my friend Shenoah Grove who points out that the Austin market is now almost ten years into our five year business cycle. And even though the market doesn’t show any signs of slowing down, you have to worry if it is too hot.

Following Buffet’s lead, I think it’s time to wait for deals that are so compelling that they’ll fund themselves or make money even if the market turns down. We may even have some of those on the horizon.

Stay tuned. Or better yet, help us find a really good deal. We believe in sharing the wealth.