The wealthiest person I know prints millions out of thin air in the real estate business.

This is what he does...

A thread.

He finds a distressed retail plaza. Let's say 50% of the space isn't leased.

On a 300,000 sf plaza that might mean 150k square feet is vacant.

If asking rent is $8 per square foot per year, that means the building has a "potential revenue" figure of of $2.4MM.

So in this retail center 50% is leased and 50% is vacant. So the actual revenue, right now, is $1.2MM.

Most retail leases are whats called "Triple Net" or "NNN". This means the tenant pays the taxes, insurance, maintenance and CAM (common area maintenance).

They basically pay all of the landlord's expenses (except debt service on any loans he/she has, of course).

Commercial properties are valued based on something called a "cap rate".

The equation is:

net operating income / (cap rate) = value

The cap rate is a %.

Think about it as the return on your money, annually, as a percentage, you spent to buy a property.

One of the things I learned from @KentBeck years ago was to see cohesion in terms of divergent change rates. If you have a class and there's a set of methods that you tend to change together while leaving others alone, that set of methods could be a separate responsibility.

Once I saw this, I went so far as to write a script to mine classes in Git and find clusters of methods that all seemed to change at the same time.

Often the results were not surprising. You could've see new responsibilities emerging just by looking at the names of methods and variables. But, sometimes this time view of the code was the first indication that a class was trying to split.

Code isn’t special that way. This is all systems stuff. If you have a group of 10 people and 3 of them often change their minds together, you can start to see them as a separate group. They may even start to see themselves as a separate group. Why does this happen?

At its base, it’s because of the tension between N and N^2. As the number of things increases, the number of possible interconnections grows (bounded by N^2). It’s harder for 10 people to coordinate than 3, so we shouldn’t be surprised to see groups from cliques periodically..

What do the Atlantic, Business Insider, Vox, Salon, Slate, BuzzFeed, Washington Post, New York Times have in common? They've all knowingly published lies about me over the past four years. There's zero honesty or accountability in journalism. We're going to change that in 2021.

I'm in a unique position to know just how dishonest the mainstream media is, because I've read lies about myself in so many major news outlets. I know who the bullshitters are, on the left and right, because they've all targeted me to try to score cheap points.

I have a hard time trusting anything that's reported the mainstream political media, because I've read lies about myself most of the major publications publications, thus forcing me to question what all else they might be lying about. It's a really creepy position to be in.

What's even more disturbing is how few people truly know how dishonest the mainstream political media is. If it's from a big name publication, they just believe it. That's because they haven't read lies about themselves in those news outlets, like I have. It's eye opening.

I'm not even talking about misinformation. I'm talking about outright and intentional lies that major publications made up about me for competitive reasons, because they were worried Palmer Report was getting too big, and didn't want the competition. Truly evil tactics.

Here are all the businesses I’ve tried:

(Half of them failed)

👇

Training Spectrum

A website showcasing local sports talent, health and fitness articles and interviews with personal trainers.

Started at 17. Lasted 4-5 months.

Food & Drink

A local website listing restaurants in each city (before Zomato was a thing).

Started at 18. Lasted 6-7 months.

Ambitionaire

An online magazine interviewing entrepreneurs for aspiring entrepreneurs.

Started at 18. Lasted 3 months.

10 Question Poll

A website asking 10 random funny questions and you share your results with friends.

Started at 22. Lasted 3 months.

Bill Gates got lucky.

With an IBM deal he signs in 1980.

Here's the hidden truth about the rise of Microsoft:

So we all know the Bill Gates story.

A brilliant kid who loves computers.

Drops out of Harvard in 1975 to start Microsoft with his childhood friend, Paul Allen.

Gates and Allen originally sell code interpreters to companies like MITS (Micro Instrumentation and Telemetry System).

In 1976, their revenue is $16,000.

By 1978, Microsoft hits $1 million in revenue.

But they were far from taking over the world.

Until...

In 1980, IBM asks Gates to build them an operating system for their new personal computers.

He had never done this.

So Gates directs them to his friend Gary Kildall from Digital Research.

The IBM-Digital Research meeting goes poorly.

The two parties argue over non-disclosure agreements and other legal issues.

Eventually, IBM offers Digital Research $250,000 to build the operating system.

They refuse.

"We will only do royalties."

Young, early stage founder asked for any hiring thoughts - figured worth sharing with the twitter-verse if they can be helpful.

1a) Make people do the work they are going to do for you during the interview process.

1b) People talking about work and experience is basically useless, except to evaluate whether this job "makes sense" for someone at this stage of their life - do the dots connect or not? If you can convince people to do a contract project for a month first, even better.

2) Optimize for IQ/horsepower. Talent overruns experience in like 3-6 months and never looks back. If you love someone, but they are missing a skill, you're better off getting them to learn it than hiring someone more skilled but with less upside.

3) Optimize for low drama and ease to work with, in all ways. You want people who just want to get shit done and enjoy themselves, not people who want to bring their personal drama into the workplace.

4) People who went to the best state school in the state they are from, and were overqualified for that school, tend to be undervalued and have a great low ego/high execution/high IQ ratio. They have ivy league brains with middle class values.

A thread of Popular brand names you've been mispronouncing all this time

0/ If you’re an SMB operator and want to increase the value of your business, focus on 2 things above all else.

1. EBITDA: how much $ do you make
2. Risk: how reliable is the $ you make

Enough has been written about #1. Here are 5 things you can do to tackle #2:

[THREAD]

1/ All 5 of these tactics are a function of the same guiding principle:

Spend more time working ON the business, not IN the business.

Your job as CEO is to consistently:

- Identify opportunity
- Execute once
- Set process
- Delegate
- Fire yourself

With that said…

2/ Establish your focus

Most SMBs survive in the early days through 1-2 key customers.

If you do a good job, they'll give you more business.

That's the trap.

If it's not in your core focus, resist the urge.

If you don't you'll become a consulting firm for 1 customer.

3/ Eliminate Key Man Risk

SMBs are overly reliant on a small handful of individuals to run the operation.

Implication: Most knowledge about the business sits in the heads of a few people.

Take the time to develop strong Tier 2 management - this creates redundancy in the org

4/ Institute Operating Process

Strong Tier 2 management isn't good enough. You need knowledge to live in docs and systems, not just in brains.

Every dept should have a stand alone playbook.

An easy test: "how quickly can somebody that knows nothing about the dept. plug in?"

@KhayaMaloney Thank you very much for reading all the way.

So SARS is not lying.

These companies hire big guys are transactional advisors who help with structuring the deals.

The tax specialists use the income tax act to help minimize the tax obligation of their clients - tax avoidance

HDFC Life Concall was today at 5.15 pm

Here are the key highlights of the Conference call 😀👇

@dmuthuk @datta_arvind @Vivek_Investor @connectgurmeet @Prakashplutus

Business Updates:

• Continue to see pickup in saving business.
• Growth is there both in volume of policy and increase in ticket size.
• Market share remained increasing at 27% and is increasing gradually.
• Solvency Ration remained at 202%.

• Bank Assurance Channel has grown 22%. Agency Channel continuous to gain growth. HDFC Bank remained growth drive.
• Company is continuously partnering with new channel partners.
• Risk Management has been constantly watched and remained on track.

• Product Mix across key channels shown is growth gradually.

New Scheme Launches: Company has yesterday launched new health plan with add on features.

Tax:
• Tax is now no longer a reason for the people to buy insurance, as customer perspective towards Insurance is improving.

Saving
• Savings have been coming back to the growth target.
• People during the covid and post covid is continuing the saving plan.

A thread on how real estate investors, developers and operators can make millions a year and pay almost nothing in TAXES by using depreciation, bonus depreciation, and 1031 exchanges.

How it works:

Depreciation is the act of slowly, over time, deducting the initial expense of an asset against your taxable income. Generally over a 27.5 (residential) or 39 (commercial) yr time frame. So each year you can write off 2-3.6% of the purchase price against your income.

Thats a big deal. We're buying a new property, a $3MM self storage facility. Thats a $60k a year write off against about $260k in NOI and 200k in cashflow on a $3MM deal.

It makes 30% of our cashflow tax free.

Very powerful but there is much more to it...

Different parts of the asset can be depreciated on different schedules.

We'll have a cost segregation study done to split up the depreciable lifespan of different parts of the building. The raw land can't be depreciated so you have to give that a value.

But other items can be depreciated on a quicker timeline. A roof, road, sidewalk, fencing, walls, gates, doors, latches, flooring, air conditioners, pavers, curbing, landscaping, etc.

The IRS has a depreciation schedule for each type. Some parts are 5 yrs. Others 15 years...

It's endlessly fascinating how economic datapoints get interpreted.

When I was in charge of a P&L, the guy who ran Finance for us and I had what we called the 'shelf plan.'

There were maybe 3-4 of us who knew it existed.

What's a shelf plan?
1/

Well it's a plan you keep on the shelf (full FP&A model), that you hope you never have to use.

It reduces forward hires, cuts back various line items (typically ad spend, travel, that sort of thing).

Oh, it also has a big fat RIF in there.

That's why we don't talk about it.
2/

Why have a plan instead of winging it?

Because this is where companies (particularly young companies) sometimes err. They do little cuts - 2-3% here and there, preserving as much headcount as they can, that sort of thing.

This is incorrect.
3/

If you're at the point where you need to make material changes to your forward P&L, at 2-3% RIF will be followed by another.

And another.

And this series of progressive cuts will cripple morale, incrementally reducing the productivity of the staff you retain to survive.
4/

And so the shelf plan cuts deep.

Your goal is to go from being a peacetime machine to a wartime machine, so you gotta lean out quick. Can't do that without a plan, hence the need to have one.

~30% cut is what you need.

And then you need to tell everyone left they're safe.
5/

I just read all of Jeff Bezos's 23 letters to Amazon shareholders. And here's a thread with just one key-takeaway from each of these letters.

So if you're an artist or an entrepreneur looking to get some insight into the mind of this genius, read this right now.

1997: Focus relentlessly on your customers and long-term growth.

1998: Here are the 3 criteria Bezos wants managers to consider when hiring (to set the bar high):

1. Will you admire this person?

2. Will they raise the average level of effectiveness of the group?

3. Along what dimension might this person be a superstar?

1999: How to think long-term? Think: it's good enough today, but it will get so much better.

2000: "In the short run, the market is a voting machine but in the long run, it is a weighing machine.” - Benjamin Graham

We aren’t 10% smarter when the share goes 10% up, nor 10% dumber when it goes down. We want to be weighed, & we're always working to build a heavier company.

I just keep being surprised by how many people expect all business to run as usual despite the fact that we're into year two of a worldwide pandemic.

Like.... anyone notice how many people's jobs got a ton harder? Or how many people lost their jobs, or the prospect of even being in the running for employment?

Anyone notice how many people now have massively heavier care responsibilities -- for children, parents, elderly relatives and friends, you name it?

Anyone notice the massive, unceasing level of stress that comes from mixed messages coming from govts, bungled safety policies and vaccination plans, endless lockdowns?

Every now and then I see someone miffed that some inessential thing hasn't gone as quickly or as efficiently as they'd have like, and I have to wonder -- are we living on the same planet?

I learned an important lesson in business when I launched a new retail category early in my career at Amazon: Fail Fast! I spent 18 months shipping a product that should have taken a few months, delaying the oppty to learn and adjust to our initial failure. Here's what happened:

I was originally hired at Amazon on the business development team. After a year I got recruited to help ship a new computer store and run merchandising. I jumped at the opportunity to launch a new business and learn new skills. Amzn was great at creating these opportunities.

Two weeks after joining the retail team, I was in a meeting presenting our pro forma P&L for our computer store launch. I was forecasting inventory turns and gross margins. It was exciting to be thrown into the deep end. I felt like I was at a start-up inside of a start-up.

Our store was predicated on a deal w/ HP that had been part of their earlier bid to win our datacenter biz. Amzn had driven a hard bargain, and when HP couldn't go any lower on server prices they offered to pay us $10M to be our anchor tenant in a new computer store.

HP's consumer business was getting disrupted by Dell who had invented configurable on-line ordering + on-demand manufacturing. HP thought they could fight back by leveraging retail distribution. They would plug their yet-to-be-developed configuration engine into our front-end.