A Ten Year Retrospective (2004-2014)

In 2004 I was a scared, lonely graduate of the Huntsman Program at the University of Pennsylvania with no job.  That summer I spent riding my bike around Philadelphia and felt like I had no purpose.  That fall, I moved to San Diego and interned for Senator Dianne Feinstein.  It was an unpaid internship, so I worked at a t-shirt warehouse fulfilling orders for $8/hour.  By the end of three months, I had learned how to use one of their electric dollies (it was a tower that allowed you to go up and down about two levels in this warehouse that was reminiscent of the aisles at Home Depot, except this place was much, much darker and dustier) so well I would be racing down the aisles at the touch of a lever.  I surfed almost every other day, and seeing the waves behind my eyes when I closed them, was the only thing that helped me sleep at night.  At Senator Feinstein’s office, I was taking constituent calls and researching the economic impact of American Indian casinos and military bases.  Little did I know that would help me later.  At this stage I was still confused, except I knew I wanted to do something related to real estate.

By the end of November, I had been promoted to $9/hour at the warehouse, and I was still rabidly surfing every day.  I remember there was this one time my contacts flew out while I was in the car – a freak accident because I was developing this condition called swollen pupillae behind my eyelids – and I surfed, nearly blind at -900/-1000, just by watching the color of the water grow darker and darker.  I also drove to the break and back, although I could barely see the colors of the traffic lights.  This just testifies to the fact that I was not in the right state of mind.

At Senator Feinstein’s office one day, we got this fax letter that was written in ALL CAPS and was sent from someone from beyond the border (Mexico), and described Mexican drug violence and retribution in such detail that I got scared.  It was written as if the guy was being chased and was trying to run away.  I gave it to my supervisor but he just smiled and said this isn’t a job for us.  I remember thinking that both me and the guy who sent it believed in a government that was more powerful than it actually was.  What if it were true?  Shouldn’t it be worth investigating?

While still down there I interviewed at the San Diego office of Marcus & Millichap.  The only thing I remember about the presentation was first, that the guy put up a slide showing a matrix of how much you could earn if you were a) a star, b) mediocre, and c) a dunce.  The dunces were growing their income from $80k to more than $120k.  The stars started at $150k and were growing their income to over $800k.  To me, for some reason, it didn’t seem like a lot.  It seemed normal.  I also remember that second, he looked at my resume and said, liberals can’t work here, shaking his head almost gently.  I said that on the whole, I was conservative when it came to economics and trade.  He nodded his head.

I didn’t get a job there or anywhere else for a while.  In December I responded to an ad in the UCLA newspaper, because I was staying with a friend in Westwood now, in a two bedroom with 6 other guys.  It was for a real estate job in El Segundo that paid $12/hour.  At that point I was so desperate for a job that this seemed like a lot of money, especially since my last paying one had paid $9.

I took the interview and got the job within three days.  I remember taking a test during the interview, it was a StrengthsFinder test that highlighted my weaknesses and strengths.  I put it in that order because the guy hiring me mentioned only a weakness that stood out to him.  The computer had indicated that I may be ‘easily bored’.  While this was true, my reply to him was that my focus was greater than my tendency to get distracted.

The substance of my work here was to validate about 4,000 contact records by cross-referencing them through Lexis-Nexis, public sources, and other means.  The job took me several months.  I don’t know how I endured that.  Actually, I do – it’s because the office itself was a prank-filled, roughhousing frat with outsize characters, some of whom were probably insane.  This was a time when young 20-year olds were making millions by merely picking up a phone and dialing.  It was like a gold rush.  To me, it was a social experiment and completely eye-opening, mainly by virtue of the fact that it violated every single thing I had learned at Wharton about business and valuations.  It shattered my worldview, I felt like I was a social anthropologist embedded in an alternate universe.  Those experiences were actually the origin of this blog.  I collected enough stories to later write a book about it.  People have said that the characters don’t seem real, to which I would say that is the highest compliment you can give, because that is exactly what I was trying to communicate.  It is all real.

I was there about a year, surfing at El Porto every day – sometimes three times: before work, at lunch, and after work.  I have fond memories about the level of my metabolism back then.  I could eat anything and get away with it.  I remember we used to take our boss’ Black Card (with permission of course), and order meals at restaurants that were on the order of three entrees per person.  I would finish my share.  But surfing meant a lot more to me than just an intense metabolism.  It instilled in me a reverence, an awe, an acceptance of the world.

At my job I started learning about real estate and how it was done, which has served me well overall.  In 2006 I moved onto another job, a quieter one, working for a private equity firm in the same office building in Rosecrans.  My boss this time was more sedate, and the office only had three people.  Two of us at times.  I just modeled the **** out of every P&L and setup sheet that was sent our way.  Now that I was on the buyside, technically, instead of on the brokerage side, it was harder to feel the pulse of the market.  I wanted to do a ‘deal’ very desperately, to learn more about this whole PE business.  By the way, I had gotten another promotion from about $30k a year to $40k.  To me, that was an improvement.  No equity though.

The only ‘deal’ I remember doing was that a Nevada broker tipped us off to some shopping center in Las Vegas, and my boss bought it and flipped it a few months later for a 75% gain.  I remember one of the partners calling in and saying ‘are you telling ME that you guys got me a 75% return in six months!  You guys are studs!’  Unfortunately, this was a deal that was a no-brainer deal, meaning I had no hand in underwriting or modeling it.

I must have underwritten/modeled a few hundred deals, and only one was acquired, an office up north in Berkeley.  To me at the time, the pace was too slow and I began making plans to leave.  It was also because I felt this inexpressible desire that the real estate shenanigans had gone too far, that something was just off in the world and that I might be in a position to be harmed most by it.  By ‘shenanigans’ I meant valuations of properties at sub-4 cap rates, price appreciation, etc.  I remember getting pitched a no-cash-flow deal.  Basically it was a real estate deal with a three year holding period where they wanted us to invest only for principal appreciation.  This was the level of certainty that people had that prices would only go up!  Something felt wrong to me.

Back at Penn, I had cold-called a company called Economics Research Associates.  I had found it by googling the terms ‘research’ and ‘economic’, two search terms that I felt aligned perfectly with what I wanted to do.  I discovered that they were a real estate consulting firm in the field of theme parks and casinos and resorts, which was far sexier than the original work I had in mind.  I gave them a call, and they politely told me there were no current openings, but I kept in touch.  One time in San Diego I remember I did a phone interview with a partner in SF while in the car, because I was too scared to say that I would call him back later.  I was driving, and kept driving aimlessly, because I had no presence of mind to pull over.

Anyway, I gave these guys a call once again.  One of the partners suggested we meet for breakfast.  I dressed up in a shirt and tie, which I never did at my job, and met him at Metlox Village in Manhattan Beach, where I actually saw one of my bosses in the background pacing back and forth, looking at his phone.  I knew he saw me.  No matter.  I talked to the partner of ERA about real estate developments in Dubai and Korea.  He said they could consider me for hire.

The other company I interviewed for at this time was Rip Curl.  My interviewer was a former banker and he looked at my resume and said, ‘you’re on the partner track at this company, why do you want to leave?’  There were a lot of things I couldn’t express to him at the time about the market and its valuations.  I said I wanted to represent a ‘brand’, be more integrated with operations, etc.  I remember showing up for the interview, in the OC, in a suit.  Everyone there, including the guy interviewing me, was wearing t shirts and flip flops.  We had a good talk, and afterwards he took me out to the parking lot, opening the back of his car, and gave me a wetsuit.  Now that, was a cool company.

I had no game plan or anything.  But I quit my job on the strength of…nothing.  Both companies told me they were not hiring.  I think it was more on the basis of wanting to escape.  So I surfed and bought a motorcycle and rode my skateboard around my block in Palms.  My motorcycle was an old CBR 600, with no fenders or plastics, in the naked style far before the manufacturers started designing bikes like that deliberately.  I crashed it one time trying to get on the freeway and ran out of gas on the 5 to the 10 interchange.  All this spooked me and I sold it.

But then ERA called me back two months later, because someone had just quit!  It was August 2006.  I was happy.  I was hired, and my first week there, they sent me to work on a project in Korea for a multi-billion dollar development.  I was young and naive and felt self-important.  I rode business class for the first time and got a taste of what all of my classmates were probably doing on a weekly basis.

I began flying to Korea on a monthly, if not bi-weekly basis.  There was a speculative theme-park boom (if you can call it that, because none of them got built) the likes of which had never before been seen.  This was insanity on a completely different level, although it was not only Korea.  Every market in the world wanted to be like Dubai, although Dubai was out-Dubaiing everyone else with the most imaginative real estate developments in the world.  I had never taken a real estate class at Wharton, but I try to imagine now how they would suggest we value things like casinos in the same of a sphere floating on water, or assault-rifle theme parks, or the investment return on recreating the Las Vegas strip in the middle of mudflats in an Asian country.  Well, no matter.  I could teach that class.

I was in the air more than I was at home in my apartment in Palms, and those were the years I was treated the best.  I had an expense account, flew business class, stayed at nice hotels.  This wasn’t like other types of consulting, where you had to stay onsite at a client’s company for months, or transaction-based where you had to get in, do the deal or negotiate, and fly out.  My business trips were leisurely, even.  I had one or two days of meetings.  And extra days or weekends to see the city (and my friends), party, play.  One of the proudest interactions I had with a client at that time was when, after a bout of mandatory karaoke, he took me aside and said that he hadn’t trusted that we could get the job done – but when he heard me sing so well (it was the Beach Boys’ Surfin USA) he knew that I had a solid character.

But when I got back from my trips, jet lag would hit me like a bomb.  I’ve never adjusted well going east.  Something about crossing the date line over the Pacific that just messes you up.  I’m in a paralysis of energy for about three weeks.

At ERA I was promoted twice within eighteen months.  Things were good.  At bonus time, the partner who had hired me asked me what I wanted for my bonus.  I asked for it.  I got it.  I probably lowballed it by a large amount.  Then ERA was acquired.  And things in the world began slowing down in 2008.

So we left to start a new company, Pro Forma Advisors, the week of September 8th, 2008.  We had great momentum.  I was close with the developer of Legoland Korea  (which is still on-going, by the way, one of the rare few), and my partners and I were close with a savings bank that at the time was acting more like a hedge fund, trading ethanol and investing in projects like wind farms in Germany and casinos in Cambodia.  They promised us a lot of work.

Then Lehman happened, and then, just to put it in surfing terms, it was like a giant wave collapsed on my head, picked me up and took me over the falls, and I almost drowned but then surfaced in the whitewash, and it was quiet and uneventful.

2009 was a bad, bad year.  For everyone else too, I’m sure, but it wasn’t good times to be in the real estate business.  It was the first down cycle I had seen and I won’t forget it.  The company survived though.  I traveled a lot, mostly for play.  For business travel, we took coach.  It was our own money and hard to justify.  I scaled down.  I moved in with my parents and I kind of just passed that year in a comatose, hermetic state.  Money wise, I did better than ever before, which taught me the economics about being my own boss, the realities of overhead, and the feeling of responsibility.

I jumped into starting the company without mentally preparing myself, but the year did it for me.  I learned about not ever really being able to walk away from work, when you’re trying to create money out of nothing and you have no name or track record.  It was time to look at what was really important.  I stopped drinking during this time period too.  I think in many ways I grew up, although the year did make me a little more withdrawn.  Especially since I lived at home.

At the beginning of 2010 one of my contacts from the brokerage where I used to work back in 2005 called me with an opportunity.  To appeal property taxes.  The business is growing and it is ‘ridiculous’, he said.  The business made perfect sense to me, and for me it was the world gone full circle.  It was satisfying in a way, like seeing a story end, tying up loose ends.  The valuations back in the 2004-2006 days, they really hadn’t been sustainable.  I had been right!

Right after I agreed to start helping out, I got a call from Berkeley offering me a scholarship.  I accepted that too.  I was still doing Pro Forma work.  I had no intention of ever going back to feeling purposeless or just ‘floating’ again.  That year I went down to the California Counties and appealed more than $100 million in property values personally.  I created a program where instead of taking 40 minutes to comp a property and put the relevant paperwork together, it took about 10 minutes.  I did about 800 of the cases before leaving in August for school.

At Berkeley I discovered my ideal lifestyle.  The city just kind of has that effect on people, doesn’t it.  In the morning I would take Chinese classes.  Then I would spend some time in the library either reading for class or doing tax work.  Then I would go work out or eat at the cafeteria (me and one of my classmates were the only MBA students there.  I thought it was a shame that the business students didn’t realize the value in getting a buffet for every meal for only about $6 per), read or take a nap, go to class and get the academic version of what had just happened in the last few years, read some more, then go to sleep.  It was about 6 hours of concentrated work a day.  Any more than that and it was unproductive and had diminishing returns.  I still think that is the ideal split, which tells you a lot about the kind of work I am suited for.

That winter I went to Beijing to continue my Chinese at BLCU.  It was a Siberian winter and I got sick the first week there, from a combination of something I ate and my decision to go running around the track in -10 degree weather.  I lived in a tiny room that with the heat on became drier than the Sahara, so I rigged a crazy humidifier system using a wet towel and hanging it from the vents on the wall.  I had never lived with so little, and never been colder in my life.  The classrooms had no heating system so we sat in there with fog coming from our breaths, my head so cold I couldn’t think, my fingers frozen solid, but I loved it.  I loved Beijing.  I loved the people, and I loved the way people spoke there (which is still a source of arguments with my Taiwanese wife).  I didn’t even notice all the killer smog.  I went to Hong Kong for the first time in the middle, then got sick again when I got back.  I considered it all an immunization process.  This one was really bad.  I had a headache that on the intensity scale was somewhere between ‘percussion drill’ and ‘jackhammer’, and my language partner took me to the hospital.  The only thing I remember her asking me was, ‘Chinese’ or ‘Western’ medicine?  I didn’t care, but I lay down for a day or two and felt better.  You can’t comprehend how grateful I was.  Before I left I took her to a ‘gourmet meal’ at Pizza Hut, which she had never had before, and I dumped three cartons of Haagen-Dazs ice cream off at her dorm, because she had never tasted that either on account of their stratospheric markup policies in China.

I also visited Erdos in Inner Mongolia during this time, one of China’s ‘ghost towns’.  We landed at the airport and had no transportation, but my translator had struck up a friendship with a minor official while on the plane.  He and his wife drove us into town.  The next day we had lunch at a restaurant whose menu was lamb-heavy, in the Mongolian/nomadic style.  The owner turned out to be from the urban planning department, and told me everything I had wanted to know about Chinese development.  Then we took a picture together.

When I got back to Berkeley in 2011, I looked for an internship.  I ended up at GE Capital in Norwalk, doing real estate valuations.  The scale of what they do there, and the systems in place and the resources and people available at their disposal, is mind-blowing.  I had never worked at a company that large.  I had never worked at a company where I needed a security badge, or one where the meeting rooms and work areas looked like the lobbies and business lounges of the Four Seasons (or the W, depending on which area of the floor you were in), and had never gotten that type of treatment from brokers and suppliers.  When you call a place and say you’re with GE Capital, you are a certified royal.  People actually return your calls, and your wait time on the phone is shortened.  I hope to earn that kind of treatment again.

The internship was good.  But I regret it in a way too, because I turned down a job at a Mongolian company to do so.  It would have been a much livelier/cooler above paragraph if I had taken that job, right?  They wanted me to help them plan a residential development made up of yurts.  But I had this insecurity about working at a ‘name brand’, which led me to GE.  In retrospect I should have gone to Mongolia.  This is all too painful to think about so I’ll stop.  Suffice it to say I learned my lesson.  Go for the fun, people.

After that I went to Hong Kong for study abroad.  I was doing both tax work and the consulting work at this time too, and flew over to Korea to work on the second iteration of a Universal Studios theme park with Lotte, who had acquired the rights.  In between our classes we took trips to the Philippines, Singapore, Thailand, and the mainland.  We mostly just traveled, and did a few boat trips.  We called them junk trips but they were chartered yachts that we moored in the outlying islands to play on the beach.

Most importantly though, I met my wife in Hong Kong, at a place called Daddy O’s.  It was halfway west to Sheung Wan from Central, and served hot wings whose spiciness was illustrated by color.  The spiciest wings were of a red that bordered on bruise-purple, and had a skull and crossbones next to it.  We picked this one.  My tongue turned numb after the first one, and my left leg went numb after the second.  After the third my limbs were throbbing, and my brain notched up into intense survival mode.  I was crying and snot was falling out of my face, and at that moment she walked in.  I remember only that she smelled good, because I couldn’t see her face.  After I had recovered in the sole bathroom (to the resentment of the people in line behind me), I came out and I was literally on fire that entire night.  My brain had been kicked up a notch because it thought I was dying, so I was so witty and conversational and charming.  At least, that’s how I remember it.  At the end of the night she left in a taxi without saying bye but I still knew I would see her again.

I was right.  I followed her to Taiwan at the end of the year and met her mom, and I kind of knew it then already that we would go the distance.  I finished up my semester and came back to Hong Kong.  I set up the Pro Forma Advisors Asia office and worked out of a cubicle in World Wide House, Central.  I was still doing the tax work at this time, and had refined my program so that it now took less than 5 minutes to prepare one case.  We traveled a lot, for pleasure, to places like Japan and Thailand and Sri Lanka and Dubai, where I finally saw the mind-blowing, monumental developments I had only studied on paper.  I traveled for work too.  One time I went to Beijing and walked around Happy Valley Beijing.  After I got back to the hotel room, I read that the AQI (air quality) had been 750, out of a scale where 300+ is hazardous.  No wonder I had been able to stare directly at the sun at around 2 pm.  I felt the effects only later in Hong Kong, where I woke up two nights in a row in a hacking, intense coughing fit.  A message to Universal Studios: do you understand the depth of the problem?  I really don’t know how you’re going to build a park there, just saying.  Another time in Bangkok I thought I was late for a meeting so I hopped on the back of a motorbike in a full suit, with a suitcase slung over my shoulder.  It is a thing of mine that I do not like to be late.  I kept making the driver go faster, and we narrowly missed a few cars, passed a car-on-motorbike accident, and did all kinds of highly illegal maneuvers to get there.  When I got there, they told me I was 3 hours early.  I said I am never late for a meeting.  Then I left and came back.

We moved back to the States last year, 2013.  I’m wrapping up my tax business.  By now I’ve made the interface web-based and I’ve have trained an army of analysts to do it, so I supervise.  And we rolled the tax clientele into a brokerage.  Two months in, and we’re seeing prices at cap rates lower than during the heights of the 2005-2006 years in some geographies.  I don’t know what to make of it, we just closed a deal last week at a 3.5% cap.  I’m still doing consulting.  Remember, dreams are free and abundant, so when your job is to make sense of dreams, it will always be a stable business.  Although last year I went to Bangkok again right when the demonstrations were in their infancy.  We drove by the capital buildings and saw the rice farmers camped out.  It was pouring rain, and I saw the people huddled under tents pouring out the water, which was flooding in.  A few months later the place exploded.  The project shut down.

I went to China a lot last year.  My personal sentiment is that they are at where Korea was in 2007, in a theme park bubble.  Hopefully they will have a quicker learning curve.  Fingers crossed there.  But I’m still figuring things out.  I’ve only realized that I have absolutely no ability to gauge the depth of a market or its long-term prospects.  I thought the theme park consulting business would be dead 5 years ago, during 2008.  I’ve come to the realization that things like this don’t just die, they change.  We need to constantly change too.

I’m no longer the scared, lonely, depressed kid I was 10 years ago.  I’ve gained the ability to think more critically and see above the noise.  I’ve learned how important it is to delegate if you want to perform higher-value work.  I’ve learned the importance of selling, but selling does not come naturally and I will need to work on it.  I’ve become more forward looking.  No more staring at the ceiling regretting every decision I’ve made.  I’ve given up on perfectionism on many things (not all).  It might be because I’m more impatient, so I push things through at the Pareto 80% level, the sufficing level.  I think I have developed a more systems-thinking worldview and understand a little bit more about how these systems work.  And by extension, the ability to see through hare-brained, money-making schemes that will not work.  Also, the ability to gauge how long something will actually take, and more patience overall.  Or is it more…lassitude and laziness?

What I’m losing is the patience to do the grunt work, and perhaps my overall tendency for completeness.  As the world gets more familiar, I’m losing more and more of those moments when things moved me to absolute tears.  I’m losing energy, small drop by drop.  As the things I attend to, and delegate, grow in size and number, I’m losing the time and focus for single-minded dedication to a task.  I’m losing the tendency to jump into things.

More cautiousness is involved.  I remember last week I stood at the edge of the water watching the waves come in for about twenty minutes, instead of just paddling in.  The past me would have just started going.  This is metaphorical but also applies to any new idea I have.  Sometimes, still, I get this blinding, mentally crippling rapid heartbeat, bordering on a mild panic attack, when I realize all the things I still want to do and the time and energy it will take to accomplish them, and I compare it against the time I think I have left.  I’m anxious and still ambitious.

Live boldly and with exuberance, everyone.

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Real Estate Notes (3/23/2014)

  • Getting the pricing right at the outset is one of the biggest challenges.  Pricing sets the expectation at the beginning for both the seller and potential buyer, and we’ve been off by $500,000 on two or three deals now.  Part of the value of a broker is getting this right. 
  • When someone says ‘I have a buyer’: translation is ‘I know someone who I want to make buy this.’ 
  • What’s going on with retail?  When I read articles like this it makes me pause.  When you value a 10 or 25-year lease, how much of a discount should you put on it as a result?  On the other hand, big box 25-year leases are one of the most desired assets right now. 
  • This is one of the best books on real estate ever written.  One of my key takeaways from the reading was that good locations, stay good locations across decades (even centuries).  There is a primacy effect between the good/best locations, and the second tier areas – meaning an exponential drop-off in the interest people have to be located/acquire there.  How to best think about this?  Core, desirable markets appeal to the broadest segment of the potential buyer pool.  Non-core markets are a niche product and only local owners have the ability to price in the turnover, default, repair/maintenance characteristics effectively (my opinion).  
  • Lending standards for commercial real estate are still tight.  People who I knew were mortgage brokers during 2006 are private, hard money lenders now. 
  • What is the value of a broker?  There are elements that need to meet a certain threshold, above which they are no longer relevant – such as the prettiness of their marketing materials, their amiability, their ability?  But the actual value, meaning the attribute whose increased presence results in increased value = I’m still trying to figure this out.  It’s the depth of the network, right?  And the speed and consistency at which the network can deliver a transaction. 
  • A property generating above-market, high rents in a lower rent neighborhood will not necessarily be valued that way, because people will be worried about its sustainability.  This seems backward to me but this is the feedback we’ve been getting.  Is this the correct way to think about it?  I guess in retail there’s a lot more churn so the desirability of a location shifts over the years, is my only theory. 
  • There are a lot of sellers just shopping around, trying to getting a fix on price.  Ultimately the price they want is so high that the buyer pool is only about .001% of the market.  Unfortunately we do not know those buyers. 
  • But most of all, again, I’m always struck by the sheer diversity of the people in the SoCal real estate business.  

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Filed under Observations of Humans

Some Reflections on Being Held Hostage by a Chinese Company

Last year, I was consulting for a large automotive manufacturer in China.  During one meeting, he demanded that we finish a report in three days, instead of the two weeks we said it would take.  

By general consensus of the team, I was the man for the job, because a) I wasn’t married yet, b) no one else could understand my Excel models, and c) I was young.

That is how I found myself on the 41st floor of the Greenland Tower in Nanjing, looking down at the Xuanwu Lake, wondering if this was the stress that investment bankers felt on a daily basis.  I had 48 hours to put together the document, and I did, pacing myself enough to be able to give the presentation for it at the end.

But I realized a lot of things during the whole process, both about Chinese companies and myself.

  • First, I realized that Chinese companies have amazing ventilation systems.  The chairman was a chain smoker but the fans and filtration were of such power that just minutes after he finished smoking, the conference rooms were rid of the cigarette smoke smell.

  • Next, I admired the fact that Chinese companies have nap time.  Imagine my surprise as I was working through lunch, fueled only by some water and half a Subway sandwich, and all the lights went off and people began pulling out neck pillows, eye masks, and cots.

  • The chairman exercised an influence that was all-encompassing.  During the design review, the chairman gave his opinion about which of the three options was best, Option A, the Butterfly-looking building.  Then he asked the four people next to him what they thought.  While using alternately grandiloquent and advanced technical language, all four managed to have the exact same opinion, like they had just been given the answer in advance or something.  When the chairman was in, there was a tension in the air, people sat up straighter in their chairs, and people didn’t take naps.  When he was not there, there were no meetings, and my analyst and I could not figure out what people were actually doing.

  • There is really no substitute for face-to-face meetings, not yet, in China.  Even in this age of advanced communications, Chinese companies want you to be there, to see you, eat with you, drink with you, and present all news – good or bad – in person.  Only then will you rise to become trusted, to the trusted advisor role.  And only after you have become a trusted advisor, will you actually be paid.  It is a necessary condition to be paid.  Fulfilling all aspects of a contract, to the letter, does not necessarily mean you will be paid.

  • There is a book somewhere, I am sure, about the encyclopedic, highly creative litany of excuses that a Chinese company will give you in order to not pay; ranging from the accountant is on vacation, to please send us hard copies of the contract recently inked, to it is the end of the year so no one is in, to it is lunar New Year so no one is in, to please send us revised copies of the contract with the new figures written in, to who are you again, to oh yes I remember you but the project has been cancelled, to please use a new template on the contract, to please use a chop, to the entire 200-person office is away on a business trip.

  • Ultimately, when you’re under time pressure and a pressure to perform, it is amazing what you can and will deliver.

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The Water Cube (Shenzhen, China)



Location: Shenzhen, Guangdong, China

Description: There are several of these massage palaces in Shenzhen, places that have industrialized massage delivery in the form of four-story buildings dedicated solely to massages.  

The entrance looks like a bordello, with tall, lithe girls in tight-fitting, full-length qipaos attending to the people who walk in.  The no less than five cashiers behind the counter attest to the size of the operation.  It looked faintly illicit, from the fact that there were no men and only women as staff.  But there were families here.  

There are a variety of packages, but there is a package that gets you a two-hour massage and a night’s stay, access to the sauna, pools, lounge area (a darkened arena of a few hundred recliners with individual tv’s and speakers built into the headrests), and unlimited fruit and soft serve.  Get that.

Cost: Approx 300 RMB (2012 pricing)  

Value: High

Tip: You get to choose your masseuse by flipping through a book of headshots.  You can’t really tell the difference between them, as each photograph is staged in the same lighting, they all wear the same kind of makeup, and are striking the same kind of glamour shot-pose.  

I suggest don’t choose your masseuse by their face.  

Instead, if you’re actually here for a massage, and not just an ego massage, ask for the woman with the strongest hands.  This is probably applicable in any massage parlor in China.  

My friends did that for me here, and the woman who walked in our room with a thud was a middle-aged, heavy-set matron in a white butcher’s-looking frock, and as she shut the door she slapped her meat cleaver-sized hands together to warm them up.  She boomed out something in Chinese.  My friend pointed to me, and then I won’t go into details, because after an hour I fell into the kind of deep sleep that only comes after a vigorous workout, but I vaguely remember my spine cracking several times, the sensation of being picked up and flipped over, and a few memories of very acute pain.  Maybe I choose not to remember the rest.  

In any case, the next morning in the lounge area all my friends complained that their masseuses had been falling asleep, that their oil massages had felt more like a lathering, etc etc.  

Even though I was in pain, I knew I had gotten the best deal.  

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Morocco Notes

The wife and I went to Morocco during our honeymoon.  I was struck by the kindness of people.  More than once in Rabat, people gave generously of their time and aid.  At the Place du 16 Novembre Station, one woman criss-crossed the tracks trying to help us break a bill so that we could get tickets from the automatic kiosk.  Finally, two young girls came to the rescue, and we all broke out into smiles of relief.  

Rabat was also where I got my first taste of celebrity, as a young woman asked to have her picture taken with me.  While I was quite flattered, my wife looked less amused.  

All in all, in the non-tourist places, I felt quite warmed by peoples’ hospitality.  The riad and hotel owners were gracious and accommodating, and just – happy.  

But walking through the tourist areas left me with a feeling like I’d been invaded or had a bite taken out of my wallet.  The tourist areas, especially in Marrakesh and Fes, are a feeding ground for scam artists, fake guides, merchants, and hawkers of all kinds.  I find it hard to imagine what the true size of Fes and Marrakesh’s respective old medinas would look like if the tourists weren’t there.  Just how many leather goods shops, all essentially selling the exact same goods, would there be?  One?  Instead of hundreds?  

I always considered myself as having a good eye for scams and salesmen, but with millions of tourists (i.e., target practice) passing through these medinas every year, the salesmen of the medinas have taken it to a level beyond any I’ve ever imagined.  To salvage the bottom falling out of my wallet during this trip, however, I’ve at least tried to come up with a few observations and lessons learned.  

  • In a land of almost undifferentiated competition, where every stall sells the same arrangement of leather bags, slippers, and tin teapots, the loudest and most officious salesman will attract the most lookers.  And then:
  • There is a dollar or euro or dirham amount you can put on a sense of guilt or obligation.  When you’ve been talking to someone for a while, and someone has been talking to you for a while, you feel a sense of obligation.  Which they convert into something.  
  • Contrary to the perception that we are rude, (young) Americans of a certain age, more than those of almost any other culture, are very polite and apologetic and carry a lot of guilt about things.  When I’m accidentally bumped into by a young person, almost anywhere in the world, I know the American will say ‘sorry!’  Other people get by with an ‘excuse me’, or nothing at all, as such an event is normal.  At dinner one night, a few students eating next to us felt it necessary to ask about the size of the tip necessary to leave behind.  
  • The souks (market places) in Morocco are sellers’ markets.  They alone know their cost basis, and they’ve done thousands of transactions before you and probably have a better sense of the demand curve than you know of their supply curve, and so the only two ways to combat that are by a) ruthless shopping around and b) keeping your mouth shut when they ask you questions about where you’re from (i.e. wealth of your nation) and how long you’re staying (i.e. ability to pay).  
  • Beware any shop where a guide takes you.  These shops are usually located so deep in the medinas that getting out of them, let alone finding them, requires you to have a level of neural-spatial programming that you as a tourist will not have.  Anything quoted in a store like this is marked up by quadruple-digit percentages.  Don’t feel bad.  Divide the quoted price by about 10 as your opening bid.  
  • In Fes, LOOK and get quotes for things in the souks, but buy them on the Rue Sellaline, where the same goods are usually clearly labeled with prices and even if they aren’t, start at prices that are about 20% of the opening bids at the souks.  Exhibit A: leather ottomans, starting at 900 dirhams in the souks, starting at 200 here.  Exhibit B: tin teapots, starting 400 in the souks, 100 here.  
  • To get out of Fes, just look up and follow the signs for the Bab Bajloud all the way out.  If in doubt, just keep walking uphill.  
  • A tip of 1 dirham is enough for the toilet attendants.  This was inside knowledge given by a guide.  
  • Always ask the price before sitting down.  In Marrakesh’s Djemma el Fna, don’t eat/touch the bread/sauce they put down in front of you unless you want to pay for it.  It is not complimentary.  Unless you speak Arabic/Berber, 70 dirhams seems to be the standard meal price for a foreigner, everywhere in the tourist areas.  
  • Get the mint tea, anywhere.  You can get it without sugar, although it’s not as good.  
  • Don’t judge any of the buildings in the old medina areas from the outside.  The entire ethos of the architecture is walled exterior/beautiful interiors.  
  • In Rabat – the tramway will take you between Rabat and Sale.  The petit taxis cannot run between them.  We didn’t know this and had to compensate one of our drivers for the risk of a turf war breaking out.  We paid up, he acquiesced, but not before stepping outside and taking off his sign.    
  • North of the Kasbah Ouddayah in Rabat is an area with blue homes; as in, all the exteriors have been painted blue.  If you don’t have time to go to Chefchaouen (the blue city), spending some quiet hours here is a decent substitute.  

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Songcheng (Song Dynasty City)


Chinese imperial style.

Summary:  A show extravaganza with a surrounding theme park.  If you’re a hardened Chinese theme park traveler (and you need to be, if you’re a theme park enthusiast in China), this is completely different.

Location: Hangzhou, China

Theming Level: The developed areas are very good.  But there are less than well-done areas – like the weeds and irrigation channels around the creek that bisects the park, or the entire main street area when you first walk in, where you’re greeted with vacant shops.

Adult Ticket Price: 260 RMB as the starting price for adults ($43 US).  Probably the highest of all major outdoor ‘theme parks’ in China.

Reinvestment: I honestly don’t know.

Don’t Miss: The show, of course, but the Qingming Festival virtual painting (in the basement floor of the exhibition area) is absolutely spectacular.  I’ve never seen anything like it – a 2,000 square foot ‘living’ painting depicting the movement of a city throughout the course of a day, complete with sound effects and a pretend moat.  There is a lot of detail there that can be overlooked.

If you’re the active type, do NOT miss the obstacle course (over real water) in front of the main castle area, which is a variety of log and chain bridges suspended and/or floating in water.  The aim is for you to gain enough momentum while maintaining balance to be able to cross it.  I observed some successes, but many more men walking around with wet pant legs.

Do Miss: Climbing all the steps to the statuary.  The reward is not worth the effort.

Ride Counts: 6 rides, 3 haunted/funhouses, several street shows, various retail, various merchandise shops, an obstacle course, 1 huge show.

Thrill Factor: Low.

Magic Factor: Moderate.

Notes: The core attraction is a show extravaganza, probably one of the better ones in China.  It is a typically Chinese-style show: over-the-top, incredibly detailed, extraordinarily colorful visuals, an absence of one core narrative, more of a collection of highly coordinated set pieces.  The sets are varied, some subtle, others highly acrobatic, or hypnotizing, or pure explosions of rhythm and displays of glory and power.  I was impressed by all of them, but the one that especially melted my cranium was a simple piece, just two lovers, dancing in the fog amidst lasers that made it seem like they were in some kind of vortex.

Besides the show, the rest of the 80,000 square meters is worth spending some time in.  It is occupied by retail shops, restaurants, funhouses, haunted mansions, street shows, and exhibits of all kinds, one of which divined one of my ‘past lives’ as having been a beautiful princess.  Go figure.

Pictures follow:


Here’s one section of the moving screen. It alternates between night and day.


Absolutely well-done.


There are rides, but you don’t go here for these.



My favorite scene.


Very varied sets.


Utilizing the entire theater, this part is well done.


Here’s half of the obstacle course. Those pads are NOT solid platforms.


Food is cheap for a theme park, but expensive in China terms. Also, not that good.


Pavilions on a hill always attract me.

Here are a few more pictures of the show, to give you an idea:

IMG_7014 IMG_7017 IMG_7018 IMG_6996


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On Watching Breaking Bad for the First Time

Walter: you’ve been occupying my thoughts.  Through a miracle of technology, I’ve lived several months of your life in just a few days.  Overall, living your life fills me with discomfort, anxiety and stress.  But I can’t stop living it.
Midway through what we here in this world would call the second season, I had to decide whether to continue to root for you, or dismiss you as someone not rooting for.  This meant that I actually briefly stopped my voyeuristic marathon of living your life (for a grand total of about five hours).
There was a moment when you just felt…wrong.  It had nothing to do with murder.  Or cooking meth.  It had to do with the way you reacted to Gretchen’s offer to pay for your surgery.  Your growling ‘F— YOU’, delivered almost with a stifled sob, was not quite Mr. White, the high school teacher, nor Heisenberg, the cold-blooded executioner.  It was a weird being in between, a man who was equal parts enraged and self-pitying.
You felt wronged about Gray Matter.  But you had let it go for however long, for twenty years, without a word about it.  That’s on you for walking away!
But as I close the series out I begin to understand.  A little bit.
I saw a kernel in that gesture, a kernel that comes up again at random times, like the time you shot Mike.  There it was again, an eruption of a man, a pitiful man.  It was childlike.  Maybe because you were suppressed for so long, you don’t know how to deal with an aggressive emotion.  Because you were suppressed for so long, you feel entitled to throw a tantrum.
I couldn’t stop thinking about your outburst.  The first Walter, the one with hair, would have let it go.  Did let it go, for two decades.  Heisenberg, the one with the hat, he is coldly calculating and efficient, and would have delivered it differently, somehow.  You said it as the monster, but it was the previous Walter saying it.  Heisenberg doesn’t show desperation.
It felt wrong.  Like you were in between states of metamorphosis.  Like a scifi mutant alternating between his beast and human states.  It was weird.  You’re too proud to accept the money.  But you were willing to drop it enough to appear pitying.  It was, in this series of choices, another choice.
And I also chose to keep watching.  And I was rooting for you before as a slumped, broken man.  But now I’m rooting for you as someone with ambition.  Out of a perverse desire to see you consolidate power, to watch organization and unity arise out of nothing.  As someone would root for a warlord.  I want to see you fulfill your potential.

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