The Most Expensive Two-Letter Word: A thought experiment

Ben Casnocha Interviews Marty Nemko

Ben Casnocha just interviewed me.TDTV #4: Ben Casnocha and Marty Nemko.

My affect was too flat and the hat looks stupid but I hope you'll find the content of value. The topics I talked about:

• advice for worklife success in a lousy economy
• the wisdom of championing unpopular causes that you believe in
• why the future really is China
• romance is overrated
• the frightening acceleration of media bias
• the case against work/life balance
• that life's goal should be productivity and contentment, not happiness

The interview runs 35 minutes.

Capitalizing on China: Specific Suggestions

My radio show today included a 40-minute conversation with Jonathan Woetzel,who's in his 18th year living in China as head of McKinsey's Shanghai operation. In light of that plus the research I did in preparing for the show, I believe these are good bets for capitalizing on China's sunrise while the U.S.'s sun sets in the west. 

Buy raw land in the near suburbs of Beijing, Shanghai, or a slightly smaller but growing city.  Choose property that is slated for light-rail and other major infrastructure development. Hold it until most of the surrounding parcels are developed and then sell to the highest bidder--probably a major Chinese developer, the Chinese government, or a U.S. multinational.

Open a school for entrepreneurs. China is said to be a country of a billion entrepreneur  but because China is new at this capitalism thing, many of those entrepreneurs have a lot to learn. And they're smart enough to realize they can learn from Americans, a people that has been entrepreneuring for 250 years. 

Sell designer-label products (e.g., Calvin Klein) to the major retailers  in 50,000-100,000-person cities. The big U.S. corporations are still busy establishing their distribution chains in larger cities. The opportunity for a little guy is to go where the big.U.S. corps aren't (yet.)

Sell precision manufacturing parts and equipment to small Chinese manufacturers. 

The satisfactory execution of such ideas require one or more trips to China or taking residence there. It requires getting a translator and, critically, local expertise. Start with the U.S. Chamber of Commerce there, but that's just a starting place--you'll have to take the time to build local relationships.

The bad news is that Woetzel said that China is very China-centric. So Americans have one or two strikes against them. And the Chinese have a set of business tactics designed to weaken Americans--for example, they'll stall on agreeing to a deal until just before your return flight to the U.S, when you're most vulnerable to a lowball offer. 

But if you diligently  and intelligently execute on the above, people like Woetzel, the N.Y. Times' Tom Friedman, and a chorus of other folks, including me believe that China and smaller emerging Asian countries offer a far more fertile opportunity for success and wealth than does the U.S. 

If the above strategies seem too daunting, you might do what I'm doing: Buy shares in FXI: an exchange-traded fund consisting of 25 of China's largest companies--the equivalent of the Dow-Jones 30 or GXC, which consists of 150 of China's largest--the equivalent of the U.S.'s S&P 500.

America's Energy Plan: Defy Physics

The U.S. is approaching its 50th year  of trying to defy physics and make solar, wind, and biofuel (e.g., ethanol) a cost-effective alternative to oil, gas, coal, and nuclear. Democrat-imposed labyrinthine regulation has extended the time it takes to build a nuclear plant to 15 years.

(Note written after I wrote this post: Commenters asked me to explain the science behind my skepticism about solar. I did so in comment 2.)

China, in contrast, recognizes alternative energy for the politically correct, practically likely-to-be-a-boondoggle it is and so has committed to increase its current 11 nuclear power plants to 100 by 2020 and a six-fold increase in nuclear power usage by 2030.

This is merely one example of the data-defying American agenda that is driving it to its knees. (Others include bailouts, international adventurism, uncontrolled immigration, reverse discrimination hiring and promotion, restrictions on sex education and distribution of birth control, and lifetime-tenured teachers.) 

If America deliberately tried to accelerate its descent into third-world status, it couldn't do a better job.