Things are going to change a lot once we come out of this chaos, opening up a lot of opportunities for those willing to seize them. Better things are sure to come. We need to be able to set our goals when things get back to some semblance of normality. Using an arsenal of baseball analogies, Scott Carson discusses what we can expect in the second half of 2020, as far as solid and profitable deals are concerned. The world is full of opportunities, even in times of crisis, and there is no reason to despair or accept defeat. Scott encourages you to make a list of the things you want to accomplish so you can be ready when life throws that curveball at you.
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Setting Goals And The New Moneyball
This episode, I’m calling it The New Moneyball. I want to throw this into two different facets. Moneyball, if you’ve ever read the book, it’s a phenomenal book. It’s also written by the guy who wrote The Big Short, which is relevant. It also starred Brad Pitt in both Moneyball and The Big Short. What Moneyball talks about is how Major League Baseball is going to sabermetrics, identifying your trans algorithms. It’s like how the Oakland Athletics was able to use scrap few players, but gametized the system to be able to fill the winning team that went to the Playoffs at 120 games straight as well through the league. Eventually, they lost to the New York Yankees in the Division round of the series. Hopefully, if you read this blog or you followed me for a while, you know I’m a huge baseball fan. Baseball, I believe, saved my life and helped skyrocket me to different places many years ago.
As the story I’ve told before, I studied in South Austin and I came up with this idea that I wanted to travel the country to see all the Major League Baseball teams. I wanted to go out and I created this journey by jumping on ESPN and tracked how many weeks it would take for me to hit all 30 of the Major League Baseball parks across the country by traveling. I wrote it down. I put the goal down and lo and behold, I had four investment clubs reach out to me to ask me if they could use not only my articles, some of the blogs I was writing about the note business, but also if I could come to speak. When I asked them what days they had available, the days they had lined up was almost exactly when I would have been in that town on this fictional baseball journey. What I thought would be 30 weeks turned into 3, 4 years of traveling nonstop.
I love baseball. There’s something about baseball that it’s as American as apple pie. It is an American pastime. I enjoyed playing baseball in high school. I wasn’t good enough to play in college. I was a much better football player than I was a baseball player, but I enjoyed tossing the ball, the glove, the smell, the familiarity. I love going to games. I’ve probably attended about 100 baseball games. There are a few parks I have not made it to yet and one is, I’m a huge Minnesota Twins fan. Most people don’t know that I was born in Minnesota, but grew up in South Texas though. I grew up being a fan of Gary Gaetti, Kirby Puckett, Dan Gladden and Jack Morris, that amazing ’91 team that went from worst to first to beat the Atlanta Braves in seven games in ’91. I consider it as one of the best series as a lot of people will do. I’ve not been to Target Field in Minneapolis.
What I want to focus on, I was thinking about life is an interesting thing. Life is a game. What I love about baseball and why I think it adds so much is the first base, the pitcher, the catcher, the outfielder, the 2nd, 3rd, 1st shortstop, everybody’s doing their part to win as a team. Baseball is one of the games where if you fail 70% of the time, you’re still going to get the Hall of Fame of 300 batting average. You were successful 3 out of 10 times, it’s a great season for the most part. Also, baseball is one of the few there where if you sacrifice yourself like a sacrifice fly, sacrifice bunt, you’re not penalized for it. It’s a great game. Some people say it’s boring to watch. It’s great. It’s much better in person than it is on TV. I usually don’t watch much baseball on TV until you get to the Playoffs. I have been feeding baseball.
The Round Rock Express local team here of the Astros, which is another favorite team of mine. My three favorite teams, Twins, San Francisco Giants and the Astros. One of the things I was thinking about, we’ve got a signed Tim Lincecum jersey. Stephanie’s a big Tim Lincecum fan. He was lucky back in the day when the Giants were doing well to be able to go to several Playoffs games. Each of those three years that the Giants won ‘10, ‘12, and ‘14, not back-to-back, but three in five years. The biggest thing being in 2016, we made it to San Francisco and watched the Giants clinch their playoff ticket to the World Series. We watched Travis Ishikawa who was an outfielder that they picked up from the Pirates who’s been in a triple-A hit a walk-off game-winning home run to the bottom of the ninth. If you want to talk about the atmosphere, it is magical. It’s now called the Oracle Park. It’s one of the best places to watch a game. Target Field is also one of the things from everything I hear.
What I’m trying to get at here is we’ve all been through things. We’re all going through things. This has been one of the craziest times. What I want everybody to think about is, what are you going to do when we get back to normal? What are some of the things that you can look forward to as an investor, as a person, as we get through all this crap? It has been chaotic. The markets aren’t up. Everybody’s still stressed out about things health-wise. Many people are out of work. Companies are filing for bankruptcy. I don’t think it’s been getting any better. We’re going to see company after company, especially some of the ones that were struggling before all this hit go out of business. We’ve seen Neiman Marcus filed bankruptcy already. We’re going to see probably JCPenney, Sears, all your bigger department stores that don’t have an online presence as much as they should struggle. We’ve already seen that in parts of the country like Simon Malls. They’re going to be one of the big companies that end up filing bankruptcy too. They own all the mall real estate.
What I want you to focus on is to think about some of the things that you would like to do. I want you to sit there and visualize it a little bit because that’s what I did. As I’m sitting here with my cup of coffee in the back patio, listening to the chimes and the birds and enjoying a little bit of the wind. We have a nice, peaceful backyard that is nice to sit out in the mornings and the evenings or throughout the day too. What are some of the things you miss the most? I miss baseball. I miss going to the park. I miss the anxiety of going, the crowd, noise, energy that comes with everybody coming together to enjoy and root on their favorite team, the smells of the burgers or the hot dogs, taste of cotton candy, taste of a good burger with mustard and ketchup or a corn dog with mustard on it. Those are some of my favorite things. I’m going to get myself a good cold beer or good cold iced lemonade because that’s usually what I’ll do.
I have one beer at a game, sometimes two, but I like lemonade. I’m not talking that Minute Maid stuff. I’m talking fresh-squeezed lemonade that a lot of the parks have. I can sit there and watch a game. I love all aspects of it, of both teams. One of the big things that I’ve been a fan of is if I’m traveling, I always root for the home team. You’ve got to root for the home team. In a few situations, if I’ve already been there and root for the home team and my favorite team, either Twins, Giants or Astros are playing, then I root for my favorite team. If neither one of those are there, I always root for the home team. Grab a cap, a shirt or something like that for support. That’s one of the things I want to accomplish on my bucket list. I want to accomplish getting to all 30 Major League parks. I’m a few 5 or 6 shy. Twins, Cleveland, Cincinnati, Toronto, Detroit, Milwaukee and Seattle, I’m six short but I will hit that. That is going to be my goal is to accomplish that 30 park tour in some form or fashion.
We’re going to do that with the help of the show. We’re going to do that with some live events, getting out and meeting people and bringing people together once we get through all this stuff. It’s one of the biggest things that we need to do is come together as investors, as people and share and identify opportunities because there are going to be a lot of opportunities even with all the craziness of the market. There are a lot of opportunities, but we don’t know where it’s at. We’re not sure of what markets, what asset classes are going to be hit or sacrificed because there are going to be some banks, some lenders that get sacrificed, and others that get bailed out. It’s going to be the way that it is. There’s no doubt in my mind that’s going to happen and you have to be prepared for that because you never know when life will throw you a curveball. You can pick up a decent asset, which others may think it would be a junk asset, but it might be a great base hit for you or double.
I’m using a baseball analogy but that’s what I’m trying to get is that in the note business, deals are full of a lot of base hits. If I can buy a note, get it reperforming, borrowers are paying me on time and cashflow each month, that’s a good base hit. My goal is out of the ten that I make offers on that I ended up closing, about 3 to 4 out of that 10 and that’s pretty good. That’s what you’re going to see as a note investor. To new note investors, you’re new to this part, you may only be getting 1 out of 10 initially. That’s okay. You’re going to get better as you hone your craft, as you work on your skills. You can become a five-tool player. You think about what the five tools would be. One, would be marketing. That will be the first tool. Due diligence would be the second tool. Identifying markets will probably be three. Four, will be raising capital and five will be the workouts. Those are probably the five tools of a good note investor.
Maybe I’ll label this episode, The Five Tools of a Good Note Investor. That’s what I’m going to do. What I’m trying to get at is do yourself a favor. If you can make a list of the things that you would like to do, it doesn’t have to baseball. If you hate baseball, you hate baseball. Maybe it’s going to the opera, arts, concert, getting out and going to the movies. We miss movies. At least once, a taste of, “I miss Alamo.” I miss Alamo Drafthouse too. It’s our movie theater here in Austin, Texas. What I’m trying to get at is try and take the time and make a list of the things that you’re going to enjoy when everything gets back to normal, when you’re allowed to leave your house, when people are going back to work because it’s a little thing that you can do.
One of the things we have happened in here, we are housing butts up, not our house, but the area we’re in. There’s a high school on a couple of streets over and they’ve got their softball and baseball field that you can see at nights when the lights are on when they’re playing games. It’s crack of the ball and the aluminum bat and the crowd sharing. That’s always fun to go through and walkthrough. It’s unfortunate that a lot of those programs were canceled. College season is canceled. Even some college programs I saw here in Austin, St. Edward’s University has canceled their baseball, track and golf programs to make up with all the turmoil. Instead of focusing on the negatives of things going out of business, it’s better to put together a list of things that you want to accomplish, things that you want to see and places that you want to travel to. Travel is going to be cheap for quite a while and might be a little limited for the one’s offered, but there are still some opportunities. It’s one of the things that Steph and I talked about too. It’s like, “Where do we want to go? Where do we want to escape to for 3 or 4 days?” We’ll still be working but where can we escape to get out of the house?
A lot of people need that get out of that house trip. Maybe it’s a road trip, a flight somewhere domestic. Maybe it’s internationally, but maybe not to Italy. Maybe it’s not on a cruise ship to Italy. I know that our friend, Mahoney, is looking forward to doing that at some point, Disney cruise, but it is going to be cheaper here for a while. Those are the things that are important. I’m not trying to trivialize anybody’s feelings, opinions or scarcity because we still live in one of the greatest places. There’s going to be some change and there’s already change going on, quite a bit of it but everybody can all use a little hope. We can all take some time and write down the biggest things that we want to accomplish here in 2020. Things you want to attend, things you want to go to that we took for granted. I would challenge you to write that down and talk with your family, kids and spouse. “What’s a place that you would like to go to? What would you like to accomplish?”
For those of you that are reading that are struggling, I get it, it’s tough but it’s still good to have a goal. Maybe it doesn’t need to be something fancy. Maybe it’s going across town. Maybe it’s a night out away from your kids. There are going to be some hotels that get booked rapidly and babysitting is going to be on the rise. Some parents need an escape for a day or two to get away. You’re going to see a lot of spots, especially haircuts and salons are going to do well here once they release things and as people get back to it. I know I’ve got some friends that are dying for manicure and pedicure too. Make a list of the things that you want. What are the things you’d like to do in the first week and the first month? Give yourself something to focus on that’s good and not so bad. Give yourself something to focus on that you can look forward to.
It’s easy to dive in and read USA Today, CNN or Fox News or go local news and get bogged down on the negativity. There are going to be some big things happen, good and bad. It will probably be a little bit more bad than with good, but that’s what we have to do is have our hopes, dreams and goals that guide us through this, that get us through this crap that we’re dealing with to help us move on in the right direction. I wanted to take some time to have you focus on that. I know I need to do this too. We’ve got goals up. I need to print it out and take a look at it and post it in some places. You can look at your New Year’s resolutions, but I guarantee everybody’s New Year’s resolutions have all gone to crap with the way things have gone here. Some people say, “Can we have 2019 back? Can we fast forward to 2021?” It’s going to be a year of change. A year of awakening is another way to look at things, a new year of opportunity.
The opportunity exists around us. You’ve got to know how to pivot. You’ve got to know how to take advantage of the opportunities. I was talking to a guy on the oil industry. He was like, “It would be a lot different here. We’re on a project, it’s not shut down yet, but I’m learning what I can remotely so that when that does happen, because I know it’s going to happen, I’m going to be ready for the other things in the next 45 to 60 days.” Everybody, go out, take some action, put some goals up, write down some things that you want to accomplish. Go out and do that and we’ll see you all at the top.
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