Business & Money

Negotiation is an important component of doing business. And there are many different ways to go about it.

At times, you might make an extremely aggressive offer right off the bat, which is to say that your offer is best and final. I think this can sometimes make sense, especially when you have a large stock of trust and rapport to stand on. This is sometimes the case when you are dealing with someone with whom you’ve worked with many times in the past.

But you have to be careful because there are tons of people that will say something like, “I have no interest in a drawn-out negotiation. So please just give me your best price.” I have found that people that say things like that often are the ones that enjoy negotiating more than most others.

On some occasions, it might be prudent to bake in considerable cushion expecting that there will be a lot of back and forth. From my experience, this is often the case when the relationship between price and demand are inelastic (meaning that people are insensitive to price changes), or when pricing is opaque in a market.

Whatever the case may be, I find that it’s always helpful to walk into a negotiation being aware of your must-haves and non-negotiables. And I wouldn’t suggest revealing these at the start as it’s never a great idea to start with 0 leverage.

Human Progress

Another week, another congressional hearing that puts the incompetence of congressional leaders on full display. This time it was Google’s CEO Sundar Pichai taking the heat.

Congressman Smith: To my knowledge, you have never sanctioned any employee for any type of manipulating the search results whatsoever. Is that the case?

Pichai: It’s not possible for an individual employee to manipulate the search results. We have a robust framework including many steps in the process.

Congressman Smith: I disagree. I think they can manipulate the process.

Or how about this one.

Congressman King: I have a seven-year-old granddaughter who picked up her phone during the election, and she’s playing a little game, the kind of game a kid would play. And up on there pops a picture of her grandfather. And I’m not going to say into the record what kind of language was used around that picture of her grandfather, but I’d ask you: how does that show up on a seven-year-old’s iPhone, who’s playing a kid’s game?”

Pichai: Congressman, the iPhone is made by a different company.

Don’t these elected officials have aids or staffers that are screening their questions and prepping them for these sessions? Perhaps not.

So I’m poking the bear a bit, but that’s not to say that this is not a serious topic. I’d say that the dominance of the big consumer technology companies is problematic in more ways than one.

First, it seems that government oversight and regulation is basically a non-issue for them. Our consumer welfare-centric antirust approach leaves them immune to any real antitrust action. You might even say that consumers benefit greatly by taking advantage of often free and incredibly useful products and services.

Second, innovation in consumer tech seems to be stagnating. Investors seem wary to invest in what has become known as “kill zones” (markets adjacent to those dominated by the big tech companies) and enterprise tech firms seem to dominate IPO headlines.

So it seems difficult to conceptualize what might unseat the tech giants and what might be the next big thing in consumer internet. But it was probably equally difficult to conceptualize what might unseat Microsoft and IBM in their heydays.

Philosophy

Human beings are inherently social creatures. We all yearn for cohesion with a group. And you might say that those groups radiate outward in a series of concentric circles. So first might be your nuclear family, then extended family, then your religion, your city or country, and so on and so forth.

Problems arise, though, when the circles for different people radiate out to different distances. For example, one person’s circles may stop at a national or racial border, while another person has a circle with a larger radius that includes all human beings.

The question is, how do we reconcile such differences? Or better yet, is such reconciliation even possible?

If you look to history for examples, it seems it is possible, but not without the drawing of new circles. Put differently, the creation of common enemy is a great uniting force. But this solution often leads to warfare, so it is perhaps less than ideal.

You might also look for the corollary of new circles, namely the erasing of circles. Take the founding of the United States. In one sense, you DO have the creation of a new circle, but you also have the erasure of existing circles. By that I mean that many Americans seem to put their US identity ahead of that of their preceeding heritage.

So I wonder if people are erasing enough circles as they go about adding new ones.

My Latest Discovery

I’ve written here before about using Robinhoob as one of my brokerage accounts. And it has been great and continues to be great for that. So I was excited and intrigued last week when they announced 3% checkings and savings accounts. But it turns out that when things sound too good to be true, they often are. It turns out that these are not traditional bank accounts at all, but instead money-market accounts with couple extra bells and whistles. That means that cash stored in those accounts are invested in US Treasury Bills (the closest thing to no-risk assets) and that it also is not subject to FDIC insurance like it would be if stored in a traditional checking or savings account.

I know I talked to a few of you about this, so I wanted to ensure that people are fully informed before making any changes to your money management strategy.