3 things I'm thinking about this week...

 
1 - Tariffs, Economic Laws and Beyond. At a long-ago meeting, my partner John and I ran into a consultant overflowing with buzzwords…our favorite was “key takeaways” which stuck as a running joke. Howard Marks’ latest memo covers a lot of ground. So, here are 3 key takeaways: broad-based tariffs impede foreign competition which generally raises costs to consumers.  Laws of economics can be temporarily ignored (e.g. rent control) but prevail in the end. And, critically, the fiscal discipline of the US must improve…the deficit is unsustainable and getting worse. 
 

2 - Good Enough...Is Great?. Usually, business articles focus on excellence. Things a company does exceptionally well. From the spotless bathrooms at Buc-ee’s to The Masters’ tight control of its broadcasts and brand, both of which were covered in prior issues. But Hampton Inn is a story of well-executed mediocrity.

This profile fills in the story. Over the decades, Hampton Inn has evolved, dropping things guests don’t care about while magnifying other elements. Namely, mediocre (but free) waffles. The waffle station is at the heart of their hot breakfast operation – a $5/room cost that provides perceived value closer to $50. And their guest listening carries into the room, with a standardized design focused on storage, bed and “the bathroom experience.” Return on investment for a Hampton Inn is compelling – low cost of construction and attractive room rates – enabling owner Hilton to attract capable franchisees to the #1 hotel brand. Nothing about it feels excellent…other than the value both franchisees and guests see in it.

 

3 - Paid...So I'm Halfway There? We’re all susceptible to behavioral quirks. One I find fascinating is the false sense of accomplishment we get just by buying something. Once I join (and pay for) the health club, I’m kind of halfway to my goal of better fitness, right? I think it’s actually a slight negative to take that first step, because we give ourselves a bit too much credit for it…slowing or stopping our continued, actually meaningful efforts.

What matters is of course…taking action. Working out. Getting a financial plan in place and underway. Funding your estate plan (have you funded yours?). Using what you’ve bought. All of this takes some work. But you don’t have to go it alone and aren’t meant to. It’s what we do with with our clients…help them act.

...and one more thing

Keeping with the geography theme from the prior issue…it turns out that PDFs do have a maximum size…here overlaid atop a map of Europe for your reference.