Too Much Information

This upcoming Friday I have a meeting with a partner that was not able to attend the LEV Annual Meeting. During the scheduling process, I sent a link my notes and asked what our agenda was. He replied with the following:

  1. Review statements. How do I read these?
  2. Review current metrics and translation into goals.
  3. EOY projections
  4. Plans for 2020 and beyond.
  5. Discuss opportunity for additional investment

I obviously took the meeting because of item #5 (and #1.) I am glad to share commentary on #2, but wish he would have attended the regularly scheduled meeting. Now, I am not writing this article to bash a partner, but rather to add some color to what goes on in my head prior to, during and after a meeting request like this. He (and others) can read it at their own risk.

First off, I am glad to clarify quarterly statements. Thus far, almost everyone that starts with us asks for an explanation of their individual statements. The statements include weird labels for side pockets and stuff that I won’t bore you with here. This is a normal question. They want to be able to merge their statements with my written report. During this explanation we often go a layer deeper than we did before their initial investment was made. I appreciate this question and want to be helpful. I’ve also tried to do this in a group setting and had people fall asleep.

The second question about metrics and goals is one that gets under my skin a little. Here is the main rub: I don’t want to give out more information to one individual that I do not give out to everyone. How would you feel if your position was traded with another? So, I end up thinking, ‘okay, I’ll review the last quarterly statement, and regurgitate it, and/or simply print out a copy and say what was written.‘ I realize that sounds snarky but the concern is real. Informational edge might not matter in a private partnership, but it is real and could cause problems amongst the partners. So, I give stale information and broad platitudes. It’s not because I don’t know what is going on, it’s because I want to batch up my work and keep things fair. I want to be a good partner and keep those asking the questions in good standing with the others.

Then, we get to the end of year projections discussion. Every time I have shared a projection I have been wrong. Every single time. In fact, I had a business that made projections about future corn yields and charged for access to those projections… and every single time they were wrong. We even updated the projections more than once per day! My accuracy with projections is subject to error and uncertainty like everyone else. I do not know precisely the state of year end yet. If I knew precisely I would have no reason to share it. Instead, I will probably tell a few stories that were already told at the annual meeting. He can read between the lines. We purchased a building and filled it with rent, extracting 33.8% gross rent on our purchase price. We bought a business and had nine employees quit. I restructured a business, and essentially laid off my brother-in-law. We may sell a company. Our beer sales are up and our cider sales are way up. Skydive is working. Etc and so forth. There are lots of stories. My punchline to summarize is eleven of twelve are going as expected. Which, our expectations are rangy, so keep the 3-5 year evaluation timeframe in mind.

My plans for 2020 and beyond are basically the same. I’m going to try to be the absolute best alternative to your own private company. I’m probably going to snag a business or two (or seven) within a dense geography in the next twelve months. I’m probably going buy something that doesn’t work. I may sell a long term asset (or two or three.) I might buy a lot of marketable securities if they get cheap (link.) Frankly, my plans are to implement our principles and processes to the best of my ability. We will rank-sort our ideas based on their margin of safety and compliment to the whole. I am going to do this until I’m dead, and I’d like to live several more decades.

The final point is about topping up his investment. And, while I am open to this conversation, I also don’t want people scheduling meetings to ask me what I’m going to do every five seconds. Now, I probably won’t say that in person (I probably shouldn’t write it.) But, I did write it, and I don’t mind people knowing exactly what I am thinking. I would like to better understand my thinking, too. And, if others have a way to improve upon it (my thinking), I’d like to hear it… and I’d like them to know who they are partnered with.

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