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Transgender Trees, Homelessness, and a Dare in San Francisco

I am almost back from San Francisco (here are pictures from the trip)– I am writing this on the plane. As I am flipping through the memory bank, I am shocked at how many experiences we packed into three days. And as I read this letter it feels a bit darker than usual.

Japanese Tea Garden

On the first day my kids (Jonah, 18, and Hannah, 13) and I visited the Japanese Tea Garden. We lucked out, as we arrived just in time for a free guided tour. The garden has a very long history that is closely intertwined with San Francisco’s. It was left over from the World’s Fair of 1894. For decades it was managed by the Hagiwara family, of Japanese descent. 

After the Pearl Harbor attack, over 110,000 Japanese American citizens and Japanese residing in the US were forcefully relocated to internment camps. The Hagiwara family was not spared. As I was listening to this tragic story, I was reminded how Yosef Stalin, after he accused Jewish doctors of plotting to poison him, drew plans to relocate Russian Jews to Siberia. Luckily, he died before he could follow through. But I digress.

Transgender Ginkgo Trees

On the garden tour we learned about the gingko tree. This is the only tree (that I know of) that has two sexes. Female trees produce fruit; male trees don’t. The fruit emits an incredibly unpleasant odor (it was described to us as smelling like well-rotted garbage). Through the magic of cloning only male trees are planted today. There is an interesting twist, however. A male tree may decide to change its gender and become female and start bearing fruit. However, this is a one-way ticket: Once it becomes female it cannot go back. Yes, there is such a thing as a transgender tree. The ginkgo tree at the Japanese Tea Garden is one such tree.

Meeting Readers

After the Japanese Tea Garden my kids and I had the pleasure of meeting my readers. This is one of the privileges of having a large audience – I get to meet readers in different parts of the world, from Dallas to London to San Francisco. For two hours my kids and I got to interact with and learn from incredibly interesting people from different walks of life, from an Amazon Web Services engineer to a retired cop to a municipal worker. Despite their diverse backgrounds, every one of them was a student of life.

Swimming in San Francisco Bay

Hannah was never afraid of anything. When she started skiing, she spent only a day on the bunny slope. Midway through day two she was conquering green slopes. She skied black slopes a month before she turned six. Jonah was the complete opposite; he was a timid kid. It took him a few days to get down a bunny slope, and it was another week or two before he agreed to get on the green slope lift. Skiing changed Jonah’s life as he learned how to conquer his fears.

Today he is an incredible skier without a fear in the world, at least when it comes to skiing. Both kids are better skiers than their middle-aged father. But Jonah still has a residue of past fears that he is trying to overcome. As we were strolling along Fisherman’s Wharf, we saw people swimming in the bay in front of Ghirardelli Square. There were some serious swimmers doing laps, most (though not all) of them decked out in wet suits.

Jokingly, I challenged Jonah to swim. I said, “I’ll pay you $100 if you swim to those boats” (Jonah responds well to financial incentives). The boats were three hundred feet offshore. To my surprise he happily agreed. Now, the water in the bay is 54 degrees. It was not dangerous for Jonah, but he would have to do something he was afraid of doing.

The next morning, we went on our usual early morning Fisherman’s Wharf walk, armed with Peet’s coffee and sourdough raisin bread from Boudin Bakery. As we were approaching the bay I have to admit I was expecting Jonah to back out. Instead he said, “Dad, today is your lucky day. I’ll take $50 instead of $100 if you swim with me.” To which Hannah added, “Dad, if you swim, I’ll swim too; and I don’t need any money, I’ll swim for free.” Jonah was visibly upset; his heroism was about to be marginalized by his younger sibling and a sister at that. Though initially I did not have any intention of swimming in the stunningly cold water, now I had to; I had a bargain on my hands – half-off and one free.

When it came time to actually go swimming, both Hannah and Jonah went in the water. When the water came up to his knees, Jonah stopped and launched into a standup comedy routine about what the cold water was going to do to his manhood. He was buying time and postponing the inevitable.

Hannah watched him and laughed, then realized that this might last awhile. She was getting cold standing in the water, so she just started swimming. (I was on the beach filming them.) Jonah could not be outdone by his sister, who is five years younger and two feet shorter. Realizing that it was either now or never, his face turned serious, and I could see how every muscle of his body tensed up as he fought his fears and started swimming. And swim he did. He had almost reached the ships when I called to him to turn back. The water was cold and Jonah, though he’s a good athlete, lacks in the swimming technique department. He was getting a bit far from shore, so at this point I was worried. It didn’t really matter to either of us whether he reached those ships or not; it was all about overcoming his fears. After I could see that both of my kids were within a safe distance from the beach, I went in swimming, too. The first few seconds are a bit unpleasant, but then your body gets used to cold water and as long as you keep moving you feel fine.

Now we have added swimming in the bay to the long and growing list of our San Francisco traditions.

Afterwards I asked Jonah why he so readily agreed to do this. He said, “A few years ago you offered to pay me to go down a slide in a waterpark that I was afraid to do and Hannah did it easily. I chickened out and I’ve regretted it ever since.” As a parent my job is nudge my kids, hopefully with carrots and sometimes with sticks. When they are young you bribe them with ice cream; when they get older the bribes get more expensive. This was the best $50 I ever spent, and I could not have been more proud of Jonah.

Modern Art

As I was growing up, whenever my family visited a new town with a decent art museum, my parents almost always made a point of taking me and my brothers there. Though my passion for music is exponentially greater than for art, I still try to do the same with my kids as my parents did for my brothers and me. On our last trip to the East Coast, Hannah and I visited the Smithsonian Museums and the Newseum in Washington DC and the Metropolitan Museum of Art and MoMA in NYC.

This time we all went to SFMOMA. Modern art museums often push the limits of what we consider to be art. You might see a “painting,” a Malevich square, painted in one color from side to side. That’s it. A joke goes, “Every time Malevich’s square was stolen, the security guards were able to recreate it before the museum opened the next morning.”

I imagine the fellow who painted our house could do a few hundred of those paintings a day. This museum was no different. There was a pile of logs (see picture here) in a corner of one room. In another room, a bookshelf, see picture here (which could have been bought at Ikea and probably was) faced a wall. That’s it. If these exhibits are so ridiculous, why do I keep coming back? In the past I would have answered that I need only one painting to touch me. Today I have an additional explanation:

When we walk into an art museum, we enter a different domain. We expect to see art – that is what you get in an art museum. When the curators put a pile of logs in the room, you cannot help but stare at those logs and try to find beauty or meaning.

We start asking ourselves, what does it mean? Where is the beauty in this? Sometimes these questions may lead us to see things that we otherwise would not see. Here is the punchline: If we train our minds to respond this way, then in other domains we may also see more beauty and meaning around us (which may or may not have inhered in the Ikea bookshelf).

See, I just gave you another angle for your next trip to Ikea.

My father, when we travelled, always looked for something to paint, and thus he found beauty in things I took for granted. I write on almost a daily basis, and thus my mind is trained to look for stories and analogies.

Homeless

The kids and I either rode scooters in San Francisco (Hannah’s favorite activity) or we walked. We decided to walk from SFMOMA through downtown San Francisco – the weather was perfect and it seemed just the right thing to do.

We live in a nice middle-class suburb of Denver. My kids have a fairly sheltered life. I am not apologetic about that. Like any parents, my wife and I want to protect our kids from the harshness of society. Jonah, Hannah, and I ended up walking through parts of downtown that were full of homeless people and that made my kids incredibly upset. It was hard to look at these people and not feel their pain. The low point was when we saw a guy my age, with lifeless eyes (Jonah’s words), shooting heroin in the middle of the street. He looked like he had absolutely nothing to lose and nothing to look forward to.

Let me make myself clear. We were not inconvenienced by these people being there. We did not feel threatened by them. But it was hard to look at them and not feel empathy and guilt. Yes, guilt. Guilt is not a rational emotion; emotions rarely are. Jonah was visibly disturbed; he told me, “We have so much and often don’t appreciate it, and these people have so little. But it’s hard not to feel guilty for what we have.” This walk was anything but the highlight of our trip, but it was very educational.

Jonah brought up an interesting point to which, at the time, I did not have a great answer. In the Japanese Tea Garden there was a hundred-year-old decorative structure that required restoration which would cost $2 million. The City of San Francisco said it would pay $1.7 million if the garden could raise $300,000 in private funds. Looking at these people sleeping on the street, Jonah felt that spending the money on the Tea Garden was somehow frivolous.

We discussed possible root causes of homelessness. I found myself to be less than an expert on this complex and painful topic, but this experience really made us (not just the kids but the father as well) think about it.

The next morning we went for breakfast to Krispy Kreme. It was early in the morning and the store on Fisherman’s Wharf was empty, so we could watch how the donuts were made. We noticed that the person manning the conveyor belt would pick out a few donuts every so often and put them aside. When we asked why, he said he takes out deformed donuts – Krispy Kreme wants all their donuts to be perfectly round. When we asked what they do with the imperfect ones, he told us they recycle them “in a fully compostable way” (whatever that means). When my kids asked why they don’t donate them to the poor, they were told that there is too much liability.

Both of my kids were puzzled at that answer. Krispy Kreme is a private company and they can do whatever they want with their product, but after seeing this insane poverty on the streets of San Francisco, it did not feel right. Jonah’s thought was to call these donuts “special donuts for special people” and instead of throwing them away, to sell them at premium prices, explaining that part or all of the proceeds would go to the homeless. Bottom line: We were not going to solve the homelessness problem in one trip to San Francisco. But our eyes are certainly more open now than they were at the beginning of the trip.  

The good news is that the San Francisco elite is not sitting still. Mark Benioff, founder of San Francisco-based Salesforce.com, has donated $30 million to research the causes and find solutions to homelessness. Jeff Lawson, a founder and the CEO of San Francisco-based Twilio (a stock we own), has also donated a million dollars to help the San Francisco homeless. Though far from a solution, this generosity is at least a step in the right direction.

Google

On the last day of our trip we visited Google’s campus in Mountain View. I was invited to give a talk to Google’s value investing club. We were given a personal tour of the sprawling campus by my friends at Google. Hannah and Jonah, in one voice, said that this was the best part of the trip. They were amazed by the size and the beauty of the campus. There were bikes everywhere, decorated in Google colors, that anyone could use to get around the campus.

Google’s biggest asset is its people, and it spoils them rotten. Bathrooms have bidets, showers, and steam rooms. Dry cleaning and gym memberships are heavily subsidized. And then there is free food everywhere, from free lemonade stands and juice bars in the lobbies to a dozen gourmet cafés around campus. If you are a Google employee, all you need is a badge and that food is all yours. Or if you are a guest, you just need to be with a Google employee with a badge.

For a minute I felt like I was on a kibbutz, or in a utopian socialist community, but then I was reminded that Google can do this because it has incredible wealth, which it achieved by being anything but socialist. Google pampers its employees and pays them well, but there is still a culture of meritocracy – you move upward or keep your job only if you get things done.

Interestingly, Amazon has taken a different route: It pays its employees well, but it doesn’t pamper them. In fact, it is very stingy, to the point that it has its own travel app that suggests which hotel (usually the cheaper one) an employee should stay in when he/she travels. But as one of my readers who works for Amazon said, he feels he has a sense of purpose.

There is one common denominator among all these internet companies: A big part (as much as half, often more) of the pay package comes in the form of the company’s stock, and those stock prices have been climbing for years. What are they going to do when stock prices enter a period of prolonged decline (these things do happen, even to great companies)? This will be an interesting test of their culture and profit margins.

I wanted my kids to visit Google for another reason. One way or another, I have exposed Jonah to business and investing. He is thinking about majoring in business or business law. I love what I do and have zero regret for my choice of profession, but I feel like I underexposed him to other professions. With this trip to the Google campus, I hoped he might find something else he likes.

 

Vitaliy Katsenelson

I am the CEO at IMA, which is anything but your average investment firm. (Why? Get our company brochure here, or simply visit our website).

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”

I’ve written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (I’m working on a third - you can read a chapter from it, titled “The 6 Commandments of Value Investing” here).

And if you prefer listening, audio versions of my articles are published weekly at investor.fm.

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