In general, I’m not one to worry.

But many years ago I woke up at 4:00 am and began to worry about an unresolved problem at work. I tried to go back to sleep, but couldn’t, which was (and is), unusual for me.

Rather than spend a sleepless night worrying, I got up, showered, dressed, and drove to my office, because working on a problem is the best cure that I have found. Once I’m in the process of solving a problem, I stop being concerned about it. By sheer coincidence, at 5:00 am that same morning one of our apartment managers called the office expecting to leave a message on the answering machine. (Remember those?). When I answered the phone, she was startled to find someone in the office that early.

But what can you do when you’re unable to find a solution? One of my most helpful People Tools is, “Stuff it in Your Sub.” When you can’t immediately solve a problem you (politely and silently) ask your subconscious mind to work on it.  I used that very Tool to decide the subject of my blog for today, and it’s a tool I have often used to great effect throughout my life.

I still remember a class I took in Shakespeare taught by an outstanding professor at USC. On the final exam there was one question, three quarters of a page long, covering all five plays we had studied. As I read that question, I thought, “This is probably the best exam question I have ever read in my life.”  Followed by, “I have no idea how to even start answering it.”

I watched as my disembodied right hand began to write an answer the question.  As it turns out, my subconscious earned an “A-“.

So don’t worry, stay happy, and I hope you enjoyed Father’s Day.

Alan

On weekends I like to watch sports on TV. My favorite is football, but until the football season begins in August, I enjoy watching other sports, including tennis.

Last Saturday morning I woke myself up early, at seven am, to watch the women’s finals at the French Open tennis tournament.

The match was already in progress when I turned it on. I was disappointed that second seeded Coco Gauff, the twenty-two-year-old American, had already lost the first set to her opponent, the top-seeded Sabalenka.

Coco would have to win two sets in a row if she were to prevail in this major tournament. But, under windy conditions, Coco thundered back to take the second set at 6-2, then the third set at 6-4. An excellent start for my weekend.

On Sunday Carlos Alcaraz, a handsome guy from Spain, was one of the two men’s finalists. Carlos can usually outplay anyone in the world, but he was equally matched in this final round by his top-ranked opponent with the intriguing name of J Sinner.  This time I tuned in shortly after six am, just as the Sunday match was beginning.

And quite a match it was.

Sinner won the first two sets 6-4 and 7-6. Alcaraz had previously lost all eight of the matches in which he’d fallen behind by two sets, so this did not look good for him. But I didn’t quite give up.

Alcaraz won the third set 6-4. At this point, alas, I had to leave my home to attend a meeting. Alcaraz would have to continue playing without me cheering him on, in what would become one of the longest finals in French Open history – more than five hours. Obviously both players were young and fit. As I was driving, Alcaraz eked out a win in the fourth set, 7-6. Now Alcaraz and Sinner were tied in an exhaustingly long match where the players were as even as they come.

Then the fifth and final set — winner take more. Throughout my meeting I surreptitiously followed progress on my iPhone sports app.

Ultimately, Alcaraz prevailed by the narrowest of margins, 7-6, in a tiebreaker. You may have seen the photo of Alcaraz lying on his back on the red clay court after he won the final point.

So through the example of Coco and Carlos this past weekend we learned, yet again, that even if we’re far behind, we can still prevail if we persevere.

I spent Sunday afternoon reading a new biography of Mark Twain (an excellent thousand-page volume).

That is, until the NBA playoff game began on TV at 5:00 pm.

Alan

P.S.  Actually, in the entire match, Sinner scored one point more than Alcarez.  It was that close.

I founded ACF Property Management, Inc. on March 1, 1968.

I submitted five names to the State registrar, but a clerk in Sacramento called to say that none was available. In those days we paid for long-distance telephone calls by the minute. Since the call was placed on the registrar’s dime, I used the time to ask about other possible names, which is how I landed on ACF.

Three or four years later I proposed to my business partner George that we begin to invest in commercial real estate.  We had been sharing profits 50-50 from our law practice, and I proposed the same for the new venture. He was dubious.
“Too much risk,” he said.

“George,” I said, “Between us, our net worth is $15,000. Suppose we take some risk and increase our net worth to a million dollars, and we keep it. That seems to be worth doing. Even if we lose everything, we would only be behind by $15,000.”

He remained dubious.

I went ahead by myself. In retrospect, the year 1968 was a great time to begin investing in Los Angeles real estate. Over several years I accumulated a portfolio of about 90 small Encino Park houses.  I paid about $17,000 for each house, with $2,000 down.

Fast forward a few years. I sold most of the houses to an investor friend of mine, who was happy to pay $51,000 for each house.

To save you the trouble, I’ll do the math. On an investment of $2,000 for each house the profit was about $34,000, for a total profit of slightly more than $3,000,000.

You read that correctly. A very nice profit. But George didn’t reap any of the profit because he refused to take any of the risk.

Twenty years later, by sheer coincidence, George was seated next to me on an airplane flight from Denver back to Los Angeles. Why had he been visiting Denver?  To look for commercial real estate.  Apparently, during the intervening years he realized that practicing law produces an income only when you are at work. An investment in real estate provides an income twenty-four hours a day — even when you’re sleeping.

As far as I’m concerned, we take risks every day. When we ride in an automobile. or accept a new job. A new relationship is a risk. Having a child is a risk.

So I conclude that taking risks is inevitable. That’s why my goal is not to eliminate risk, but to manage it as best I can. Generally, a reasonable risk is okay.

Of course, a little luck also helps, and I consider myself very lucky to have started investing in California real estate in 1968.

But luck only helps if you allow yourself to take a risk in the first place.

Just ask George.

Alan