The Ranch is in contract, AI, eavesdropping, and Friday Night Lights.
AI is presenting a lot of interesting situations for me and I watch with curiosity of where this will go.
One, is empowerment, and while that seems like a positive word and sentiment, in the wrong hands it is anything but. For instance, right now I’m having a sumo-like chest bumping who has got the bigger package in the pants type of quarrel with a subcontractor, which isn’t that unusual. Construction is hard, money is delicate, and disputes of all sizes arise all the time, and for the most part, it’s my job to fix them. So this tradesman who runs a small company is under-performing not just in scheduling and performance, but also in quality management. Since we keep a close eye on things, all the above deficiencies are identified early, remediated, or addressed, sometimes by parting ways with said contractor.
When this happens, their logic is always suspect, less than well-rounded, and never open to a wider perspective. Now however, they can turn to AI for not just affirmation, but a well-crafted perfectly formatted legal letter laying it all out on the line, developing and extrapolating their small kernels of situational awareness into a full-blown cogent argument that allows them safety in their position, even if it is self-defeating.
AI isn’t asking hard questions about how the situation occurred, the relative consequences of the action/letter, the faults of the person requesting the letter, or the merits of the approach. Scan in the contract, prompt Claude or Chat, and wham, you are a genius. And if you really don’t know what you’re talking about or have any experience with the subject you are dealing with, you can feel very smart by the logic, argument and as important as anything, the formatting and spell-check of the document, in what, 4 minutes.
In this case, that 4 minute document got them thrown off the job, since it was apparent they were even stupider than they looked by substituting an adversarial AI letter with conversation and compromise.
Another subcontractor is using AI to price their jobs - small excavation project pricing depends on a lot of things - proximity to the\ HQ of the contractor, amount of work (too small is always expensive). So instead of figuring out how long it would take, and the various factors of production, they plug in some simple parameters and come up with pricing that could be considered justified by whatever logic Claude is using, but doesn’t take into account the practical implications of actual time and cost - not all contractors are similarly composed - some have the right machines, some have more efficient processes, some take long lunches and arrive late on the job. AI can’t price the profitability level of a job - that’s up to the individual contractor to measure based on a host of factors. AI will nearly always price a project or task too high since it doesn’t and can’t take into account how bad the person wants the job.
And then we even had a client who had an idea of furniture placement that ran counter to logic, but he plugged it into AI, got affirmation and support, and hardened into the position. AI doesn’t argue, debate or pivot - it agrees. Ask it a question in a way to achieve the answer you want, no matter how slight the hint, and you will get it. And you will get it in a form that can be used for cogent debate.
The issue is, the time it takes to craft cogent arguments, and put those arguments into proper form, is the time it takes to raise self-doubts about your logic in the first place, and that self-doubt and critical self-examination is part of the process of self-defense, and many times you realize during the emotion of rebuttal and response, that you are wrong, and you should ‘stop digging’.
Another thing that is true is our phones are listening. Without a doubt. It’s not an anecdotal story of coincidence where you can’t quite remember but weren’t you talking about house plants the other day and now house plant memes are showing up on my tiktok feed type of things.
No, it’s blatant, like telling my fiance about the wonders of freelance marketplace Upwork, and the next day and week she is fed for the first time dozens of ads for Upwork.
And if the phone is listening, then watch the Edward Snowden movie and see that the government is capturing all those conversations, and running them through AI for threats and risks, and then go back up top to the beginning of this thread about the relativeness affirmation bias of AI. A tool for fighting terrorism, this mass surveillance will also be a tool for mass, subtle, constant opinion manipulation. You think you are thinking for yourself, but you are only regurgitating information that has been fed to you in insidiously invisible ways, shaping, forming a propaganda mindset deep inside the layers of the mind.
Though, this article on CNET explains it differently, so everything above is just paranoid conspiracy thinking I guess. But that's what reading can do - help you think through a problem.
That’s the takeover- not necessarily computers running amok, but information so distorted and disrupted and tailored to your individual weakness you never even knew it happened. Walking breathing bleeding bots, manchurian candidates lacking free will or thought. And the less you read novels, magazines and books, the more you are susceptible.
As for free will and thought, this Modern Masterpiece took a lot of both. Free will to buy the land, roll the dice on the house, experiment with materials the whole way through, engage some clients as it was finishing up and then landing a deal before it hit the marketplace, freeing up cash and refilling the risk reservoir for future endeavors. It’s a big win - taking the risk on the piece of land, dreaming up a new house, spending a lot to build it, taking some risks and then selling it myself, direct to consumer. No one else I know - literally no one - can do that.
My son’s football team has lost two straight to teams a lot better than them, but they have been great games, pre-season. A few worrisome early injuries changing the makeup of the team, but he's got poise and looks great.
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Thoughts, and a House in Contract (most likely)
Oh yeah, in 2023 when I was dating this fine young woman during my Asian Fever period, she was working in the Fintech space on a startup which had a lot of investor interest and right before a sale, the purchaser started asking about AI integration and how that was going to work with this product, to the surprise of the company developing the product - I’m only mentioning it because, yes, once again, Like Forest Gump, I was at or near the epicenter of every tech milestone since 1998 and literally, unlike Forest Gump, purposely or by accident participated financially in none of them. And even by some grace of god that I actually did read the tea leaves, the chances that I would put $1000 in and let it ride for 20 years and now have it be worth $10,000,000 like you see in all the ‘what if, FOMA’ scenarios, is again, literally zero.
Buttttt, I did see and pounce on the Upstate Opportunity. Actually, that’s too modest. I saw and then created the Upstate Opportunity. Literally created a market for new homes out of thin air, and then nurtured and nursed that idea for decades, with a day to day effort that couldn’t be exaggerated if you tried. It’s still true today - the day to day effort of leading from the front, problem-solving, shirking no duty - remains. It’s why our profit margins allow me to pay pensions, retirements, holidays, some healthcare, and vacations. It’s why several of my employees and past employees have a million dollars in 401ks. While I milk the company to my own benefit as is my right and earned honor, the amount that gets shared is real, earned, and can’t be diminished. It’s mostly unheard of for a mid-sized construction company to generate enough profits and be administratively adept to fund and manage these programs.
And it returns me something that is second-nature to me, but would be a temptation for others, and that is the trust and other people’s money that flows through my hands weekly - bank debt, employee tax withholdings, retirement and pension payments, client deposits, construction payments. It’s how people get in big trouble - hit some rough waters, borrow from Peter to pay Paul, divert this, commingle that, defer those. And you never get straight, and you have to keep doing it, and eventually you reach the end of the shenanigans - that’s why bankruptcies can seem so sudden - because there are so many ways to string out the decline - credit cards, not paying bills, diverting funds - so many ways until they are all used up, and bam, ‘overnight’ collapse that was years in the making.
I took some big swings last fall, buying 7 or 8 pieces of land that we are building on and selling now. We sold the Dymond Barn, that was huge. We put Wynkoop Ranch into contract, that was huge. And now, wait for it, our Modern Masterpiece in Fremont NY the very week we finished it, is going into contract in an all-cash close in 30 days deal That solidly turns the financial corner for the big swings of last fall. 25 years and I still got it!
What’s true about the McColly Ranch, is the team I have in place allowed me more creative flexibility than I’ve had in a long time, and I took that freedom and flexed what has always made the difference in Catskill Farms - I have a good eye, rumored so good I must be gay. But unfortunately for all those fair-haired boys with lusty thoughts, I’m just a unicorn - Straight guy with a sharp eye. Used to actually really burn my sister up, who considered herself the artist of the family, that she’s stuck in an operations role and I’m out here designing shit every day.
Who said life was fair?
Me and the Bride on date night Sunday, with Opera in the Park in Milford PA.
Moving the opera piano around post-event.
And my Son Lucas Petersheim, after two long years as a QB understudy for his HS football program, is primed and prepped and ready to go as the starter, with a game under his belt last weekend that proved he deserved the role, and that his patience and hard-work and commitment to the dream paid off. No one really knew how he was going to perform, and he played with confidence and skill. Toughness, like taking a good hit is like a boxer getting his lip bloodied - it focuses and engages you, takes you into the game. It's a running program, but he was 7-9 passes, for 100 yards, and two TD's. Many if not all of the throws were with defenders in his face and on the move. Good job Son. Happy for you. Correction, make that 3 TD's.
Friday Night Lights.
Mod Pools, Tariffs and Trump
I’ve been asked a lot over the last 2 years if the Trump tariffs have impacted us or our projects and I think with confidence that I’m sure it’s caused some inflation here and there embedded invisibly of some of the product or services we buy, but it was hard to see. But generally I was surprised by the non-impact.
Not any longer as madman Trump throws a fit and slaps a 50% tariff on many Canadian imports, one being sporting goods, a category which my modular pool seems to fit into. So they have my $81,000, and now are trying to figure out who and when is going to pay $40,000 more just to sell or buy the same product. While I’m unsympathetic to the idea that I should pay those tariffs for my seller, I’m empathetic that it is an existential problem for this modular container pool company, Mod Pools. The problem is the 4 or 5 people who work there including the Owner Levi are so damn annoying that I was dying to buy this last pool and never have to deal with them and their shitty company again - but alas, not the case. I’m stuck in tariff limbo with them, like a poorly paired college dorm room-mate -except there is $80k on the line, which is a lot of money even if you do the after tax rationality of $50k. My guess is this can’t last, this latest round of tariffs - it’s like mutually assured destruction.
Trump’s losing streak must really be getting him to be lashing out like this, hurting non-constituents as well as the MAGA crowd. At least when he messed around with the SALT taxes on high tax blue states, it was a somewhat targeted political attack - this is more spray and pray. Not sure what the end game is but to have Canada capitulate. I can’t even follow the story except Trump didn’t get what he wanted so he melted down. Same as in Iran, but there we just go ahead and kill a few more thousand people with some bombs. The impact of this round of tariffs will actually produce some pain and impact - can't see many positives of it no matter what angle I'm looking from.
Great way to expend our power and reputation - no one can afford gas, health care, child care, education or the cost of living everyday, but let’s bomb people and start trade wars.
This new Modern Masterpiece has me returning to my roots as an experimenter and designer. Should be listed next week.
Ranch 72 Sold, and more news...
Big news - perhaps our last house up in that project straddling North Branch and Fremont in Northern Sullivan County. This is a pretty special place in the world -remote, rural, big skies, big views. But not so remote, just 15 minutes from Callicoon and 30 from Livingston Manor and Narrowsburg. I bought - gulp - 300 acres up there, right at the beginning of Covid, along with my gigantic gamble of 16 lots in Saugerties about the same time, and I think I had another 4 or 5 lots in between in like Kerhonkson, etc... That type of acquisition, entirely with debt, in a world-wide pandemic whose ramifications and consequences were yet to be understood in anyway - I mean, come on, seriously? That's risk tolerance. It's not like Soros betting it all against the British Pound, or Hitler going all in with an attack eastward into the vastness of Russia, or Michael Burry against the real estate market in 2007 - but for my size, cash flow, and sailing into the unknown full of sea monsters and flats earths, the gamble was shockingly bold. And it paid off. I was in the right place, positioned well, with 20 years of accumulated experience, and an opportunity came my way and I pounced, and as importantly, executed. By solving every problem that arose each day. Never slacking. Never shirking. Never procrastinating. Just taking care of business.
It's actually hard to remember how simple tasks became hard tasks - supply disruptions to the point where common lumber became uncommonly hard to get, if not outright unavailable. Price swings that pushed plywood from $20 a sheet to $100, and you use hundreds of sheets in a job. Closed building departments, changing regulatory environment, moving target for sales prices, people getting sick. Pretty crazy stuff.
So this house on 20 acres has pretty much everything and is well-suited and sited to take advantage of the plot of land and the views. It's one of our favorite large Ranches, sold with an assist from Erik Freeland of Country House Realty. Selling for a tidy profit but less than it was worth. But freeing up the cash and moving on is a regret I'm used to living with. It's impossible to calculate, really no way to do it, how much money I've left on the table over the years. But there is a way to measure it - and only one way, and it's a bit indirect - Success. Catskill Farms has it. The micro is unimportant when the macro is undeniable. The micro certainly makes up the macro, but the micro is mostly lost and forgotten while the Macro lives on.
Lives on in my bank account, and in the bank accounts of a huge number of employees, subcontractors, employees of subcontractors, vendors, banks, towns supported by our taxes we generated. Lives on with the homes dotting the landscape of the Hudson Valley, timeless homes, good looking homes, eye catching homes, modest homes, well-tended to homes, valuable homes. Lives on on the profits of our clients bank when they sell, which is actually just so huge it's hard to believe. The impact this hard-working, bill paying, eye-on-the-ball company has made and continues to make is huge.
I guess I'm focused and bit more aware of it lately because I've been out and about lately. Been to party or two, attended Jeff Bank Customer appreciation night at the Forestburgh Playhouse and a bunch of other events I don't usually attend, but have been because, wait for it, I'm engaged and now have a partner in crime to make grand entrances with. The point is when I attend these events, usually filled with business owners, realtors, bankers, community members of some substance, the reaction is always the same - respect and deference for my contributions over the last 25 years. It's just when you are in an industry with tight margins and lots of day to day problems, the macro results and impacts need to be consciously snake charming that beast from the basket, cause otherwise all you know is the danger of the rattle. No matter how you shake it, no matter the angle you view it from, what I've done locally and regionally, for longer, than anyone else around, is of great and enviable import and consequence.
Yes, getting hitched. You heard it here first. 15 years of raising a kid and staying focused on my business, pivoting to a more fully rounded life.
Not to be vain at a moment like this, but I think this athletic shirt wrongly accentuates my gut. Must be the angle, or the lighting.
