The Finality of Markets

Hello Followers.  Hope you’re having a wonderful week!

About a century ago, I was a young man with at least 5 friends.  Of that group, I was the first among my friends to become a father (so I had that going for me). I was also the very last to buy my own home (And that tells you all you need to know about my smarts—or lackthereof).

So, when it came to all things parenting, I was the original go-to guy in my peer group. But when it came to that thing called “home buying” and “home selling”, well, I always had to call upon my “homies” for advice.

And even though my history with home buying and selling can be judged as historically below average, my record was not due to a lack of good advice.  Here are some sample tidbits of knowledge that were dropped on me by my posse:

Me:  What do you think my house worth?

My Buddies:  Whatever someone will pay for it.

Me:  How should I go about house hunting?

My buddies:  (Allow me to elaborate in the paragraphs below)…

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When my first friend bought his first home, he had some really good insights to share with me about his experience.  In his words:  “Sutra, you won’t believe what the process is like.  You give the Realtor a price range of what you can afford and you won’t believe the variation you will find in that price range. You’re going to see average homes, some homes that are WAY overpriced, and then you’re going to find one that is so great you’re gonna wonder ‘What the hell are those owners thinking selling their house at such a ridiculously low price?”

About 7 years later, another buddy dropped this related bit of knowledge on my fatty, albeit cerebral, head and mind:  “Sutra: If you want to get a good deal, you need to shop at multiple price points.  So, if you’re looking for say, a $500,000 house (I wasn’t), then go down to about $390,000-$400,000 because I think that you’ll find that somewhere there is a house that is listed for about 399k that is really a $500k house that you might be able to get for 375k.

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So that all brings me to my own house hunting experience in 2010.  At that time, me and the brood were moving from our first compound in Northern California to my first academic gig in Upstate New York. And during that house hunting expedition, I made it a point to follow the advice from Buddy #2. And so, we shopped for houses at multiple price points.  And one day, we walked into this fairly amazing house (says me) that had a huge yard, about 4,000 square feet of space on the interior, higher ceilings, some nice updates, a man cave, you know, EXACTLY what every ‘real man’ could ever want for himself and his family.

What is more, the house was listed for about $290,000 (which was the upper point of our price range).  But the thing was—it was a $500,000 house!!!!!!

And I was about ready to make the unilateral proclamation that “this is it, this IS the house!!!” when my wife and the Realtor decided it was time to make THEIR statement.

My wife said to the Realtor:  “I don’t like it.  I mean, the floorplan is weird. When you walk in, the first thing you see is the bedroom on the right.  The hallway is too narrow and it has a weird angular entry into the living room.  And then the Den doesn’t flow off the living room like it should and so it cramps the stairway.”  Yada, yada, yada.

The point being is that this house that I am talking about was FINE.  In fact, it was stinking GREAT.  I mean, sure the guest bedroom was just a “little” to close to the front door/walkway and that made the flow a little bit off-kilter. But you know what, IT WAS A $500,000 HOUSE that was on the market for $290,000. And I was sure that we could have gotten that sun-beech for about $279,000!!!

At the end of the day, we wound up buying the house next door.  Meanwhile, the house that “should have” gone for much higher wound up going for about $269k when it was all said and done. Three years later, that same house wound up selling for about 259k because no one wanted to buy that house, presumably because of that COMPLETELY IRRELEVANT issue of “flow.”

(I still don’t understand it!)

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There are now a few more days left in this madness called the Coaching Carousel. But if today’s penultimate hires are any indication, Mike Leach has been shown to be the $290,000 house that, in a rational market and world, would be worth at least $500,000 if not more.

I mean, Mike Leach has shown over his near two decade coaching career that he does nothing but win games, win press conferences, win sound bites, and graduate his players (the most important thing).

But he also has shown a penchant for things that rub people the wrong way. Indeed, like the bedroom that is JUST too close to the front door, Leach has turned some people off by tweeting negative stuff at/about his former employer, calling them crooks, fighting for the money they still owe him…..blah, blah, blah.

But because of all of his considerable strengths and record that Leach has established at WSU—he and his staff have been amazing–Mike Leach EARNED his chance and right to test his worth on the open market. And were it not for some fluke problem with the Title Company (The University of Tennessee), Leach might have secured himself a deal worth somewhere around 5 million dollars a year.

Unfortunately, that Title Company was a bit shaky (even worse, everyone should have easily recognized going in that the said Title Company was shaky).

So, when a virtual dream deal fell through, Leach picked himself up and put himself right back on the market to find out what he has worth.  And like many of us who have tested the market for all manner of purposes, Leach has found over the last couple of days that he is worth EXACTLY what the market will pay for him.

And for now—and for the near future—that “buyer” is NONE other than our Washington State University.  And to give you all a “market comparison,” Leach is making around 3 million a year.  In contrast, Dana Holgorson at West Virginia is making about 3.6 million this year and will be making around 4 million per in the next couple of years.

And, in my view, Mike Leach is a better coach than Holgorsen BY FAR, in every single metric but one:  that thing called the “FREE MARKET.”

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So, tomorrow the sun will come up and barring some crazy last minute development (e.g., Oregon hiring Leach or Morris ditching Arkansas at the alter to go to Tennessee) Mike Leach will be “stuck” as the Head Ball Coach at WSU.

The good news:  Because of Leach’s “predicament”, we will still have an A-list coach whose services we will have secured for a dollar amount that is “WAY BELOW” market value, even if that cost represents the top of our budget and price range!

And for Leach?  Well, he’s the commodity that should be located at a much higher price point.

He SHOULD BE!! Really!

But, alas, he is not.

And I’m sure that fact is hard as hell for him to internalize  because he IS worth more, right?—perhaps even a helluva lot more in my view….but again, the market says otherwise.

And because of that, it is incumbent upon Leach to quickly disregard the disappointment, call the President and Athletic Director and go sign that contract extension that is worth more than what anyone else is willing to pay.  And he should embrace that fact and be gosh darn grateful for it.

Because just as we are lucky to have the venerable and successful Mike Leach leading our football program, Mike Leach is lucky as all hell to have a WSU family and community that is willing to pay him in excess of THREE MILLION DOLLARS  a year  to live and work at a place that allows him the latitude to do the things that allow him to be personally and professionally successful.

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So, as Leach returns to WSU later this week, he can be unashamed to tell  his players, fans, and the media that he’s been doing EXACTLY what every other successful person and businessman would do following a successful run:  Assess your value, explore new opportunities, and in so doing, set an agenda for the next 5-10 years and beyond.  And now, having done all of that, he can genuinely let his players, his staff, and fans know that he is THRILLED to be able to continue his career at WSU where he will strive to conclude his career a top all of WSU’s coaching records.

Because Leach and WSU—however reluctantly at times—are a near perfect marriage and match.  And while the last week has been difficult, these last few days should represent one of those moments that serve to strengthen and deepen that relationship as well as an appreciation of it.

Now let’s go get Michigan State, shall we?

All for now. Go Cougs.