In Washington, DC last week, some welcomed big news. The owner of the Washington Commanders, Daniel Snyder, sold the team. Since his purchase of the franchise in 1999, some fans have been longing for this day.
Mr. Snyder has never been a fan favorite. The fact that the team didn’t win a lot of games stands out, but the fan experience ranks among the worst in the NFL. The team also faces several hostile workplace inquiries, including for the sexual harassment of the cheerleaders, and is in the middle of a Congressional inquiry about having misrepresented revenues to the league so that it did not have to pay its fair share under the revenue sharing agreement.
I’ve heard some commentary that, despite all the dislike, he was, at the very least, a great businessman because he turned an $800 million investment into $6.0 billion, which was the sales price. Although I don’t intend to debate what constitutes good business, I have a comment on the perception of the growth of the investment. In 1999, Mr. Snyder bought the team, and he sold it 24 years later. When you do the math, the return on the investment is just over 9% per year. While this rate of return is healthy, it is below the long-term average of the stock market.
Drawing a quick conclusion (he’s a good businessperson) from a small amount of information (he did get $6.0 billion) is a good example of heuristics. Heuristics are defined as mental shortcuts we all use to simplify problems. Heuristics are necessary to our daily lives; otherwise, we wouldn’t get anything done. However, we all know that quick decisions without all the information can sometimes be poor decisions and judgments.
In the modern world, where all sorts of people and entities are vying for our attention, heuristics can be used to manipulate us toward irrational behavior. We can’t avoid these shortcuts because if we had to research every thought we have, we’d have no time for anything. But we can recognize them for what they are: quick decisions that allow us to accomplish tasks with little consequence. For bigger, more important decisions, we are better served by doing more research and analysis. Now we just have to figure out what’s important and what’s not.
Take care and stay safe.
Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud by Ben McKenzie and Jacob Silverman
At the height of the pandemic, TV star Ben McKenzie (The O.C., Gotham) was the perfect mark for cryptocurrency: a dad stuck at home with some cash in his pocket, worried about his family, armed with only the vague notion that people were making heaps of money on something he—despite a degree in economics—didn’t entirely understand. Lured in by the promise of taking power from banks, possibly improving democracy, and sure, a touch of FOMO, McKenzie dove deep into blockchain, Bitcoin, and the various other coins and exchanges on which they are traded. Weaving together stories of average traders and victims, colorful crypto “visionaries,” Hollywood’s biggest true believers, anti-crypto whistleblowers, and government agents searching for solutions at the precipice of a major crash, Easy Money is an on-the-ground look at a perfect storm of 2008 Housing Bubble–level irresponsibility and criminal fraud potentially ten times more devastating than Bernie Madoff.