Andy Kessler

WSJ: Rejection Is Like Rocket Fuel

https://www.wsj.com/articles/rejection-is-like-rocket-fuel-11553459174

Rejected? Take a lesson from University of Tennessee basketball coach Rick Barnes. According to ESPN, Mr. Barnes has saved every rejection letter he’s ever received, including those from Indiana coaching legend Bobby Knight and Louisville coach Denny Crum. When hyper-announcer Dick Vitale heard this, he said, “Wow, those are real schools.” Turns out Dickie V was turned down by almost every high school and small college he applied to coach. These are successful people holding on to long-ago rejections. Effect, meet cause.

Rejection notices used to be called boot letters (until email ruined everything). High-school seniors would draw a boot on college rejection letters and wallpaper their rooms. College seniors would thumbtack job rejections, with an inked boot, on their doors.

These happy rejects are in good company. One publisher turned down Herman Melville’s “Moby-Dick,” saying, “First, we must ask, does it have to be a whale?” Joseph Heller’s book once was turned down with the comment, “I haven’t the foggiest idea about what the man is trying to say. Apparently the author intends it to be funny.” Heller named it “Catch-22.” John Cleese’s hilarious sitcom “Fawlty Towers” initially was written off as “a collection of clichés and stock characters which I can’t see being anything but a disaster.” And there’s Steve Jobs: “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me.”

Now it’s college-admissions week. You or your child might soon be turned down by some institution of higher learning. Or worse, maybe you lost a spot because some pushy parents used William “Rick” Singer’s tutoring and college-application “services” and “side door” to get into Yale or Georgetown or USC.

So how do you handle it? In one Ted Talk, a psychologist named Guy Winch suggests you “apply emotional first aid,” and if that doesn’t work, try to “boost feelings of social connection.” That sounds like a first-class ticket to Depressionville. My advice? Ignore the namby-pamby voices telling you to forget it, let it slide, move on, or pack up your troubles in your old kit bag. And don’t waste your money on books filled with motivational gobbledygook, like Norman Vincent Peale suggesting, “Change your thoughts and you change your world,” or Tony Robbins’s insight: “Where focus goes, energy flows.”

Instead, embrace rejection. It’s a power boost. Grab it. Internalize it. Feel it. Swirl it under your tongue like a single-malt scotch, or a Mountain Dew Baja Blast for you high-schoolers.

WSJ: Warren’s Populist Puritanism or Should we break up Facebook, Google, Amazon and Apple?

https://www.wsj.com/articles/warrens-populist-puritanism-11552848483

H.L. Mencken defined puritanism as the haunting fear that someone, somewhere, may be happy. Remember that amid the deluge of demands to break up Facebook , Google, Amazon and Apple .

Columbia law professor Tim Wu insists that bigness is bad. “We’ve let Facebook have their ride, they’ve made their money and they’ve been very successful,” he told the American Enterprise Institute last month. “I just think there’s a very good track record in tech of trying to put pressure on the monopolist and break things up a little bit.” Basically, Facebook got big and now it’s someone else’s turn.

Wannabe president Elizabeth Warren wants to “break up Big Tech” and split the companies into heavily regulated “platform utilities.” She told crowds at South by Southwest: “The monopolist will make fewer monopoly profits. Boohoo.” The politics of envy is the populist playbook.

Yet the Sherman Antitrust Act prohibits two specific types of business practices: anticompetitive agreements, or collusion, and conduct to limit competition. Judges define these violations by a consumer-welfare standard, assessing whether consumers are harmed by a lack of competition. “Innocent monopolies” earned by merit are not illegal. Antitrust says nothing about bigness.

No matter. The calls are getting louder for Facebook to split off Instagram and WhatsApp. Same for Amazon carving out Whole Foods. Or Google divesting its 2007 acquisition DoubleClick. Or spinning out the App Store from Apple, as Spotify is seeking in the European Union. There’s little sign of consumer harm in any of these cases.

Sure, the tech titans have some issues. Google’s searches favored its own sites over others. Facebook sold private information after agreeing not to, and the Federal Trade Commission is set to collect a huge fine. So keep up the pressure. Firms clearly ought to respect property rights better, and pay for news content and user data. But demanding divestitures and regulation is an old trick competitors use to get government to do their bidding. In reality, the moves would freeze innovation without enhancing competition.

WSJ: Impeachment and Your Investments

https://www.wsj.com/articles/impeachment-and-your-investments-11552245553

“It’s very clear that the president obstructed justice,” House Judiciary Committee chairman Jerrold Nadler told ABC’s “This Week” last week. On the same show, House Republican Leader Kevin McCarthy said Mr. Nadler “decided to impeach the president the day the president won the election.” You don’t get better foreshadowing than that! The $64 trillion question is what happens to the stock market if President Trump is impeached.

I’ve long contended that only fools predict stock markets, so here I go. Fortunately, there are plenty of clues. A week before Election Day 2016, analysts at Barclays forecast the market would drop by 11% to 13% if Mr. Trump was elected. When it became clear he had won, CNN anchors noted—almost with glee—that Dow 30 futures were down more than 900 points. They dropped 5% overnight, the maximum selloff allowed on the exchange. But I hope you didn’t sell: The Dow Jones Industrial Average regained 3% the next day and has risen almost 40% since. Shocked investors had traded on their emotions the night of the election, but others undid the damage when they woke up thinking about policy.

A similar mix of shock and shrewd analysis is apparent in market reactions to each of the three impeachment episodes in U.S. history. When Andrew Johnson was impeached in 1868, markets were cruising in the wake of the Civil War, with banks and railroads making up the majority of the stocks. Lehman Brothers strategists calculated that the market—call it the Dow Jones Pre-Industrial Average—rose 10% in the three months before the impeachment, paused, then rose another 6% over two months after acquittal.

Richard Nixon resigned before being impeached. From the start of the televised Watergate hearings in May 1973, the market began a 16-month decline of more than 20%. After Nixon released the White House tapes and then quit on Aug. 8, 1974, the market popped up 5% in a few days. I hope you did sell then, because that’s when the real bloodbath started. The Dow dropped 27% through early October and bottomed out at 577 in December. Messy oil markets, inflation, a recession and Gerald Ford didn’t help.

Bill Clinton’s impeachment made similar shock waves. During the run-up to the release of the Starr report, from July through September 1998, the market sold off almost 20%. A friend who ran a big investment fund told me, “I don’t care what Clinton does with his sex life until it affects my portfolio.” Financial chaos after Russia’s debt default made matters worse. After Mr. Clinton was acquitted in February 1999, the dot-com debauchery began.

So if a Trump impeachment takes place, here’s what I think will happen: First, stock futures will soar, maybe by as much as 5% on Day 1. Bells will peal across the land, and I’d expect massive flash mobs dancing in circles singing “Ding, dong, the wicked witch is dead!” Or something like that.