Broken Promises

Years ago during my study abroad, I volunteered at an orphanage.  I can’t imagine something like this being legal or allowed today, but there was a ‘recess period’ or playtime in the afternoon on the weekends when volunteers were allowed to go in and play with the kids.  All you had to do was show up.  No background check, application, nothing.

The kids ranged in age from newborn to about 8, and volunteering there was one of the most affecting experiences of my life.  I still think about it all the time.

Recently I was digging through some journals and came across a letter I wrote to a kid there, and one distinct memory came flooding back to me.

She must have been 3 or 4 at the time, younger than my older daughter is now, and now I wonder – where is she?  What is she doing?  Is she safe?  On the streets?  Does she have a family?  Is she…exploited?

The first time I met her during that playtime, she was sitting in a play car and wanted to be pushed around by one of the adult figures in the room.  She liked that.

Over the next few weeks, she warmed to me.  I don’t know what caused her to open up, although I suspect the bar is lower for small children, and she asked to be picked up and held.  And she didn’t want to be let go.  When other kids came by and begged for their own turn, she kicked and lashed out at them.

One week when I arrived, she was staring out the window when I arrived.  She didn’t see me – or rather she was looking past me.  I entered and approached her, and she didn’t respond.  Her eyes were faraway, like she was imagining something.  Or waiting for someone.

And that day when I picked her up and let her down again, she in a very small voice tugged at me and said, ‘don’t go.’

She and I both knew the rules.  It was an orphanage.  It was a place where none of the kids had an adult.  Only a group of aunties that took care of them in the collective.  But something, whatever it was that causes people to trust each other, had caused her to break and imagine, maybe to be filled with hope for the first time in a really long time.

Leaving was always painful, but especially so on that day.  I quelled her with promises to come back next week.  I’ll be back, right?  Let’s play again then.

But for two weeks I was held up successively with first, a school event, and the second time, I’m ashamed to say, with a hangover.

When I returned, she was nowhere to be seen.  As I gave the other kids a ‘ride’ I caught her out of the corner of my eye.  She was standing there angrily, her entire body in a stricken pose.

That day the flood of kids was so great that I couldn’t get to her until a good 15 minutes later.  But when I did, she wouldn’t look at me.  She stared straight ahead, not responding to me even as I knelt down and called her name.

I didn’t know what to do.  Eventually I moved on to the other kids, noticing that she retreated to a corner, by herself.  I said bye to her, thinking I would try again the next week.

But that was the last time I saw her.  To where, I don’t know.

I knew on that day I had destroyed something for this child.  Once again, to her, I was just another adult: adults left and didn’t come back.  Adults held out promises and didn’t keep them.  To her, in the purview of a small child, she had held out hope and offered a boundless, pure trust.  Opened her warm little heart.

And I realized leaving on that day, what I had done.  I had completely broken that trust.  Disrespected it.  Yet again.  Maybe for the last time.

I understood her actions.  She was protecting herself, as she should have.  They were actions of a world she did not yet understand, and should not have already been exposed to – of lies, excuses, of broken promises, of ‘let’s-meet-again-but-not-really’, of words taken lightly and tossed out.

To me, school had seemed so important at the time.  In the schemes of things, it absolutely wasn’t.  Drinking?  Let’s not even get started with that.  How could I have not known what was important?  The most important, human, life thing by a million times?

Should I have picked her up anyway, even when she was wrapped up in that hurt and loneliness?  To reassure her that someone cared?  Or would that have just delayed the inevitable, the eventual parting?

Whatever it was, what I had done to this poor little kid was wretched and ugly.  You don’t break promises to little children.  They trust you completely.

I’m sorry, I said in my letter.  I’m so, so sorry.  But she’ll never read it and will never know.

Happy f***in’ holidays.

What I Should’ve Studied

Every year beginning around this time, I interview high school seniors applying to Penn.

The outcome of these interviews, and my evaluation of them, have almost zero correlation to whether the candidate is eventually admitted.  Out of the 5-7 ‘highest recommendations’ I’ve made during the course of 50+ interviews, 0 have gotten in.  Conversely, only the candidates who I felt were mediocre were admitted.

Either the kids are lying to me (I don’t see their application, resume, essays, etc.), I suck at conveying ideas in written form, or the college admissions game is so complex that those who are admitted, get in on the basis of luck: i.e., some weird interaction between certain of their traits and the traits the admissions office is looking for.

Anyway, that’s not the point of the post.  The point is that many of them ask me about my experience at the school, what I studied, what I would recommend, etc.

My view on this has really been influenced by the fact that over the last 15 years, much of what I learned has either been pushed aside as obsolete, or completely demolished during the financial crisis and its aftermath.  International and development economics, macroeconomics, marketing, management, etc., have not held up well – or at all – in the face of unprecedented worldwide central bank actions, a Chinese economy that defies all the principles we learned, social media, new tech businesses, remote workforces, etc.

Later on, I went to Haas to get my MBA, partially motivated by the desire to try to figure out what happened during the financial crisis.  The only thing I was able to conclude was that no one really knows anything.  And that my internship was at a company whose stock price is down 90% in the last few years, because its model – and model of the world it was operating on – was fundamentally flawed.

So what does that mean?

With the benefit of hindsight, which is of course an unfair advantage, I would have focused less on the Wharton “technical” courses purporting to teach us about the business world.  There’s no way to “learn business” except by working, or building a business.  What you can actually study in business school that’s maybe useful is:

  • The principles of finance – just a single 101 class might do.  All of finance is based on the concept of discounting and Net Present Value, that’s it.
  • An accounting class.  This is the language of business and besides NPV (above), the only concept of business that’s stood the test of time.
  • Taking some sort of class or seminar, if it exists, to tie the above together using Microsoft Excel.
  • Picking up some legal knowledge or framework for the jurisdiction you’ll end up working in, is useful.  I’m always astounded by how much interaction with the law we have, with so little understanding of it.

That’s all.

In retrospect, that’s what I would teach in business school because that’s all that’s stuck with me, even after going to business school twice.  Wharton in general is almost a vocational school for the banking and consulting industries, and while as a result the curriculum was very current (trendy?), there’s definitely a shelf life on “technical” stuff.

Instead, I would have spent the rest of my classes loading up on more liberal arts, instead of feeling guilty about it being a waste.  I should have taken more classes in philosophy, history, psychology, politics, anthropology, languages.

Topics that have existed for thousands of years, with thousands of years of documentation and history, and will last for thousands of years longer (see: Lindy effect, Taleb).  Understanding the patterns of history that rise over and over again, learning rhetorical and debate tactics (arts of persuasion), studying and refining communication skills in English and other languages (including computer-based ones), learning how humans think and behave, refining my own thought processes and rationality, studying great ideas to serve as a framework for my own thinking.  And sprinkling in random classes to be exposed to perspectives completely foreign and new – because adults, how often do we actually do this in life?

Maybe this is a middle-aged man speaking.  But to anyone who asks, that’s what I advise.

Interning at Samsung

I interned at Samsung America the summer after my freshman year.  It was my first experience with a real corporation, so I showed up dressed in college-kid slacks and tie,  excited about having this super important official job.

Now this super important official job was located in Samsung America’s headquarters in La Mirada, off the 5 freeway.  From the freeway, the building looked so tall!  It had to have been at least 10 to 15 stories.  It was with pride that I pulled into the parking lot.

Super excited about this super important official job I was there to do, I walked in and promptly discovered that the facade was literally that, an optical illusion.  The actual building was only two stories high, but achieved the look of verticality from glass panes that were stacked in ten rows atop each other, 3-5 panes per floor.

This was in the early 2000s, when Samsung’s primary products were televisions, printers, video players, CD-R’s, etc., before a single phone.  It was a prestigious company back then, but not at the level of the past 10 years.  And I became very intimately acquainted with all these primary products over my time there, not because I helped market them or do analysis on them, but because I spent most of my time there in the storage closet, which was a repository of old hardware.

My immediate supervisor was a short, bespectacled senior manager whose eyes were blurry behind his frames, and whose own ambivalence about his role in the company caused my summer to be a pretty unproductive, although amusing one.

Let’s just call him Mr. Lee, because I have a 20% chance of being right anyway.  Mr. Lee was well-meaning and honest, but maybe too honest.

After a two-day period of being introduced to people around the office, and being feted with lunches, I asked for work to do, to which he responded that there was nothing to do.

Dumbfounded, I asked what he meant.  I’m here on an internship, I said.

So, he said.  We have people to do everything already, he replied, casting a hand around the office.  You’re here to learn.

And what I discovered the learning was, was life lessons imparted in 3-hour lecture form, in Korean, by this man on an overseas posting.  They usually took place after lunch, in the storage closet.  More on the significance of this storage closet later.

I came into work three days a week.  In the mornings I was unsupervised and free.  One day I walked into another intern’s office (a guy from Harvard), and discovered him watching footage of a Korean pop star’s sex tape scandal with his own immediate supervisor, a man likely in his 30s.  His supervisor excitedly asked him to make a copy for him.

Sometimes I tried to do work.  This consisted of organizing files, and going out to get coffee.  When I asked for real work, I was waved off by everyone in the office, as if instructed by an invisible set of orders on high.

They can do it better than you, Mr. Lee said to me.

His lectures to me usually started right after lunch and sometimes lasted until 3 or 4pm.  And I’m embarrassed to admit, I remember almost nothing about them.  My Korean wasn’t as good as it is now, so even at the time, I understood maybe ~30%.  Add the effect of heavy lunch-induced food comas, so that the most distinct thing I remember is repeatedly dozing off right in front of Mr. Lee’s face and feeling bad about it, but as I blinked my eyes wide open with superhuman effort, him not even pausing, missing a beat, or commenting on my slumber, and instead continuing in his rapid, undulating, quite dramatic exhortations about working hard and being an immigrant and being loyal.

At home, I looked up ways to stay awake through food comas, and came across such tactics as biting your tongue and pinching yourself hard.  Neither worked for me.  I was too tired to summon the effort.

Mr. Lee himself had been sent by HQ on this overseas posting, and while he wasn’t the head of the office, he was a powerful #2.  Not so powerful that he could do anything he wanted, but still – three hour storage closet breaks can only be administered by someone with some clout.

The #1, boss of bosses, was an even older gentleman who was also bespectacled, and who Mr. Lee tried to avoid at all costs using various tactics and techniques.  If, in the parking lot, Mr. Lee spotted the Boss, he would instruct me and other underlings to duck inside the car so that we were not visible.  He himself would recline the seat back all the way so as to avoid detection.  More than once as we made our way up to the executive floor (the second floor of the 2-story building), he instructed me to crouch under the cubicles and commando-style, move towards the back while keeping out of the Boss’ line of sight.  This was way easier for him, because he didn’t have much crouching to do.  Our destination during these crawls was the storage closet, where the Boss never seemed to think to check.

The other staff in the office saw us and knew exactly what we were doing, but never said anything.  After all, Mr. Lee was the #2.

During our lectures, Mr. Lee became more animated and passionate than I ever saw him.  It’s like he could finally be the person he wanted to be, through his words.  By the way, I am not exaggerating about the duration of his lectures.  Directly after lunch, I knew I would be tied up until it was time to leave.

It was almost as if Mr. Lee didn’t want me to work.  A lot of it was defined by the fact that he resented the corporate hierarchy and his place in it, but looking back on it now, I wonder if in some way he was looking out for me.

It’s your job to learn, he had said.  To be a student.  Not to engage in the mindless drudgery that his staff was buried in.  The subtext: not so fast.

And you can’t give 3 hour lectures imparting the entirety of your life experience to someone you don’t like.  Probably the opposite.

I realize in retrospect that in many ways, without explicitly meaning to be, he was quite kind.

What Gary Taught Me

I never thought I was going to write a second post with Gary in it.  But he was killed two weeks ago in a tragic boat accident, aged 64.  When I went to his funeral yesterday, I saw that the latest entry in the guest book was, ‘so young!’  Overwhelmed, I didn’t know what to write after that, so I didn’t.

I also didn’t stay for the celebration of life part, where everyone gets together and talks about the recently deceased.  I just didn’t know what to say.  But now I think I do.

I met Gary during what was probably the roughest time during the last 20 years of his life.  He was going through an acrimonious divorce and everyone who worked with him, the 9 of us, stuffed in that two bedroom apartment off Manhattan Beach Blvd, knew it.

Sometimes his soon-to-be-ex-wife would drive up, shower us with abuses, and drive off.  One time we had a counterintelligence expert show up and do a thorough sweep of the apartment for bugs.  For whatever reason, this ‘expert’ thought I was working with the enemy, and kept turning away from me when I tried to listen.

They tried to sabotage each other, they maligned each other, they were each lawyered up to the gills, and part of my unofficial job description was to sort through his bank statements and files from the last decade in an effort to make the lawyers’ lives easier, because they were high-priced idiots who couldn’t see the outlines of the case.  I just remember the attorneys sitting there in the conference room, clearly exposing their ignorance about basic details, as the paralegals chimed in with what the paid-by-the-hour idiots should have known.  I don’t remember the firm’s name, but they were based out of Torrance.

Anyway.  Throughout this, Gary worked like a fiend.  I joined in 2010; in 2008 and 2009 he saw his net worth get destroyed by half, and the combination of this and the divorce made him feel like he was up against a wall.

Every morning he did 5 am yoga.  Then at noon he went out again for a spin class.  Then sometimes he did another yoga session in the evening, calling all the rest of us lazy wusses[not this exactly but something similar] for not being able – or unwilling – to keep up with him, who was twice our age.

He was working with a manic, crazy energy.  You could sometimes see his eyes go vapid from the exhaustion and anxiety.  Files were strewn all over his room as if TNT had exploded in it, but he knew where every single thing was.  Sometimes while he was talking, he would drift off, his mind wanting to be somewhere else.

Gary was my single ‘professional’ mentor.  Actually, he was more of a life mentor.  During that time, Gary was going through a period of intense reflection.  Mixed in with a simmering bitterness about the divorce, and intense anxiety about…everything, he rambled on about events in his life, thinking out loud about what had happened, and the majority of it revolved around the theme of Not Trusting the System.

He railed against everything – his ex-wife, against bankers, against people who spent too much on their cars and houses, against all the people in Manhattan Beach trying to be big fish in small ponds, against county assessors, against dishonorable clients who didn’t pay, against people who had full time jobs they didn’t enjoy.  The IRS.  The federal government.  Lawyers.  Accountants (he was formerly one).  Mostly against people who he thought spent too much on anything, and people who ‘bought’ into the system, the (former) American Dream, who tried to be like other people.  Son of a mailman, a boy from Hawthorne, Gary had a huge chip on his shoulder even while from the outside, you would see him as a millionaire and as part of the establishment.

Of course, a lot of it went too far.  Walking into hotel lobbies to enjoy their free continental breakfasts.  Withholding our checks while trying to convince us it was better for tax purposes.  Driving thirty minutes out of the way because gas was cheaper somewhere else.  Not wanting to go to lunch anywhere unless it had a lunch special that was at least a double-digit percentage cheaper than regular price.  Taking his son to LA Kings games but arriving purposely late, and then ‘teaching’ him about the bargaining advantage against scalpers when one arrives after the game has started.  Spending more time trying to rack up miles than on the details of his divorce (which we had to handle).

And the combination of his own personality and his circumstances made him bitter.  He did spend a lot of time badmouthing his ex-wife.  This spilled over into a judgmental attitude about other people too.  His neighbors who tried to keep up appearances.  County assessors and their work ethic.  And his relationship with his brother was not the greatest either.

But despite it all, he walked the walk.  He was frugal to a fault, even though he had become a millionaire many times over.  He said what he thought.  And I absorbed it all.  Because in most ways, he was right.  And for that, I was always grateful.

And that’s what I thought I knew about Gary.  Based on his cynicism and sometimes-pettiness, I didn’t expect to see the entire hall-full of people come to pay their respects.  I saw how much he was loved by his children.  I even saw his ex-wife sitting in the first row, and who read a poem about forgiveness, which had layers upon layers of meaning on it, since the boat accident was another’s fault.

One of his friends gave a moving speech full of fondness and affection.  More than once I heard him described as fun-loving, generous, big-hearted, friendly.

And then it got me thinking, as I stood there in the back of the room.  I thought I had known Gary.  But it seemed like actually, there was another side to him that I had never known.

Perhaps, just maybe, who I had seen was a man at his worst.

And that man at his worst, had still never raised his voice, was ready to greet us with a smile, and lived every day through that dark period with desperate, almost superhuman energy.  And come to think of it, I hadn’t made much of it at the time, but I do remember he had talked incessantly about his kids – about their nature, about their accomplishments, even when I hadn’t thought they were so great – with exceeding pride and love.  That man at his worst, was still better than many people at their best.

Rest in peace Gary.

8th Wonder of the World

Once I hit my mid-thirties, I started losing track of my age.  Sometimes I have to pause and think, and calculate the number of my rotations around the sun.  Time passes by deceptively quickly.  The months and days blend in with each other, and sporadically I have these startling realizations where I feel like I’ve been asleep and just woken up.

Like when, after spending 4 years abroad, I start reading the news and every article’s headline looks like it could be from the Onion.  I swear to you, my Feedly at some point started looking like April Fools’ Day, every day.

Or when you start not being able to comprehend pop culture or music.  And when the music you grew up listening to, becomes ‘old school’.  Sigh.

Or like when I go to the gym, and everyone is younger than me.  And I end up wrestling with high school kids.

Or when people who I think are not that younger than me, keep calling me sir.  That happens, by the way, when you’re in your mid-to-late twenties.  When it first happened, I was pleasantly surprised.  Now I’m more disgruntled.

Or when you lose touch with some friends for a few years, and that new job or project they were working on whose name no one knew, ends up being on the headlines of major newspapers.  And they become startup founders with huge exits, fund managers with billions under management, managing directors, directors, and start becoming the grizzled old guard.  This is astounding and inspiring at the same time.

Einstein called the power of compounding the 8th wonder of the world, and it truly is.  When you’re in school, everyone is kind of equal.  You have standouts and geniuses, but you drink together, study together, sleep together.  Shortly after graduating, you start seeing peoples’ paths diverge.  Ten to fifteen years out, and you see people on opposite ends of the spectrum.

People who haven’t taken care of themselves end up with serious health problems.  Some end up in jail.  Others make fortunes.  Others have almost fully grown kids.  Still others completely turn their lives around from drug addicts or violent juveniles to successful businesspeople.  It takes time, but the tiniest bit of compounding plays out.

I don’t know if it’s universal, but in my twenties I couldn’t even imagine being thirty.  Now I’m in my late thirties but I definitely can imagine 40, 50.  I wish when I was younger, I had fully appreciated this power of compounding.  And believed in it.  I would have made plans in 5- to 10-year increments.  Because although they might have taken nearly a decade, the things that my friends and colleagues said they would become, they truly became.

What’s your next 5 to 10 years look like?  It goes by in a flash.

1%

Of the places I’ve been to, there’s one entire city that I think would singularly defy explanation to an ancient visitor.  It isn’t one based on manufacturing, like Shenzhen, or trade, like Dubai,  or a port, like Antwerp, or a capital seat of power, like Washington D.C.  It’s not even a city based on mirages, like Los Angeles, or tourism, like Orlando.  Because it wouldn’t be that hard to explain these places.

Buildings are a concentration of energy and resources, and a reflection of our values and culture.  An ancient Egyptian looking up at the skyline, would see the Pyramid of Khufu, the deity-king, and go about his business, knowing that in his world, the link between the afterlife and this life was sound.  An ancient European, looking at the nearest castle or church, would have similarly seen the relationship between herself, the powers that be, and the powers that govern the ever after.

Even in our modern world, you can pretty much look at any building and identify its reason for being.  Office towers – a clustering of service-industry companies.  Malls – our consumerist economy at work, and/or modern town centers.  Residential towers – lack of space in a city where people want to live.

But.  There’s an island in the middle of the South China Sea with some of the largest buildings in the world.  Likely, 99% of the population of the world will never go there, nor have a reason to.  And I’m not so sure an ancient visitor would have any idea what they were for, nor understand how they were built.  They aren’t residences, marketplaces, nor granaries, offices buildings, warehouses, or anything that could have existed a few hundred years ago.

Because these buildings?  They’re a type of factory built on a single mathematical probability, and that is the probability that over hundreds of thousands of games played, it will lead to a convergence towards a single number – 1%.  It is an island built on our modern world’s triumph of risk management.

I’m talking about Macau.

Now there are a lot of different directions we can go here, but I want to start with the sheer size of these buildings.

Ancient descriptions of splendor always interest me.  For example, Marco Polo, arriving at the court of Kublai Khan, marveled at the “greatest palace that ever was”, with gilded walls and a main hall so large that it could seat 6,000 dinner guests.  The Khan’s palace, like many other palaces, were built to awe, stupefy, and impress power upon their subjects and vassals.

Now of course, this kind of breathless praise is subjective, and dependent on the eye of the observer.  What if we applied this kind of writing to modern buildings?  How’s this one:

A massive pleasure ground filled with all sorts of marvels and luxuries, boasting 30 restaurants of cuisines from all around the world, accessible to guests by means of a gondola crossing a lake, nearly 6 football fields in size, activated with fountains that explode into the sky in a synchronized dance.  At the end of the voyage, guests are greeted by attendants who show them into a staggering hall accommodating nearly 10,000 pleasure-seekers at once.  Above them, more than 1,000 stately rooms await, bedecked in lavish gold leaf and precious metal furnishings.  Plush carpeting create a serene environment for these guests of honor, who arrive at their rooms passing carousels and ferris wheels arranged throughout the lobby, made entirely of floral arrangements.  Artwork carefully selected from around the world and across the span of history, with priceless Qing Dynasty treasures and more than $120 million worth of contemporary paintings alike, greet these visitors.  Costing a staggering sum of more than $4 billion dollars, constructed over a 2-year period with a city’s worth of laborers, this pleasure palace is…the Wynn Palace in Macau.

Located in Cotai, the Wynn Palace is one of twelve casino resorts built with a similar level of stupefying investment.  At 400,000 square meters (4.5 million square feet), its gross area is larger than most buildings in North America, including the Mall of America (the largest mall in America) and the One World Trade Center (the tallest building on the entire continent), and larger than Disneyland or Disney World Magic Kingdom, including parking lots.  It’s larger than airports.

To build the Palace, Wynn invested more money than went into the One World Trade Center, a building whose reason for being, in Manhattan, is more or less crystal clear.

The Wynn’s neighbor, the Venetian Macau, ranks among the top 5 largest buildings in the world.  At over 1,000,000 square meters (250 acres), the single casino resort is more or less the size of Hudson Yards’ East Yard (home of 4 skyscrapers each over 900 feet tall, a retail mall, hotel, 2 million square feet of residential properties).

And on the Cotai Strip alone, there are ten more like them!

Returning to our ancient visitor.  No doubt he would be astounded to step foot inside one of these palaces, although he would have no idea what people were doing inside of them.  He probably would have been even more astounded by the fact that unlike ancient tombs, palaces, temples, or castles, stepping inside one of these modern palaces is completely free of charge.

Now imagine you’re the ancient visitor, entering a casino in Macau.  The casino floor sprawls out for, literally, acres.  There are people with their eyes glazed over the slot machines, seemingly engaged in some sort of modern-day temple offering.  They insert tokens of monetary value into a metallic, neon offering jar.  Capriciously, it offers some back.  Other times it swallows the tokens, as if appeased.

If you walk a little further, out to the open expanse of the tables, then you might see something that you can relate to.  No machines here.  Just a simple exchange between two humans, and a crowd of people surrounding them.  The two humans seem engaged in some sort of rite.  One of them wildly gesticulating, engaged in all sorts of rituals of extreme concentration: blowing on some pieces of paper, mumbling what seem to be incantations, shouting words as they flip them over, peeking slyly under them, slamming the side of a hand down and pretending to ‘chop’ the paper in half.

This is baccarat in Macau.  

This is a game where the house edge is slight, and the actual decision-making made by players is almost nonexistent.  Add to that the influence of native Chinese superstitions, and you get a game where paradox of the illusion of control looms large.

In baccarat, or punto cano, one plays the game by betting on one of three outcomes: whether the “banker”, usually the dealer, or the “player”, usually another player, will  win.  Or that they will tie.  The two sides are dealt cards, and these two players then flip them, nothing else.  Then they are issued new cards according to strict rules.  Literally, after you bet on one of these three outcomes you have nothing else to decide.  

And for the player herself, she does nothing else but flip the cards or draw them according to preset rules.  There is literally nothing to stop casinos from replacing the “players” and dealers with robot arms.  But perhaps for this simple reason, an elaborate edifice of rationalizations in the form of rituals and superstitions, arises.

Gambling has a rich mythology. From the earliest days of human society, casting lots —often by drawing straws or tossing dice made from the knuckle bones of sheep—was a way to ask the gods for answers. The high priest who wanted influence soon learned to become a “sharper,” positioning the straws just right, shaving the dice, or even devising elaborate rules to ensure that more than random chance would determine the outcome. In many societies, it was a serious crime for anyone but the high priest to touch the instruments used to divine the will of the gods. This imbued the dice with a sacred quality. It also made sure no one could tell if they were loaded.

A screen by the table displays whether the banker or player has won previous rounds, in alternating colors.  What is this screen even for?  The result of a previous hand has literally nothing to do with the next round of play.  

But when a player gets hot, you see the player’s marker blazoned in blue or red, curling back down and around, like an improbable banner, a dragon’s tail.  You see players in states of concentration, chain-smoking, guzzling tea by the gallon, “cutting” their cards with a big fist, pounding it down on the table, then chopping it in half before taking the edge of the card, like it weighs a ton and he’s struggling against the weight of his fight against fate, peeling it back with the force of the spirits unleashed in his hands.  Then you see tables erupting in pandemonium as players go on streaks, crowds gathering around the table four deep, jostling for position to bet, often through reps located closer to the action, chips flying above and through the crowd and landing all over the table, and then ladies of the night creeping up and slipping their phone numbers to the big winners.

The energy is intense, and it makes you start believing it, this thing called luck.

And on second thought, maybe it’s not so far-fetched to believe that an ancient visitor would have related to what goes on there.

*******

Gambling is 90%+ of revenues in Macau.  In Las Vegas, that percentage is closer to 40%.  Baccarat alone accounts for 80% of revenues in Macanese casinos.  And of this 80% of revenues, most of it is from VIP gaming, where the minimum bet size is $5,000 US dollars.  

By some estimates, the actual count of these VIPs is in the thousands or tens of thousands, meaning that it is the population of a small town driving the revenues of a small country’s GDP.

The mechanics of the baccarat game are worth reiterating.  

When you play baccarat, unlike most casino games, where there is no strategy or decision making.  You do not decide to draw or stand, like blackjack.  You do not have dozens of options, like in roulette.  You do not look at the other players’ cards or try to read their faces.  You can try to card count, but the consensus among the best card counters alive, including Ed Thorpe, are that “despite the resemblances between baccarat and blackjack, the favorable situations detected by perfect card counting methods are not sufficient to make the game favorable.”  

A more appropriate analogy might be to think of it as a team-based version of casino war.  There is no winning strategy.  The odds are given.  The “banker” will win 45.9% of the time, and the “player” will have the upper hand 44.6% of the time.  And you can bet on either.  Less than 1% of the time, they will tie.

The net of these three outcomes results in a 1% advantage for the casino.  It’s the slimmest of odds, and it’s the statistical substrate on which nearly billions of dollars in buildings have been built.  

Take some time to think about whether you would build a business on a 1% margin.  Does that sound appealing?

You might be saying that if it’s a sure thing, then of course!  

But the problem is that probabilities are not sure things.  In fact, because the house edge is so slim, in short games, small volumes, and large hands, baccarat players can go on inexplicable streaks that wreck holes in casino vaults.

Bill Zender, former Nevada Gaming Control Agent, sums it up: “your risk is 100 times your average bet.  So if a guy is betting $10,000 a hand, he could conceivably win $1 million from you.  That’s within two standard deviations, so it can happen.”

And in a game where VIP regularly wager half a million dollars a hand, the casino can lose tens of millions of dollars in minutes.  If this sounds theoretical, let’s take a trip back to 1990.

This was the era of one of the greatest bubble eras in human history, with its epicenter in Japan.  Residential land in Tokyo was worth $6,000/sqm.  That’s more than $60,000 a square foot!!!  The Nikkei stock index had quadrupled in less than 10 years.  The appraised value of the Imperial Palace was reportedly higher than the land value in California.  Reeling from the heights of their stock market, Japanese banks, companies, and businessmen were on a shopping spree, snapping up properties in Manhattan and London and “priceless” artworks the world over.  It was, for many Japanese companies and businessmen, the height of their arrogance.   

It was in this milieu that two real estate tycoons met.  One was a shadowy Japanese businessman named Akio Kashiwagi.  Rumored to have ties to the yakuza, Kashiwagi was known among casino owners to be a whale, one who would wager hundreds of thousands of dollars a hand.  And for this reason, he was widely courted.

His game of choice was baccarat, and he was the type of player to play big hands and have the ability to walk away with profits.  Exactly the type of player that casinos both love and fear.  In effect, because of the even nature of the game, a casino owner inviting a whale to play is himself making a gamble – that the combination of circumstances, custom rules, and setting will induce the player to stay as long as possible to let the slim 1% odds play out.

The second tycoon?

None other than our current president, Donald Trump.

This was their second meeting.  In their first meeting, Kashiwagi walked away with $6 million of the Trump Plaza’s money.  Earlier in the year, he had blown a $20 million hole in the vaults of the Diamond Beach casino in Australia, almost bankrupting it.  In other words, he was a fearless and skilled(?) gambler.

Now in their second encounter, Kashiwagi wagered $18 million an hour, playing a hand every 50 seconds.  At one point he had looted Trump’s vaults of that amount, $18 million.  The RAND consultant/mathematician that Trump had hired, along with Trump himself, watched in confoundment and extreme anxiety as the pile of $5,000 chips overflowed off the felt onto the carpet.

It was more money than the entire rest of the casino had lost or even wagered that weekend, meaning that this single chain-smoking businessman was single-handedly wrecking the hotel’s profits for the year.

As the marathon gambling session went on, the grindstone of the ever-present 1% odds began to work in Trump’s favor.  Kashiwagi started giving back his winnings, millions at a time.  He was down $10 million with every intent to continue playing when Trump decided to call it quits, reportedly against the terms of the $12 million freeze-out agreement that had been negotiated.

The point is not what happened.

It’s that the house edge of 1% is not assured.  A casino’s very fortunes can swing on the volatility of one player.  It takes time for probabilities to play out.  The probabilities also play out over multiple players.  Getting as many people to play, and staying as long as possible, is the only way to ensure that the probabilities work out in the long run.

Returning to our ancient visitor again.  By this time, having explained the workings of the casinos to him or her, perhaps explaining the game as a battle of spirits or gods, what would the game look like?

Macau, as a machine that crunches half a trillion dollars in rolling chips, the clay tokens thrown or carefully slid across the felt tables by players, making countless glances into the edges of their cards.  Millions of cards folded beyond recognition, thrown across the table, billions of dollars exchanged into chips, and as the probabilities roll on across millions of plays spanning thousands of hours, a residue.  A layer at the top, the 1% that is the house take, resulting in the gross revenues that drive the entire place.  A place where the vagaries of superstition, fortune-telling meet the caprices of probabilities and fortune, and have largely been…controlled.  

Essentially, a factory where thousands of hands transform money into revenues for the casino.  And that, is the reason for Macau’s very existence.  

What I Learned From: My Grandfather

I don’t remember much about him, but what I do remember: a booming voice that carried across a room, an unafraid voice, a voice from a generation unaccustomed to the idea of phones.  Whenever he picked one up, he yelled into it, unsure if the other person could hear him.  He spoke Korean with a northern, Pyongyang-tinged dialect, a lilting one, rendered harsh by Siberian winters.

He was an expansive man, moving in abundance and generosity.  Some of my favorite memories of him were when he came to visit, asked us if we “needed” anything from Toys R Us, and proceeded to order my father to drive us there.

He was born in 1923, at the height of Japan’s colonization of Korea.  He was fluent in Japanese, studied at Keio University, then returned to Pyongyang to work with his family of industrialists, capitalists, and landowners.

Also, they were Christians, which basically meant that there were at least four reasons the Communists wanted them dead.

Kim Il Sung’s goons came for him once, but he hid himself in the wardrobe – my grandmother standing at the door, chills running up her spine, her voice shaking as she remembered identifying the dead bodies of her cousins at the police station.  He wasn’t home, she said.

She sold it well – they went away.

Things got worse, and the war broke out.  He carried my oldest aunt, 7 at the time, on his back the whole way from Pyongyang to Busan.  They rode trains, took boats across rivers, and mostly walked.  The flood of refugees was so chaotic and compressed that sometimes babies were mistaken for luggage and thrown off the tops of trains.

They bundled all the money they had around themselves, but after carrying it thousands of miles, discovered that everything besides the gold was worthless paper.

In Busan, they became food stall peddlers.  Then they sold leather, coming home every night reeking of hides and dye.

Some of my most vivid memories are of my grandparents counting money.  They would take a wad of bills, fold it in half, lick their thumb, and rapidly flick the wad like human money counters.  They were in their golden years so I always associated it with prosperity, but I realize now that it was probably from their days as merchants.

They moved frequently.  A few years after the war, looking for startup capital, he wandered the city for a week.  My grandmother said the only time she saw him cry was when he was turned down by some people for loans.  These were “friends” who owed him the money to begin with.

I always try to measure myself against him.

When he was 30, the Korean War was on the verge of ending.  Having lost everything, he was just scraping by.

And then – for two decades, he just worked.  At one point, he saved enough to sublet space in a shoe factory near Daejeon.

This was his big break.  Before the war, his family were a clan of manufacturers.  And though they had to abandon all their property, including factories, my grandfather did have one thing left: knowledge of the precise method to make rubber.  In the desolate post-war landscape, not many other people had the knowledge.

And being sublet in the shoe factory had its advantages, because they had a ready customer for rubber soles.

By the 1970s, when my grandfather would have been 50 or so, he had completely reestablished his family’s business, with a factory churning out rubber soles for all sorts of uses.  He was on a council of a hundred businessmen personally advising Park Chung-Hee, the strongarm dictator of the decade.

They were prosperous enough that they were able to hire drivers, with a Ford Mustang and Jeep in the stable.  This was to the enormous chagrin of my father and younger aunt, who begged to be dropped off a block away from school.

And from his 50s until he passed away, just before the age of 70, my grandfather became the picture of a prosperous businessman.

Those are the outlines of his life, and that is all I know.  He died when I was 10, before I had a chance to ask him anything about life or business.  I’ve wanted to ask him so many questions.  What was the war like?  How did you go from having nothing to a KOSPI-listed company?  What did you tell himself, day after day, while struggling for decades?  What advice would you give?  What guidance?

I wish I knew more, but over the years, I’ve come to accept that maybe, he’s taught me what I need to know.

He was generous with his wealth, boisterous, loud.  He was playful, always shadowboxing with me, a big fan of “pro” wrestling, and outspoken and outgoing to a fault.  I remember him going up to complete strangers at Six Flags or Disneyland, striking up conversations in barking English monosyllables and gestures, and asking random people – usually blondes – to take pictures with him.

He came from a world where business was mostly conducted in person, and on the back of envelopes.  He carried around a little black address book, and lots of pens.  Decisive and quick, but sometimes wrong.

This made him not so good in other areas, such as principles of managerial succession, and those of finance.  With lots of debt, and no competent middle- or even senior managers at the company, it was made quick work of during the Asian financial crisis.  At some point, it was delisted.  And a few years after the AFC, it was completely liquidated.

He wasn’t alive at the time it happened.

My last memory of him was in 1992, when I held his warm, dying hand and looked into his eyes before they pulled the cord on his life support.  Only 10 at the time, I didn’t know what was happening.  I didn’t realize he was dying.  Surely after a few treatments, he would get better.  Because that’s how medical care works, right?

As a kid, no one tells you anything, especially in Korean families.  So I thought I was just there to say hi, and when my uncle told me later that he had passed away, my first reaction was disbelief and denial.

What I saw in his eyes?  They recognized me.  His grasp was light but warm.  His eyes were still very much alive.

It is a matter of family legend that his company had faced a credit crunch right before I was born.  It was an issue, again, of a loan.  After I was born, whatever the issue was, it resolved itself, and so it was the reason my grandfather prized me so much, his only grandson, because I was a good omen.  Or so it goes.

But I like to think it’s more than that.  Maybe it’s because he recognized something in me.  Maybe he wanted to pass something down to me.  Or, maybe it’s that I recognize something in him.  Maybe something he wanted me to have.

I saw a picture of my grandfather as a young man once.  He must have been in his late 20s, early 30s.  It must have been taken shortly before or after the Korean War.  It was his whole clan, his five brothers and a sister.  He was the fifth brother, and he stood at far right, the shortest one, a gaunt, almost hollow face above a wiry frame, in complete contrast to the thick, booming man that I had known.

It was a revelation about what those years between 30 and 50 must have been like.

Because his face was intense and his eyes were burning with hunger.