As I got walked across the parking lot, I saw noticed a strange sight.
It was dusk in West Texas, and my eyes could only make out so much. But off in the distance, there was a wall of storm clouds in the distance.
That’s odd, I thought. There’s no chance of rain tonight.
I would know.
For this parking lot was outside the TV station where I had just produced the 5:00 newscast. And during the weather segment, there was nary a mention of stormy weather. Not today, and not anytime soon.
Such was life on the West Texas plains, a desolate landscape that barely averaged a foot of rain a year.
So, I shrugged off what was on the horizon. It was probably just a random cloud deck that would be gone by morning, I figured. Nothing to worry about.
I got in my car and headed to town to pick up dinner. But once I hit the highway, everything changed.
The wind started howling, jostling the vehicle around. The road ahead of me — flat and straight as an arrow — faded from view. And my windshield got plastered with dirt.
I was driving into a dust storm.
I’d never encountered a dust storm before. And somehow, I knew what to do. I slowed down, turned on my hazards, and let my memory guide me forward.
I had driven this road dozens of times before, heading to and from work. I had a sixth sense as to where the traffic lights should be, and where the danger spots lay .
I would have to rely on this knowledge to get me through since I couldn’t see much beyond the 6 inches in front of my face. And I would have to hope that I wouldn’t rear-end a slower driver ahead of me.
By the time I made it to Sonic, my adrenaline was pumping. As I rolled down the window to place my order, a plume of dust settled on the bill of my Texas Rangers baseball cap.
I didn’t mind. I had made it.
Many of us have never driven through a dust storm.
They’re common in the desert or on the high plains. But those parts of America are sparsely populated.
Yet, even if we haven’t encountered sand-colored skies, we know how to handle such a circumstance. For we’ve been doing it just about every day.
We live by the doctrine of first-order effects. Of being in the moment. Of actions and reactions.
Many of our decisions help us respond to something thrown at us. Others are meant to force a response from someone else.
Our short game is masterful. We can rise to meet the occasion. We can harness the power of the moment to promote change.
But the long game? That’s woefully lacking.
I’m writing this article in the shadow of a monumental event. An investing gold rush that’s brought Wall Street hedge funds to their knees like never before.
Spurred by social media threads and enabled by smartphone apps, scores of people have bought shares in struggling companies. This has caused the value of these companies to rise. And it has damaged hedge funds betting on those stocks to fall.
These developments haven’t hurt anyone outside of Wall Street. Individual investors have seen the value of their “meme stocks” skyrocket. They’ve given themselves a new tool to pay off debt or stay afloat in a tough economy. And they’ve found a way to stick it to a system that has long kept inequality in place.
Still, the second-order effects of this development percolate. And they are troubling.
Taxes are one such concern. The amateur investors leading the charge are often young and new at playing the market. They might not realize that a portion of their gains go back to the government through taxes. And that means they might not budget properly for their investment — particularly if they borrowed money to buy shares.
Then there’s the bubble effect. After a scorching start, the market has already shown signs of cooling off. If these “meme stocks” lose value, will these investors have the know-how to sell in time?
Both these concerns impact investors alone. But the most ominous second-order effect of this frenzy impacts all of us.
Hedge funds were betting against the “meme stocks” for a reason. Those stocks represented companies with outdated business models, poor financial performance, or a flagging consumer base. They were pieces of companies set up to fail.
But because of the recent gold rush, these companies have a new lease on life. Their value now outpaces their viability.
This sets a dangerous precedent for the greater business community.
Money is the oxygen of the corporate world, and the North Star of business strategy is maximizing a company’s value. Generally, such a quest focuses on viability — producing something consumers crave, marketing it properly, and yielding sustainable revenue. Both the company and the consumer sector stand to benefit.
But in an environment where flailing businesses are overvalued, the quest for value no longer includes viability. Companies stop worrying about how to best serve consumers, as such endeavors no longer impact the stock price.
If the “meme stock” movement goes on to bankroll other flailing companies, this might be the future we see. A world full of overvalued companies making products that don’t meet our needs.
I doubt the investors seeking to dethrone the hedge funds thought of this when they started their escapade. But they should have.
In the movie The Godfather, there is a man who often sits near Don Corleone.
His hair is reddish-brown. His skin is pale. And his name is not Sicilian at all.
Tom Hagen might seem out of place at first. But he plays a critical role in the family business.
Hagen is a lawyer who serves as the Don’s advisor, or consigliere. Like a chess Grandmaster, his role is to think many steps ahead. His charge is to consider the second-order effects. His mission is to ask But then what?
As consigliere, Hagen maintains a quiet presence. Yet, his coolheaded advice keeps the Corleone family from countless pitfalls throughout the film.
In a sense, Tom Hagen is the silent hero for much of The Godfather.
The role of consigliere is profound. But it needn’t be limited to the silver screen.
I believe it’s critical that we find our inner consigliere. That we consider the second-order effects of the ventures we undertake in our own lives. That we remember to ask But then what? in advance of all we do.
Doing this won’t stop the turbulence of the times. But it just might cut down on the collateral damage. It might spare us from the disasters we were too shortsighted to anticipate.
Preventing such calamity doesn’t require much.
A cool head. Critical thinking. And the courage to ask a simple question.
But then what?