Here’s a magic trick. Take any time you’ve done any thing ever. Think intently about what you were doing. Visualize it in your head: Where you were, who you were with, etc. Here’s where the magic part happens. Now consider that exact same thing you were doing, except, this time you’re on a roof. Way better, right?

There’s actually no magic here. Hanging out on the roof is just a consistently sublime experience.

It’s hard for me to fathom why so few residences enable (much less encourage!) robust roof access. This seems to me to be the most consistently underutilized part of the house. I get that some places are cold. And for structural reasons it’s not great to have a flat roof in places where it snows frequently (usually, there’s a high correlation between these two). Though even still—you could totally pay the neighborhood kid $10 to shovel the snow off the roof like he would for your driveway.

You’re probably making money on the deal, anyway. Adding an extra bedroom to a house raises the property value by a couple thousand dollars. And that’s not even adding livable real estate—just rearranging some walls.

San Francisco doesn’t have a single decent rooftop bar near the water. Plenty of bars near the water, and plenty of roofs. Nobody thought to merge the two. And I mean, if St. Louis with its myriad of weather problems can figure out a rooftop bar, I can’t see why any complaints about the wind or the heat would have any weight here.

Moral of the story is this: When I design a house for myself down the road, the roof will be my 2nd* most prized and relished feature. Rooftopping it will be a hobby. I’ll have a staircase from the backyard that you can ascend like a normal human—no fire escapes, musky hatches, attic trespasses necessary. Maybe a grill, or a hammock, swimming pool…anything you can put in a backyard you can totally put on the roof. And rooftop parties, always.

(*Of course there’ll be the Idiots in a Box room in the basement. Either you know what I mean or you don’t.)

Save yourself the fifty million tuition dollars. Here’s everything I learned through one semester at Harvard Business School, summarized in concise, easy-to-read blog format.

FINANCIAL REPORTING & CONTROL (ACCOUNTING)

1. Accounting is the language of business. It’s important to understand how to speak it.

In theory, you can get a pretty good idea on the health of any business by looking at three things: A) an Income Statement, B) a Balance Sheet, and C) a Statement of Cash Flows. Respectively, these three things explain A) how much money comes in and out of a business over a period of time, B) how many assets a business holds at a point in time (and also, what the business owes others), and C) how cash, the most important asset, moves in and out over a period.

There are plenty of intricacies in creating and finely analyzing these three documents. For starters, there are really only two rules to follow: 1) More Cash/Income/Profit/whatever is GOOD, and 2) the equation Assets = Liabilities + Equity is sacred…don’t mess with it.

Not surprisingly, many line items in accounting are subject to the same faults and biases that I covered in Part I. So, be prepared to deal with that.

2) Everybody is going to act in their own best interest, no matter what guidelines and incentives you set. Somebody is bound to find a loophole in your system and break the rules—assuming they haven’t, already.

Why did Lehman Brothers go out of business? Why did Bernie Madoff end up in jail? Why did Enron collapse? Why did the subprime mortgage crisis occur? They fundamentally all had the same source problem: Somebody figured out a way to beat the accounting system to make it look like their company/asset was worth way more than it actually was.

No system will ever be perfect. It’s a numerical problem. Figure there are a dozen people who sit and make the rules…and millions of accountants in billions of situations who are looking to beat the system. There’s no way the handful of rule makers will ever cover everything.

This hardly just applies to business. When the MLB brass made the personal health rules twenty years ago, all it took was one player out of thousands to figure out that human growth hormone was an effective way to pad your stats without explicitly breaking a rule (or at least, without having a high chance of getting caught). Competitive play in the last generation of Super Smash Bros revolves around a technique called wavedashing—essentially, an abuse of the game’s physics engine that allows players to move their characters faster and less predictably.

Ultimately: when creating a rules system, never expect perfection, and always expect someone to take advantage.

3. Have a deep, innate understanding of when you’ve crossed the line.

On the other side of the coin: if what you’re doing feels wrong, it probably is. If you’re not comfortable talking about it, there’s probably a reason. Etc. Rules are going to be broken by individuals and by entire firms. Either way, if you get caught you get to go to jail.

The Milgram Experiment sheds light on how difficult it is to stop reprehensible behavior once it’s onset. Know where the line is, and be smart enough to stop yourself before you cross it.

The Air Bud series is getting more and more ludicrous with each installment. What started as a dog who could at least remotely feasibly bounce a basketball off its nose to make free throws into a dog that has, among other things, won the MLB World Series and FIFA World Cup.

Some metrics that loosely helped guide discussion and rank: Does the sport typically necessitate the use of opposable thumbs? How funny is your mental image of a dog trying to do this? Can a cutesy movie title be concocted? Perhaps most importantly, how inappropriate is the notion that a dog would be better at this simply because it’s a dog?

It made for a few ridiculous bar conversations. In select cases, I managed to come up with the most likely title.

10) Air Bud: Bulldog’s Eye (Darts). Arose naturally, as the debate occurred in a bar.

9) Rowing/Crew.

8) Air Bud: WWooF (Wrestling) . Though those animal rights activists would probably be all up in arms over this. Edges out Boxing/MMA because I was actually able to come up with a cutesy movie title.

7) Air Bud: Pool Hall Poodle (Billiards)

6) NASCAR. Why so low? Because you have to think like a mentally incapacitated movie director and/or 3-year old. The mechanics of driving a race car are pretty complex—but from what little I’ve ever seen of NASCAR, the casual observer never actually has to see the driver operating the vehicle; you only ever really see his head poking out the window. Besides, I’ve already seen a vehicle successfully manned by a dog at speeds of up to 88 miles per hour; Hollywood can definitely make this concept happen.

5) Paintball. The other reason NASCAR was so low? I don’t think it requires the participant to have fingers.

4) Surfing. And now, we enter the zone of dogs riding increasingly silly things. I’d advise you to take exactly 15 seconds to ponder each of the following concepts. Any less, and the weight of the absurdity may be lost. Any more, and your head will surely a’splode.

3) Rock Climbing.

2) Air Bud: On HorseBark (Horseback Riding)

1) Air Bud: World Series of Pawker (Poker) . Because the prerequisite need of opposable thumbs, as well as an understanding of both mathematics and human psychology. But also because it’s a neat hat tip to that nifty painting.

Honorable Mentions: Jai-Alai, Polo, competitive eating (all not really mainstream enough)

Did I miss anything?

Save yourself the fifty million tuition dollars. Here’s everything I learned through one semester at Harvard Business School, summarized in concise, easy-to-read blog format.

FINANCE

1. If you ever find yourself not doing a Discounted Cash Flow (DCF) Model…just remember that you’re wrong.

The DCF is a fancy modelling tool used to project future growth and expectations of a company or a project. In the simplest terms possible: take what you know about a business (we sell ten sodas every year!), add in your estimates for the future (we’ll sell 10% more sodas every year because of how popular we’re getting!), and discount the value of the future cash flows based on how risky you think the idea is or how much/little you value money next year compared to this year (I’m pretty sure people will still like soda next year, so this is low risk). You’ll end up with a number that’s either positive or negative (if, for example, someone said “you can buy the soda business for $100” but you find it only sells $12 worth of sodas), and you’ll want to pick whatever makes money.

It sounds simple, but I promise that the bigwigs in finance have found plenty of ways to make things impossibly complicated. If you want to get serious, you’ll need to do things like figure out how your assets are going to depreciate, how your working capital is going to grow, how your company typically expects returns from its current projects and values for its future cash flows, and more. Still curious? Get started with an Introduction to Present Value at the Khan Academy.

On a more practical note…

2. Everybody’s pretty much just (educated) guessing. Don’t trust things blindly.

So…maybe the cases we discussed in class were oversimplified. And maybe the lesson above is a bit extreme. But the points still stand.

At length, we explored instances where even minuscule differences in estimates had unnervingly large effects on really big decisions. Expecting a Discount Rate (r*) of .09 instead of .085? Suddenly, your business which draws $100,000 in perpetual yearly cash flows is worth $1,111,111 instead of $1,176,470.  You just destroyed $65,000 in value because of a whim…or a rounding error.

Worse, perhaps, is the notion of how easy it is to build—even subconsciously—projections and valuations that conform to your own desires and expectations.

Granted, we’re not picking numbers out of a hat. We’ve at least, through hours of careful analysis and years of expensive education, been able to narrow down our field of expectations to something on the order of just over a million dollars. Nonetheless, the lack of true accuracy and transparency, and the subjectivity to error should be quite alarming.

Easy to apply this lesson beyond the finance realm. How much does any expert really know anything? In business, and in life, always exercise reasonable doubt and tread very, very carefully.

A questionable graphic I noticed in my dad’s important-sounding and official-looking magazine:

I already drew on it a little bit (sorry) before realizing this might be an interesting thing to comment on.

Here’s why it’s important to:

1. Understand your source of information (and its biases)
2. Understand how graphs work (and can be abused)

The aim of this pair of graphs (and the article) is to show that a particular politician’s economic plan is not working—a point that seems illustrated if you cast a passing glance at these two charts.

But look closely.

The Y-axis (vertical) of the red graph on the right doesn’t start at $0, it starts at $330. If it started at zero, your graph might look more like the pen line I doodled on top.

The Y-axis of the blue graph does start at zero. If it didn’t (to match the original red graph), the blue chart might look more like its respective doodled line.

Corporate profits went up by nearly $1 Trillion, and median weekly earnings went down by roughly $15. Median earnings going down is still not a positive, but clearly, the information presented here has been warped to show a significantly more tragic reality.

Note: I’m no politician, I’m not taking sides, etc., etc. If you’re concerned about the political nature of this content, then you’ve missed the point entirely. Which is, again: Graphs and information can be manipulated. Exercise caution.

Moving to Boston has been a bitch.

I come from a place called St. Louis. It’s cheap. If you know your spots, you can drink for $1 a beer on just about any night of the week. The notion of spending $35 (just for the cover!) for a night’s entertainment is staggering—you wouldn’t dream of doing it more than once a month.

But here? Every week. Multiple times a week. $35 for a beach-themed party. $65 for a yacht party. And counting. (So far, I’m pretty sure the only reason that Harvard even bothered giving me a @hbs.edu email address was so that I could receive spam from student clubs selling party tickets.)

Hell—I asked a bartender at last night’s gig for her cheapest beer: she lectured me that I should never say this to a bartender, because it means I’m cheap and not going to tip well (uncorrelated, I’d argue). I ended up with a $6 Bud Light, plus $1 for the tip. NO! This is bullshit! This kind of pricing ought only be acceptable in two places: sports arenas, and strip clubs.

Here’s a few situations I’ve come across, and some tricks I’ve used to cut corners:

1. Dinner time. The waiter has asked us if we’d like anything to drink.

Private Equity Dick: Yeah, I’ll have your tall, fancy, cocktailrita. Bring it to me in a designer glass. The menu item has a star next to it that says “house specialty,” so it must be good. They didn’t bother listing a price; who knows how much it is? Whatever. Bring (and charge me for) a second one when I’m done, too. Even if I didn’t ask for one.

Guy with some Goddamn Sense: Just a water, please. You know, the free one you serve with ice. With free refills. And sometimes a lemon slice. (Editor’s Note: This tip may not apply if you live in a place like Zihuatanejo.)

2. At the bar. The bartender has acknowledged our presence (finally!).

Private Equity Dick: I want the hardest alcohol you’ve got (and the premium crap! nothing on rail!), but mix it with a a ton of fruity shit so that it’s probably watered down enough to serve to minors. Give me eight—one for each of my seven Consulting Dick friends.

Guy with some Goddamn Sense: A Budweiser. Not a Bud Light, a Budweiser. I am drinking efficiently. I’m not giving you the same money for a light beer that some brewing company just watered down. Budweiser’s ABV is 5% to Bud Light’s 4.2%.

When it’s applicable, I’m ordering a Pabst Blue Ribbon (5%) for a dollar less. Or possibly, if I’m feeling adventurous, an IPA (roughly, 6%-10%) for a dollar or two more. And by the way: You should thank me for just asking you to turn on a tap and move on to your next order and tip, rather than forcing you to bust out the crazy mixing glasses, sifters, juices, kitchenette set, and pyrotechnic equipment just for me.

3. At dinner. The waiter is back to take our order.

Private Equity Dick: What’s on special? Wait! Like I give a fuck! Just bring it to me. And a few extra $20’s you’ve got lying around back that I can use for napkins.

Guy with no Goddamn Cents: Just an appetizer. Probably something meat-based.

Why? Because I pre-gamed. You know, that thing everyone does before they go out drinking to try and cut back on their bar tab? Yep. I do it for dinners. I’ll make myself a sandwich or a bowl of pasta before heading out. My pasta at home isn’t all that much worse than anything you can prepare me at your restaurant. I won’t argue that I can’t compete with you in regard to meats, which require heightened practice, timing, seasoning, selection, and attention to detail. So that’s all I’ll order. What’s more, the price difference between a wheat-based and meat-based dish in the restaurant is probably only about 30%. At the supermarket? A pound of pasta is about a dollar. A decent cut of steak is probably eight or nine times that. So I try to allocate the distribution of my food pyramid needs accordingly, to each supplier’s competitive advantage.

Other notes:

• Cabs in groups of four. You don’t need the extra legroom for $15.
• Don’t buy drinks for girls. First of all: Everyone knows what you’re trying to do, and it doesn’t work. Save your money. Chivalry isn’t dead, but at the bar, it’s definitely kicked the bucket. Second of all: It’s way funnier to convince girls to buy you drinks instead.
• Cash. Always. The physical feel of draining your hard-earned money is totally depressing absolutely helps keep track of how much you’ve blown through, puts a natural limit on your spending that you get to set when you’re sober, and eliminates the obnoxious habit of opening a tab at the bar and forgetting it there overnight.

A heated debate over a family dinner on a late summer eve: Given an open menu, what might be the best food items to pick in anticipation of a food fight?

Okay, so my family is a little weird.

Anyway, here are the metrics we came up with (in no order):

• Knockback: You want your artillery to connect with a satisfying *thud*. There’s little joy to be had in successfully landing a single pea across the brow of your foe. Little benefit, too—she’ll easily be able to recover and return volley. Assuming a goal of general messiness and fun, your optimal choice here might be something like a handsomely cut prime rib. (For those seeking a trip to the hospital, by all means consider whole watermelons, thanksgiving turkeys, and other heavyweight options.)
• Residue: Lacking anything in the way of a stamina bar, body counts, etc., to measure fight success, your effectiveness is primarily measured in how much schlop you can deploy upon your enemy’s hair, face, and clothing. Consequently, your weapon’s ability to leave residue is critical. Most dry foods falter notably in this department. Stickiness may be the most desirable food attribute. Be mindful, however, that residue is a double-edged sword—what’s likely to stick to your opponent’s Sunday best is also likely to stick to your own hands.
• Range: How far can your food be thrown? The value of this criteria is likely dependent on external environmental factors. Are we in a large restaurant, or your girlfriend’s apartment’s kitchen? Is there cover available? Some food items may not have enough internal cohesion to stick together for a long flight. Shrimp seem to have an ideal weight/size/consistency for long volleys, but be warned: They can also be easily picked up and re-used by the enemy.
• Sound: Often a side-benefit of weaponry with high knockback or residue, your food’s sound on contact is often highly correlated with your satisfaction. A nice *plop* is good, a *crack* means we might be headed to the infirmary.
• Miscellaneous Comedy: There’s no other way to describe it. Some foods are just funnier than others. Consider the comparative joy found between throwing a slice of cake at your brother across the room, and throwing a slice of wedding cake. Opt for foods that are widely regarded as gross, especially fancy, or foreign.