Mark Cuban on Cash

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Mark Cuban on Cash

Postby snyder66 » Sun Mar 24, 2013 1:05 pm

Interesting little clip from Mark Cuban talking about the virtues of cash and not trusting the stock market. Pretty sure I can link it. It is from CNBC. Interesting.
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Re: Mark Cuban on Cash

Postby NYBoglehead » Sun Mar 24, 2013 1:18 pm

Interesting, but not all of us have the kind of cash he does. He can afford to hang out on the sidelines, the overwhelming majority of us cannot. I'm a big fan of his on Shark Tank so I don't see this because I don't like him, I'm just saying that these guys operate outside of the usual lines that the rest of us are in.
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Re: Mark Cuban on Cash

Postby momar » Sun Mar 24, 2013 1:21 pm

I've seen him talk about this before. Basically use cash to pay down debts or buy things at a discount. "Hey, if you can use your cash to get 30% off on black friday instead of using a credit card, you haven't lost to inflation."

Ok. Yeah, it's better not to put things on credit. I don't need 100k in cash to not put things on credit.

And negotiate with retailers to get a cash discount. Really? How big of a cash discount is Kohl's or Safeway going to give me, exactly, when I try to negotiate with the person at the register?
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Re: Mark Cuban on Cash

Postby snyder66 » Sun Mar 24, 2013 1:29 pm

I didn't quite understand what he meant by the discount on cash thought either. Maybe it does work differently for him. He did say more than half of his assets are in cash. I think he is worth over a billion.
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Re: Mark Cuban on Cash

Postby momar » Sun Mar 24, 2013 1:35 pm

snyder66 wrote:I didn't quite understand what he meant by the discount on cash thought either. Maybe it does work differently for him. He did say more than half of his assets are in cash. I think he is worth over a billion.

I certainly get where that comes into play. It is more where someone is providing a one on one service or is self employed. Like an exterminator, contractor, masseuse, trainer, stylist etc. They can make the decision to give you the discount and not pay the transactions fees on the credit card (and probably not pay the taxes either, when they don't report the income).

Perhaps at his income level, that is what he spends most of his money on. I imagine for most people it is a small fraction.
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Re: Mark Cuban on Cash

Postby flyingelvis » Sun Mar 24, 2013 1:49 pm

What about discount on credit. I use an AMEX credit card and get 2% back for everything. Then pay it off in full each month. Not sure how I can do better than this with cash for everyday purchases.

Although there are exceptions. My dentist gives me a 5% discount writing a check over a cc. And if buying a car with cash gets me a discount, I would certainly consider cash in this scenario.
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Re: Mark Cuban on Cash

Postby WHL » Sun Mar 24, 2013 5:49 pm

flyingelvis wrote:What about discount on credit. I use an AMEX credit card and get 2% back for everything. Then pay it off in full each month. Not sure how I can do better than this with cash for everyday purchases.

Although there are exceptions. My dentist gives me a 5% discount writing a check over a cc. And if buying a car with cash gets me a discount, I would certainly consider cash in this scenario.


My dentist gives a TEN percent discount for cash, I couldn't believe it. I told him, I usually don't think twice about using my CC for everything, even a 3% cash discount isn't enough to make me pay cash, the protection and value received by paying with CC is too great, but 10%...I think I will hit the bank before my next trip to the dentist!
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Re: Mark Cuban on Cash

Postby RenoJay » Sun Mar 24, 2013 10:45 pm

Cuban is known as a great entrepreneur, but I would be as wary of taking investing advice from him as I would be from any celebrity.
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Re: Mark Cuban on Cash

Postby zebrafish » Mon Mar 25, 2013 12:28 am

Does the rare person who wins big at the slots at Vegas know anything more or less than the vast majority who lose at this game? I don't think so.
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Re: Mark Cuban on Cash

Postby nedsaid » Mon Mar 25, 2013 12:37 am

As I recall, Mark Cuban sold an internet company at the heighth of the Internet Bubble. I don't think his company was even profitable.

He may not really be that great of an investor or that great of a businessman. He might have just been lucky.

I would rather listen to someone with a better track record of actually owning and running a successful business. An interesting guy, but I would rather listen to Warren Buffett. Buffett has a long track record and he has been consistent. He didn't hit a lucky break all at once.
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Re: Mark Cuban on Cash

Postby TerryDMillerMBA » Mon Mar 25, 2013 7:47 am

nedsaid wrote:As I recall, Mark Cuban sold an internet company at the heighth of the Internet Bubble. I don't think his company was even profitable.

He may not really be that great of an investor or that great of a businessman. He might have just been lucky.

I would rather listen to someone with a better track record of actually owning and running a successful business. An interesting guy, but I would rather listen to Warren Buffett. Buffett has a long track record and he has been consistent. He didn't hit a lucky break all at once.


This. Cuban is far smarter than the average person walking the street, and he knows it, but he is no genius, and I strongly suspect he knows that, too. He admitted in some article I read that he was VERY fortunate both with the timing of his sale, and the price.

(I always have a sore spot for him. He is one of only three celebrity types that I have dealt with that were rude in some way. The others are Tyra Banks, and Timbaland (Timothy Mosley, music producer))
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Re: Mark Cuban on Cash

Postby Calm Man » Mon Mar 25, 2013 10:59 am

Is Mark Cuban the basketball team owner who acts like a child in the stands? If so, then what he says makes sense. Because all of his money came from selling stock to people who overpaid him. So he knows about the games in the market. But this does not effect real companies as much although I am sure there are some shenanigans.
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Re: Mark Cuban on Cash

Postby irwinmfletcher » Mon Mar 25, 2013 11:15 am

it is easy to bash Cuban but you folks should so some reading before trying it.

The fact is he has built and sold multiple businesses. He started a company in his 20s, sold it and was a multimillionaire by 30.

Then he started broadcast.com as a way to listen Indiana University basketball games (his alma mater) over the internet while living in Dallas. It was really the precursor to all of the internet streaming of content that all of use today. That was the company he sold to Yahoo for billions before the crash, I believe. He then correctly forecasted the crash and got out of tech stocks before the bubble burst.

I submit that most of us could learn a lot by listening to what he has to say.

Yes, he is weird, but weird people change the world. Read his book "how to win at the sport of business". It is entertaining if nothing else.

Jack Bogle was considered weird, right?
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Re: Mark Cuban on Cash

Postby midareff » Mon Mar 25, 2013 11:18 am

snyder66 wrote:I didn't quite understand what he meant by the discount on cash thought either. Maybe it does work differently for him. He did say more than half of his assets are in cash. I think he is worth over a billion.



Hopefully they were not in a Cyprus bank. Cash not be as safe as one would like to think....... :oops:
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Re: Mark Cuban on Cash

Postby snyder66 » Mon Mar 25, 2013 11:44 am

I am not here to defend Mark Cuban. But, I do think it is silly and shortsighted to think that you could learn nothing from him or his style.
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Re: Mark Cuban on Cash

Postby z3r0c00l » Mon Mar 25, 2013 6:30 pm

irwinmfletcher wrote:it is easy to bash Cuban but you folks should so some reading before trying it.

The fact is he has built and sold multiple businesses. He started a company in his 20s, sold it and was a multimillionaire by 30.

Then he started broadcast.com as a way to listen Indiana University basketball games (his alma mater) over the internet while living in Dallas. It was really the precursor to all of the internet streaming of content that all of use today. That was the company he sold to Yahoo for billions before the crash, I believe. He then correctly forecasted the crash and got out of tech stocks before the bubble burst.


So he sold two unprofitable companies to the competition and then cashed out, instead of one? I bet he did know what he was doing; get big and sell before the door closes. Same thing Pets.com was trying to do. I too question the relevance of anything he has to say on our personal lives or investing.
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Re: Mark Cuban on Cash

Postby Atilla » Mon Mar 25, 2013 6:37 pm

When dealing face to face with an independent business owner you'd be amazed what kind of discount you get for paying cash. Especially if there's no receipt.
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Re: Mark Cuban on Cash

Postby Gnirk » Mon Mar 25, 2013 6:46 pm

Atilla wrote:When dealing face to face with an independent business owner you'd be amazed what kind of discount you get for paying cash. Especially if there's no receipt.


Interesting. My DH owned 4 retail stores as an independent business owner (with each store averaging $2.5-$4 million per year in sales) and would find no reason to offer discounts for cash. Nor do any of our business-owner friends, when I polled them. Though he did offer discounts on purchases of very large quantities in certain circumstances.
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Re: Mark Cuban on Cash

Postby Calm Man » Tue Mar 26, 2013 8:43 am

Gnirk wrote:
Atilla wrote:When dealing face to face with an independent business owner you'd be amazed what kind of discount you get for paying cash. Especially if there's no receipt.


Interesting. My DH owned 4 retail stores as an independent business owner (with each store averaging $2.5-$4 million per year in sales) and would find no reason to offer discounts for cash. Nor do any of our business-owner friends, when I polled them. Though he did offer discounts on purchases of very large quantities in certain circumstances.


Not meaning to be cynical at all, but don't be so sure.
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Re: Mark Cuban on Cash

Postby kenyan » Tue Mar 26, 2013 10:25 am

WHL wrote:
My dentist gives a TEN percent discount for cash, I couldn't believe it. I told him, I usually don't think twice about using my CC for everything, even a 3% cash discount isn't enough to make me pay cash, the protection and value received by paying with CC is too great, but 10%...I think I will hit the bank before my next trip to the dentist!


Wonder what his motivation is for that. The fees are nowhere near that high, and I doubt it simplifies his billing that much (since I'm sure he has some patients who use CCs).
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Re: Mark Cuban on Cash

Postby Default User BR » Tue Mar 26, 2013 11:34 am

The main way a deep discount for cash makes sense is tax fraud. A merchant won't give 30% off to save credit card merchant fees, as they don't cost that much .


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Re: Mark Cuban on Cash

Postby Cut-Throat » Tue Mar 26, 2013 12:00 pm

kenyan wrote:
WHL wrote:
My dentist gives a TEN percent discount for cash, I couldn't believe it. I told him, I usually don't think twice about using my CC for everything, even a 3% cash discount isn't enough to make me pay cash, the protection and value received by paying with CC is too great, but 10%...I think I will hit the bank before my next trip to the dentist!


Wonder what his motivation is for that. The fees are nowhere near that high, and I doubt it simplifies his billing that much (since I'm sure he has some patients who use CCs).


My Dentist offers a 10% discount for immediate payment even with a Credit Card. I guess they have a problem with collections....He 'takes the bird in the hand' approach. People here do it with their S.S. at age 62, even though it is much more profitable to delay to age 70. So, I can understand his 10% discount, as people are far less reliable than the government.
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Re: Mark Cuban on Cash

Postby sesq » Tue Mar 26, 2013 12:02 pm

I like Mark, but he isn't very boglehead-ish.

Mark Cuban on asset allocation:

http://blogmaverick.com/2011/01/24/wall ... llocation/
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Re: Mark Cuban on Cash

Postby hoops777 » Tue Mar 26, 2013 12:05 pm

Ditto....The only advantage to a business for accepting cash is to save on cc transaction fees or tax evasion.Simple as that.
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Re: Mark Cuban on Cash

Postby Epsilon Delta » Tue Mar 26, 2013 12:40 pm

A business can also use a cash discount as a sort of targeted discount. Making people jump through a hoop to get a discount can attract new (but still profitable) business from price conscious customers without lowering your rates to everybody.
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