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Speaker 1: This is Mesters in Business with very Results on Bloomberg Radio.

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Speaker 1: This week on the podcast, I have an extra special guest.

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Speaker 1: Bill Cohen is a fixture on Wall Street for a

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Speaker 1: long time, both as an investment banker at Lizard Freres

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Speaker 1: and eventually Meryl and JP Morgan Chase, as well as

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Speaker 1: an author. He is one of the co founders of Puck.

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Speaker 1: He is a writer for vanley Fair, for The New

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Speaker 1: York Times, for Bloomberg. He's really well known on the

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Speaker 1: street and puts out a number of fascinating books, arguably

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Speaker 1: a sort of parallel career to Michael Lewis. He's at

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Speaker 1: Lizard Freres for seven eight years and then sometime later

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Speaker 1: writes his version of Liars Poker, which is a history

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Speaker 1: of Lizard Frere. His most recent book, Power Failure, about

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Speaker 1: the rise and fall of General Electric, is really of

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Speaker 1: fascinating history with some fun stories and a lot of

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Speaker 1: really interesting gossip throughout it. It's deeply researched, deeply reported,

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Speaker 1: and really a very enjoyable read. I think you'll find

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Speaker 1: this conversation quite fascinating. I know I did. With no

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Speaker 1: further ado, my conversation with Bill Cohen, author of Power failure.

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Speaker 1: William Cohen, Welcome back to Bloomberg. Thank you, Barry. It's

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Speaker 1: great to be here. So let's talk a little bit

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Speaker 1: about your career, which began as a reporter, went into

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Speaker 1: M and A banking, and then went back to writing.

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Speaker 1: You start writing for the Rally Times. Tell us a

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Speaker 1: little bit about what you were doing there. I was

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Speaker 1: doing something I probably should never have been allowed to do,

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Speaker 1: which was right about public education in Wake County, which

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Speaker 1: was fine. I had uh just graduated from Columbia School

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Speaker 1: of Journalism again Masters and Journalism, and I had done

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Speaker 1: my thesis on public schools in Central Harlem and Central

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Speaker 1: Harlem School District. I went to one of the best

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Speaker 1: schools in the district and one of the worst schools

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Speaker 1: in the district and just sat there for like six

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Speaker 1: weeks and tried to absorb what was going on, and

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Speaker 1: no one had ever done that. I had to get

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Speaker 1: special permission from the Board of Education in Brooklyn back

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Speaker 1: when they still had that to do that. But uh,

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Speaker 1: and then I went to Raleigh, uh and covered public

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Speaker 1: schools in Raleigh. But I've never been to a public

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Speaker 1: school in my life, so other than sitting in the

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Speaker 1: classrooms in Central Harlem. So it was great, but it was,

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Speaker 1: you know, like anything, a total learning experience. So you

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Speaker 1: end up becoming an investment banker. You work at places

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Speaker 1: like Loizard Freres and Merrill Lynch and JP Morgan. Tell

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Speaker 1: us a little bit about your banking background. What did

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Speaker 1: you do, what sort of deals? By the way, this

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Speaker 1: wasn't like I'm going to try this for six months

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Speaker 1: and go back to writing. You did this for seventeen years. Yeah,

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Speaker 1: And I actually started out of business school and when

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Speaker 1: had gone back to Columbia. So I graduated from business

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Speaker 1: school in nine and went to G Capital for two

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Speaker 1: years financing leverage buyouts. And I also spent a year

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Speaker 1: there working for the chief credit officer at G Capital,

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Speaker 1: learning all the different business lines at G Capital, And

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Speaker 1: then I went to Lazard and so let's stay with

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Speaker 1: the Capital for a minute, because they're gonna loom large later,

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Speaker 1: Lenny relevant Um. In the eighties they were really a

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Speaker 1: financial arm of ge in a way to facilitate its

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Speaker 1: client base. It was seems like in the nineties it

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Speaker 1: evolved into something else. When you were there, was it

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Speaker 1: a financial engineering firm or was it a more traditional

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Speaker 1: credit finance farm by the time I was there, and

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Speaker 1: it started in the depression, you know, financing customers purchase

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Speaker 1: of ges, appliances, right because credit was hard to come

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Speaker 1: by during those years. Everybody General Motors had a credit

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Speaker 1: on all the big manufactors that right, G had a

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Speaker 1: benefit in over other companies in that regard because they

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Speaker 1: had a triple A credit rating, so they were able

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Speaker 1: to borrow very cheap and then lend out expensively, and

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Speaker 1: they were able to arbitrage that credit rating, which of

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Speaker 1: course Jack Welch did in spades. And by the time

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Speaker 1: I got there, you know, uh, you know, Jack had

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Speaker 1: been CEO for you know, six years, and he was

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Speaker 1: well into turning G Capital into a financial powerhouse. So

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Speaker 1: by the time I got there, it was well beyond

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Speaker 1: just you know, financing customer acquisitions and appliances. I mean,

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Speaker 1: we were actually, you know, I probably shouldn't have been

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Speaker 1: doing it because I had been a journalist covering public

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Speaker 1: schools and NW very nothing about leverage biouts. But I

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Speaker 1: was financing leverage biouts a G Capital and that was

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Speaker 1: one of eighteen or twenty business lines that the business

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Speaker 1: was in, and you know, just making huge profits arbitrage

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Speaker 1: and that credit rating so you go from GE Capital

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Speaker 1: to Lazard. Next tell us about laz Art. Well, Lazar,

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Speaker 1: it couldn't have been more different than ge old school,

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Speaker 1: classic partnership, managing risk, very different headspace. Oh, totally, totally.

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Speaker 1: I mean I had always been fascinated by Lizard because

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Speaker 1: I had read Carrie Reig's book The Financier about Andre

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Speaker 1: my Ear, which was a fabulous book. And Carrie reg

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Speaker 1: was a great writer, but he died way too young. Uh.

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Speaker 1: And you know, as it was, I've been a Francophile

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Speaker 1: my whole life. I read that book, I wanted to

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Speaker 1: work at Lazard. When I was at business school, I

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Speaker 1: got an interview at Lizard with two partners who probably

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Speaker 1: are still there. Uh. And uh, they didn't even send

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Speaker 1: me a ding letter, Barry, do you know what a

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Speaker 1: ding letter? Thanks for coming in, thanks for we don't

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Speaker 1: need you, you know, good luck to you. Don't hold

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Speaker 1: your breath. They didn't even send me one of those.

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Speaker 1: They just ignored me. Okay. And then two years later

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Speaker 1: I tried again. Uh, and I wanted to go you know,

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Speaker 1: G Capital. You have to understand, like investment banking was

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Speaker 1: so hot then everybody wanted to be it was it

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Speaker 1: was monstrous. I mean, investment bankers were rock stars, right.

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Speaker 1: So I was a g capital and you know, we

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Speaker 1: were getting business because we had access to all this capital.

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Speaker 1: You know, I became enamored of this idea of getting

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Speaker 1: business through your ideas, right, And that's what happened. That

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Speaker 1: was Lazar Lazard had no capital, no capital, but it

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Speaker 1: got in the middle of deals. It became interstitial men

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Speaker 1: because of you know, its reputation, it's brain power, and

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Speaker 1: that really appealed to me. And plus it was French

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Speaker 1: and a private partnership and all these great men were

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Speaker 1: wandering around like, you know, Felix Rowant and Michelle Davie

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Speaker 1: Bay and Damon Metsicapa and so I, you know, wanted

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Speaker 1: to be part of that. I was the only associate

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Speaker 1: they hired in in nine they're like the last partnership

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Speaker 1: standing know they went public. Yeah, they've they've been. And

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Speaker 1: that was my first book covered them being a private

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Speaker 1: partnership to going public and when Bruce Wasserston came in

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Speaker 1: and basically stole the company from Michelle David Bay, which

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Speaker 1: is a story I tell in detail in the book. Uh,

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Speaker 1: they went public in May about of two thousand. Uh,

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Speaker 1: six and they've been public now. For the argument is

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Speaker 1: they avoided trouble in the financial crisis because they didn't

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Speaker 1: have a decade of over leverage. Well, they didn't have

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Speaker 1: any They had basically zero capital markets business. They had

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Speaker 1: no balance sheets, so they weren't ever gonna be, you know,

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Speaker 1: having securities on their balance sheet that were at risk

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Speaker 1: and losing value, whereas all the other public companies had

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Speaker 1: access to capital and managed to get into trouble. Of course,

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Speaker 1: having access to capital can be a big problem. And

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Speaker 1: they used to say that the Goldman sex which is

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Speaker 1: one of the reasons they stayed private until is because

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Speaker 1: John Whitehead used to say that, you know, and I

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Speaker 1: know this from writing my book about Goldman, John Whitehead

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Speaker 1: used to say that, you know, not having capital forced

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Speaker 1: them to make tougher choices, and other banks which had

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Speaker 1: more access to capital, you know what, we're often foolish

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Speaker 1: with that money. So you go from Lazard to Meryl

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Speaker 1: to JP Morgan, tell us about those other experiences. How

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Speaker 1: did they compare to Lazard, which seems much more unique

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Speaker 1: being in a public company versus a partnership. What was

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Speaker 1: the workflow like there? I mean, I mean Lazard you

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Speaker 1: were drinking from the fire hose because you know, there

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Speaker 1: were seventy two partners and seventy two non partners in

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Speaker 1: the investment banking group, so very small. So you know,

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Speaker 1: that was not a pyramid structure. That was a rectangular structure.

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Speaker 1: So you know, there are a lot of people at

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Speaker 1: the top of the funnel pushing down on the people

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Speaker 1: at the bottom of the funnel. Uh And so you know,

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Speaker 1: you're just constantly busy working on the biggest and best

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Speaker 1: deals of all time, you know. Uh. And that's that's

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Speaker 1: what I did. And you know, Meryl was of course

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Speaker 1: much more corporative, was public, and the ultimate corporate was Chase,

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Speaker 1: JP Morgan, JP Morgan Chase. You know, so they were

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Speaker 1: all very different. But you'll note of those uh three uh,

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Speaker 1: you know, Lazard and Meryl and J. B. Morrien Chase,

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Speaker 1: the only one I've written a book about is Lazard

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Speaker 1: because it was so unique and you know, really the

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Speaker 1: people there were quite extraordinary and fun to write about. Huh.

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Speaker 1: So compared to Lizard and Goldman Sachs. I have to

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Speaker 1: ask the question about ge Capital, did they essentially in

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Speaker 1: the nineties nineties morep what was an industrial giant into

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Speaker 1: a financial giant in fairness. You know, once Jack took

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Speaker 1: over G Capital in the seventies, and you know, once

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Speaker 1: he decided that, as he told me, it was easier

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Speaker 1: to make money from money than from making selling widgets,

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Speaker 1: making jet engines, making power plants, making you know, it

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Speaker 1: was just easier. It was easier to do that arbitrage

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Speaker 1: and if you had the people in place who could

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Speaker 1: understood the risks and managing the so uh during Jack's

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Speaker 1: you know, twenty year reign atop UH g E A

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Speaker 1: G Capital became an increasingly large and important contributor to

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Speaker 1: the bottom line and to the point of like providing

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Speaker 1: of the profits. So of course it was giant. It

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Speaker 1: was like the third or fourth largest banking institution in

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Speaker 1: the country, and it was completely unregulated Berry, completely unregulated.

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Speaker 1: It was not a bank because no fd I C insurance,

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Speaker 1: no regulations, didn't have deposits, well, they had one depositor.

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Speaker 1: It was General Electric, it was it was the commercial

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Speaker 1: paper market. That's quite amazing. So when I think of

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Speaker 1: g E in the eighties and nineties, the three things

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Speaker 1: that come up GE Capital obviously the rise of shareholder value,

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Speaker 1: which a lot of people point to General Electric as

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Speaker 1: a key driver of that, and then six sigma. Let's

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Speaker 1: let's talk a little bit about shareholder value in that

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Speaker 1: Chicago School philosophy that Jack seemed to have embraced. Well,

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Speaker 1: I think what Jack, you know, Jack wouldn't know Chicago

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Speaker 1: philosophy from you know, a hole in the wall. But

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Speaker 1: what Jack really understood was you know, stock price and

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Speaker 1: share and as you know, shareholder value. When he took

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Speaker 1: over ge it was had a market value of twelve billion,

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Speaker 1: and you know, by the time he left, like a

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Speaker 1: year before he left, it was the most family company

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Speaker 1: in the world. So that's a nice uh, you know,

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Speaker 1: compounded rate of return over those basically twenty years. I mean,

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Speaker 1: you know, we not unlike you know, sort of Tesla

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Speaker 1: or even Apple. I mean, you know, really, I mean

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Speaker 1: if you think about Tim Cook took over Apple, it

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Speaker 1: was worth three billion, and at one point it was

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Speaker 1: worth two and a half trillions. So that's inequally Jack

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Speaker 1: Welchy and like or even more so, the afference between

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Speaker 1: the two. I'm glad you brought that up as an example.

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Speaker 1: The vast majority of the game we've seen in Apple

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Speaker 1: has been an increase in revenues and profits with a modest,

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Speaker 1: very modest uptick in pe multiple. When we look at

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Speaker 1: GE from eight two to two thousand under the Jack

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Speaker 1: Welsh rain, it began priced as a stage industrial. And

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Speaker 1: I have argued that he left this giant, ticking time

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Speaker 1: bomb of a pe on an industrial with a cratering

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Speaker 1: capital business that had a ticking time bomb of an

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Speaker 1: accounting fraud and sec finds about to happen. How much

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Speaker 1: of the growth of GE was due to the legend

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Speaker 1: of Jack Welsh and how effectively he presented the company

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Speaker 1: to the world. So there's a lot, Derek to unpack. Hey,

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Speaker 1: I read this giant that goes into all these details

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Speaker 1: called power failure. Don't hurt yourself. So yeah, so I

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Speaker 1: would agree with a lot of what you said, not

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Speaker 1: all of it. So Jack had Wall Street research analysts

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Speaker 1: eating out of the palm of his hand. Absolutely, Okay,

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Speaker 1: So that's important number. And he figured that out, okay,

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Speaker 1: and he played that game. And he also it was

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Speaker 1: a fact that for the longest time, the research analysts

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Speaker 1: that covered GE were industrial side analysts, didn't understand what

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Speaker 1: was going on at the capital, so he could kind

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Speaker 1: of wow them every quarter with the performance of the

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Speaker 1: company and he you know, eighties straight quarters or something

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Speaker 1: like that, you know, either met or exceeded the analysts

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Speaker 1: estimates he had Bernie made Off numbers, didn't he just

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Speaker 1: like consistency to a degree that should have raised some

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Speaker 1: red flags. Well, except that Bernie made Off was a

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Speaker 1: Ponzi scheme and totally fictional where never made a trade

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Speaker 1: right for his customers. So Jack was actually you know,

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Speaker 1: running legit. It was just that penny or two of

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Speaker 1: up or down that well, you know, you know, we

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Speaker 1: could debate that, probably endlessly, and there are people who

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Speaker 1: you know, love to debate this. I mean, you know,

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Speaker 1: having worked at ge Capital, I'm actually you know, sympathetic

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Speaker 1: to you know, if you've got six fifty billion of

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Speaker 1: assets you know, floating around including loans, uh, you know,

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Speaker 1: actual buildings because you're in the real estate business, warrants

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Speaker 1: in companies, equity stakes and companies, you know, and if

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Speaker 1: you have those assets and you can monetize them at

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Speaker 1: some point during a quarter to achieve what you told

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Speaker 1: Wall Street Research analists you were going to achieve. If

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Speaker 1: you don't do that, then I don't know, you're committing

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Speaker 1: some sort of financial malpractice, it seems to me. And

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Speaker 1: if you do do it, then people accuse you of

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Speaker 1: financial mal practice. So well, we'll get to the SEC

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Speaker 1: finds and that stuff later. I want to stick with

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Speaker 1: the analyst community. Yes, Jack having them eat out, and

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Speaker 1: he also had the media eating so that's where exactly

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Speaker 1: where it's gonna go. G E owns NBC Universal. NBC

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Speaker 1: Universal has on its platform CNBC. Jack created c NBC.

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Speaker 1: He created MSNBC. So it's different today when the media

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Speaker 1: ratings for financial television are all off. Regardless of which

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Speaker 1: television channel you're talking about, the numbers are way down

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Speaker 1: from the nineties. You'll get a spike during the financial crisis.

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Speaker 1: You're getting a spike during the pandemic lockdown. But that's

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Speaker 1: more like a cross between ESPN six Australian Rules Rugby

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Speaker 1: and the Weather Channel. Right when some disaster happens, everybody

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Speaker 1: turns to it. But look, we both came up in

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Speaker 1: the eighties and nineties. At that time, if a CEO

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Speaker 1: went on CNBC and said here's what I'm gonna do,

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Speaker 1: and then he went out and do it, the entire

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Speaker 1: investment community was hanging on that. Every word, which raises

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Speaker 1: the question how effective was Jack Welch as a media

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Speaker 1: spokesperson and how challenging was it for him to go

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Speaker 1: on his own channel and tout his company's stock. Well,

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Speaker 1: he obviously had a conflict a little, but I guess

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Speaker 1: they got over that. I mean, did you ever meet

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Speaker 1: Jack ever so briefly at CNBC for like thirty seconds

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Speaker 1: in a green room getting he was getting makeup on

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Speaker 1: and I was coming in for cud Low and Cramer

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Speaker 1: and maybe it was eight seconds. Well, then you have

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Speaker 1: a hint of what he what he was like. I mean,

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Speaker 1: I spent you know, hours and hours and hours with

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Speaker 1: him before he died, and he even is an eighty

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Speaker 1: year old man. He was incredibly charming and magnetic and

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Speaker 1: had a larger than life personality. So you know, when

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Speaker 1: he would get on television, you know, with that cranky

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Speaker 1: sort of New England, the accent that I managed to

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Speaker 1: get rid of, and he didn't, even though we grew

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Speaker 1: up near each other. He was magnetic, so you know,

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Speaker 1: in captivating. So yes, he had the media eating out

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Speaker 1: of the palm of his hands. He had the research

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Speaker 1: community eating out of the palm of his hands. He

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Speaker 1: had shareholders eating out of the palm of his hands.

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Speaker 1: And when you have that kind of performance as a

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Speaker 1: as a CEO over that long period time, don't forget

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Speaker 1: he was around for twenty years, you know, he would

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Speaker 1: he became sort of an imperial CEO. There was an

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Speaker 1: I'm trying to remember which magazine it was. It might

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Speaker 1: have been Fortune declared him the greatest CEO of CEO,

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Speaker 1: the manager of the century, manager of quite impressive. Yes,

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Speaker 1: you know, don't forget. At that time, Ge was the

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Speaker 1: most valuable company, was the most respected company, and Jack

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Speaker 1: was the manager of the century. So would be like Apple, Google, Microsoft,

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Speaker 1: all rolled up into one, and you know that was

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Speaker 1: g E. It was, you know, original member of the

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Speaker 1: Dow Joe's Industrial Average. It was a triple a credit

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Speaker 1: rated company, had been paying dividends for you know, fifties, sixty,

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Speaker 1: seventy years. It's like they invented the light bulb, and

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Speaker 1: they did. And it was a true bell weather. Remember

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Speaker 1: that phrase, a bell weather. They don't really use that anymore,

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Speaker 1: but it was a bell weather of the market. Amazing

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Speaker 1: So power failure, the rise and fall of an American icon.

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Speaker 1: You know, when I saw the title of this book,

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Speaker 1: I thought it was gonna be about the modern GE.

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Speaker 1: You really do an amazing deep dive into the early

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Speaker 1: history of the company, I mean the foundation from when

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Speaker 1: they before they were a company, when it was just

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Speaker 1: a gleam in h Thomas Edison's eyes. Tell us a

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Speaker 1: little bit of about the process of researching something this substantial,

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Speaker 1: very very painful. Well, you do this in all your books,

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Speaker 1: You do a giant dive. I feel like that's you know,

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Speaker 1: I write the books that I want, I would like

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Speaker 1: to read, you know, so they have to be sort

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Speaker 1: of part oral history, part real history, part you know,

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Speaker 1: investigative reporting, part documentary. Uh, you know, deep dive and evidence.

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Speaker 1: And you know, I like to get at the d

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Speaker 1: n A of these firms or these companies right there.

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Speaker 1: And the d n A of g E goes back

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Speaker 1: to the late nineteenth century, right, So I had to

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Speaker 1: figure out and I didn't know what it was. So

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Speaker 1: I had to figure that out because you know, the

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Speaker 1: myth is that this GE was started founded by Thomas Edison. Well,

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Speaker 1: within a minute of or two of researching, I discovered

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Speaker 1: that actually that's not true. But they play that up

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Speaker 1: at nauseam. And I don't blame him. I mean how

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Speaker 1: can you not play up Thomas Edison and the light bulb. Well,

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Speaker 1: the light bulb is real he he did, you know, uh,

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Speaker 1: developed the light bulb, create the light bulb. But you know,

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Speaker 1: the business started as a you know, electricity power generation up.

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Speaker 1: Let's talk about that, because the lightbulb is useless if

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Speaker 1: you and plug it into the At the time, it

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Speaker 1: wasn't candles. If you heard of whale oil, have you

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Speaker 1: heard of fireplaces? I mean, you know, this was an

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Speaker 1: incredible This was an Internet like leap forward in technology.

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Speaker 1: So General Electric plays an integral role into electricity, at

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Speaker 1: least starting in the northeast of the United States. Tell

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Speaker 1: us a little bit about that process of electrifying New

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Speaker 1: York City, electrifying other parts of the Northeast. Well, basically

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Speaker 1: what became General Electric, which was a merger of two companies, uh,

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Speaker 1: you know, sort of was a pioneer in bringing electric power,

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Speaker 1: the generation of electric power, and then creating the electric

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Speaker 1: power grid. Remember, there was you can create electricity, but

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Speaker 1: but if there's no way to deliver it to businesses,

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Speaker 1: and then by the way, you know, you have to

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Speaker 1: convince people to like connect to it, and it's invisible, right,

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Speaker 1: and if you mess up, it's deadly. So other than that,

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Speaker 1: it seems other than that, it seems like a simple thing.

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Speaker 1: And then and in the early days, there were like fires,

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Speaker 1: you know, and people's businesses burned down, so you can

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Speaker 1: imagine that wasn't exactly the greatest recommendation for this product.

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Speaker 1: But over time, you know, the miracle accord. And part

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Speaker 1: of the reason the miracle occurred is because you know,

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Speaker 1: there were electric subway cars and electric trams above ground.

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Speaker 1: And you know, I don't know if you you you

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Speaker 1: probably didn't watch this, but the you know, the Gilded

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Speaker 1: Age Show, Okay, so I mean there's there's an episode,

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Speaker 1: I think the second or third episode in there where

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Speaker 1: they actually have a big social event in downtown Manhattan,

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Speaker 1: in a square mile in downtown Manhattan around City Hall

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Speaker 1: where they were, you know, electrifying that square mile of

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Speaker 1: downtown Manhattan. And that was GE doing that, Okay, that

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Speaker 1: was General Electric doing that, and that was like a

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Speaker 1: major league event in New York City's history, you know,

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Speaker 1: electrifying a square mile of downtown Manhattan. And there was

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Speaker 1: like a big social event, and you know, Page six

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Speaker 1: covered it, Bloomberg covered it. You know, everybody covered it.

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Speaker 1: I don't think Bloomberg covered it might have been before

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Speaker 1: Mike was born. It might have been. But when you

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Speaker 1: think about people seeing street lights that are running without

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Speaker 1: revolutionary this is maybe not as quaint. Well, this is

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Speaker 1: before the days of fomo was called fomo. But how

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Speaker 1: attractive was the idea of clean accessible light? How long

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Speaker 1: did it take for this to catch on it? It

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Speaker 1: happened quickly. Obviously it was a major, you know revolution,

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Speaker 1: But I mean people had to get comfortable with it,

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Speaker 1: and the and the grid had to be built out,

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Speaker 1: and and the power had to be able to be manufactured.

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Speaker 1: So as the demand crept up and continued, then the

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Speaker 1: supply rose to meet that demand. So let's talk about

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Speaker 1: how that was done. Tell us about the merger or

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Speaker 1: in the early days that gave us General Electric, and

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Speaker 1: who ran that company. It wasn't Thomas Edison. So Thomas

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Speaker 1: Edison was completely against the merger of what became GE.

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Speaker 1: So right off the bat, I'm thinking, why do they

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Speaker 1: keep talking about Thomas Edison? Like I get it from

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Speaker 1: the technology point of view and the entrepreneurial point of view,

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Speaker 1: but the actual merger, So right off the bat, we're

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Speaker 1: talking about M and A, which of course intrigue your wheelhouse, right,

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Speaker 1: so you know, and and how I mean there was

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Speaker 1: probably no bigger acquirer and seller of companies over the

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Speaker 1: years than g So M and A was in ges

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Speaker 1: D n A. It's like an investment banker's dream ge

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Speaker 1: and so. Uh. Edison had a company called Edison General

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Speaker 1: Electric but by uh it had about ten million of revenue,

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Speaker 1: it wasn't doing that well. He was just basically a shareholder.

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Speaker 1: And the other big air holder was JP Morgan, the man.

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Speaker 1: And then it was you know, run by you know,

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Speaker 1: a different CEO and who was also a venture capitalist

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Speaker 1: friend of JP Morgan's. And uh there was another company

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Speaker 1: called the Thompson Houston Company, which was owned by a

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Speaker 1: guy named Charles coffin up in Massachusetts. Uh. And he

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Speaker 1: was from Maine, but his uncle owned a shoe manufacturing

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Speaker 1: business in Lynn, Massachusetts. He went to work for his

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Speaker 1: uncle and decided, like many you know, entrepreneurial minded people,

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Speaker 1: that the shoe business wasn't all that exciting, but what

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Speaker 1: was exciting was the electric power business and the generation

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Speaker 1: of electric power. So he ended up buying the Thompson

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Speaker 1: Houston Company, which had was started by two high school

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Speaker 1: teachers in Philadelphia, moved it up to eventually up to Lynn, Massachusetts,

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Speaker 1: uh and started uh you know, running it, and he ran.

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Speaker 1: He was a very good businessman and he ran at

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Speaker 1: my such more profitably than Edison's company. So basically JP

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Speaker 1: Morgan and the Boston venture capitalist backing Thompson Houston Company

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Speaker 1: backing Charles Coffins business wanted to merge these two businesses,

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Speaker 1: and the merger took place in over the serious objection

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Speaker 1: of a guy named Thomas Edison. He wanted nothing to

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Speaker 1: do with it. He became a minor shareholder, eventually sold

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Speaker 1: his shares and like started working on like limestone mining

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Speaker 1: in New Jersey. So did Edison profit from when GE

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Speaker 1: eventually went public or did he he you know, he

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Speaker 1: wasn't a very good businessman and no, h and you know,

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Speaker 1: I'm sure he made money because he started the company.

429
00:25:40,160 --> 00:25:43,680
Speaker 1: But he ended up like a ten percent shareholder of GE. Right,

430
00:25:44,359 --> 00:25:46,920
Speaker 1: well you know when it went when it went public,

431
00:25:47,080 --> 00:25:49,600
Speaker 1: but you know, we're talking about relatively small numbers. But

432
00:25:49,640 --> 00:25:51,800
Speaker 1: at the time, I'm sure that was you know, more

433
00:25:51,920 --> 00:25:56,119
Speaker 1: money than most everybody else. He was fine, don't you worry?

434
00:25:56,160 --> 00:26:00,240
Speaker 1: But you know, JP Morgan and Charles coff and and

435
00:26:00,320 --> 00:26:02,639
Speaker 1: others made a lot more money. That's really interesting. So

436
00:26:02,760 --> 00:26:06,600
Speaker 1: let's roll into the twentieth century, the teens, the twenties,

437
00:26:06,640 --> 00:26:11,480
Speaker 1: the thirties. GE has electrified a lot of America. They're

438
00:26:11,520 --> 00:26:14,280
Speaker 1: adding businesses, is a lot of M and A. And

439
00:26:14,359 --> 00:26:19,320
Speaker 1: it turns out that you know, this competition thing, it's hard,

440
00:26:19,520 --> 00:26:22,360
Speaker 1: and it's much easier if we all kind of agree,

441
00:26:23,160 --> 00:26:26,399
Speaker 1: don't tell anybody will meet in the hotel room, not

442
00:26:26,480 --> 00:26:30,080
Speaker 1: in the conference facility. But let's all kind of fix

443
00:26:30,160 --> 00:26:33,320
Speaker 1: our prices in a way that works out best for everybody.

444
00:26:33,320 --> 00:26:37,640
Speaker 1: This is good for everybody, isn't it. What happened with that? Yeah,

445
00:26:37,680 --> 00:26:40,639
Speaker 1: you're you're you're referring to a major league you know,

446
00:26:41,320 --> 00:26:45,600
Speaker 1: electrical conspiracy, as it was called. I mean, you know

447
00:26:45,680 --> 00:26:52,000
Speaker 1: where we're Westinghouse and other other manufacturers of electrical equipment

448
00:26:52,000 --> 00:26:55,840
Speaker 1: basically conspired together at the prices. And by the way,

449
00:26:56,000 --> 00:26:59,320
Speaker 1: these people didn't innovate that. This is fairly common. It's

450
00:26:59,359 --> 00:27:02,239
Speaker 1: why we have any trust rules. At the time, this

451
00:27:02,280 --> 00:27:05,840
Speaker 1: seemed to have happened pretty regularly, and you know, they

452
00:27:05,880 --> 00:27:08,200
Speaker 1: would sort of get caught or they would decide that

453
00:27:08,240 --> 00:27:10,240
Speaker 1: it wasn't such a great idea. They would try to

454
00:27:10,280 --> 00:27:12,800
Speaker 1: stop it, and then or they would cheat amongst themselves,

455
00:27:12,840 --> 00:27:16,040
Speaker 1: cheat amongst themselves, and and then then then they would realize,

456
00:27:16,040 --> 00:27:18,120
Speaker 1: you know, this probably isn't great what we're doing here,

457
00:27:18,200 --> 00:27:20,399
Speaker 1: let's wind it down. Then they would be told to

458
00:27:20,440 --> 00:27:26,840
Speaker 1: wind it back up again. It was incredibly unethical, immoral, illegal.

459
00:27:27,200 --> 00:27:30,200
Speaker 1: People went to jail, you know, no doubt. After about

460
00:27:30,200 --> 00:27:33,800
Speaker 1: ten years it was flushed. What was so fascinating in

461
00:27:33,840 --> 00:27:36,719
Speaker 1: the book, the way you describe it is when these

462
00:27:37,119 --> 00:27:42,040
Speaker 1: sort of quiet coalitions and trusts would start to break down,

463
00:27:42,760 --> 00:27:47,720
Speaker 1: the price competition became fierce, and the penetration into the

464
00:27:47,760 --> 00:27:52,240
Speaker 1: market and the ability to get new products like capitalism

465
00:27:52,280 --> 00:27:55,119
Speaker 1: turns out to work. It's a test case that shows

466
00:27:55,200 --> 00:28:00,000
Speaker 1: you the importance of competition and collusion does not really

467
00:28:00,080 --> 00:28:04,159
Speaker 1: work out for consumers. So, you know, there's a reason

468
00:28:04,280 --> 00:28:06,960
Speaker 1: we have anti trust. There's a reason you know that's

469
00:28:06,960 --> 00:28:10,159
Speaker 1: still being you know, litigated even today we see you know,

470
00:28:10,200 --> 00:28:14,960
Speaker 1: anti trust litigation now ramping up again. So competition is important,

471
00:28:15,200 --> 00:28:19,600
Speaker 1: and collusion really is not great and is illegal. You know,

472
00:28:19,800 --> 00:28:23,840
Speaker 1: the differences between the twenty one century collusion and the

473
00:28:23,880 --> 00:28:28,480
Speaker 1: twentieth century. You hear about Google and Apple and Microsoft

474
00:28:28,560 --> 00:28:33,960
Speaker 1: trying to cap prices on certain software engineers salaries. This

475
00:28:34,119 --> 00:28:38,720
Speaker 1: was just massive effected cities. It affected businesses like there

476
00:28:38,840 --> 00:28:42,640
Speaker 1: was a real hard number that you couldn't buy a

477
00:28:42,720 --> 00:28:47,320
Speaker 1: turbine from, which was enormously important. Now, I'm not saying

478
00:28:47,320 --> 00:28:50,000
Speaker 1: what Apple and Google did was right, it was wrong.

479
00:28:50,400 --> 00:28:54,400
Speaker 1: It just seems like it's so much smaller than the

480
00:28:54,480 --> 00:28:59,200
Speaker 1: collusion from the good old days. Or maybe if there

481
00:28:59,280 --> 00:29:03,120
Speaker 1: is collusion to let's just make it hypothetical. Uh, it's

482
00:29:03,160 --> 00:29:06,400
Speaker 1: sort of more insidious because you're not exactly sure how.

483
00:29:06,520 --> 00:29:09,040
Speaker 1: You know, it might affect, you know, the pricing of

484
00:29:09,360 --> 00:29:12,840
Speaker 1: software products, or it might affect you know, whether there's

485
00:29:13,280 --> 00:29:17,320
Speaker 1: you know, cookies that are taken you know, from our data,

486
00:29:17,440 --> 00:29:19,240
Speaker 1: you know, and how our data is using. You know.

487
00:29:19,640 --> 00:29:21,960
Speaker 1: Back then, it was okay, we need to build the

488
00:29:22,000 --> 00:29:26,680
Speaker 1: power plant in Florida, and you know, you guys make

489
00:29:26,720 --> 00:29:29,240
Speaker 1: your bids at Westinghouse. You make your bids, You make

490
00:29:29,280 --> 00:29:32,880
Speaker 1: your bid and oh these bids seem awfully similar and

491
00:29:32,960 --> 00:29:36,800
Speaker 1: you know, identical. In fact, what are you are you

492
00:29:36,800 --> 00:29:39,880
Speaker 1: guys colluding And you know I'm gonna go around you know,

493
00:29:39,920 --> 00:29:42,560
Speaker 1: and kind of deals, you know, So it was sort

494
00:29:42,600 --> 00:29:45,400
Speaker 1: of amateur hour, if you will. It really was kind

495
00:29:45,400 --> 00:29:48,840
Speaker 1: of amateur hour, which doesn't make it any less illegal

496
00:29:49,120 --> 00:29:52,800
Speaker 1: or immoral or unethical. But you know what, you can

497
00:29:52,840 --> 00:29:57,880
Speaker 1: probably get away with unbeknownst to people nowadays with and

498
00:29:57,920 --> 00:30:00,320
Speaker 1: again I'm not saying that it's happening, but if it

499
00:30:00,360 --> 00:30:02,840
Speaker 1: were to happen, uh, you know, it's probably much more

500
00:30:02,880 --> 00:30:06,080
Speaker 1: insidious and hard to track down. So let's fast forward

501
00:30:06,080 --> 00:30:09,720
Speaker 1: a little bit. Um, G E plays a huge effort

502
00:30:09,840 --> 00:30:12,920
Speaker 1: during both world wars. Tell us a little bit about

503
00:30:12,960 --> 00:30:17,760
Speaker 1: what GE did. How did they affect the ability to

504
00:30:17,840 --> 00:30:21,040
Speaker 1: fight a global conflict like that from here in the

505
00:30:21,120 --> 00:30:23,960
Speaker 1: United States. Well, G was, you know, for a long

506
00:30:24,000 --> 00:30:27,880
Speaker 1: time a very big defense contractor. UH made jet engines

507
00:30:28,000 --> 00:30:31,360
Speaker 1: for you know, fighter jets, um, but and you know,

508
00:30:31,480 --> 00:30:35,440
Speaker 1: made nuclear power plants and probably had a role in

509
00:30:35,520 --> 00:30:38,800
Speaker 1: making you know, nuclear bombs and triggers and things, and

510
00:30:38,920 --> 00:30:41,640
Speaker 1: disclosed none of that. We know, you know, we know, no,

511
00:30:41,840 --> 00:30:46,120
Speaker 1: we know you know they were you know, nuclear waste dumps, etcetera.

512
00:30:47,120 --> 00:30:50,800
Speaker 1: Probably at one point that GE was involved with. UH.

513
00:30:51,200 --> 00:30:53,160
Speaker 1: What I found to be the most interesting thing was

514
00:30:53,200 --> 00:30:57,960
Speaker 1: sort of in World War One, GE created the radio

515
00:30:57,960 --> 00:31:02,200
Speaker 1: technology uh you that we may be even using today.

516
00:31:02,200 --> 00:31:05,600
Speaker 1: I don't know right now. Uh. That allowed people to

517
00:31:05,640 --> 00:31:09,920
Speaker 1: communicate with one another and uh it was a real

518
00:31:10,000 --> 00:31:13,840
Speaker 1: technological breakthrough and helped the Allies win the war. And

519
00:31:14,280 --> 00:31:18,840
Speaker 1: so GE created this technology. Uh, and after the war

520
00:31:19,000 --> 00:31:22,560
Speaker 1: wanted to sell it to Marconi, which was the big

521
00:31:22,600 --> 00:31:27,360
Speaker 1: British company. They had an American subsidy called American Marconi,

522
00:31:27,400 --> 00:31:31,280
Speaker 1: which was a public company, and basically the government would

523
00:31:31,360 --> 00:31:37,760
Speaker 1: a Wilson's administration blocked the sale too valuable, and UH

524
00:31:38,040 --> 00:31:43,920
Speaker 1: essentially forced g E to create what became our c A,

525
00:31:44,000 --> 00:31:49,200
Speaker 1: the Radio Corporation of America inside GE, and forced GE

526
00:31:49,360 --> 00:31:53,760
Speaker 1: to buy American Marconi and create what became our c

527
00:31:54,000 --> 00:31:57,280
Speaker 1: A inside GE so that the British wouldn't get access

528
00:31:57,520 --> 00:32:00,680
Speaker 1: to this technology and dominate the radio, which is funny

529
00:32:00,720 --> 00:32:04,400
Speaker 1: because they're an ally of ours. And then I'm a

530
00:32:04,520 --> 00:32:07,760
Speaker 1: recalling this correctly, wasn't the subsequent event of that And

531
00:32:07,800 --> 00:32:10,480
Speaker 1: now that we've done all this, you have to divest

532
00:32:10,480 --> 00:32:12,760
Speaker 1: our c Yeah. So that was like you know, in

533
00:32:12,960 --> 00:32:16,800
Speaker 1: nineteen seventeen, nineteen eighteen, nineteen, nineteen, nineteen twenty, and then

534
00:32:16,800 --> 00:32:20,000
Speaker 1: in nineteen thirty two for reasons that actually kind of

535
00:32:20,040 --> 00:32:24,640
Speaker 1: I still don't quite understand. The Justice Department decided that

536
00:32:24,800 --> 00:32:29,040
Speaker 1: g E owning r c A was anti trust violation,

537
00:32:29,440 --> 00:32:32,600
Speaker 1: forced GE to divest our c A. That's when our

538
00:32:32,640 --> 00:32:35,280
Speaker 1: c A became a public company run by David Sarnoff.

539
00:32:36,040 --> 00:32:40,120
Speaker 1: And then you know, in nineteen eighty six, our hero

540
00:32:40,320 --> 00:32:43,800
Speaker 1: Jack Welch buys back our c A for six point

541
00:32:43,840 --> 00:32:46,200
Speaker 1: four billion dollars at that point, the largest M and

542
00:32:46,280 --> 00:32:49,960
Speaker 1: A deal in history, and everybody like Harald's Jack Welch

543
00:32:50,040 --> 00:32:52,920
Speaker 1: is like this hero for doing this incredible deal, which

544
00:32:52,920 --> 00:32:56,080
Speaker 1: by then r c A also owned NBC. That's how

545
00:32:56,160 --> 00:32:59,680
Speaker 1: g got NBC. And in fact, Jack was just buying

546
00:32:59,720 --> 00:33:03,480
Speaker 1: back something that he had started. He's getting the band

547
00:33:03,480 --> 00:33:06,160
Speaker 1: back together. He's getting the band back together. But of

548
00:33:06,160 --> 00:33:09,520
Speaker 1: course nobody has that kind of a memory, and so

549
00:33:09,840 --> 00:33:12,160
Speaker 1: everybody was like, front page of the New York Times

550
00:33:12,200 --> 00:33:14,600
Speaker 1: was Jack Welch buying back r c A and the

551
00:33:14,600 --> 00:33:16,440
Speaker 1: biggest M and A deal of all time, and now

552
00:33:16,480 --> 00:33:19,680
Speaker 1: he's got NBC. But Jack was just buying back what

553
00:33:20,080 --> 00:33:22,080
Speaker 1: had already owned. So let's and I didn't know that,

554
00:33:22,120 --> 00:33:24,080
Speaker 1: by the way, and I had worked there, and that

555
00:33:24,200 --> 00:33:26,160
Speaker 1: was one of the major That was a big revelation

556
00:33:26,240 --> 00:33:28,680
Speaker 1: to me. I was fascinated by that. So let's stay

557
00:33:28,680 --> 00:33:31,880
Speaker 1: with the chronology. Well, we're two ends. They come out

558
00:33:31,920 --> 00:33:35,560
Speaker 1: of the war with a burgeoning defense business. Jet engine

559
00:33:35,600 --> 00:33:39,200
Speaker 1: is invented during World War Two, but not deployed until

560
00:33:39,520 --> 00:33:41,880
Speaker 1: after the war. I don't know if we had any

561
00:33:42,080 --> 00:33:46,200
Speaker 1: jet fighters during the war. The Germans had a couple.

562
00:33:47,280 --> 00:33:49,600
Speaker 1: It certainly didn't affect the tide of the war one

563
00:33:49,640 --> 00:33:51,880
Speaker 1: way or another. I mean, I think, you know, the

564
00:33:52,000 --> 00:33:56,040
Speaker 1: g E perfected, you know, the jet engine by going

565
00:33:56,080 --> 00:33:59,480
Speaker 1: up to Pike's Peak, you know, I'm sure story they

566
00:33:59,480 --> 00:34:02,640
Speaker 1: have to drive up there. It's the highest point that

567
00:34:02,680 --> 00:34:04,800
Speaker 1: you can get to by truck because there's a road

568
00:34:04,840 --> 00:34:06,680
Speaker 1: up to the top of Pike's Peak. And then they

569
00:34:06,760 --> 00:34:09,080
Speaker 1: test the engine because they needed to test it. It

570
00:34:09,120 --> 00:34:11,680
Speaker 1: out that a propeller engine, not a jet engine, right,

571
00:34:11,680 --> 00:34:13,719
Speaker 1: I think that was a jet engine. But you know,

572
00:34:13,880 --> 00:34:16,240
Speaker 1: but the whole idea was some of the fighter planes

573
00:34:16,680 --> 00:34:19,920
Speaker 1: were losing altitude. They would get up to a certain power,

574
00:34:20,000 --> 00:34:22,080
Speaker 1: they would lose power, and so they needed to test

575
00:34:22,080 --> 00:34:25,400
Speaker 1: a new jet engine to see whether it would maintain

576
00:34:25,520 --> 00:34:29,120
Speaker 1: its you know, velocity or firth thrust at that at

577
00:34:29,120 --> 00:34:32,560
Speaker 1: had a I altitude, and obviously GE perfected that on

578
00:34:32,680 --> 00:34:34,840
Speaker 1: top of Pikes Peak and that made a huge difference

579
00:34:35,360 --> 00:34:38,760
Speaker 1: for the speed and the you know, viability of these

580
00:34:38,800 --> 00:34:40,880
Speaker 1: fighter jets. So they come out of the war with

581
00:34:40,960 --> 00:34:45,160
Speaker 1: this huge book of patents, all these new products, essentially

582
00:34:45,160 --> 00:34:48,720
Speaker 1: an entire new line of aerospace and and defense sectors.

583
00:34:48,760 --> 00:34:53,400
Speaker 1: It seems like the post war era really began the

584
00:34:53,480 --> 00:34:59,920
Speaker 1: modern period of General Electric becoming a dominant conglomerate. Fair statement,

585
00:35:00,680 --> 00:35:05,480
Speaker 1: I mean yes, I mean you know they would you know,

586
00:35:05,560 --> 00:35:08,799
Speaker 1: GE kind of ended up, for whatever reason, doing some

587
00:35:08,880 --> 00:35:12,400
Speaker 1: of the largest M and A deals you know up

588
00:35:12,440 --> 00:35:18,960
Speaker 1: to that point. Like, uh, you know, Jack's predecessor, rig Jones,

589
00:35:19,400 --> 00:35:22,600
Speaker 1: bought something called Utah International, which was like a mining

590
00:35:22,680 --> 00:35:25,640
Speaker 1: company of all things, because he decided that, you know,

591
00:35:25,680 --> 00:35:30,880
Speaker 1: owning commodities would be a good hedge against nineteen seventies inflation.

592
00:35:31,360 --> 00:35:32,800
Speaker 1: So that was like a two and a half billion

593
00:35:32,800 --> 00:35:36,279
Speaker 1: dollar deal that was again Utah International. That was the

594
00:35:36,400 --> 00:35:38,200
Speaker 1: largest M and A deal you know up to that

595
00:35:38,320 --> 00:35:42,879
Speaker 1: point prior to our c A. Right, so which Jack

596
00:35:42,920 --> 00:35:46,600
Speaker 1: had done a decade later, and of course when Jack

597
00:35:46,680 --> 00:35:50,920
Speaker 1: became the CEO in Night, he hated the Utah International deal.

598
00:35:50,960 --> 00:35:53,440
Speaker 1: He was against it, but nobody listened to him. And

599
00:35:53,480 --> 00:35:57,680
Speaker 1: the first thing he did was divested. So Jack divests,

600
00:35:57,719 --> 00:36:01,680
Speaker 1: you know. So that's not unsurprising that the new CEO,

601
00:36:01,800 --> 00:36:04,560
Speaker 1: you know, wants to undo Jeff em All wanted to

602
00:36:04,680 --> 00:36:09,080
Speaker 1: un Jack Ge. Jack wanted to, you know, make changes

603
00:36:09,200 --> 00:36:13,799
Speaker 1: to the way Reg Jones ran GE. And so I

604
00:36:13,840 --> 00:36:17,839
Speaker 1: think you know, it was under Jack really that GE

605
00:36:18,200 --> 00:36:21,239
Speaker 1: was just buying and selling so many companies all the time.

606
00:36:21,280 --> 00:36:23,120
Speaker 1: They were really an M and A machine, you know.

607
00:36:23,080 --> 00:36:26,400
Speaker 1: And they hired this guy, Mike Carpenter, you know, from McKenzie,

608
00:36:26,480 --> 00:36:29,560
Speaker 1: to be the M and A guy, and you know,

609
00:36:29,680 --> 00:36:34,160
Speaker 1: just create a strategic planning department just to do deals.

610
00:36:34,719 --> 00:36:36,879
Speaker 1: And they did a ton of them, didn't That did

611
00:36:36,880 --> 00:36:39,319
Speaker 1: a ton of deals. So I have to start by

612
00:36:39,360 --> 00:36:43,440
Speaker 1: asking you begin the book telling a story of driving

613
00:36:43,440 --> 00:36:47,239
Speaker 1: with Jack to the golf course. Tell us a little

614
00:36:47,239 --> 00:36:50,319
Speaker 1: bit about how you met him and what that set

615
00:36:50,360 --> 00:36:57,279
Speaker 1: of conversations were like. So once I decided to to

616
00:36:57,320 --> 00:37:01,040
Speaker 1: see if I could do this book in August of

617
00:37:01,719 --> 00:37:07,279
Speaker 1: two eighteen, Uh geez, that's a five year process. Huh, Well,

618
00:37:07,320 --> 00:37:09,480
Speaker 1: I mean it took me probably two and a half

619
00:37:09,600 --> 00:37:13,240
Speaker 1: years to write it and research it, and then another,

620
00:37:13,960 --> 00:37:17,040
Speaker 1: you know, fifteen months to get it published. You know,

621
00:37:18,200 --> 00:37:20,880
Speaker 1: getting a book published in the middle of a pandemic

622
00:37:21,080 --> 00:37:23,320
Speaker 1: is not that easy. See I would think it's easy

623
00:37:23,400 --> 00:37:26,000
Speaker 1: because you're at home there. You know, it was easy

624
00:37:26,120 --> 00:37:29,400
Speaker 1: for me, but you know, we're talking about paper supply

625
00:37:29,800 --> 00:37:32,640
Speaker 1: and printing, time on the printer and things like that

626
00:37:33,480 --> 00:37:36,040
Speaker 1: really got bogged down, and not just for my book,

627
00:37:36,040 --> 00:37:40,359
Speaker 1: but a lot of books. And getting time on the

628
00:37:40,400 --> 00:37:43,560
Speaker 1: press was very hard to do, and finding the paper

629
00:37:44,040 --> 00:37:47,239
Speaker 1: was very We had supply chain issues with supply chain

630
00:37:47,719 --> 00:37:51,719
Speaker 1: paper for books exactly, and time on the press. I

631
00:37:51,760 --> 00:37:55,279
Speaker 1: think I actually started it in October two eighteen. But

632
00:37:56,120 --> 00:37:59,120
Speaker 1: one thing I did was, you know, I figured if

633
00:38:00,040 --> 00:38:03,680
Speaker 1: Jack weren't going to talk to me, then I would

634
00:38:03,680 --> 00:38:05,880
Speaker 1: have to think about whether I wanted to do it.

635
00:38:05,920 --> 00:38:08,400
Speaker 1: But he was. You know, I had a home in Nantucket.

636
00:38:08,920 --> 00:38:11,320
Speaker 1: I was there. He had a home around the corner

637
00:38:11,440 --> 00:38:13,960
Speaker 1: for me and Nantuget. I would see him occasionally. Did

638
00:38:14,040 --> 00:38:16,160
Speaker 1: you know him when you worked at the capital? I mean,

639
00:38:16,160 --> 00:38:19,000
Speaker 1: of course we all quote new. Did you meet him?

640
00:38:19,000 --> 00:38:21,400
Speaker 1: Did he chat? What was he familiar with you prior

641
00:38:21,440 --> 00:38:25,080
Speaker 1: to I seriously doubt it, but I think I was,

642
00:38:25,480 --> 00:38:28,719
Speaker 1: you know, Pip Squeak, way down the way down the

643
00:38:28,760 --> 00:38:32,720
Speaker 1: food chain. And I think over time, over the years,

644
00:38:32,760 --> 00:38:35,760
Speaker 1: he became aware of who I was writing the books,

645
00:38:35,760 --> 00:38:41,160
Speaker 1: and and when I reached out to him, he surprised

646
00:38:41,160 --> 00:38:43,759
Speaker 1: me by saying, yeah, let's have a meeting, and let's

647
00:38:43,840 --> 00:38:46,400
Speaker 1: meet at the Nantucket Golf Club, which you know was

648
00:38:46,440 --> 00:38:50,360
Speaker 1: where he was a member. Uh, and we met. I

649
00:38:50,480 --> 00:38:53,960
Speaker 1: love the story of him like kind of rolling up

650
00:38:54,160 --> 00:38:57,200
Speaker 1: in the car to the valet to us and the

651
00:38:57,280 --> 00:38:59,200
Speaker 1: kid the keys to tell us a little bit about

652
00:38:59,200 --> 00:39:01,800
Speaker 1: what that was. So so I you know, I uh,

653
00:39:01,840 --> 00:39:05,440
Speaker 1: you know, when you I walked into the Nantucket Golf

654
00:39:05,440 --> 00:39:07,480
Speaker 1: Club and told him I was meeting Jack Welch, of course,

655
00:39:07,520 --> 00:39:09,839
Speaker 1: you know, it was like I was meeting Royalty. And

656
00:39:09,880 --> 00:39:12,400
Speaker 1: so we go out. I love this story. We go

657
00:39:12,440 --> 00:39:15,880
Speaker 1: out onto the verandah, which was the porch you know

658
00:39:16,080 --> 00:39:21,080
Speaker 1: for lunch. Uh, and he was already seated there and

659
00:39:21,600 --> 00:39:27,040
Speaker 1: at the next table there was Phil Nicholson. It was

660
00:39:27,080 --> 00:39:30,719
Speaker 1: a Wednesday, okay, and and the Thursday was when this

661
00:39:31,320 --> 00:39:34,360
Speaker 1: uh like the thing the Deutsche Bank Golf Tournament, the

662
00:39:34,400 --> 00:39:39,040
Speaker 1: annual Deutsche Bank Golf Tournament happens in Massachusetts, right, So

663
00:39:39,400 --> 00:39:46,360
Speaker 1: the professional golfers were in and around Massachusetts, and Phil Mickelson, lefty,

664
00:39:47,000 --> 00:39:50,959
Speaker 1: was doing a practice round at the Nantucket Golf Club

665
00:39:51,000 --> 00:39:53,640
Speaker 1: the day before the tournament started. So he was there

666
00:39:53,680 --> 00:39:56,000
Speaker 1: having lunch, and he was seated at a table with

667
00:39:56,040 --> 00:39:59,319
Speaker 1: Bob Diamond, who had been the CEO of Barkleys and

668
00:39:59,320 --> 00:40:03,040
Speaker 1: I think had been defenstrated by then. And he was

669
00:40:03,160 --> 00:40:07,480
Speaker 1: with Paul Salem, who I knew from growing up in

670
00:40:07,520 --> 00:40:11,080
Speaker 1: central Massachusetts. And Paul was one of the founders of

671
00:40:11,120 --> 00:40:15,160
Speaker 1: a private equity firm, Providence Equity Partners. And so they

672
00:40:15,160 --> 00:40:18,560
Speaker 1: were having lunch, and you know, one after another they

673
00:40:18,600 --> 00:40:22,239
Speaker 1: came over and paid their respects to Jack. Everybody was

674
00:40:22,280 --> 00:40:26,799
Speaker 1: always paying their respects to Jack, uh and this was

675
00:40:26,840 --> 00:40:29,520
Speaker 1: no different. And so and I knew Bob and I

676
00:40:29,600 --> 00:40:32,960
Speaker 1: knew Paul. So they're probably wondering, what the hell is

677
00:40:33,000 --> 00:40:35,960
Speaker 1: Bill Cohen doing sitting and having lunch with Jack Welch.

678
00:40:36,480 --> 00:40:38,279
Speaker 1: The first thing out of Jack Welch, as I tell

679
00:40:38,320 --> 00:40:40,520
Speaker 1: the story, in the out of his mouth, was that,

680
00:40:40,600 --> 00:40:43,799
Speaker 1: you know, he had messed up. He didn't use messed up,

681
00:40:43,840 --> 00:40:46,359
Speaker 1: but he used something he was not afraid to use.

682
00:40:46,360 --> 00:40:49,319
Speaker 1: Salty line. He was not afraid. Uh. And he had

683
00:40:49,320 --> 00:40:51,960
Speaker 1: messed up the succession process, and he had messed up

684
00:40:52,000 --> 00:40:55,960
Speaker 1: the selection of Jeff Immult, which was basically who was

685
00:40:56,040 --> 00:40:59,319
Speaker 1: his hand picked successor. And he felt, you know, by

686
00:40:59,360 --> 00:41:04,480
Speaker 1: two teen, Jeff of course had been fired. He you know,

687
00:41:04,520 --> 00:41:08,000
Speaker 1: he had been fired a year earlier. And uh, John

688
00:41:08,000 --> 00:41:11,440
Speaker 1: Flannery was the new CEO. Now I had worked with

689
00:41:11,520 --> 00:41:14,160
Speaker 1: John Flannery. John Flannery and I had started a G

690
00:41:14,400 --> 00:41:16,919
Speaker 1: capital together and shared in office together. So I knew

691
00:41:17,000 --> 00:41:20,480
Speaker 1: John for thirty years. Uh, and you know, it was

692
00:41:20,560 --> 00:41:23,200
Speaker 1: great that John was the new CEO. And but so

693
00:41:23,560 --> 00:41:25,400
Speaker 1: the first thing out of Jack's mouth is how he

694
00:41:25,440 --> 00:41:27,800
Speaker 1: had messed up the process. And I'm thinking to myself,

695
00:41:27,800 --> 00:41:32,080
Speaker 1: whoa Jack Welch is telling me that the person he

696
00:41:32,120 --> 00:41:36,160
Speaker 1: had hand selected as his successor, he was completely disavowing

697
00:41:36,200 --> 00:41:39,600
Speaker 1: and like saying, I messed this up completely. And but

698
00:41:39,680 --> 00:41:43,279
Speaker 1: I said, Jack, you chose him. Yes, I know, but

699
00:41:43,400 --> 00:41:45,640
Speaker 1: I screwed it up. And this is on me, and

700
00:41:45,640 --> 00:41:48,479
Speaker 1: this is going to affect my legacy. At that moment,

701
00:41:48,520 --> 00:41:51,680
Speaker 1: I kind of knew I was onto something quite special. Yeah,

702
00:41:51,760 --> 00:41:57,160
Speaker 1: And he had already published his his memoir, his memoir

703
00:41:57,239 --> 00:42:00,759
Speaker 1: came out literally on September eleven too as one. In fact,

704
00:42:00,840 --> 00:42:06,279
Speaker 1: he had been on the Today Show that morning and

705
00:42:06,360 --> 00:42:11,279
Speaker 1: had finished his segment about his book when Memory. If

706
00:42:11,360 --> 00:42:17,799
Speaker 1: Memory serves his ghostwriter, a co author, eventually becomes his

707
00:42:18,280 --> 00:42:23,120
Speaker 1: third wife, second wife. No, it was. The co author

708
00:42:23,160 --> 00:42:27,360
Speaker 1: on that book was a former Fortune and Business Week

709
00:42:27,640 --> 00:42:32,920
Speaker 1: reporter John Byrne. I'm pretty sure and and Jack Welch

710
00:42:32,960 --> 00:42:37,279
Speaker 1: were not. Did not get married a woman that he

711
00:42:37,440 --> 00:42:40,479
Speaker 1: ended up Okay, So so then this book comes out

712
00:42:41,120 --> 00:42:46,080
Speaker 1: and there's a woman named he's married. Uh. This book

713
00:42:46,120 --> 00:42:50,400
Speaker 1: comes out on September one, but because of the events

714
00:42:50,440 --> 00:42:53,480
Speaker 1: of that day, it was still a best seller, but

715
00:42:53,640 --> 00:42:57,000
Speaker 1: the publicity disappeared and they didn't pick up the publicity

716
00:42:57,000 --> 00:43:00,239
Speaker 1: again until October. So it's part of the public city

717
00:43:00,280 --> 00:43:03,000
Speaker 1: that got picked up in October of two thousand one.

718
00:43:03,560 --> 00:43:07,400
Speaker 1: By the way, the book was a big bestseller straight

719
00:43:07,440 --> 00:43:10,719
Speaker 1: from the gut h and as part of the publicity,

720
00:43:10,760 --> 00:43:14,239
Speaker 1: they got picked up again in October two one. The

721
00:43:14,280 --> 00:43:17,080
Speaker 1: woman who was the editor of Harvard Business Review when

722
00:43:17,120 --> 00:43:20,440
Speaker 1: by the name was Susie wet Louver was the editor

723
00:43:20,760 --> 00:43:24,000
Speaker 1: of the Harvard Business Review, had been a former journalist

724
00:43:24,040 --> 00:43:28,120
Speaker 1: Harvard Business School graduate. Uh interviewed Jack came to New

725
00:43:28,200 --> 00:43:31,320
Speaker 1: York to interview Jack. They had launched at the twenty

726
00:43:31,400 --> 00:43:34,840
Speaker 1: one Club, which I think no longer exists, and then,

727
00:43:35,000 --> 00:43:38,960
Speaker 1: you know, pretty much soon after that they became shall

728
00:43:39,040 --> 00:43:43,239
Speaker 1: we say an item, and you know, next thing, you know,

729
00:43:43,440 --> 00:43:47,440
Speaker 1: Jack was divorcing his second wife and marrying Susie, who

730
00:43:47,480 --> 00:43:51,560
Speaker 1: was leaving her husband and her three kids to be

731
00:43:51,680 --> 00:43:54,719
Speaker 1: with Jack. And then they wrote the two of them,

732
00:43:54,760 --> 00:43:57,880
Speaker 1: you know, had a column in Business Week together, wrote

733
00:43:57,880 --> 00:44:01,719
Speaker 1: books together. Okay, so I got the chronology wrong, but

734
00:44:02,280 --> 00:44:05,439
Speaker 1: more or less, this, by the way, is an issue

735
00:44:05,840 --> 00:44:09,360
Speaker 1: we'll circle back to because this has come up previously

736
00:44:09,600 --> 00:44:14,200
Speaker 1: in his tenure. But let's roll back to Nantucket. You're

737
00:44:14,239 --> 00:44:18,200
Speaker 1: on the veranda, everybody. So we we have our lunch

738
00:44:18,239 --> 00:44:21,160
Speaker 1: and we have our first interview. Uh. And my wife

739
00:44:21,200 --> 00:44:23,680
Speaker 1: had dropped me off there because she wanted to take

740
00:44:23,680 --> 00:44:26,000
Speaker 1: our car. We had one car, and she wanted to

741
00:44:26,040 --> 00:44:28,399
Speaker 1: take the car to you know, go around and do things.

742
00:44:28,480 --> 00:44:32,040
Speaker 1: And so Jack was going to drive me home because

743
00:44:32,400 --> 00:44:35,200
Speaker 1: he lived near me. Uh. So we have the lunch

744
00:44:35,480 --> 00:44:39,759
Speaker 1: and usually I would see Jack around Nantucket driving his

745
00:44:40,239 --> 00:44:47,080
Speaker 1: uh Mercedes, you know, coupe uh, convertible. It was that's right,

746
00:44:47,120 --> 00:44:49,240
Speaker 1: It was. It was right. And so you can always

747
00:44:49,280 --> 00:44:52,359
Speaker 1: see this sort of like you know, you know Mr

748
00:44:52,480 --> 00:44:55,080
Speaker 1: Magoo type character because he's a little he was a

749
00:44:55,120 --> 00:44:58,640
Speaker 1: little fellow, just sort of his his white baseball caps,

750
00:44:58,680 --> 00:45:02,080
Speaker 1: sort of sticking a of you know, the drive, the

751
00:45:02,120 --> 00:45:04,840
Speaker 1: steering wheel you know, around town. Uh. And he had this,

752
00:45:05,000 --> 00:45:09,000
Speaker 1: you know, it was not a late model convertible. It

753
00:45:09,040 --> 00:45:12,120
Speaker 1: was sort of an older ish but not really old version.

754
00:45:12,200 --> 00:45:14,840
Speaker 1: So anyway, I was thinking, that's what we're going to

755
00:45:15,080 --> 00:45:16,799
Speaker 1: drive home in, but it turned out it was his

756
00:45:17,120 --> 00:45:20,000
Speaker 1: you know, grand Cherokee. One thing that they sort of

757
00:45:20,000 --> 00:45:22,360
Speaker 1: do at the club, which was quaint, is you know,

758
00:45:22,400 --> 00:45:25,320
Speaker 1: they bring the car around and they opened both doors

759
00:45:25,560 --> 00:45:28,520
Speaker 1: facing out so and they turned it on. So all

760
00:45:28,560 --> 00:45:30,600
Speaker 1: you have to do is like hop in and drive off,

761
00:45:30,640 --> 00:45:33,360
Speaker 1: you know, like you're some you know, person out of

762
00:45:33,400 --> 00:45:35,920
Speaker 1: a James Bond movie or something like you're some CEO

763
00:45:36,080 --> 00:45:38,480
Speaker 1: of a giant job of the most valuable company in

764
00:45:38,480 --> 00:45:41,480
Speaker 1: the world. And so, you know, I get in and

765
00:45:41,480 --> 00:45:44,439
Speaker 1: I put my seatbelt on, you know, and Jack had

766
00:45:44,480 --> 00:45:47,680
Speaker 1: a uh, you know, either a walker or a cane

767
00:45:47,680 --> 00:45:51,320
Speaker 1: at that point, and I was wondering He's eighty or

768
00:45:51,400 --> 00:45:53,960
Speaker 1: something at this point, and I'm I'm thinking, you know,

769
00:45:53,960 --> 00:45:56,239
Speaker 1: when he wasn't in the greatest health. His mind was

770
00:45:56,280 --> 00:45:58,719
Speaker 1: all there, but physically he had started to tear it,

771
00:45:58,760 --> 00:46:01,359
Speaker 1: and I was wondering, how is he gonna hop up

772
00:46:01,400 --> 00:46:04,000
Speaker 1: and you know, being the driver's seat, let alone drive

773
00:46:04,760 --> 00:46:07,600
Speaker 1: us home. And but so he, you know, he scrambles

774
00:46:07,719 --> 00:46:10,879
Speaker 1: right up there and but sits on the seatbelt, won't

775
00:46:10,880 --> 00:46:13,560
Speaker 1: put the seatbelt on, and it's dinging, dinging like it is,

776
00:46:13,600 --> 00:46:15,799
Speaker 1: And I said, Jack, you know, put your seat you know,

777
00:46:15,920 --> 00:46:18,560
Speaker 1: why not put your seat belt on? Jack? You know, uh,

778
00:46:18,600 --> 00:46:21,080
Speaker 1: still at least to stop the dinging. Yeah, I don't

779
00:46:21,080 --> 00:46:25,240
Speaker 1: like those things. So he decides he's not going to

780
00:46:25,400 --> 00:46:27,360
Speaker 1: put his seatbelt on, So he sits on the seatbelt.

781
00:46:27,400 --> 00:46:31,640
Speaker 1: The dinging is going the whole way home, and he drives,

782
00:46:31,680 --> 00:46:34,320
Speaker 1: you know, there's a long driveway out of the golf club,

783
00:46:34,920 --> 00:46:37,200
Speaker 1: and we finally get to what is Milestone Road, the

784
00:46:37,320 --> 00:46:40,680
Speaker 1: long road between the town of Nantucket and Ensconsin where

785
00:46:40,680 --> 00:46:44,839
Speaker 1: we both live, and he took a left to go

786
00:46:44,920 --> 00:46:48,360
Speaker 1: back down to the village Ofisconsin, and instead of driving

787
00:46:48,360 --> 00:46:50,680
Speaker 1: on the right side of the road like we do

788
00:46:50,719 --> 00:46:54,640
Speaker 1: in America. He decided to drive literally in the middle

789
00:46:54,640 --> 00:46:59,520
Speaker 1: of the road, right down the two tires on the

790
00:47:00,239 --> 00:47:02,319
Speaker 1: tires on either side of the center of the car

791
00:47:02,640 --> 00:47:06,160
Speaker 1: were you know, straddling the yellow double yellow line. And

792
00:47:06,200 --> 00:47:09,240
Speaker 1: of course cars come in the other direction. We're freaking out,

793
00:47:10,120 --> 00:47:15,880
Speaker 1: pulling off into the uh, into the grass, and I'm thinking, well, okay,

794
00:47:15,920 --> 00:47:19,560
Speaker 1: if I perish right now, at least my O bit

795
00:47:19,640 --> 00:47:22,960
Speaker 1: will say that I was, you know, driving in a

796
00:47:23,000 --> 00:47:27,160
Speaker 1: car driven by Jack Wells, the former CEO of g Neutron. Jack,

797
00:47:27,200 --> 00:47:30,560
Speaker 1: you wouldn't be the first person eliminated by Jack, That's right.

798
00:47:31,800 --> 00:47:33,600
Speaker 1: I just picked in the book. I just kind of

799
00:47:33,640 --> 00:47:37,080
Speaker 1: picture him careening off of cars on either side of

800
00:47:37,080 --> 00:47:40,160
Speaker 1: the road, just just you know, pin bowling down the road.

801
00:47:40,320 --> 00:47:42,800
Speaker 1: You know it's close. But what what really was happening

802
00:47:42,840 --> 00:47:44,720
Speaker 1: is cars come in the other direction. We're all pulling

803
00:47:44,760 --> 00:47:47,719
Speaker 1: off into the grass, and there wasn't a lot of

804
00:47:47,760 --> 00:47:50,960
Speaker 1: grass because it's sort a lot of trees and stuff,

805
00:47:51,000 --> 00:47:57,680
Speaker 1: you know. So, UM, let's discuss his career at General

806
00:47:57,680 --> 00:48:01,640
Speaker 1: Electric from the beginning, rather than his latter days as

807
00:48:01,719 --> 00:48:06,560
Speaker 1: a demolition derby driver. Um, this is pretty much his

808
00:48:06,840 --> 00:48:10,440
Speaker 1: entire career is at a general Electric. Tell us a

809
00:48:10,480 --> 00:48:14,680
Speaker 1: little bit about where he began and how he rose

810
00:48:14,719 --> 00:48:19,600
Speaker 1: through the ranks through plastics and everything else. Yeah, I

811
00:48:19,640 --> 00:48:23,879
Speaker 1: mean he was an only child and uh, his mother

812
00:48:24,000 --> 00:48:26,520
Speaker 1: was a stay at home mom. He grew up in Salem, Massachusetts,

813
00:48:26,520 --> 00:48:30,640
Speaker 1: and his father was like a conductor or you know,

814
00:48:31,680 --> 00:48:35,600
Speaker 1: on a train train, right on the train that went

815
00:48:35,600 --> 00:48:37,800
Speaker 1: from Boston to the North Shore, which was a train

816
00:48:38,320 --> 00:48:41,239
Speaker 1: that I grew up taking all the time too. So

817
00:48:41,360 --> 00:48:47,279
Speaker 1: I might Jack Welsh's dad have punched your ticket. It's

818
00:48:47,320 --> 00:48:50,399
Speaker 1: not inconceivable, but I doubt it because I probably would

819
00:48:50,400 --> 00:48:52,799
Speaker 1: have been, you know, too young to have taken the

820
00:48:52,800 --> 00:48:57,560
Speaker 1: train by myself, but you know that idea. Uh. And

821
00:48:57,600 --> 00:49:01,560
Speaker 1: then you know, Jack was actually a bit of an athlete,

822
00:49:01,600 --> 00:49:04,480
Speaker 1: even though he was small and his uh and he

823
00:49:04,520 --> 00:49:06,799
Speaker 1: also stuttered. He had a stutter, and his mother got

824
00:49:06,920 --> 00:49:10,040
Speaker 1: him over through. His mother was as great as champion. Uh.

825
00:49:10,080 --> 00:49:13,560
Speaker 1: You know, he got him through. The stuttering, got him thinking,

826
00:49:13,640 --> 00:49:17,880
Speaker 1: you know, made him seem like he was uh, you know,

827
00:49:17,960 --> 00:49:20,520
Speaker 1: ten feet tall and a huge athlete, even though he

828
00:49:20,640 --> 00:49:23,080
Speaker 1: really wasn't any of those things. But he was athletic

829
00:49:23,080 --> 00:49:26,640
Speaker 1: and he was on high school teams. And then he

830
00:49:26,719 --> 00:49:31,640
Speaker 1: went to u mass in Amherst, Massachusetts. UH and then

831
00:49:32,160 --> 00:49:37,120
Speaker 1: you know, from there, got a ps PhD in UH

832
00:49:37,360 --> 00:49:41,959
Speaker 1: chemical engineering at the University of Illinois UH and got

833
00:49:41,960 --> 00:49:45,560
Speaker 1: offered a number of jobs back then h including an

834
00:49:45,560 --> 00:49:50,520
Speaker 1: Exxon and other places. UH. GE he was offered a

835
00:49:50,600 --> 00:49:52,799
Speaker 1: job at g which paid him a little bit more

836
00:49:53,160 --> 00:49:55,839
Speaker 1: so that's why he decided to take it. UH and

837
00:49:55,920 --> 00:49:59,480
Speaker 1: he moved to Pittsfield to basically try to figure out

838
00:49:59,680 --> 00:50:05,200
Speaker 1: how to commercialize gees plastic pellets business. Gee had created

839
00:50:05,239 --> 00:50:08,600
Speaker 1: these plastic pellets and you know, how do we make

840
00:50:08,719 --> 00:50:13,000
Speaker 1: these useful to American industry and industry are all around

841
00:50:13,000 --> 00:50:15,680
Speaker 1: the world. The plastic was used as an insulator on

842
00:50:15,719 --> 00:50:19,320
Speaker 1: electrical wires, and it had all sorts of other applications

843
00:50:19,719 --> 00:50:22,880
Speaker 1: that melted down and put it in cars like car bumpers,

844
00:50:22,880 --> 00:50:24,960
Speaker 1: I mean, and all of a sudden, you know, potentially

845
00:50:24,960 --> 00:50:27,720
Speaker 1: a huge business. Potentially a huge business. It was Jack's

846
00:50:27,840 --> 00:50:30,680
Speaker 1: job to figure out how to commercialize that, and of

847
00:50:30,719 --> 00:50:33,719
Speaker 1: course he did it fabulously. You tell the story of

848
00:50:33,760 --> 00:50:37,319
Speaker 1: them hitting a roadblock and then ultimately one of the

849
00:50:37,360 --> 00:50:40,200
Speaker 1: engineers who was working on this had left GE in

850
00:50:40,239 --> 00:50:43,719
Speaker 1: a huff, but left all of his books behind his

851
00:50:43,800 --> 00:50:47,080
Speaker 1: notebooks and someone said might have been Jack said, let's

852
00:50:47,080 --> 00:50:50,839
Speaker 1: go through the notebooks. Literally the solution to the engineering

853
00:50:50,880 --> 00:50:54,359
Speaker 1: problem written down waiting for them. Very true, and they

854
00:50:54,440 --> 00:50:57,839
Speaker 1: ended up, you know, having to compensate that guy who

855
00:50:57,880 --> 00:51:01,560
Speaker 1: they had I think who. Yeah, And but that made

856
00:51:01,600 --> 00:51:05,440
Speaker 1: a you know, huge uh difference in Jack's career. And

857
00:51:05,480 --> 00:51:09,120
Speaker 1: you know, he once was responsible for a chemical plant

858
00:51:09,120 --> 00:51:12,160
Speaker 1: that blew up at ge and you know that literally

859
00:51:12,200 --> 00:51:14,600
Speaker 1: the roof blew off. He thought he was gonna be fired,

860
00:51:14,640 --> 00:51:16,960
Speaker 1: but he wasn't. Uh. You know, he did things like

861
00:51:17,040 --> 00:51:20,799
Speaker 1: complain about his compensation because he was concerned that you know,

862
00:51:20,840 --> 00:51:22,920
Speaker 1: he thought he was doing this great job and he

863
00:51:22,960 --> 00:51:25,319
Speaker 1: was getting the paid the same as you know, the

864
00:51:25,360 --> 00:51:27,560
Speaker 1: other people he had started with, and he didn't like that.

865
00:51:28,080 --> 00:51:30,520
Speaker 1: So you know, even a year after he started, he

866
00:51:30,600 --> 00:51:33,719
Speaker 1: threatened to quit, uh, and was literally given a going

867
00:51:33,760 --> 00:51:37,440
Speaker 1: away party. Uh. And then he you know, one of

868
00:51:37,520 --> 00:51:41,640
Speaker 1: his person who became his rabbi, uh, you know, had

869
00:51:41,719 --> 00:51:44,680
Speaker 1: detected by then his talent and convinced him to stay

870
00:51:45,040 --> 00:51:49,920
Speaker 1: paid him more. And you know, this guy became his rabbi.

871
00:51:49,960 --> 00:51:52,799
Speaker 1: He sort of circumvented the guy who paid him the

872
00:51:52,840 --> 00:51:57,480
Speaker 1: same as other people and you know, Jack really uh,

873
00:51:57,520 --> 00:52:00,960
Speaker 1: you know, began to differentiate himself. Um for the quote

874
00:52:01,040 --> 00:52:04,719
Speaker 1: the Rabbi tells him when the building blows up, Hey,

875
00:52:04,800 --> 00:52:07,360
Speaker 1: you know, that's what happens in the chemistry. Stuff blows up,

876
00:52:07,360 --> 00:52:10,760
Speaker 1: stuff happens, Stuff happens. Although that's not the exact quote.

877
00:52:11,160 --> 00:52:16,040
Speaker 1: It's not so. The other thing that really stuck out

878
00:52:16,080 --> 00:52:21,040
Speaker 1: to me from the pre CEO period with him was

879
00:52:22,080 --> 00:52:26,319
Speaker 1: the Hudson Valley PCB issue. There was one of the

880
00:52:26,640 --> 00:52:30,319
Speaker 1: plants that General Electric had up the Hudson legally, with

881
00:52:30,360 --> 00:52:33,400
Speaker 1: the approval of the federal government in the state, is

882
00:52:33,560 --> 00:52:39,120
Speaker 1: discharging right into the Hudson, And decades later we find out, hey,

883
00:52:39,120 --> 00:52:42,600
Speaker 1: this stuff is really dangerous and kills people. Uh. And

884
00:52:42,719 --> 00:52:46,400
Speaker 1: it was a giant overhang on General Electric. He seemed

885
00:52:46,440 --> 00:52:51,200
Speaker 1: to negotiate a deal that everybody was happy with, Very

886
00:52:51,320 --> 00:52:55,920
Speaker 1: rare when you're dealing with regulators, politicians, and big companies.

887
00:52:55,920 --> 00:52:58,120
Speaker 1: Tell us a little bit about that deal. First of all,

888
00:52:58,239 --> 00:53:00,759
Speaker 1: Jack is a chemical you know, engineer or PhD. And

889
00:53:02,480 --> 00:53:09,560
Speaker 1: did not agree, did not think PCBs were dangerous. Isn't

890
00:53:09,600 --> 00:53:12,320
Speaker 1: the science Like, hey, you know, given a choice, you

891
00:53:12,440 --> 00:53:16,359
Speaker 1: probably don't want to be drinking PCBs. Well, look as

892
00:53:16,400 --> 00:53:21,080
Speaker 1: you said again, and I'm just being reportorial here, Okay,

893
00:53:21,200 --> 00:53:25,600
Speaker 1: So I'm not a scientist. I don't know what the

894
00:53:25,640 --> 00:53:29,719
Speaker 1: science is. I know it's very controversial. The PCBs were

895
00:53:29,880 --> 00:53:33,560
Speaker 1: discharged into the Hudson, pretty far up the Hudson, with

896
00:53:33,680 --> 00:53:37,239
Speaker 1: knowledge and approval. With knowledge and approval, you know, then

897
00:53:37,440 --> 00:53:40,880
Speaker 1: all of a sudden, V p A began to think

898
00:53:40,920 --> 00:53:44,960
Speaker 1: that you know, there were reports of PCBs in like

899
00:53:45,040 --> 00:53:47,799
Speaker 1: the milk in Japan making people sick, and you know,

900
00:53:47,840 --> 00:53:51,040
Speaker 1: so there was starting to be some data and evidence

901
00:53:51,120 --> 00:53:55,120
Speaker 1: that this chemical you know, could be dangerous to people,

902
00:53:55,160 --> 00:54:00,600
Speaker 1: but not necessarily completely definitive. And Jack, for one, you know,

903
00:54:00,719 --> 00:54:03,000
Speaker 1: do not believe they were dangerous. So then you know,

904
00:54:03,040 --> 00:54:06,200
Speaker 1: it became his problem to clean up, like Greg Jones

905
00:54:06,239 --> 00:54:09,960
Speaker 1: gave it to him to clean up, maybe because you know,

906
00:54:10,080 --> 00:54:13,640
Speaker 1: Pittsfield was near the Hudson, and he was up there anyway,

907
00:54:13,760 --> 00:54:16,480
Speaker 1: and he was a go getter and if anybody could,

908
00:54:17,400 --> 00:54:21,160
Speaker 1: and a local guy. So Jack negotiates a deal, uh

909
00:54:21,200 --> 00:54:25,360
Speaker 1: and g E pays three million dollars to three million.

910
00:54:25,640 --> 00:54:28,319
Speaker 1: Three million. That was the original deal. I thought it

911
00:54:28,400 --> 00:54:31,319
Speaker 1: was three billion. No, no no, no, the original deal was

912
00:54:31,400 --> 00:54:35,200
Speaker 1: three million it was absurdly low pencils for the month

913
00:54:35,760 --> 00:54:38,560
Speaker 1: exactly three million with the state. And it was you

914
00:54:38,560 --> 00:54:41,800
Speaker 1: know in the New York Times, Uh, the picture of Jack,

915
00:54:42,000 --> 00:54:45,759
Speaker 1: you know, reaching a deal with with the state and uh,

916
00:54:46,200 --> 00:54:49,920
Speaker 1: long story short that again, the e PA got involved

917
00:54:50,080 --> 00:54:54,080
Speaker 1: and other you know, state conservation people got involved, and

918
00:54:54,160 --> 00:54:57,440
Speaker 1: that whole agreement, even though it was signed and G

919
00:54:58,000 --> 00:55:00,520
Speaker 1: I think being paid the money, h that got all

920
00:55:00,560 --> 00:55:04,520
Speaker 1: completely overturned Jack, you know, thought it was ridiculous. Then

921
00:55:04,560 --> 00:55:09,840
Speaker 1: over time and it went on through Jack's tenure like decades, decades,

922
00:55:09,920 --> 00:55:13,440
Speaker 1: and eventually G had to pay like five million dollars

923
00:55:13,880 --> 00:55:18,799
Speaker 1: to have the Hudson dredged. They literally sucked all the

924
00:55:18,840 --> 00:55:21,759
Speaker 1: PCBs out of the floor of the river, I mean

925
00:55:21,760 --> 00:55:24,440
Speaker 1: where they had where they had rest come to rest.

926
00:55:24,600 --> 00:55:27,000
Speaker 1: And some people think that that made it worse, made

927
00:55:27,040 --> 00:55:30,440
Speaker 1: it worse. It's like asbestos, if it's there, leave it

928
00:55:30,480 --> 00:55:32,720
Speaker 1: alone or cover it up, but don't Well, of course,

929
00:55:33,160 --> 00:55:37,680
Speaker 1: you know asbestos is much worse than PCBs. But whatever,

930
00:55:37,840 --> 00:55:40,279
Speaker 1: G E. You know, the whole thing became you know,

931
00:55:40,360 --> 00:55:42,560
Speaker 1: caused lebt that went on for decades net net. It

932
00:55:42,640 --> 00:55:45,480
Speaker 1: was a billion dollars by the time they're done. Whatever

933
00:55:45,680 --> 00:55:48,120
Speaker 1: they have to pay to dredge the Hudson River. And

934
00:55:48,160 --> 00:55:50,640
Speaker 1: we're not talking about like a little segment, no huge second.

935
00:55:50,680 --> 00:55:53,520
Speaker 1: Miles miles, Miles, that's right. I mean, I can't even imagine.

936
00:55:53,520 --> 00:55:57,160
Speaker 1: But ultimately this is a feather in his cap because

937
00:55:57,920 --> 00:56:00,719
Speaker 1: they give him this assignment and is it. Well, he

938
00:56:00,760 --> 00:56:03,160
Speaker 1: solved it three million dollars, you know, he solved so

939
00:56:03,360 --> 00:56:06,360
Speaker 1: for Jack it was. But of course then then it

940
00:56:06,400 --> 00:56:09,600
Speaker 1: got relitigated during his tenure and he was against it

941
00:56:09,640 --> 00:56:12,239
Speaker 1: the whole time, and then even you know, it was

942
00:56:12,440 --> 00:56:15,399
Speaker 1: ultimately Jeff emials Ge that had to pay the money

943
00:56:15,440 --> 00:56:18,759
Speaker 1: to dredge the river, which is kind of ironic. But

944
00:56:18,840 --> 00:56:21,920
Speaker 1: he ends up cleaning up a number of things after Jack,

945
00:56:22,320 --> 00:56:25,360
Speaker 1: which is kind of ironic that Jack is not thrilled

946
00:56:25,360 --> 00:56:28,160
Speaker 1: with him. But I want to roll back to Susie

947
00:56:28,200 --> 00:56:32,239
Speaker 1: and the history the building blowing up. It seems like

948
00:56:32,440 --> 00:56:35,040
Speaker 1: there's a lot of red flags in the early part

949
00:56:35,080 --> 00:56:37,600
Speaker 1: of his career, alright, So he blows up a factory.

950
00:56:38,080 --> 00:56:40,719
Speaker 1: Everybody's trying to get people to return to working from home.

951
00:56:41,520 --> 00:56:43,600
Speaker 1: They had a hard time getting him to come into

952
00:56:43,600 --> 00:56:46,800
Speaker 1: the Lexington Avenue headquarters, which is right down the street

953
00:56:46,840 --> 00:56:49,880
Speaker 1: from us, which is actually a gorgeous Art Deco building

954
00:56:50,080 --> 00:56:54,799
Speaker 1: which g E got as part of the divestiture from

955
00:56:54,800 --> 00:56:58,080
Speaker 1: our right that was originally the r c A building,

956
00:56:58,120 --> 00:57:03,799
Speaker 1: And it's the spectacular, spectacular crown of that building is gorgeous,

957
00:57:04,200 --> 00:57:07,480
Speaker 1: which I think was in the movie Mr Mrs Smith.

958
00:57:07,880 --> 00:57:11,200
Speaker 1: And the base of it is fabulous lobby, the elevators,

959
00:57:11,239 --> 00:57:14,480
Speaker 1: everything right down the street from the priceler buildings. So

960
00:57:14,520 --> 00:57:18,360
Speaker 1: it's a little overlooked because of that, but a fantastic building.

961
00:57:18,840 --> 00:57:23,080
Speaker 1: And he's listen, I'm on the road anyway, two hundred

962
00:57:23,160 --> 00:57:25,000
Speaker 1: days a year. What does it matter if I have

963
00:57:25,040 --> 00:57:28,080
Speaker 1: a desk here or a desk in Pittsfield. So there's that,

964
00:57:28,280 --> 00:57:31,920
Speaker 1: there's the drinking. There's if there was an HR department,

965
00:57:32,000 --> 00:57:34,360
Speaker 1: he would have been in a lot of trouble. There was,

966
00:57:34,560 --> 00:57:37,280
Speaker 1: and then there was if he were, he would have

967
00:57:37,280 --> 00:57:41,240
Speaker 1: been canceled. Today. A lot of womanizing going on back in,

968
00:57:41,360 --> 00:57:46,280
Speaker 1: the lot of insulting, fat jokes. Really, oh yeah, a

969
00:57:46,320 --> 00:57:51,160
Speaker 1: lot of that. Like he would go into manufacturing plants

970
00:57:51,160 --> 00:57:53,320
Speaker 1: and he'd take the scale out and he would force

971
00:57:53,400 --> 00:57:56,560
Speaker 1: people to weigh themselves, men and women, not not just

972
00:57:56,680 --> 00:58:00,200
Speaker 1: the females in the man too, men too yet right sore.

973
00:58:00,280 --> 00:58:03,400
Speaker 1: And in fact, once when Jeff Immolt was working his

974
00:58:03,720 --> 00:58:06,400
Speaker 1: way up and was head of major appliances, Yeah, I

975
00:58:06,400 --> 00:58:08,240
Speaker 1: guess he had gained a lot of weight and was

976
00:58:08,560 --> 00:58:12,320
Speaker 1: weight like pounds or something, and and well he had

977
00:58:12,320 --> 00:58:15,160
Speaker 1: played football at Dartmouth, but he had sort of bloomed

978
00:58:15,240 --> 00:58:17,440
Speaker 1: up because it was a very stressful time and just

979
00:58:17,720 --> 00:58:20,880
Speaker 1: testing all the cooking, and he blamed it all the

980
00:58:20,920 --> 00:58:23,800
Speaker 1: business wasn't The business he was running was the g's

981
00:58:23,840 --> 00:58:27,640
Speaker 1: toughest business before they sold it. Uh, And Jack basically

982
00:58:27,680 --> 00:58:29,200
Speaker 1: told them like, if you don't lose weight, you're not

983
00:58:29,200 --> 00:58:31,280
Speaker 1: going to be ever be the CEO of this place.

984
00:58:31,760 --> 00:58:35,600
Speaker 1: So let's talk a little bit about succession planning. And

985
00:58:35,640 --> 00:58:38,000
Speaker 1: there were a couple of things that really stood out first.

986
00:58:38,480 --> 00:58:43,400
Speaker 1: It seems like for all the criticism about Jack's succession planning,

987
00:58:43,880 --> 00:58:47,600
Speaker 1: he really groomed and created a lot of people who

988
00:58:47,640 --> 00:58:51,600
Speaker 1: became successful elsewhere. Now whether or not that was because

989
00:58:51,720 --> 00:58:55,800
Speaker 1: Jack wasn't going anywhere, and people figured out pretty quickly, hey,

990
00:58:55,840 --> 00:58:58,040
Speaker 1: if I want to be CEO, I gotta find a

991
00:58:58,080 --> 00:59:02,000
Speaker 1: different home because it ain't gonna be a e um.

992
00:59:02,040 --> 00:59:06,240
Speaker 1: But still, there have been a lot of leaders groomed

993
00:59:06,520 --> 00:59:08,560
Speaker 1: under Jack Welsh tell us a little bit about that.

994
00:59:09,680 --> 00:59:11,720
Speaker 1: I mean, I think that there's an analogy to be

995
00:59:11,800 --> 00:59:16,520
Speaker 1: made with you know, Jamie Diamond and JP Morgan Chase. Right,

996
00:59:16,680 --> 00:59:21,760
Speaker 1: Jamie has been there since whatever two thou five, uh,

997
00:59:21,840 --> 00:59:25,880
Speaker 1: and so that's you know, eighteen years. Jack was there

998
00:59:25,880 --> 00:59:28,160
Speaker 1: for twenty years and he just got the stints, so

999
00:59:28,240 --> 00:59:32,800
Speaker 1: he's good for another ten years. Jamie ain't going anywhere, uh,

1000
00:59:32,840 --> 00:59:34,960
Speaker 1: as far as anybody can tell. And but you can

1001
00:59:34,960 --> 00:59:38,520
Speaker 1: see even with Jamie, a lot of top executives have

1002
00:59:38,680 --> 00:59:43,080
Speaker 1: left and they've become CEOs of other financial institutions. And

1003
00:59:43,520 --> 00:59:48,400
Speaker 1: you know, the Jamie Diamond coaching tree is large and influential.

1004
00:59:48,720 --> 00:59:51,920
Speaker 1: You know, the Coach k uh coaching tree is large

1005
00:59:51,920 --> 00:59:56,919
Speaker 1: and influential. Jack Welch's coaching tree was large and influential. Uh.

1006
00:59:56,960 --> 00:59:59,560
Speaker 1: And you know, Jack, and I'm sure Jamie is the

1007
00:59:59,600 --> 01:00:05,200
Speaker 1: same way had no hesitation in telling potential CEO candidates

1008
01:00:05,200 --> 01:00:07,720
Speaker 1: that they weren't going to make it and and firing them.

1009
01:00:07,760 --> 01:00:10,960
Speaker 1: Might tell the great story of Dave Cody, who was

1010
01:00:11,920 --> 01:00:15,320
Speaker 1: also ran the major appliance business for a period of time.

1011
01:00:16,000 --> 01:00:18,600
Speaker 1: Jack called him in and of course Dave Cody went

1012
01:00:18,640 --> 01:00:21,600
Speaker 1: on to be the CEO of Honeywell, and Honeywell was

1013
01:00:21,680 --> 01:00:25,240
Speaker 1: incredibly successful. You know, of course Jack could have bought Honeywell.

1014
01:00:25,320 --> 01:00:28,600
Speaker 1: That's another story. But Dave Cody went on to become

1015
01:00:28,840 --> 01:00:32,320
Speaker 1: CEO of honey Well, and honey Well's market value exceeded

1016
01:00:32,400 --> 01:00:35,960
Speaker 1: gees uh for for a long period of time. So uh,

1017
01:00:36,040 --> 01:00:38,040
Speaker 1: And Jack admitted to me that he made a mistake

1018
01:00:38,160 --> 01:00:41,640
Speaker 1: by getting rid of Dave Cody. But uh, and Dave

1019
01:00:41,720 --> 01:00:44,280
Speaker 1: Cody is a great guy, by the way, and uh,

1020
01:00:44,720 --> 01:00:47,600
Speaker 1: but Jack, you know, he was running major appliance business,

1021
01:00:47,640 --> 01:00:50,760
Speaker 1: which was their most difficult business, was like thirteen out

1022
01:00:50,800 --> 01:00:54,080
Speaker 1: of thirteen in the GE portfolio. And Jack called him

1023
01:00:54,160 --> 01:00:56,880
Speaker 1: up one day and basically had dinner with him and said,

1024
01:00:57,400 --> 01:01:01,040
Speaker 1: that's it, Dave, you're out. And Dave tried to you know,

1025
01:01:01,160 --> 01:01:03,840
Speaker 1: he'd been at G's whole career too, and you know,

1026
01:01:03,920 --> 01:01:07,680
Speaker 1: tried to discuss it with Jack and try to you know,

1027
01:01:07,840 --> 01:01:10,280
Speaker 1: buy himself more time, and tried to have Jack explained

1028
01:01:10,280 --> 01:01:12,400
Speaker 1: to him why he was being like, oh, Jack, you know,

1029
01:01:12,520 --> 01:01:15,920
Speaker 1: basically just wanted nothing to do with that conversation, just

1030
01:01:16,080 --> 01:01:18,680
Speaker 1: kept repeating over and over and over again. You know,

1031
01:01:19,280 --> 01:01:22,320
Speaker 1: it's over, Dave, just take your stuff and go. I

1032
01:01:22,400 --> 01:01:24,280
Speaker 1: want you out by the you know, you know, the

1033
01:01:24,400 --> 01:01:26,480
Speaker 1: end of the year, whatever it was, and just go.

1034
01:01:27,640 --> 01:01:30,120
Speaker 1: And so Jack, you know, once it was like a

1035
01:01:30,200 --> 01:01:32,520
Speaker 1: light switch. Once he had made a decision and that

1036
01:01:32,640 --> 01:01:35,920
Speaker 1: was it. You're out. So uh, either he had that

1037
01:01:36,040 --> 01:01:39,360
Speaker 1: discussion over and over again with people or they realized

1038
01:01:39,360 --> 01:01:40,720
Speaker 1: they weren't going to make it on their own. And

1039
01:01:40,840 --> 01:01:45,440
Speaker 1: so you know, they were constantly being headhunted because you know,

1040
01:01:45,760 --> 01:01:49,880
Speaker 1: of G of course had Crotonville, which was the Management

1041
01:01:49,920 --> 01:01:53,400
Speaker 1: Development Training Center, which was you know, world famous. You know,

1042
01:01:53,520 --> 01:01:57,920
Speaker 1: they had you know, executives were schooled in six signal

1043
01:01:58,000 --> 01:02:00,760
Speaker 1: whether it was worthwhile or not, I mean, you know,

1044
01:02:01,040 --> 01:02:03,680
Speaker 1: and they were rotated around in all sorts of positions.

1045
01:02:04,040 --> 01:02:06,840
Speaker 1: So they you know, had a very declared eclectic and

1046
01:02:06,920 --> 01:02:11,080
Speaker 1: diverse both manufacturing and finance background, most of them, and

1047
01:02:11,200 --> 01:02:14,400
Speaker 1: so they were very desirable as CEOs of other companies.

1048
01:02:14,480 --> 01:02:17,000
Speaker 1: So head hunters would of course go there and pick

1049
01:02:17,080 --> 01:02:19,240
Speaker 1: him off left and right. So now that leads us

1050
01:02:19,320 --> 01:02:21,880
Speaker 1: to Jeff em Altz. And let me just preface this

1051
01:02:22,000 --> 01:02:25,360
Speaker 1: by saying I had him alt on the show during

1052
01:02:25,400 --> 01:02:27,800
Speaker 1: the pandemic while he was out in Stanford where he's

1053
01:02:27,800 --> 01:02:32,040
Speaker 1: a professor now. And I gave him a dozen opportunities

1054
01:02:32,120 --> 01:02:34,880
Speaker 1: to toss Jack under the bus. And remember Jack is

1055
01:02:35,080 --> 01:02:38,320
Speaker 1: by this time gone, so there's not gonna be any

1056
01:02:38,600 --> 01:02:42,240
Speaker 1: tit for tat, And he absolutely refused to rise to

1057
01:02:42,280 --> 01:02:46,320
Speaker 1: the bait, continuously said, hey, he left you a ticking time, um,

1058
01:02:46,600 --> 01:02:50,480
Speaker 1: paying for the Hudson clean up, cleaning up the SEC

1059
01:02:50,920 --> 01:02:55,800
Speaker 1: accounting scandals, cleaning up the ge Capital subsequent fraud, all

1060
01:02:55,880 --> 01:02:59,480
Speaker 1: this other stuff, uh, and an industrial with a pe

1061
01:03:00,480 --> 01:03:04,920
Speaker 1: ratio of He refused to do that. You know. So

1062
01:03:05,200 --> 01:03:09,480
Speaker 1: I spent a lot of time with Jeff immult to

1063
01:03:10,120 --> 01:03:14,120
Speaker 1: uh many many hours, um, just like I did with Jack.

1064
01:03:15,400 --> 01:03:22,360
Speaker 1: Of course, I've read Jeff's book, uh hot seat many times. Uh,

1065
01:03:22,560 --> 01:03:29,320
Speaker 1: you're right, Uh, I know Jeff privately was quite miffed

1066
01:03:29,800 --> 01:03:33,880
Speaker 1: at Jack. Don't forget. In whatever was April of two

1067
01:03:34,000 --> 01:03:39,680
Speaker 1: thousand and eight, after Jeff announced that the first quarter

1068
01:03:39,760 --> 01:03:41,160
Speaker 1: of two thousand and eight was going to be a

1069
01:03:41,280 --> 01:03:44,400
Speaker 1: major miss. You know, he had promised he was gonna

1070
01:03:44,440 --> 01:03:46,440
Speaker 1: make X amount of money and then it was a

1071
01:03:46,520 --> 01:03:49,439
Speaker 1: major miss. He didn't do any of things because don't forget,

1072
01:03:49,480 --> 01:03:51,600
Speaker 1: bear Stearns went down the tubes, and you know, the

1073
01:03:51,760 --> 01:03:55,600
Speaker 1: levels that he might have usually pulled weren't available, Like

1074
01:03:55,840 --> 01:03:59,400
Speaker 1: selling G capital assets was not an option. Right. The

1075
01:03:59,560 --> 01:04:03,960
Speaker 1: financial chull crisis kind of revealed the black box of

1076
01:04:04,120 --> 01:04:08,400
Speaker 1: G capital and suddenly the scales fell from the analyst

1077
01:04:08,440 --> 01:04:12,400
Speaker 1: size totally. The financial crisis of two thousand eight, where

1078
01:04:12,440 --> 01:04:16,440
Speaker 1: everybody was focused on Wall Street banks and even the

1079
01:04:16,520 --> 01:04:19,960
Speaker 1: car companies, the dirty little secret of the two financial

1080
01:04:20,000 --> 01:04:23,840
Speaker 1: crisis was G and capital for sure. So Jack goes

1081
01:04:23,960 --> 01:04:28,640
Speaker 1: on CNBC in April of two eight to criticize Jeff

1082
01:04:29,680 --> 01:04:32,000
Speaker 1: and GE for missing the first quarter of two thous

1083
01:04:32,320 --> 01:04:35,200
Speaker 1: earnings and he says, on national television, you know, if

1084
01:04:35,240 --> 01:04:38,760
Speaker 1: Jeff Emma misses earnings again, I'm going to take a

1085
01:04:38,800 --> 01:04:42,040
Speaker 1: gun out and shoot him on national television, which, you know,

1086
01:04:42,320 --> 01:04:45,360
Speaker 1: can you imagine the hoots of this guy who himself

1087
01:04:46,120 --> 01:04:52,320
Speaker 1: has been engaging in the sort of behavior manipulating GE capital,

1088
01:04:52,480 --> 01:04:56,000
Speaker 1: manipulating some big word. But okay, alright, but the SEC

1089
01:04:56,640 --> 01:05:01,280
Speaker 1: used the phrase accounting fraud, earnings manipulation action and find

1090
01:05:01,360 --> 01:05:04,760
Speaker 1: ge was it two d thirty million or three thirty

1091
01:05:04,800 --> 01:05:10,840
Speaker 1: million for their earnings falsity? Under the one and only

1092
01:05:10,960 --> 01:05:17,920
Speaker 1: Jack Welch Well, I don't know if there's a question there. Again,

1093
01:05:18,000 --> 01:05:21,640
Speaker 1: I go back to what I said before. And maybe

1094
01:05:21,720 --> 01:05:27,520
Speaker 1: it's because Jack repeatedly made this argument to me. Maybe

1095
01:05:27,560 --> 01:05:30,280
Speaker 1: it's because I worked at G Capital. Maybe it's because

1096
01:05:30,760 --> 01:05:34,560
Speaker 1: I understood and understand how the two pieces of g

1097
01:05:34,760 --> 01:05:38,640
Speaker 1: E fit together. It's a fabulous combination. When it's working,

1098
01:05:38,720 --> 01:05:40,919
Speaker 1: there's no doubt about it. So if you have those

1099
01:05:41,040 --> 01:05:45,120
Speaker 1: assets and you've promised research anial, you've promised the street

1100
01:05:45,120 --> 01:05:48,160
Speaker 1: you're gonna do X dollars per share, and then you

1101
01:05:48,280 --> 01:05:52,720
Speaker 1: don't do it, then obviously people are gonna fall out

1102
01:05:52,760 --> 01:05:54,480
Speaker 1: of love with you. And if you do do it,

1103
01:05:54,600 --> 01:05:57,360
Speaker 1: they're gonna love you. And if you do it because

1104
01:05:57,480 --> 01:06:00,840
Speaker 1: you're you know, selling a building that you own, or

1105
01:06:01,800 --> 01:06:05,000
Speaker 1: or selling warrants that you own, or or monetizing the

1106
01:06:05,040 --> 01:06:07,960
Speaker 1: equity in a business that you own in the market

1107
01:06:08,080 --> 01:06:10,360
Speaker 1: to make up any shortfall going on in the industrial

1108
01:06:10,440 --> 01:06:13,840
Speaker 1: side of the business, that's not manipulation, that's not fraud.

1109
01:06:14,240 --> 01:06:18,040
Speaker 1: That's just telling people doing what you told people you're

1110
01:06:18,040 --> 01:06:21,600
Speaker 1: gonna do. Why don't Why is that a problem? The

1111
01:06:21,720 --> 01:06:26,320
Speaker 1: problem that if it was just selling the building, that's

1112
01:06:26,400 --> 01:06:30,040
Speaker 1: one thing, But there was a lot of paper transactions. Look,

1113
01:06:30,080 --> 01:06:32,600
Speaker 1: when I'm an investor in ge I expect them to

1114
01:06:32,840 --> 01:06:37,080
Speaker 1: sell a certain amount of widgets, whether that's industrial or

1115
01:06:37,200 --> 01:06:41,840
Speaker 1: financial widgets, and generate a profit. And if they're playing

1116
01:06:41,920 --> 01:06:44,160
Speaker 1: with the levers and this is what this is what

1117
01:06:44,400 --> 01:06:51,720
Speaker 1: what did happen was what I call ocation, constant obsucation.

1118
01:06:51,800 --> 01:06:55,919
Speaker 1: They would make big acquisitions and then of course everyone

1119
01:06:55,960 --> 01:06:59,040
Speaker 1: would say, oh, well, now everything has to be integrated.

1120
01:06:59,360 --> 01:07:05,000
Speaker 1: You know, the special charges, you know, discontinued operations. You know,

1121
01:07:05,040 --> 01:07:06,520
Speaker 1: we're gonna have to wait for this to get all

1122
01:07:06,560 --> 01:07:09,280
Speaker 1: smoothed out. And that would go on year after year

1123
01:07:09,360 --> 01:07:13,120
Speaker 1: after year, constant inability to compare apples and apples and

1124
01:07:13,320 --> 01:07:18,280
Speaker 1: apples and oranges. And then after Sarbanes Oxley passed, you know,

1125
01:07:18,520 --> 01:07:22,240
Speaker 1: the g E annual report became like a textbook, so

1126
01:07:22,400 --> 01:07:24,800
Speaker 1: you couldn't parse it even if you knew what you

1127
01:07:24,880 --> 01:07:29,960
Speaker 1: were parsing. And the accounting mumbo jumbo that was contained

1128
01:07:29,960 --> 01:07:31,600
Speaker 1: in there, Yeah, there was an awful lot of that

1129
01:07:31,680 --> 01:07:34,600
Speaker 1: you could never figure out with you are you still cannot?

1130
01:07:34,800 --> 01:07:39,280
Speaker 1: If I may figure out GEES earnings, it's always well,

1131
01:07:39,840 --> 01:07:42,160
Speaker 1: you know, we can't compare this quarter to that quarter

1132
01:07:42,240 --> 01:07:45,400
Speaker 1: because in this quarter there was this distinctntinued operation or

1133
01:07:45,520 --> 01:07:48,080
Speaker 1: that special charge and oh, by the way, the pandemic

1134
01:07:48,480 --> 01:07:51,200
Speaker 1: and blah blah blah blah blah. I mean, so to me,

1135
01:07:51,320 --> 01:07:53,920
Speaker 1: when I walk into a room full of manure, I

1136
01:07:54,000 --> 01:07:56,760
Speaker 1: don't say where's the pony? I say, hey, there's a

1137
01:07:56,840 --> 01:07:59,320
Speaker 1: lot of bs in here. You're looking for the pony.

1138
01:08:00,080 --> 01:08:04,280
Speaker 1: You're more generous than I am to fair Well. I

1139
01:08:04,360 --> 01:08:08,520
Speaker 1: mean I am more generous perhaps to Jack and what

1140
01:08:08,680 --> 01:08:11,640
Speaker 1: he was doing than you are. Yes, you know, maybe

1141
01:08:11,800 --> 01:08:15,479
Speaker 1: because I have yet to meet a person who spent

1142
01:08:15,760 --> 01:08:20,040
Speaker 1: any time with him, people who who we fired. If

1143
01:08:20,280 --> 01:08:22,559
Speaker 1: you if Dave Cody was sitting here today, they would

1144
01:08:22,560 --> 01:08:24,760
Speaker 1: say how much he loved him. Right, It's amazing you

1145
01:08:24,800 --> 01:08:29,000
Speaker 1: could fire people and they still said. This guy, David Zaslov,

1146
01:08:29,080 --> 01:08:32,040
Speaker 1: the head of you know, Warner Brothers Discovery, loves the guy.

1147
01:08:32,080 --> 01:08:34,479
Speaker 1: I mean, you know, people who left Ge and worked

1148
01:08:34,520 --> 01:08:38,280
Speaker 1: for him loved the guy. I mean. And so manipulation

1149
01:08:38,520 --> 01:08:41,719
Speaker 1: and fraud those are big, big, big words. Okay. Another

1150
01:08:41,960 --> 01:08:45,000
Speaker 1: more charitable way to look at it is, you know,

1151
01:08:45,040 --> 01:08:47,680
Speaker 1: and don't forget he managed the earning. He managed the

1152
01:08:47,720 --> 01:08:54,280
Speaker 1: earnings beautifully. Okay. Remember our friend Harvey Marcopolis, Harry Marcopol

1153
01:08:54,400 --> 01:08:57,639
Speaker 1: from from the Bernie Maynoff scheme. Remember a few years

1154
01:08:57,680 --> 01:09:01,920
Speaker 1: ago he also took his vast accounting skills and and

1155
01:09:02,320 --> 01:09:05,479
Speaker 1: forensic skills and applied them to ge working for a

1156
01:09:05,560 --> 01:09:10,440
Speaker 1: short seller, and he produced a document that was supposedly,

1157
01:09:10,600 --> 01:09:15,080
Speaker 1: you know, definitive, and that became pretty much totally debunked.

1158
01:09:15,240 --> 01:09:19,559
Speaker 1: Could one person ever in a given lifetime figure out

1159
01:09:20,600 --> 01:09:24,519
Speaker 1: the full earnings report? But to me that lack of

1160
01:09:24,640 --> 01:09:28,000
Speaker 1: transparency is kind of telling. Of course it was telling.

1161
01:09:28,200 --> 01:09:30,960
Speaker 1: But we're talking about a major Can you figure out

1162
01:09:31,720 --> 01:09:34,439
Speaker 1: in fairness, can you figure out Amazon? Can you figure

1163
01:09:34,479 --> 01:09:38,280
Speaker 1: out Google? I mean you're yes, this is going you

1164
01:09:38,360 --> 01:09:41,920
Speaker 1: know what you're advertising? Can you figure out Meta? Can

1165
01:09:41,960 --> 01:09:45,400
Speaker 1: you figure out I mean yes, I can figure out Apple.

1166
01:09:45,439 --> 01:09:49,080
Speaker 1: I can figure out Meta because they have certain revenues

1167
01:09:49,439 --> 01:09:53,240
Speaker 1: and they have certain costs and they line up fairly certainly.

1168
01:09:53,439 --> 01:09:57,639
Speaker 1: I'll tell you of all the companies you can figure out,

1169
01:09:57,920 --> 01:10:00,519
Speaker 1: can you figure out JP Morgan? Chase? You you took

1170
01:10:00,520 --> 01:10:02,559
Speaker 1: the words out of my math. That's although of all

1171
01:10:02,640 --> 01:10:06,120
Speaker 1: the banks, that's the easiest one to figure out. Can

1172
01:10:06,160 --> 01:10:09,719
Speaker 1: you imagine a business that was like half JP Morgan

1173
01:10:09,880 --> 01:10:13,920
Speaker 1: Chase and half and half honeywell and try to figure

1174
01:10:13,960 --> 01:10:16,680
Speaker 1: it out. I mean, so you could have made that

1175
01:10:16,880 --> 01:10:20,680
Speaker 1: more transparent if you wanted to. It's a choice to

1176
01:10:20,800 --> 01:10:24,120
Speaker 1: say we're gonna move the meter, which, by the way,

1177
01:10:24,800 --> 01:10:28,519
Speaker 1: leads me to a funny little story with Jack back

1178
01:10:28,720 --> 01:10:34,240
Speaker 1: during the financial crisis, post financial crisis, when Obama was president,

1179
01:10:34,640 --> 01:10:39,080
Speaker 1: after Bush had left and McCain had lost. I want

1180
01:10:39,120 --> 01:10:43,360
Speaker 1: to say, it was like or where the economy is

1181
01:10:43,439 --> 01:10:47,920
Speaker 1: coming off the lows and you're finally, after three years,

1182
01:10:48,040 --> 01:10:51,840
Speaker 1: seeing the employment data improve, which is what you would

1183
01:10:51,880 --> 01:10:55,920
Speaker 1: expect with zero percent interest rates and a fifty seven

1184
01:10:56,000 --> 01:11:01,240
Speaker 1: percent market reset. Welsh had a line I'm paraphrasing, but

1185
01:11:01,479 --> 01:11:05,240
Speaker 1: the BLS report comes out one Friday, and Welsh tweets

1186
01:11:05,760 --> 01:11:09,080
Speaker 1: leave it to those Chicago boys to cook the books,

1187
01:11:09,160 --> 01:11:14,320
Speaker 1: meaning Obama and BLS. And I responded immediately, if anybody

1188
01:11:14,400 --> 01:11:17,960
Speaker 1: knows about cooking the books, it's Jack Welsh. And one

1189
01:11:18,000 --> 01:11:21,639
Speaker 1: of my greatest memories is Jack Welsh, you know, cursing

1190
01:11:21,680 --> 01:11:24,200
Speaker 1: me out on Twitter, and I was thrilled to death

1191
01:11:24,240 --> 01:11:26,640
Speaker 1: about that. I'm not sure there's a question there, but

1192
01:11:26,720 --> 01:11:29,759
Speaker 1: I can tell you that Jack did not like Obama

1193
01:11:30,160 --> 01:11:35,519
Speaker 1: clearly he was veriolently anti Obama. I remember going to

1194
01:11:36,560 --> 01:11:42,000
Speaker 1: a talk that Jack gave with Bob Wright in Nantucket

1195
01:11:42,040 --> 01:11:43,720
Speaker 1: at the Nantucket High School, and I was in the

1196
01:11:43,760 --> 01:11:45,880
Speaker 1: audience and they were up on stage talking and I

1197
01:11:46,000 --> 01:11:50,760
Speaker 1: think David Gregory if I'm not Bob Bob. Bob Wright

1198
01:11:51,000 --> 01:11:54,000
Speaker 1: also lived in Nantucket and ran NBC and then NBC

1199
01:11:54,200 --> 01:11:57,000
Speaker 1: Universal for a long time was a vice chairman of Jack.

1200
01:11:57,080 --> 01:11:59,559
Speaker 1: Brought him in Jack and a rock star. Well Jack,

1201
01:11:59,760 --> 01:12:02,640
Speaker 1: he was the lawyer that worked for Jacket Plastics. I mean,

1202
01:12:03,120 --> 01:12:06,439
Speaker 1: Jack had the vision to make Bob right, you know,

1203
01:12:06,640 --> 01:12:10,439
Speaker 1: into a media and he did fabulous job, even though

1204
01:12:10,640 --> 01:12:12,960
Speaker 1: most people doubted that he could ever do it. And

1205
01:12:13,880 --> 01:12:16,479
Speaker 1: up on stage and this was I think during the

1206
01:12:16,560 --> 01:12:20,679
Speaker 1: Obama years. Uh it was, and Jack just lit into

1207
01:12:20,760 --> 01:12:25,960
Speaker 1: it was offensive almost how how veriantly anti Obama he was. So,

1208
01:12:26,400 --> 01:12:30,960
Speaker 1: you know, Jack was to the right of Attila the Hunt,

1209
01:12:31,000 --> 01:12:32,800
Speaker 1: I think, you know kind of thing. But he did

1210
01:12:32,840 --> 01:12:35,600
Speaker 1: not like Donald Trump. I got to talk about some

1211
01:12:35,720 --> 01:12:39,200
Speaker 1: of your other columns and books. You're writing for Puck.

1212
01:12:39,240 --> 01:12:42,280
Speaker 1: You're writing for Vanity Fair, not writing for Vanity Fair anymore.

1213
01:12:42,400 --> 01:12:45,680
Speaker 1: So now it's all Puck. It's all Puck and other things. Previously,

1214
01:12:45,800 --> 01:12:48,120
Speaker 1: you wrote for The Times, you wrote for a Bloomberg,

1215
01:12:48,160 --> 01:12:51,200
Speaker 1: You've written for all over the place. I want to

1216
01:12:51,280 --> 01:12:55,479
Speaker 1: do one Vanity Fair story, And I mean I wrote

1217
01:12:55,520 --> 01:12:59,160
Speaker 1: for Vanity Fair for thirteen years Undergraden and then by

1218
01:12:59,200 --> 01:13:03,479
Speaker 1: the way, Great was the publisher. You'll remember this in

1219
01:13:03,560 --> 01:13:06,519
Speaker 1: the eighties of spy magazines he was, which was the

1220
01:13:06,800 --> 01:13:12,000
Speaker 1: greatest publication of Old Times. He famously called Donald Trump

1221
01:13:12,479 --> 01:13:15,680
Speaker 1: a short fingered vulgarian. And we'll come back to some

1222
01:13:15,880 --> 01:13:18,560
Speaker 1: of your quotes on Trump, which I found to be

1223
01:13:18,720 --> 01:13:22,000
Speaker 1: quite fascinating, some of the stories. But let's stick with

1224
01:13:22,120 --> 01:13:25,599
Speaker 1: the pandemic. You're writing about the meme stocks, and uh,

1225
01:13:27,080 --> 01:13:32,879
Speaker 1: this is effing unbelievable. Bankrupt hurts is a pandemic, zombie

1226
01:13:33,040 --> 01:13:36,120
Speaker 1: meme stock. Tell us a little bit about what was

1227
01:13:36,200 --> 01:13:40,479
Speaker 1: going on when you were writing that piece. Well, you know,

1228
01:13:40,560 --> 01:13:43,240
Speaker 1: when I was at Lizard, I did a lot of

1229
01:13:43,880 --> 01:13:48,600
Speaker 1: restructuring advisory work, both out of bankruptcy and in bankruptcy.

1230
01:13:48,760 --> 01:13:53,880
Speaker 1: So I mean the law, well, I know the rules anyway,

1231
01:13:53,920 --> 01:13:58,120
Speaker 1: I know the rules, and I know the financial side

1232
01:13:58,200 --> 01:14:03,040
Speaker 1: of bankruptcy. So do recommend people by companies that are

1233
01:14:03,120 --> 01:14:10,439
Speaker 1: publicly traded and have declared bankruptcy. Absolutely not, because in

1234
01:14:10,920 --> 01:14:14,200
Speaker 1: nine hundred and nine times out of a thousand, the

1235
01:14:14,280 --> 01:14:17,560
Speaker 1: equity gets wiped out. For instance, when Revalon filed for

1236
01:14:17,680 --> 01:14:22,479
Speaker 1: bankruptcy last year and next thing you know, it became

1237
01:14:22,600 --> 01:14:27,200
Speaker 1: a meme stock and the equity like went up six times.

1238
01:14:28,200 --> 01:14:31,920
Speaker 1: I had I wrote and said, this basically is insane.

1239
01:14:32,800 --> 01:14:36,040
Speaker 1: This is insane. The equity is going to get wiped out.

1240
01:14:36,120 --> 01:14:39,120
Speaker 1: Here you are, you are making a major mistake. And

1241
01:14:39,200 --> 01:14:42,080
Speaker 1: of course the equity got wiped out in their structuring.

1242
01:14:42,280 --> 01:14:49,240
Speaker 1: Now once every thousand times something weird happens, and that's

1243
01:14:49,280 --> 01:14:52,000
Speaker 1: what happened with Hurts. It's a stub. You don't ever

1244
01:14:52,080 --> 01:14:54,360
Speaker 1: see a hundred cents on the dollar. You'll see some

1245
01:14:54,560 --> 01:14:58,880
Speaker 1: fraction of it unless someone comes in to make the

1246
01:14:59,240 --> 01:15:02,920
Speaker 1: creditors who well, look, you know, usually in a bankruptcy,

1247
01:15:03,280 --> 01:15:05,400
Speaker 1: you know, a company files for bankruptcy because they can't

1248
01:15:05,400 --> 01:15:07,840
Speaker 1: pay their creditors, They can't pay their bills as they

1249
01:15:07,920 --> 01:15:10,960
Speaker 1: become do right. That's what happened with ft X. That's

1250
01:15:11,000 --> 01:15:16,240
Speaker 1: what happens. People. Companies go into bankruptcy because they literally

1251
01:15:16,360 --> 01:15:20,440
Speaker 1: cannot pay their obligations as they become do so to clarify,

1252
01:15:21,120 --> 01:15:24,240
Speaker 1: It's not a buying opportunity on the equity side, is it. No,

1253
01:15:24,479 --> 01:15:26,720
Speaker 1: it might be a buying opportunity on the debt side. Sure,

1254
01:15:26,760 --> 01:15:28,519
Speaker 1: you pick them up for pennies on the dollar, and

1255
01:15:28,600 --> 01:15:31,439
Speaker 1: then you convert that debt to equity and baba being

1256
01:15:31,520 --> 01:15:34,400
Speaker 1: there are people who loan to own on the other

1257
01:15:34,479 --> 01:15:39,320
Speaker 1: side of the bankruptcy proceeding rights, and then you convert

1258
01:15:39,439 --> 01:15:43,240
Speaker 1: that debt to equity in the new in the reorganized company,

1259
01:15:43,280 --> 01:15:45,880
Speaker 1: and then you know, maybe that will become worthwhile. Maybe

1260
01:15:46,000 --> 01:15:48,800
Speaker 1: it will, maybe it won't. With Hurts, what happened is

1261
01:15:49,040 --> 01:15:51,479
Speaker 1: that the people there was like a bidding war for

1262
01:15:51,600 --> 01:15:54,760
Speaker 1: Hurts in bankruptcy. And you know, once you make the

1263
01:15:54,800 --> 01:15:58,680
Speaker 1: creditors hold, then you know you can control you know,

1264
01:15:58,880 --> 01:16:01,760
Speaker 1: the equity, you can control the action. And so you know,

1265
01:16:02,120 --> 01:16:04,320
Speaker 1: this is apparently something that these hedge funds did and

1266
01:16:04,880 --> 01:16:06,960
Speaker 1: and made a killing from the equity side, or the

1267
01:16:07,000 --> 01:16:09,720
Speaker 1: death from buying the equity. I mean, and you know,

1268
01:16:09,760 --> 01:16:13,400
Speaker 1: I'm not sure. Well, I mean it was pandemic related

1269
01:16:13,479 --> 01:16:17,320
Speaker 1: because you know, everybody was, you know, not going anywhere,

1270
01:16:17,439 --> 01:16:21,600
Speaker 1: and and the and the demand for rental cars evaporated,

1271
01:16:21,720 --> 01:16:25,960
Speaker 1: and I guess they figured correctly that it would rebound,

1272
01:16:26,040 --> 01:16:28,200
Speaker 1: and they were right. So let's talk a little bit

1273
01:16:28,200 --> 01:16:31,240
Speaker 1: about a more recent piece you wrote in Puck about

1274
01:16:31,960 --> 01:16:36,679
Speaker 1: Bob Iger's Nelson Peltz saga. Let's talk about what's happening

1275
01:16:36,720 --> 01:16:41,160
Speaker 1: over there. Well, of course, you know I've known, uh,

1276
01:16:41,680 --> 01:16:45,879
Speaker 1: you know, having done all this restructuring work at Lizard

1277
01:16:45,960 --> 01:16:49,760
Speaker 1: and working with private equity firms at at Maryland, JP, Morgan, Chase,

1278
01:16:50,760 --> 01:16:53,800
Speaker 1: Uh and Uh. You know, I was extremely familiar with

1279
01:16:55,520 --> 01:17:00,400
Speaker 1: uh Nelson Pelts and try On Uh. And of course

1280
01:17:01,040 --> 01:17:03,000
Speaker 1: they had taken a two and a half billion dollar

1281
01:17:03,160 --> 01:17:08,080
Speaker 1: position in GE and Jeff Immolt had been friends with

1282
01:17:08,680 --> 01:17:12,479
Speaker 1: Ed Garden's brother. Edgarden is Nelson Peltz's son in law.

1283
01:17:12,720 --> 01:17:18,360
Speaker 1: So after Jeff Emil decided to sell G Capital in

1284
01:17:18,439 --> 01:17:23,080
Speaker 1: two thousand fifteen Project Hubble, he also decided it would

1285
01:17:23,120 --> 01:17:26,720
Speaker 1: be you know, a great idea to invite try and

1286
01:17:26,920 --> 01:17:32,040
Speaker 1: partners into the GE Capital shareholder base. It's sort of

1287
01:17:32,080 --> 01:17:37,519
Speaker 1: a way to ratify Jeff's strategic initiatives, you know, to

1288
01:17:38,240 --> 01:17:41,760
Speaker 1: refocus the company on its industrial origins, to get out

1289
01:17:41,800 --> 01:17:44,280
Speaker 1: of G Capital. He had by that time gotten out

1290
01:17:44,320 --> 01:17:50,120
Speaker 1: of NBC Universal, He had doubled down by buying uh Alstom,

1291
01:17:50,240 --> 01:17:54,000
Speaker 1: the big you know, power generation business in France, and

1292
01:17:55,479 --> 01:17:58,720
Speaker 1: was remaking the company. And he thought, well, he had

1293
01:17:58,760 --> 01:18:02,599
Speaker 1: been told that activists investors were going to come into

1294
01:18:02,720 --> 01:18:05,760
Speaker 1: the company one way or another. So Jeff decided he

1295
01:18:05,760 --> 01:18:08,880
Speaker 1: would invite someone in who we thought would be friendly

1296
01:18:09,040 --> 01:18:11,879
Speaker 1: to him because he knew Ed Garden's brother from Dartmouth,

1297
01:18:11,920 --> 01:18:13,880
Speaker 1: and he had known the Gardens. He used to go

1298
01:18:14,000 --> 01:18:17,760
Speaker 1: to their house on holidays and steading going back to Cincinnati.

1299
01:18:17,840 --> 01:18:22,960
Speaker 1: They lived in Melrose, Mass And Uh, Jeff would go

1300
01:18:23,040 --> 01:18:25,840
Speaker 1: down there for Easter and other holidays, Thanksgiving and things

1301
01:18:25,880 --> 01:18:28,920
Speaker 1: like that. And so he thought bringing, you know, Nelson,

1302
01:18:29,000 --> 01:18:31,040
Speaker 1: and he would talk to Nelson and get advice and

1303
01:18:31,080 --> 01:18:33,200
Speaker 1: invite him up to Crotonville and things like that. And

1304
01:18:33,280 --> 01:18:35,960
Speaker 1: he thought that he was going to get a sympathetic

1305
01:18:36,360 --> 01:18:40,920
Speaker 1: partner by having try and partners in by two and

1306
01:18:40,920 --> 01:18:44,280
Speaker 1: a half billion dollars worth of stock. Huh, that's not

1307
01:18:44,400 --> 01:18:46,400
Speaker 1: how it works out. It's fine if you you know,

1308
01:18:46,520 --> 01:18:48,640
Speaker 1: make your numbers and the stock price goes up and

1309
01:18:48,720 --> 01:18:51,680
Speaker 1: you do everything he wants you to do. But you know,

1310
01:18:51,840 --> 01:18:55,880
Speaker 1: Jeff got overtaken by events. It didn't work out, and uh,

1311
01:18:56,040 --> 01:18:59,920
Speaker 1: you know, the smiling crocodile and Nelson Pelt's Bard's Tea

1312
01:19:00,320 --> 01:19:04,000
Speaker 1: and basically was responsible for Jeff Mo being fired. So

1313
01:19:04,760 --> 01:19:09,839
Speaker 1: and basically being responsible for firing John Flannery after fifteen

1314
01:19:09,920 --> 01:19:12,439
Speaker 1: months and bringing in Larry Culp who is still there

1315
01:19:13,080 --> 01:19:16,920
Speaker 1: and sort of Larry Culp sort of executing the try

1316
01:19:17,000 --> 01:19:21,640
Speaker 1: and playbook. Uh. And so then when I see uh

1317
01:19:22,040 --> 01:19:24,920
Speaker 1: try and you know, making a nine D thirty million

1318
01:19:25,000 --> 01:19:28,439
Speaker 1: dollar investment in Iger and Iger kind of and asking

1319
01:19:28,560 --> 01:19:31,200
Speaker 1: for a board seat, and I kind of showing him

1320
01:19:31,320 --> 01:19:34,759
Speaker 1: his hand. Uh, well that I couldn't I couldn't resist

1321
01:19:34,880 --> 01:19:37,720
Speaker 1: writing that. That is a big mistake. We've seen this

1322
01:19:37,840 --> 01:19:41,800
Speaker 1: movie movie repeatedly, not just at G but in other

1323
01:19:41,880 --> 01:19:45,120
Speaker 1: places to you know, P and G and du pont.

1324
01:19:45,320 --> 01:19:48,960
Speaker 1: I mean, you know, come on here, Bob, the Leander

1325
01:19:49,040 --> 01:19:52,599
Speaker 1: leopard doesn't change its spots. And uh, you know, why

1326
01:19:52,680 --> 01:19:56,400
Speaker 1: does scorpions Stingbob? Because that's what they do, right. So,

1327
01:19:56,840 --> 01:19:58,559
Speaker 1: but Bob Iger is going to learn the hard way.

1328
01:19:58,560 --> 01:20:01,840
Speaker 1: I think the scorpion in the as a perfect metaphor. Um,

1329
01:20:02,360 --> 01:20:06,000
Speaker 1: let's talk about some of your other books. This is

1330
01:20:06,040 --> 01:20:09,799
Speaker 1: an embarrassment of riches. I don't know where to go first, Goldman, Bear, Lizard,

1331
01:20:09,880 --> 01:20:11,639
Speaker 1: we only have you for a limited amount of time?

1332
01:20:11,800 --> 01:20:13,600
Speaker 1: Which was the most fun to write? Which one do

1333
01:20:13,640 --> 01:20:16,439
Speaker 1: you like talking about the most? Lazard seems to be

1334
01:20:16,560 --> 01:20:20,840
Speaker 1: the most fascinating and least well known of the three.

1335
01:20:22,439 --> 01:20:25,800
Speaker 1: I had a great time writing about Lazard because that was,

1336
01:20:25,880 --> 01:20:27,599
Speaker 1: first of all, was my first book. And of course

1337
01:20:27,640 --> 01:20:30,200
Speaker 1: it was challenged who who was I to think I

1338
01:20:30,280 --> 01:20:32,080
Speaker 1: could even write a book. I mean, I hadn't written

1339
01:20:32,120 --> 01:20:36,920
Speaker 1: anything in twenty years. But I decided, well, you know,

1340
01:20:37,000 --> 01:20:38,280
Speaker 1: this is what I was going to do. And I

1341
01:20:38,360 --> 01:20:40,759
Speaker 1: knew it was a great story. I knew the characters

1342
01:20:40,800 --> 01:20:42,439
Speaker 1: were great, and I knew that because I had worked

1343
01:20:42,479 --> 01:20:44,800
Speaker 1: there even though it was you know, ten years before,

1344
01:20:45,640 --> 01:20:48,679
Speaker 1: so uh, and I didn't take a single note or anything.

1345
01:20:48,720 --> 01:20:51,519
Speaker 1: I had no plans ever to write a book, so

1346
01:20:51,840 --> 01:20:54,360
Speaker 1: you know, to me, it was every you know, every

1347
01:20:54,360 --> 01:20:56,760
Speaker 1: page was kind of a revelation, you know, going back

1348
01:20:56,840 --> 01:20:59,720
Speaker 1: and trying to figure out the history and then unearthing

1349
01:21:00,080 --> 01:21:02,680
Speaker 1: various scandals which I had heard about but no one

1350
01:21:02,720 --> 01:21:05,680
Speaker 1: ever talked about, and so it was just I was

1351
01:21:05,800 --> 01:21:08,840
Speaker 1: just a lot of fun, money and power. How Goldman

1352
01:21:08,880 --> 01:21:11,679
Speaker 1: Sacks came to rule the world do we still think

1353
01:21:11,760 --> 01:21:15,480
Speaker 1: today Goldman Sachs ruled the world? Have they been bypassed

1354
01:21:15,520 --> 01:21:18,599
Speaker 1: a little bit by other companies or are they still

1355
01:21:19,360 --> 01:21:22,680
Speaker 1: you know, the company that fills all the seats in

1356
01:21:22,760 --> 01:21:26,360
Speaker 1: the federal government, Department of State, Department of Treasury. I

1357
01:21:26,400 --> 01:21:30,200
Speaker 1: mean there used to be former Goldman execs wherever you

1358
01:21:30,280 --> 01:21:33,200
Speaker 1: looked in d C. Yeah, it's two different questions. I

1359
01:21:33,280 --> 01:21:36,960
Speaker 1: think there are still Goldman execs who managed to make

1360
01:21:37,040 --> 01:21:40,240
Speaker 1: the leap into government all around the world, you know,

1361
01:21:41,000 --> 01:21:46,440
Speaker 1: better than any other bank. Uh. And their influence continues

1362
01:21:47,000 --> 01:21:50,879
Speaker 1: to be, you know, unparalleled in the halls of government.

1363
01:21:51,240 --> 01:21:53,680
Speaker 1: You know, obviously depends on the administration, like in the

1364
01:21:53,960 --> 01:21:57,280
Speaker 1: Trump administration, they were kind of everywhere, you know, in

1365
01:21:57,640 --> 01:22:02,880
Speaker 1: the Biden administration less. Oh, but there are still examples. Uh.

1366
01:22:04,160 --> 01:22:08,000
Speaker 1: Then there's a question about Goldman as a as a bank,

1367
01:22:08,520 --> 01:22:12,519
Speaker 1: h and as a financial institution. Uh, you know still

1368
01:22:12,920 --> 01:22:20,040
Speaker 1: you know, uh, highly respected. Uh still probably the number

1369
01:22:20,120 --> 01:22:23,960
Speaker 1: one place that you know, college graduates want to work

1370
01:22:24,080 --> 01:22:28,360
Speaker 1: and nbas want to work. Probably number one still in prestige.

1371
01:22:29,000 --> 01:22:33,000
Speaker 1: Certainly you know, number one in many investment bank care categories,

1372
01:22:33,040 --> 01:22:37,320
Speaker 1: including M and A, and has been forever basically, but

1373
01:22:37,960 --> 01:22:42,479
Speaker 1: it's no longer. Uh, you know, it's trading below book value.

1374
01:22:42,920 --> 01:22:45,120
Speaker 1: It went public at like four times book value. It's

1375
01:22:45,160 --> 01:22:50,160
Speaker 1: trading below book value or at book value. Uh. Morgan Stanley,

1376
01:22:50,200 --> 01:22:53,400
Speaker 1: it's a longtime rival. Trades at one point seven times

1377
01:22:53,439 --> 01:22:58,320
Speaker 1: book value. You know. James Gorman, the CEO of Morgan Stanley,

1378
01:22:58,479 --> 01:23:02,920
Speaker 1: diversified Morgan Stanley into wealth management and asset management. Bob Smith, Barney,

1379
01:23:03,240 --> 01:23:06,439
Speaker 1: you know, Goldman has sort of been stuck. It's the

1380
01:23:06,479 --> 01:23:08,400
Speaker 1: truth is, it's not very good at doing M and

1381
01:23:08,479 --> 01:23:10,760
Speaker 1: A deals for its own account. The ones that it's

1382
01:23:10,800 --> 01:23:13,200
Speaker 1: done have not worked out particularly well, except for perhaps

1383
01:23:13,320 --> 01:23:16,679
Speaker 1: Jay Aaron, which got them a lot of management talent,

1384
01:23:17,200 --> 01:23:20,559
Speaker 1: but basically hasn't haven't worked out. Whereas you know, Morgan

1385
01:23:20,600 --> 01:23:23,000
Speaker 1: Stanley has been much more successful at doing deals and

1386
01:23:23,080 --> 01:23:26,640
Speaker 1: diversifying its business away from the volatile investment, banking and

1387
01:23:26,680 --> 01:23:30,839
Speaker 1: trading businesses two more steady fee income and it's gotten rewarded.

1388
01:23:30,880 --> 01:23:33,320
Speaker 1: Now trades at one point seven times book It's market

1389
01:23:33,400 --> 01:23:37,000
Speaker 1: capped is like forty to fifty billion dollars higher than

1390
01:23:37,200 --> 01:23:41,200
Speaker 1: than Goldman's now. Uh. And uh, you know, so Goldman's

1391
01:23:41,560 --> 01:23:45,360
Speaker 1: valuation is around you know, hundred ten hundred twenty billion

1392
01:23:45,479 --> 01:23:49,000
Speaker 1: and Morgan Stanley is around one seventy. You now, meanwhile, J. B.

1393
01:23:49,120 --> 01:23:52,000
Speaker 1: Morrigan is was what four fifty I don't know what

1394
01:23:52,120 --> 01:23:55,040
Speaker 1: it is today, but you know, so JP Morgan Chase,

1395
01:23:55,200 --> 01:23:57,680
Speaker 1: you know, Jamie Diamond of course is you know, the

1396
01:23:57,720 --> 01:24:01,400
Speaker 1: biggest bank, the most powerful financial institution, and that used

1397
01:24:01,439 --> 01:24:04,840
Speaker 1: to be Goldman's role. But you know, Goldman has not

1398
01:24:06,479 --> 01:24:10,879
Speaker 1: diversified well or easily. And you know, obviously now everybody's

1399
01:24:10,920 --> 01:24:14,160
Speaker 1: wondering about David Solomon in his tenure and how long

1400
01:24:14,240 --> 01:24:16,960
Speaker 1: he can last. You know, his effort at diversification into

1401
01:24:17,160 --> 01:24:22,000
Speaker 1: consumer banking was very expensive and so far on rewarding

1402
01:24:22,520 --> 01:24:26,240
Speaker 1: trying to get into commercial banking and banking generally. Basically,

1403
01:24:26,320 --> 01:24:29,840
Speaker 1: Goldman needs to do what the FED won't let it do,

1404
01:24:30,040 --> 01:24:32,600
Speaker 1: which was you know, by a balance sheet merge with

1405
01:24:32,720 --> 01:24:35,800
Speaker 1: a big bank, you know, like you know banking New York,

1406
01:24:35,840 --> 01:24:39,479
Speaker 1: Melon or something which doesn't have h investment banking so

1407
01:24:39,600 --> 01:24:42,040
Speaker 1: that you don't be on then overlap there. But it's

1408
01:24:42,439 --> 01:24:44,760
Speaker 1: has a very big asset management business in a very

1409
01:24:44,960 --> 01:24:48,240
Speaker 1: big sort of back office custody will be I mean,

1410
01:24:48,240 --> 01:24:51,960
Speaker 1: it would be a great merger with Goldman, which ironically,

1411
01:24:52,080 --> 01:24:54,200
Speaker 1: is the thing that John Corson was trying to do

1412
01:24:55,160 --> 01:24:58,560
Speaker 1: in the late nineties do that merger. And he was

1413
01:24:58,560 --> 01:25:01,679
Speaker 1: trying to do it without the approval, as I write

1414
01:25:01,680 --> 01:25:05,240
Speaker 1: in the book of his partners on the management committee,

1415
01:25:05,240 --> 01:25:07,880
Speaker 1: like Hank Paulson, and that got cor designed zoughts and

1416
01:25:07,960 --> 01:25:10,519
Speaker 1: they and they probably missed their window. Let me ask

1417
01:25:10,560 --> 01:25:13,519
Speaker 1: you one last question before I get to my favorite questions,

1418
01:25:13,560 --> 01:25:18,880
Speaker 1: which is, you've had some really interesting columns about Donald Trump,

1419
01:25:19,479 --> 01:25:24,320
Speaker 1: who spoke with you on frequent occasion and liked a

1420
01:25:24,400 --> 01:25:27,600
Speaker 1: lot of the stuff you were writing, even though a

1421
01:25:27,720 --> 01:25:30,519
Speaker 1: lot of it was fairly critical. Tell us a little

1422
01:25:30,520 --> 01:25:32,800
Speaker 1: bit about what it's like to get that phone call

1423
01:25:33,479 --> 01:25:37,120
Speaker 1: from Trump inviting you on Air Force one. No, no, no,

1424
01:25:37,439 --> 01:25:40,679
Speaker 1: I never got invited. Weren't you supposed to take a flight.

1425
01:25:40,800 --> 01:25:42,719
Speaker 1: Maybe it was before he was elected, you were supposed

1426
01:25:42,720 --> 01:25:45,840
Speaker 1: to take a flight with him? And then yes, well, well,

1427
01:25:46,560 --> 01:25:51,040
Speaker 1: so I had written a piece in the Atlantic about

1428
01:25:51,080 --> 01:25:54,600
Speaker 1: why nobody does business, why nobody on Wall Street this

1429
01:25:54,680 --> 01:25:57,800
Speaker 1: is except for Deutsche Bank, right, But this is why

1430
01:25:57,920 --> 01:26:00,840
Speaker 1: you like mainstream Wall Street doesn't do busines with Donald Trump.

1431
01:26:00,880 --> 01:26:03,479
Speaker 1: And this was in like two thousand thirteen, beginning of

1432
01:26:03,560 --> 01:26:06,360
Speaker 1: two thousand fourteen. Uh, and I talked to the Donald

1433
01:26:06,439 --> 01:26:08,400
Speaker 1: for that. You know, he was not he was a

1434
01:26:08,479 --> 01:26:12,040
Speaker 1: pretend candidate at that Uh. So, you know, I spoke

1435
01:26:12,120 --> 01:26:15,599
Speaker 1: to him several occasions. And then he didn't like that article.

1436
01:26:15,760 --> 01:26:18,439
Speaker 1: It was critical of him. And then I wrote an

1437
01:26:18,560 --> 01:26:23,520
Speaker 1: article in Vanity Fair about Trump University and Eric Schneiderman,

1438
01:26:23,560 --> 01:26:26,759
Speaker 1: then the New York State Attorney General, going after Trump University,

1439
01:26:27,000 --> 01:26:29,680
Speaker 1: and I spoke to him again as well as Schneiderman,

1440
01:26:29,760 --> 01:26:31,920
Speaker 1: and they basically went at each other in this vanity

1441
01:26:32,040 --> 01:26:35,519
Speaker 1: Vanity Fair article and that was fun. That was great. Uh.

1442
01:26:35,840 --> 01:26:38,479
Speaker 1: And then Graydon and so then he announces he's you know,

1443
01:26:38,560 --> 01:26:40,439
Speaker 1: he comes down the escalator in June of two thousand

1444
01:26:40,439 --> 01:26:42,439
Speaker 1: and fifteen and he announced he's going to be a candidate,

1445
01:26:42,720 --> 01:26:46,160
Speaker 1: and he's like campaigning. And so Graydon said, well, you're

1446
01:26:46,200 --> 01:26:49,080
Speaker 1: the only one that because of course, as you pointed out,

1447
01:26:49,120 --> 01:26:54,479
Speaker 1: Graydon had referred to Donald Trump as a short fingered

1448
01:26:54,560 --> 01:26:58,760
Speaker 1: bulgarian in Spy magazine. So let's just say Grayden and

1449
01:26:58,840 --> 01:27:01,920
Speaker 1: Donald Trump didn't get a very well. Among other things

1450
01:27:02,000 --> 01:27:04,880
Speaker 1: over the years that Graydon had done to Donald oppresciently,

1451
01:27:04,960 --> 01:27:08,120
Speaker 1: I might add Uh. And so Graydon said, well, you're

1452
01:27:08,120 --> 01:27:09,720
Speaker 1: the only one that gets along with him, can you,

1453
01:27:09,880 --> 01:27:12,120
Speaker 1: you know, see if he'll let you follow him around

1454
01:27:12,160 --> 01:27:14,479
Speaker 1: on the campaign trail. So at that time, as you'll remember,

1455
01:27:14,520 --> 01:27:17,880
Speaker 1: what Donald like to do is he would take Trump

1456
01:27:18,000 --> 01:27:22,360
Speaker 1: Air out for the day and he'd fly to you know, Iowa,

1457
01:27:22,560 --> 01:27:25,280
Speaker 1: or he'd fly to Minnesota, or he'd fly to Chicago

1458
01:27:25,360 --> 01:27:28,200
Speaker 1: and they'd fly home to you know, sleep at Trump Tower.

1459
01:27:28,800 --> 01:27:33,439
Speaker 1: So I I asked him if I could go on

1460
01:27:33,640 --> 01:27:36,760
Speaker 1: a day on, you know, go with him. Uh. And

1461
01:27:37,120 --> 01:27:40,160
Speaker 1: Hope Hicks, who is his communications person at that time,

1462
01:27:40,760 --> 01:27:43,280
Speaker 1: you know, uh, you know I was in touch with Hope,

1463
01:27:43,439 --> 01:27:47,200
Speaker 1: I mean, and Hope basically said, yeah, you know, we

1464
01:27:47,240 --> 01:27:49,200
Speaker 1: can get you, we can get you on. I think

1465
01:27:49,240 --> 01:27:53,160
Speaker 1: this is gonna work out, you know, Uh, let me

1466
01:27:53,280 --> 01:27:55,519
Speaker 1: work on it for you. But I think he's he's

1467
01:27:55,680 --> 01:27:59,600
Speaker 1: basically favoritely disposed to this. And I'm getting ready to go,

1468
01:28:00,160 --> 01:28:03,599
Speaker 1: and then I get an email saying, you know, no, no, Bill, Uh,

1469
01:28:03,840 --> 01:28:07,000
Speaker 1: he's changed his mind. Uh, he's not gonna let you

1470
01:28:07,080 --> 01:28:10,200
Speaker 1: go with him. But he did want me to ask

1471
01:28:10,320 --> 01:28:15,560
Speaker 1: you this question. What happened to you? Bill? What? What

1472
01:28:15,720 --> 01:28:20,280
Speaker 1: what happened to you? Why the implication being, you know,

1473
01:28:20,400 --> 01:28:22,920
Speaker 1: I thought you were a fan of Donald Trump's. Now

1474
01:28:23,000 --> 01:28:25,120
Speaker 1: you seem to be so against him. We can't have

1475
01:28:25,280 --> 01:28:29,240
Speaker 1: somebody who's this against Donald Trump, you know, uh being

1476
01:28:29,479 --> 01:28:31,920
Speaker 1: going with him and reporting on it. You really weren't

1477
01:28:32,080 --> 01:28:36,000
Speaker 1: editorializing against him. And you had said, Okay, the guy

1478
01:28:36,120 --> 01:28:40,320
Speaker 1: cheats at golf, hold that aside. But you also said, hey,

1479
01:28:40,479 --> 01:28:43,200
Speaker 1: he used to be a terrible business who would put businessman,

1480
01:28:43,200 --> 01:28:46,000
Speaker 1: who would put his own money at risk. Now he

1481
01:28:46,080 --> 01:28:49,040
Speaker 1: uses other people's capital. He slaps his name on stuff.

1482
01:28:49,400 --> 01:28:53,360
Speaker 1: It's a cash cow. In fact, Barry I said that

1483
01:28:53,880 --> 01:28:57,479
Speaker 1: on Bloomberg TV air. Okay, so can I tell you

1484
01:28:57,560 --> 01:29:00,800
Speaker 1: this story? This is like so I had written this

1485
01:29:01,040 --> 01:29:03,719
Speaker 1: article in the Atlantic about why nobody on Wall Street

1486
01:29:03,760 --> 01:29:07,120
Speaker 1: does business with Donald Trump anymore except for Deutsche Bank,

1487
01:29:07,720 --> 01:29:09,559
Speaker 1: And I talked about in that article how he had

1488
01:29:09,600 --> 01:29:12,080
Speaker 1: evolved as a businessman where instead of putting his own

1489
01:29:12,120 --> 01:29:16,240
Speaker 1: money at risk and when losing it oftentimes you know,

1490
01:29:17,040 --> 01:29:21,599
Speaker 1: Trump Air and Trump Steaks whatever it was, he had

1491
01:29:21,760 --> 01:29:24,920
Speaker 1: decided to license his name and just take fees. And

1492
01:29:25,400 --> 01:29:28,439
Speaker 1: you know that, you know, much better business model, much

1493
01:29:28,479 --> 01:29:32,040
Speaker 1: better business model. He was capitalizing on his uh name

1494
01:29:32,120 --> 01:29:36,160
Speaker 1: recognition and his you know, so called the business expertise.

1495
01:29:37,000 --> 01:29:40,880
Speaker 1: So this is after the Apprentice, after the election. He

1496
01:29:41,000 --> 01:29:43,160
Speaker 1: had a brand. He had he had a brand, I mean,

1497
01:29:43,240 --> 01:29:45,320
Speaker 1: and of course, as we all know, he capitalized it

1498
01:29:45,439 --> 01:29:48,200
Speaker 1: on two thousand sixteen. So so I come on TV

1499
01:29:48,520 --> 01:29:51,680
Speaker 1: here and uh, the anchors who I don't remember who

1500
01:29:51,760 --> 01:29:55,280
Speaker 1: they were, but they were asking me, you know, to uh.

1501
01:29:55,360 --> 01:29:57,080
Speaker 1: They were saying, but you know, Donald's not a very

1502
01:29:57,120 --> 01:30:01,040
Speaker 1: good businessman, is he, you know, know you're writing your article.

1503
01:30:01,080 --> 01:30:04,519
Speaker 1: I said, well, actually he was. You know, he evolved.

1504
01:30:04,560 --> 01:30:07,240
Speaker 1: He wasn't a great businessman, but and he's probably not

1505
01:30:07,360 --> 01:30:09,360
Speaker 1: worth as much as he claims to be, but he

1506
01:30:09,520 --> 01:30:11,640
Speaker 1: is evolved, and I have to give him credit for

1507
01:30:11,760 --> 01:30:16,080
Speaker 1: evolving his business model and becoming smarter about that. He

1508
01:30:16,240 --> 01:30:19,360
Speaker 1: had invested forty million dollars in the Chicago Tower, which

1509
01:30:19,640 --> 01:30:22,519
Speaker 1: he lost, but you know, basically that was chump change

1510
01:30:22,520 --> 01:30:24,240
Speaker 1: as far as Donald was concerned. He was using other

1511
01:30:24,280 --> 01:30:27,479
Speaker 1: people's money. He was taking fees for licensing his name used,

1512
01:30:27,560 --> 01:30:29,680
Speaker 1: and I thought that was pretty smart, even though Wall

1513
01:30:29,720 --> 01:30:31,680
Speaker 1: Street won't do business with him. And I understood why

1514
01:30:31,800 --> 01:30:34,600
Speaker 1: because he, you know, was famous for not paying his

1515
01:30:34,720 --> 01:30:40,320
Speaker 1: bills and stiffing creditors. So but he had evolved. So then,

1516
01:30:40,960 --> 01:30:43,720
Speaker 1: so that was the Atlantic article. Then I called him

1517
01:30:43,800 --> 01:30:45,599
Speaker 1: up and I say, I want to do this article

1518
01:30:45,600 --> 01:30:48,479
Speaker 1: about Trump University. And I didn't know whether, you know,

1519
01:30:48,600 --> 01:30:50,240
Speaker 1: he was gonna I knew he didn't like the Atlantic

1520
01:30:50,360 --> 01:30:51,920
Speaker 1: article because he had written me they didn't like it,

1521
01:30:52,720 --> 01:30:54,040
Speaker 1: but I didn't know whether he was going to talk

1522
01:30:54,120 --> 01:30:56,680
Speaker 1: to me. But I figured, okay, he called me up

1523
01:30:56,680 --> 01:30:59,320
Speaker 1: and he says, William. He called me William mean, you

1524
01:30:59,400 --> 01:31:01,639
Speaker 1: know they I won't do his voice, but I could,

1525
01:31:01,720 --> 01:31:08,040
Speaker 1: but I won't come, he said. He said, you know, Bill, uh,

1526
01:31:08,600 --> 01:31:13,360
Speaker 1: you know, I thought that that Atlanta article you rode

1527
01:31:13,439 --> 01:31:17,080
Speaker 1: was a bunch of crap and um. But then I

1528
01:31:17,200 --> 01:31:21,280
Speaker 1: saw you on Bloomberg talking about it, and the anchors

1529
01:31:21,320 --> 01:31:23,640
Speaker 1: wanted you to say bad things about me, and you

1530
01:31:23,640 --> 01:31:27,400
Speaker 1: wouldn't do it. And I really appreciated that. And so

1531
01:31:27,640 --> 01:31:29,680
Speaker 1: as a results, he told me he would talk to

1532
01:31:29,800 --> 01:31:33,120
Speaker 1: me for the Trump University article. And then he told

1533
01:31:33,160 --> 01:31:37,040
Speaker 1: me my favorite line of all, which is he said,

1534
01:31:37,080 --> 01:31:42,280
Speaker 1: to me, like me, Bill, William, Like me, William. You're

1535
01:31:42,360 --> 01:31:45,200
Speaker 1: a good looking guy and you have a great head

1536
01:31:45,240 --> 01:31:50,120
Speaker 1: of hair. And I thought the like me part was

1537
01:31:50,240 --> 01:31:54,720
Speaker 1: my favorite thing ever because we all know that hair

1538
01:31:55,000 --> 01:31:57,479
Speaker 1: whatever that is on top of his head is not hair.

1539
01:31:57,800 --> 01:31:59,720
Speaker 1: That what I don't know what it is. I don't

1540
01:31:59,720 --> 01:32:01,920
Speaker 1: know what it is, but it's you have a full

1541
01:32:02,160 --> 01:32:08,160
Speaker 1: You and I both middle aged guys, genetics something that

1542
01:32:08,520 --> 01:32:12,599
Speaker 1: whatever whatever that orangutan is on top of his head, uh,

1543
01:32:12,800 --> 01:32:15,280
Speaker 1: that is not And the pictures of him, you know,

1544
01:32:15,600 --> 01:32:17,760
Speaker 1: making it up in the wind and then making it

1545
01:32:17,840 --> 01:32:20,200
Speaker 1: up in the morning are like my favorite thing ever.

1546
01:32:20,560 --> 01:32:23,120
Speaker 1: So in the last few minutes we have let's jump

1547
01:32:23,280 --> 01:32:26,880
Speaker 1: to our favorite questions and we'll we'll make this a

1548
01:32:26,960 --> 01:32:29,960
Speaker 1: speed round. What are you streaming these days? Tell us

1549
01:32:30,000 --> 01:32:33,800
Speaker 1: your favorite Netflix? Amazon Pride. Yeah, I mean I've I've

1550
01:32:33,840 --> 01:32:37,160
Speaker 1: been doing Bad Sisters. I have to say, I really okay,

1551
01:32:37,840 --> 01:32:40,719
Speaker 1: they really are bad sisters. What they're great now watching

1552
01:32:40,840 --> 01:32:45,640
Speaker 1: Dairy Girls, which is you know, crazy fun. But you

1553
01:32:45,720 --> 01:32:50,040
Speaker 1: know it's been like call my agent and and uh

1554
01:32:50,240 --> 01:32:55,719
Speaker 1: the Americans and yeah, a big Francophile. So my wife

1555
01:32:55,760 --> 01:32:59,680
Speaker 1: and I went to Paris for like two weeks for anniversary.

1556
01:33:00,320 --> 01:33:05,679
Speaker 1: So we loved Call my agent and we watch Emily

1557
01:33:05,760 --> 01:33:12,000
Speaker 1: in Paris just because the scenery is just the it's spectacular,

1558
01:33:12,240 --> 01:33:14,880
Speaker 1: and you know, it's a goofy sec. I have not

1559
01:33:15,000 --> 01:33:17,360
Speaker 1: watched that, but but if you just mute it and

1560
01:33:17,520 --> 01:33:20,639
Speaker 1: just let it roll, it's fantastic. Um, tell us about

1561
01:33:20,680 --> 01:33:24,599
Speaker 1: your early mentors who helped shape your career. Uh well,

1562
01:33:24,680 --> 01:33:26,960
Speaker 1: I mean, I think, and I've talked about this in

1563
01:33:27,080 --> 01:33:29,719
Speaker 1: my books. Someone. I mean, you know, I had two careers.

1564
01:33:29,760 --> 01:33:33,000
Speaker 1: I had invested banking career, h such as it was,

1565
01:33:33,439 --> 01:33:37,840
Speaker 1: uh and uh journalistic career, and uh you know which

1566
01:33:37,960 --> 01:33:41,800
Speaker 1: probably been better. Uh So I think you know, one

1567
01:33:41,880 --> 01:33:45,519
Speaker 1: of my important mentors was a guy named mel Mencher,

1568
01:33:45,600 --> 01:33:48,679
Speaker 1: who was a professor at Columbia Journalim School who basically

1569
01:33:49,400 --> 01:33:51,800
Speaker 1: told me something I've never forgotten. And you know, he

1570
01:33:51,920 --> 01:33:55,000
Speaker 1: was a very tough professor and most people could only

1571
01:33:55,040 --> 01:33:57,400
Speaker 1: take his course for one semester because it couldn't stand it.

1572
01:33:57,520 --> 01:34:00,840
Speaker 1: He was very rough and gruff and abusive. But I

1573
01:34:00,920 --> 01:34:03,240
Speaker 1: of course love that, and uh took him for the

1574
01:34:03,280 --> 01:34:05,519
Speaker 1: whole year. It was a one year program. And he

1575
01:34:05,560 --> 01:34:08,720
Speaker 1: always used to say, you can't write writing, you can

1576
01:34:08,800 --> 01:34:12,240
Speaker 1: only write reporting. And I never quite understood what that

1577
01:34:12,360 --> 01:34:14,760
Speaker 1: meant for a while, but but I figured it out now.

1578
01:34:14,920 --> 01:34:17,240
Speaker 1: And basically, if you don't do the reporting, you can't

1579
01:34:17,280 --> 01:34:19,920
Speaker 1: write anything. So you have to do the reporting. You

1580
01:34:20,000 --> 01:34:22,959
Speaker 1: can't just you can't. You've got to do the reporting.

1581
01:34:23,360 --> 01:34:26,240
Speaker 1: And so that's why these books are so full, chopped,

1582
01:34:26,280 --> 01:34:28,719
Speaker 1: full of reporting, because if you don't do the reporting,

1583
01:34:28,760 --> 01:34:31,320
Speaker 1: you can't do the writing. Every page is rich with

1584
01:34:31,560 --> 01:34:34,880
Speaker 1: research and details, and you know, it doesn't make for

1585
01:34:34,960 --> 01:34:38,240
Speaker 1: a fast read, but it makes for a very satisfying read.

1586
01:34:38,439 --> 01:34:40,439
Speaker 1: I don't know if if anybody has ever told you that,

1587
01:34:41,080 --> 01:34:45,080
Speaker 1: but I found myself going back and saying, let me

1588
01:34:45,200 --> 01:34:48,240
Speaker 1: just make sure I understand this chronology, because it's so

1589
01:34:48,439 --> 01:34:52,200
Speaker 1: detailed and so rich. So you put that advice to work, right,

1590
01:34:52,479 --> 01:34:55,000
Speaker 1: Thank you well, and and and and Melmenter was the

1591
01:34:55,080 --> 01:34:59,040
Speaker 1: proponent of that. And then you know, in banking, you know,

1592
01:34:59,200 --> 01:35:02,200
Speaker 1: I think about guy was still my friend. David Supino

1593
01:35:02,400 --> 01:35:05,920
Speaker 1: at Lizard was a Lizard partner. He's also a renaissance man.

1594
01:35:06,080 --> 01:35:09,760
Speaker 1: He loved art and collected art. Is you know, I

1595
01:35:09,880 --> 01:35:12,960
Speaker 1: love art and he's a real collector. And he's also

1596
01:35:13,520 --> 01:35:16,640
Speaker 1: a writer. Uh David, Uh. You know, he was a

1597
01:35:16,720 --> 01:35:18,719
Speaker 1: lawyer at Sherman Sterling and then he went to Lizard

1598
01:35:18,720 --> 01:35:21,920
Speaker 1: as a partner. He was head of the restructuring, bankruptcy effort.

1599
01:35:21,960 --> 01:35:24,800
Speaker 1: I mean he was a true renaissance man and he's

1600
01:35:24,840 --> 01:35:29,400
Speaker 1: written you know, bibliographies of of great writers and uh

1601
01:35:29,960 --> 01:35:35,640
Speaker 1: he's incredibly uh incredibly important to me, uh in my

1602
01:35:35,840 --> 01:35:40,679
Speaker 1: banking and writing a career, and um so I think

1603
01:35:40,760 --> 01:35:45,320
Speaker 1: of all Uh, you know, I didn't have many mentors

1604
01:35:45,400 --> 01:35:49,080
Speaker 1: at Javid Morgan Chase. I had sort of uh colleagues

1605
01:35:49,120 --> 01:35:53,240
Speaker 1: who were very competitive. It was more of a I mean,

1606
01:35:53,320 --> 01:35:57,040
Speaker 1: Lizard always seemed like a viper pit. But uh, and

1607
01:35:57,360 --> 01:35:58,960
Speaker 1: of course it was if you were a partner, but

1608
01:35:59,080 --> 01:36:02,160
Speaker 1: I wasn't. I I left before became a partner. But

1609
01:36:02,520 --> 01:36:06,320
Speaker 1: Jabe Morgan Chase it was a true viper pit, at

1610
01:36:06,400 --> 01:36:12,000
Speaker 1: least before Jamie Diamond got there. And uh and you know,

1611
01:36:12,120 --> 01:36:14,920
Speaker 1: people were at each other all the time. Speaking of art,

1612
01:36:15,280 --> 01:36:20,840
Speaker 1: doesn't Wizard have quite a storied art collection? Not inside

1613
01:36:20,920 --> 01:36:24,160
Speaker 1: the firm? The partners had an incredible art collection. And

1614
01:36:24,320 --> 01:36:27,320
Speaker 1: one of my favorite parts of the Lizard Book was

1615
01:36:27,400 --> 01:36:30,639
Speaker 1: when I went and spent time with Michelle David Bay,

1616
01:36:31,800 --> 01:36:35,200
Speaker 1: of course, the the descendant of the David Bay family

1617
01:36:35,240 --> 01:36:38,840
Speaker 1: who owned the firm before Bruce Watterston came along, as

1618
01:36:38,880 --> 01:36:43,200
Speaker 1: I said, stolen and took it public. Uh, Michelle and

1619
01:36:43,320 --> 01:36:45,880
Speaker 1: I would meet his apartment on Fifth Avenue and it

1620
01:36:45,960 --> 01:36:48,600
Speaker 1: was just filled with art. And then I met with

1621
01:36:48,720 --> 01:36:54,599
Speaker 1: him once at his incredible uh uh full block uh

1622
01:36:54,880 --> 01:36:58,840
Speaker 1: town house on in Paris, which is filled with this

1623
01:36:58,960 --> 01:37:02,200
Speaker 1: incredible art collection and and and he walked me through

1624
01:37:02,520 --> 01:37:06,400
Speaker 1: his collection. Uh. He basically didn't explicacion de text of

1625
01:37:06,560 --> 01:37:10,240
Speaker 1: his collection and how it had been stolen by the

1626
01:37:10,360 --> 01:37:13,080
Speaker 1: Nazis during World War two, and you know, he had

1627
01:37:13,120 --> 01:37:15,240
Speaker 1: to fight to get it back, and he basically got

1628
01:37:15,280 --> 01:37:17,960
Speaker 1: back his father's and his grandfather's a large part of

1629
01:37:18,040 --> 01:37:20,880
Speaker 1: that collection, and you know, it was just surrounding him

1630
01:37:20,960 --> 01:37:23,680
Speaker 1: and his party. It was an incredible collection. But I

1631
01:37:23,720 --> 01:37:26,760
Speaker 1: mean Andre Meyer collected art, and Felix wrote and collected art,

1632
01:37:26,960 --> 01:37:31,080
Speaker 1: but Andre but it was Michelle was annually named one

1633
01:37:31,120 --> 01:37:34,360
Speaker 1: of the best two collectors in the world. That's amazing.

1634
01:37:34,439 --> 01:37:37,760
Speaker 1: I actually just watched A Woman in Gold when we

1635
01:37:37,840 --> 01:37:41,439
Speaker 1: were traveling about that whole story and the recovery of

1636
01:37:41,760 --> 01:37:44,759
Speaker 1: Nazi I was it was really quite fascinating. With Gustaf

1637
01:37:44,880 --> 01:37:48,320
Speaker 1: Clempton and all that. Speaking of books, tell us about

1638
01:37:48,360 --> 01:37:50,720
Speaker 1: some of your favorite books. What are you reading right now.

1639
01:37:51,520 --> 01:37:57,560
Speaker 1: I'm finishing up The Divider by Peter Peter Baker and

1640
01:37:57,600 --> 01:38:00,280
Speaker 1: Susan Glasser, who are my friends. I mean, it's it's suh,

1641
01:38:00,439 --> 01:38:02,880
Speaker 1: it's a great book. Uh. I hate to read it

1642
01:38:03,000 --> 01:38:07,840
Speaker 1: because it's reliving of course Donald Trump era, which you know,

1643
01:38:07,880 --> 01:38:10,080
Speaker 1: I hope we all don't have to relive again, but

1644
01:38:10,200 --> 01:38:12,360
Speaker 1: I fear that we you know, there's probably better than

1645
01:38:13,439 --> 01:38:18,080
Speaker 1: that we might. Uh. And uh, you know I've I've read, Uh,

1646
01:38:19,280 --> 01:38:22,160
Speaker 1: I've been blurbing books. So there's some new books coming

1647
01:38:23,120 --> 01:38:26,439
Speaker 1: out which you'll probably want to have people on your

1648
01:38:26,439 --> 01:38:31,760
Speaker 1: show about. Uh, you know, a book about Mark Spitznagel

1649
01:38:31,840 --> 01:38:34,760
Speaker 1: and it seemed to lab. Uh that's coming out by

1650
01:38:34,800 --> 01:38:41,400
Speaker 1: a Well Street Journal reporter who's Scott Patterson. That's a

1651
01:38:41,560 --> 01:38:45,240
Speaker 1: very uh interesting book that I just blurbed, which is

1652
01:38:45,320 --> 01:38:48,280
Speaker 1: coming out soon. You should have Scott on he wrote

1653
01:38:48,280 --> 01:38:55,000
Speaker 1: the Quantz and Um. So you know, Uh, it's it's

1654
01:38:55,080 --> 01:38:59,800
Speaker 1: hard when you write as much as I do to

1655
01:39:00,439 --> 01:39:03,760
Speaker 1: actually you know, be constantly reading other stuff. But I'm

1656
01:39:04,160 --> 01:39:09,200
Speaker 1: always reading, you know, articles, and so so let's get

1657
01:39:09,240 --> 01:39:11,840
Speaker 1: to our last two questions before they toss us out

1658
01:39:11,880 --> 01:39:15,280
Speaker 1: of here. Um, what sort of advice would you give

1659
01:39:15,360 --> 01:39:18,280
Speaker 1: to a recent college grad who was interested in a

1660
01:39:18,400 --> 01:39:24,760
Speaker 1: career in either investment banking or journalists. You know, Uh,

1661
01:39:25,439 --> 01:39:30,680
Speaker 1: my father, who's still I've never wanted me to go

1662
01:39:30,840 --> 01:39:37,519
Speaker 1: into journalism, Uh because he knew intuitively and correctly that

1663
01:39:37,680 --> 01:39:42,759
Speaker 1: it is extremely low paying profession. Uh compared to others.

1664
01:39:43,120 --> 01:39:45,200
Speaker 1: You didn't want to be an ink stain wretch. He

1665
01:39:45,240 --> 01:39:47,880
Speaker 1: would rather have you in investment banking. Well, I think

1666
01:39:47,920 --> 01:39:51,320
Speaker 1: he wanted me to be able to, you know, uh

1667
01:39:52,520 --> 01:39:57,040
Speaker 1: have a good life, you know, an affordable uh make

1668
01:39:57,080 --> 01:40:00,960
Speaker 1: a good enough living to afford a style that I

1669
01:40:01,120 --> 01:40:05,280
Speaker 1: probably had become accustomed to, so to speak. And uh

1670
01:40:05,479 --> 01:40:08,280
Speaker 1: know that being an ink stained wretch. You know, I

1671
01:40:08,400 --> 01:40:11,080
Speaker 1: was making thirteen thousand dollars a year working for the

1672
01:40:11,200 --> 01:40:14,160
Speaker 1: Raley Times, which was fine. I was a single guy,

1673
01:40:14,280 --> 01:40:18,880
Speaker 1: but that was clearly not going to be sustainable long term.

1674
01:40:19,560 --> 01:40:23,800
Speaker 1: So uh, you know, I don't know, it's it's very tough.

1675
01:40:24,360 --> 01:40:26,639
Speaker 1: Profession has gotten no easier. I mean, don't forget when

1676
01:40:26,680 --> 01:40:30,200
Speaker 1: I was making thirteen thousand dollars a year. Uh, the

1677
01:40:30,439 --> 01:40:35,519
Speaker 1: Ibadam Margins in the newspaper business was sixty and the

1678
01:40:35,560 --> 01:40:38,760
Speaker 1: paper I worked for, the News Observer Publishing Company, got

1679
01:40:38,840 --> 01:40:41,360
Speaker 1: sold by the Daniels family for three hundred million dollars

1680
01:40:41,920 --> 01:40:45,719
Speaker 1: to to McClatchy. Uh, you know, the Louisville Courier Journal

1681
01:40:45,840 --> 01:40:49,360
Speaker 1: got sold, uh you know, to Gannett for whatever. You know.

1682
01:40:49,479 --> 01:40:54,519
Speaker 1: That's before eBay, Craigslist, Google, before before everything. Okay, And

1683
01:40:54,600 --> 01:40:57,959
Speaker 1: so now we're you know, sort of having a media meltdown.

1684
01:40:58,120 --> 01:41:00,360
Speaker 1: And of course, you know, I'm a founding partner of

1685
01:41:00,479 --> 01:41:03,240
Speaker 1: Puck and We're trying to to make, you know, a

1686
01:41:03,320 --> 01:41:05,360
Speaker 1: go of it, and I think we're doing knockwood. Uh,

1687
01:41:05,760 --> 01:41:09,479
Speaker 1: you know quite well, but uh, you know, so I

1688
01:41:09,560 --> 01:41:13,360
Speaker 1: don't know that I could. You know, And my younger son,

1689
01:41:13,720 --> 01:41:15,640
Speaker 1: my oldest son is a lawyer here and tell my

1690
01:41:15,720 --> 01:41:18,160
Speaker 1: younger son works in l A and sort of has

1691
01:41:18,200 --> 01:41:23,960
Speaker 1: aspirations towards writing and journalism and he's doing documentary films now.

1692
01:41:24,080 --> 01:41:27,080
Speaker 1: So you know, that's tough. It's great in the abstract,

1693
01:41:27,280 --> 01:41:30,040
Speaker 1: you know, it's great for people to get into these

1694
01:41:30,120 --> 01:41:34,840
Speaker 1: line of work because you know, it's obviously endlessly fascinating

1695
01:41:34,960 --> 01:41:37,400
Speaker 1: and riveting, and you know, every day is a new

1696
01:41:37,479 --> 01:41:40,040
Speaker 1: day and you learned so much. It's great if it's

1697
01:41:40,080 --> 01:41:43,439
Speaker 1: not your child. When it's your child, and you know,

1698
01:41:43,640 --> 01:41:47,000
Speaker 1: it's can be challenging, you can understand your own father's concern.

1699
01:41:47,800 --> 01:41:50,439
Speaker 1: Now I can, and and you know he encouraged me

1700
01:41:50,520 --> 01:41:54,439
Speaker 1: to go back to get my m b A. And well,

1701
01:41:54,479 --> 01:41:56,840
Speaker 1: I didn't want to do it, just like my younger

1702
01:41:56,880 --> 01:41:58,640
Speaker 1: son didn't want to do it and he hasn't done it.

1703
01:41:58,720 --> 01:42:02,559
Speaker 1: I did do it, and it worked out great for me. Uh.

1704
01:42:02,800 --> 01:42:04,400
Speaker 1: You know. One of the fleetings I wanted to do

1705
01:42:04,640 --> 01:42:08,360
Speaker 1: was to get a job working for Business Week before

1706
01:42:08,520 --> 01:42:10,719
Speaker 1: Mike Bloomberg going to I know, I know Joe Weber,

1707
01:42:11,640 --> 01:42:14,120
Speaker 1: I know Joel, but I mean before, but when it

1708
01:42:14,160 --> 01:42:16,559
Speaker 1: was owned by McGrath hill, I wanted to work there

1709
01:42:16,560 --> 01:42:18,640
Speaker 1: and I couldn't couldn't pull it off. I wanted to

1710
01:42:18,680 --> 01:42:21,160
Speaker 1: work at the Wall Street Journal, and I couldn't pull

1711
01:42:21,200 --> 01:42:23,960
Speaker 1: it off. So that's why I. In fact, I told

1712
01:42:24,000 --> 01:42:27,320
Speaker 1: the editor at the Wall Street Journal, whose offices I

1713
01:42:27,439 --> 01:42:30,200
Speaker 1: had managed to get myself an interview at, and he

1714
01:42:30,680 --> 01:42:32,720
Speaker 1: I was in his office when he came in, and

1715
01:42:32,760 --> 01:42:34,760
Speaker 1: he couldn't figure out what I was doing there, and

1716
01:42:34,840 --> 01:42:37,479
Speaker 1: I said, I'm here for a job interview, and he said, well,

1717
01:42:37,880 --> 01:42:41,760
Speaker 1: forget that, my friend, Yes, you forget that. We have

1718
01:42:41,800 --> 01:42:45,559
Speaker 1: a hiring freeze on this either. And if we didn't

1719
01:42:45,560 --> 01:42:48,080
Speaker 1: have a hiring freeze. We're gonna hire this person from

1720
01:42:48,160 --> 01:42:50,320
Speaker 1: Fortune and that person from Forbes, so you know you

1721
01:42:50,360 --> 01:42:52,840
Speaker 1: can take your Abbott M B A and and shove

1722
01:42:52,960 --> 01:42:55,439
Speaker 1: it and and I said, well, I mean they're gonna

1723
01:42:55,479 --> 01:42:58,479
Speaker 1: go to the Wall Street Journal or Wall Street and

1724
01:42:58,600 --> 01:43:03,200
Speaker 1: he said goodbye. Wow, that's fascinating. Our final question, what

1725
01:43:03,280 --> 01:43:07,200
Speaker 1: do you know about the world of finance, investing and

1726
01:43:07,400 --> 01:43:11,000
Speaker 1: journalism today? You wish you knew forty or so years

1727
01:43:11,040 --> 01:43:14,800
Speaker 1: ago when you were first getting started. Really thirty or

1728
01:43:14,840 --> 01:43:18,560
Speaker 1: so years ago when you were first getting started. So

1729
01:43:18,680 --> 01:43:22,240
Speaker 1: I'll tell you one of another one of my favorite stories.

1730
01:43:22,800 --> 01:43:25,400
Speaker 1: Since we seem to have endless amount of time here,

1731
01:43:25,520 --> 01:43:27,519
Speaker 1: I told you I get you out by dinner. You

1732
01:43:27,600 --> 01:43:32,920
Speaker 1: did you mentioned that? Uh? And endless? So when I

1733
01:43:33,000 --> 01:43:37,920
Speaker 1: was at Lazard UH as an associate. Um, it was

1734
01:43:37,920 --> 01:43:43,240
Speaker 1: about I used to have a quotron machine. Do you

1735
01:43:43,280 --> 01:43:45,920
Speaker 1: know what a quotron machine? Of course you do. Now

1736
01:43:46,040 --> 01:43:51,120
Speaker 1: we have Bloomberg's streaming real time information. The quotron machine,

1737
01:43:51,160 --> 01:43:53,320
Speaker 1: you would put in the ticker and out would come

1738
01:43:53,400 --> 01:43:58,639
Speaker 1: the price or something resembling a price, so or less

1739
01:43:59,439 --> 01:44:04,639
Speaker 1: Lawrence who knows what? Certainly no desktop streaming of real

1740
01:44:04,760 --> 01:44:09,920
Speaker 1: time financial information which enables us to be sitting here today. Uh.

1741
01:44:10,080 --> 01:44:13,160
Speaker 1: And so I decided I wanted to buy some Berkshire Hathaway.

1742
01:44:13,320 --> 01:44:16,400
Speaker 1: I had become enamored of Warren Buffett. He had gone

1743
01:44:16,400 --> 01:44:18,679
Speaker 1: to Columbia Business School. I had gone to Columbia Business School,

1744
01:44:18,680 --> 01:44:22,240
Speaker 1: and I just thought, okay, uh he's you know, there's

1745
01:44:22,280 --> 01:44:25,960
Speaker 1: something about him that's captivating to me. Uh. So this

1746
01:44:26,200 --> 01:44:30,599
Speaker 1: was what thirty plus years ago, and the Berkshire huh

1747
01:44:30,720 --> 01:44:34,519
Speaker 1: so I Uh. I went to the quotron machine. There

1748
01:44:34,600 --> 01:44:38,320
Speaker 1: was one on the floor. One one. I went to

1749
01:44:38,640 --> 01:44:41,120
Speaker 1: the quote on machine floor. I put b r k

1750
01:44:41,520 --> 01:44:51,120
Speaker 1: into the quotron and up popped hundred person. Well, I'm thinking, okay,

1751
01:44:51,160 --> 01:44:54,200
Speaker 1: twelve d per shire. I didn't have much money. Uh.

1752
01:44:54,600 --> 01:44:56,919
Speaker 1: And you had to put the trade through the Wizard

1753
01:44:57,000 --> 01:44:59,200
Speaker 1: trading desk, even though there was like one person or

1754
01:44:59,240 --> 01:45:01,400
Speaker 1: a quarter of a per person who was the Lizard

1755
01:45:01,600 --> 01:45:05,400
Speaker 1: trading desk. Uh. And so I said, I want to

1756
01:45:05,439 --> 01:45:08,679
Speaker 1: buy ten shares. So I thought, okay, I have twelve

1757
01:45:08,760 --> 01:45:13,000
Speaker 1: thousand dollars barely, I'll buy ten shares of Berkshire Hathaway.

1758
01:45:13,160 --> 01:45:16,439
Speaker 1: There was only Berkshire Hathaway a there wasn't Berkshire Hathaway

1759
01:45:16,520 --> 01:45:19,800
Speaker 1: b uh so I They said, okay, do you want

1760
01:45:19,800 --> 01:45:21,320
Speaker 1: to do it at market? I said, sure, I'll do

1761
01:45:21,360 --> 01:45:24,080
Speaker 1: it at market. Call I'll call you back. Call me

1762
01:45:24,160 --> 01:45:26,519
Speaker 1: back a half hour and say, okay, you're done. Uh

1763
01:45:26,720 --> 01:45:30,479
Speaker 1: twelve ten shares of Berkshire at Uh. How do you

1764
01:45:30,520 --> 01:45:32,160
Speaker 1: want to pay for it? I said, I'll write you

1765
01:45:32,200 --> 01:45:34,320
Speaker 1: a check. So I'm thinking I'm gonna have to write

1766
01:45:34,320 --> 01:45:38,800
Speaker 1: a check for twelve thou dollars. He said, it's a

1767
01:45:38,880 --> 01:45:40,800
Speaker 1: hundred and twenty thousand dollars. How do you want to

1768
01:45:40,800 --> 01:45:42,719
Speaker 1: pay for it? I said, what are you talking about?

1769
01:45:42,720 --> 01:45:47,000
Speaker 1: I'm literally having a heart attack. Hundred twenty thousand dollars.

1770
01:45:47,040 --> 01:45:49,000
Speaker 1: I went to the quotron and it said twelve hundred

1771
01:45:49,560 --> 01:45:53,560
Speaker 1: times ten. That's twelve thousand. What am I missing here? No? No, no,

1772
01:45:53,640 --> 01:45:58,679
Speaker 1: no no. The quotron only went to four spaces. It's

1773
01:45:58,760 --> 01:46:02,479
Speaker 1: twelve thousand. You owe me a hundred twenty thousand dollars?

1774
01:46:02,840 --> 01:46:04,599
Speaker 1: You know what? What do you? What do you want

1775
01:46:04,640 --> 01:46:06,559
Speaker 1: to do? I don't have a hundred twenty thousand dollars.

1776
01:46:07,080 --> 01:46:10,400
Speaker 1: I thought, okay, well I there goes my career at

1777
01:46:10,439 --> 01:46:17,200
Speaker 1: laz Art. I will buy two shares, I will write

1778
01:46:17,240 --> 01:46:19,400
Speaker 1: you a check for two thousand. So I did that,

1779
01:46:19,640 --> 01:46:21,679
Speaker 1: and it's okay, we'll sell the rest. I said, sell

1780
01:46:21,720 --> 01:46:24,080
Speaker 1: the rest. They sold the rest. No one was hurt,

1781
01:46:24,200 --> 01:46:27,960
Speaker 1: no foul. I gave them food dollars. I kept my

1782
01:46:28,000 --> 01:46:31,200
Speaker 1: two shares. I still have them. And and what are

1783
01:46:31,240 --> 01:46:34,439
Speaker 1: the Asia strading at today? Well, I don't know four

1784
01:46:36,320 --> 01:46:38,240
Speaker 1: So are you happy you made a million dollars in

1785
01:46:38,280 --> 01:46:42,320
Speaker 1: the trade or are you thinking about shares? You left

1786
01:46:42,800 --> 01:46:44,600
Speaker 1: the other eight shares, so you want to know what

1787
01:46:44,720 --> 01:46:47,160
Speaker 1: my advice would have been? Right, the check for the

1788
01:46:47,200 --> 01:46:50,200
Speaker 1: whole hundred twenty thousand would have been my advice. Thank you,

1789
01:46:50,320 --> 01:46:52,680
Speaker 1: Bill for being so generous with your time. We have

1790
01:46:52,880 --> 01:46:57,400
Speaker 1: been speaking with Bill Cohen, author of many fabulous books.

1791
01:46:57,439 --> 01:47:01,160
Speaker 1: The most recent is Power Fail Year. I wish we

1792
01:47:01,240 --> 01:47:03,240
Speaker 1: had a little time to talk about your history at

1793
01:47:03,760 --> 01:47:06,320
Speaker 1: Duke and the lacrosse team in the book you did there,

1794
01:47:06,760 --> 01:47:10,479
Speaker 1: but we're completely out of time. It's been four hours

1795
01:47:10,560 --> 01:47:13,680
Speaker 1: and there's only so long they can leave us with this.

1796
01:47:14,600 --> 01:47:17,880
Speaker 1: If you enjoy this conversation, be sure and check out

1797
01:47:17,960 --> 01:47:21,439
Speaker 1: our other four hundred and eighty nine previous discussions. You

1798
01:47:21,560 --> 01:47:26,519
Speaker 1: can find those at iTunes. Spotify, YouTube, or wherever you

1799
01:47:26,600 --> 01:47:29,800
Speaker 1: get your favorite podcast from. You can sign up to

1800
01:47:29,840 --> 01:47:32,679
Speaker 1: see my daily reads at rid Halts dot com, follow

1801
01:47:32,760 --> 01:47:35,720
Speaker 1: me on Twitter at rid Halts. Be sure and check

1802
01:47:35,760 --> 01:47:41,400
Speaker 1: out the entire family of Bloomberg podcasts at podcasts on Twitter.

1803
01:47:41,960 --> 01:47:43,760
Speaker 1: I would be remiss if I did not thank the

1804
01:47:43,800 --> 01:47:47,360
Speaker 1: correct team that helps with these conversations together each week.

1805
01:47:48,200 --> 01:47:51,080
Speaker 1: Paris Wald is my producer. Sean Russo is my head

1806
01:47:51,120 --> 01:47:54,599
Speaker 1: of research. A Tika val Bron is our project manager.

1807
01:47:54,760 --> 01:47:58,960
Speaker 1: Justin Milner is my audio engineer. I'm Barry Rihlts. You've

1808
01:47:59,000 --> 01:48:02,360
Speaker 1: been listening to mass sts in business on Bloomberg Radio