What It Takes - Stephen Schwarzman

[spartan]

I watched an incredible talk last night between Andrew Ross Sorkin and Stephen Schwarzman. The topics were fairly wide ranging and related to his new book. I haven't read the book but didn't know where else to post this. Here's the link to the talk:

 

 

In case you don't have enough time to watch, here are some key takeaways:

 

1. Steve seems to deal with insecurities with "bigness". He is very proud of the size of his firm and explicitly mentions that Blackstone's size is - at times - a competitive advantage. It is an interesting lesson in business and psychology. Seems to be a defence mechanism that he has exploited.

 

2. Steve talked about a failed deal (Edgecomb) involving a commodity business. As commodity prices dipped, revenues followed suit. The company could no longer service their interest and, as a result, went bankrupt. He lost all money on this deal. He discusses the experience of getting reamed out by an investor and being on the brink of tears. This made him vow to never fail again, which then led to his firm's process of assessing investments.

 

3. His firm's process sounds incredible. It is a completely de-personalized process of logically fleshing out all aspects of an investment (risks, dynamics, etc.). He mentions that this is a fun process and one that he no longer fully partakes in.

 

4. He thinks AI will change everything (no surprise here, but refreshing to hear an older person appreciate the significance of this development). An AI expert recently visited his office and told him that he could fire 40% of all HR and Accounting department employees in all of his companies due to AI developments. And he responded with "OMG". Lol he then goes on to say that the creators of the internet regretted inventing it due to drawbacks (decreased freedom of speech, social media, etc.) and that the implementation of AI should have some ethical standards.

 

5. There are a lot of negotiating tips as well. For example, getting into a person's mind and understanding their problems is absolutely critical. "There is nothing more important to someone than their personal problems." If you can solve their problems, and speak sincerely, you have a friend for a "loooong time".

 

6. On China: He mentions that the country needs to adopt more "adult-like" policies, which involve less protectionism. He acknowledges that America did this in the past and appreciates China's ferocious growth, but insists that they need to change their policies so that they don't completely diverge from the US. This would "not be a productive outcome". Quite the euphemism...

 

7. Has a funny story about Angela Merkel... I'll leave it up to you to find it in the vid.

 

Anyway, those are some key takeaways. I'll probably buy the book. Very interesting man...boring, but interesting.

[ValueMaven]

I just finished it -- it is extremely well written - with many practical application...guy is extremely interesting!!

[elliott]

I have also read and enjoyed the book.

For anyone interested, I would tag it: autobiography, investing, Wall Street, economy, politics, the US, business...

[sleepydragon]

Reading this book now.

Just finished the first chapter.

It’s a very interesting book about his life stories.

But there is a lot of self promotion. He certainly feels very good about himself.

A World class salesman.

I don’t know if others feel the same after reading this book.

 

[elliott]

Reading this book now.

Just finished the first chapter.

It’s a very interesting book about his life stories.

But there is a lot of self promotion. He certainly feels very good about himself.

A World class salesman.

I don’t know if others feel the same after reading this book.

 

The guy has accomplished more than most of the people from his generation. But, true - even among his class there are many who dont feel so good about themselves, who give more credit for their sucess than Schwarzman does to external factors.

[Jurgis]

$4.99 sale on Amazon today: https://smile.amazon.com/dp/B07SBX56MC/ref=cm_sw_em_r_mt_dp_U_KKq-EbD1BSE2Z 

[Morgan]

Just finished the book. It was easy to read and had lots of good info. It sounds like it would be great to work at Blackstone and learn their analysis process.

 

He has been wildly successful (obviously) and it's fun to "go through" those experiences if you will.

[Xerxes]

I closed the deal of the century with an arbitrage trade.

 

Browsing through my to-get list of books, came across this one "What it takes" and saw that it was trading on Amazon.ca for $21 CAD for hardcover and brand new.

Clicked on buy. Got it last week. My arbitrage trade has now eliminated the pocket of inefficiency that existed in the market place. Now it is back at $30+ CAD level.

Interestingly, although through Amazon, it came wrapped as an Indigo pacakge.

 

In a true, Xerxian fashion, I proceeded than to use my tried and true LIFO methodology to manage my book backlog. So, I start reading it right away.

 

I recommend, also the following. I read it last year.

 

https://www.amazon.ca/King-Capital-Remarkable-Schwarzman-Blackstone/dp/0307886026/ref=msx_wsirn_v1_2/137-3773990-9794505?_encoding=UTF8&pd_rd_i=0307886026&pd_rd_r=99866a43-0f8d-4b49-a2a9-8dd5b7b9e171&pd_rd_w=Vbt1g&pd_rd_wg=e0mkW&pf_rd_p=4f813f9a-219c-4276-b961-dd64dc407a40&pf_rd_r=STFQZ0KJFZWVJEF65GQQ&psc=1&refRID=STFQZ0KJFZWVJEF65GQQ

 

If you read the two books above about Blackstone alongside this one with Sam Zell, you get a nice triangular point of view on the trade they did right before 2008 crash.

 

https://www.amazon.ca/Am-Being-Too-Subtle-Straight/dp/1591848237/ref=msx_wsirn_v1_1/137-3773990-9794505?_encoding=UTF8&pd_rd_i=1591848237&pd_rd_r=99866a43-0f8d-4b49-a2a9-8dd5b7b9e171&pd_rd_w=Vbt1g&pd_rd_wg=e0mkW&pf_rd_p=4f813f9a-219c-4276-b961-dd64dc407a40&pf_rd_r=STFQZ0KJFZWVJEF65GQQ&psc=1&refRID=STFQZ0KJFZWVJEF65GQQ

[Xerxes]

Finished the book.

Great and fast read.

 

I should say though this one (below) has more detail on transactions.

The one written by Steve is more high level and has none-BX related stuff in to. i.e. his involvement with WH etc.

 

https://www.amazon.ca/King-Capital-Remarkable-Schwarzman-Blackstone/dp/0307886026/ref=msx_wsirn_v1_2/137-3773990-9794505?_encoding=UTF8&pd_rd_i=0307886026&pd_rd_r=99866a43-0f8d-4b49-a2a9-8dd5b7b9e171&pd_rd_w=Vbt1g&pd_rd_wg=e0mkW&pf_rd_p=4f813f9a-219c-4276-b961-dd64dc407a40&pf_rd_r=STFQZ0KJFZWVJEF65GQQ&psc=1&refRID=STFQZ0KJFZWVJEF65GQQ

 

[LC]

In a true, Xerxian fashion, I proceeded than to use my tried and true LIFO methodology to manage my book backlog.

 

Originally uncovered, of course, in a whitepaper entitled: "Efficient methods for optimal dust extraction and collection"