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Tuesday at Trump Tower (1987) · Real Donald Trump Wisdom

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  Hi guys, so here we're back at Trump Tower Tuesday in 1987.
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  So again another very busy day for Trump and a lot of lesson learned in yet another day.
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  So it kicks off with him getting a call from someone who's interested in selling the Beverly
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  Hills Hotel in LA.
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  And although Trump attended that hotel multiple times when he was a bit younger, 10 to 15
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  years prior, he's not fully convinced by this opportunity and he says he doesn't let his
• 0:50
  personal preference affect his business judgement.
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  So it's not because he's been exposed to that hotel in the past and he enjoyed his time
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  there that he's going to consider this opportunity different than another, with any set of different
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  criteria than he would otherwise.
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  So this personal preference is not affecting his business judgement.
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  Secondly there's a theme that repeats again throughout this day, it's to never waste yours
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  or someone else's time.
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  To go straight to the point, and there's many instances where he shows how much he values
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  that, the ability to go straight to the point.
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  For example he's going to mention one of his interactions with a top real estate attorney.
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  He's going to say Jerry's more than an attorney, he's an absolute business machine and he can
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  see through to the essence of a deal as fast as anyone I know.
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  And he says we cover a half dozen subjects in less than 10 minutes.
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  Similarly when he has calls with his investment bankers, he can come to a conclusion in two
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  minutes.
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  Again a theme that's recurring is a lot to go with gut instinct.
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  And if you hear, of course this is focused on Donald Trump, but from other top CEOs,
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  gut instinct is often referred to as a superior intelligence versus purely an analytical analysis
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  if you will, forgive the repetition.
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  Essentially Trump prefers to go with his gut and he's going to, here's another interesting
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  quote on trusting his gut.
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  He says I hear Lee and his guys on their deal, but in truth it doesn't excite me much.
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  We leave it at that and I'll get back to them.
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  So he shows that he trusts his gut so much that he'll listen to someone else and he'll
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  see how he feels about it.
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  And if it didn't convince him, it didn't convince him.
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  He adds another quote, Larry's both a bright and a nice guy and he's very enthusiastic,
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  but he doesn't convince me.
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  Here again we see how much importance he gives to letting almost his body speak to him in
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  terms of should he go forward or not with his gut instinct.
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  So he hears it out, but he's going to go with the gut feeling.
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  So he encourages, you're going to see an interesting change in tax that happens at the time that
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  is going to benefit him, but he sees the second order consequence and the incentives behind
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  it.
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  So he says I still believe this law will be a disaster for the country since it eliminates
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  incentives to invest and build, particularly in secondary locations where no building will
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  occur unless there are incentives.
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  So he comes to the, with foresight, another one of his attributes, he sees that although
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  he's getting relief by certain tax that came into passing, this is not going to be good
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  for the industry as a whole and for ultimately for the country because the incentives are
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  becoming lessened.
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  And if you want to quote the great Charlie Munger, he's going to say that show me the
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  incentive, I'll show you the outcome.
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  And he refers to incentives as the driving force behind human motivation and human action
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  and accomplishment.
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  So understanding second order consequences and incentives is also a big thing.
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  And he then follows up by thanking the senator who stood against this new tax bill.
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  So he says I don't know that for personally, but he's one of the few senators who fought
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  hard against this new tax bill.
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  It's probably too late, but I just want to congratulate him on having the courage of
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  his convictions, even though it might cost him politically.
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  Of course, this is a recurring theme in Trump's life and his political life.
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  So here the lesson is to cultivate the courage to speak up your convictions even when it
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  may be unpopular.
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  This is another lesson we can walk away with.
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  Earlier we mentioned his tendency to protect or to not waste time for others.
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  He's also mindful of time for his.
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  To protect his time, he says frankly I'm not too big on parties because I can't stand small
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  talk.
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  Unfortunately, they're part of doing business, so I find myself going to more than I'd like.
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  And then trying hard to leave early.
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  Talking to his investment bankers, he says that he likes to keep as many options open
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  as I can.
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  So he's deliberating whether he should acquire the holiday inn hotel or wait until he gets
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  a casino license before doing that in Nevada.
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  He gets a call from a landowner, an undeveloped land in Las Vegas, and he's thinking that
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  they also own perhaps the best undeveloped site on the Vegas trip.
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  For the right price, I'd consider buying it.
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  I like the casino business.
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  I like the scale, which is huge.
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  I like the glamour, and most of all I like the cash flow.
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  If you know what you're doing and you run your operation reasonably well, you can make
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  a very nice profit.
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  If you run it very well, you can make a ton of money.
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  This will likely be the genesis of the Trump Las Vegas later on.
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  So here the idea is to think right price and to think cash flow.
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  So again, to not be emotional in the decision making process and for the right price, meaning
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  not at any price, regardless of how attractive a piece of land, a piece of property, a stock
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  may look like, right price is a real metric.
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  Cash flow, of course, in real estate, is another one that's important.
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  He was supposed to meet one of the mayor's officials for city planning, and he didn't
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  get through to him on the phone, so he left a message.
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  The message was very brief.
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  Instead of laying out his pleas or what he would have wanted to ask on a voice note,
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  that's not the smartest thing to do.
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  It's long.
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  It's impersonal.
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  He lacks a report.
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  He just left a message with his secretary saying, I'm looking forward to seeing him
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  on Friday morning.
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  So keeping things brief is recurring again.
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  You mentioned the cultivated ability to see through the essence of a deal as fast as possible,
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  to be quick thinking.
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  In the afternoon, Trump gets a visit from his wife and he explains how and where he
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  met her.
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  He came from the Czech Republic and was a skier in Czechoslovakia before coming to Montreal
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  in Canada where she was a model.
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  She was attending events at the Montreal Summer Olympic Games in 1976.
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  So Donald Trump met his wife Ivana in Montreal and he says, I dated a lot of different women
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  by then, but I'd never gotten seriously involved with any of them.
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  Ivana wasn't someone you dated casually.
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  Ten months later, in April 1977, we were married.
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  So of course he met someone he thought was of high potential to spend a life with and
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  they had three children that we now know who've been raised in some ways exemplarily.
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  So Trump made the bet to marry the woman he met ten months later.
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  That's a comment on his first wife Ivana.
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  He gets calls from Cadillac, the iconic branch from General Motors.
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  They want to brand a limousine to his name or a set of limousines to his last name that
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  was already well known.
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  And we'll see that his knowledge of the automobile industry is going to be useful a bit later
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  on in subsequent books.
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  So we're going to find out that he predicted their demise or to be more accurate, their
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  bankruptcy.
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  So these books were written in the late 80s and he's going to write books in the early
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  90s.
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  And we'll see that in 2009, the three big auto manufacturers indeed needed government
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  bailouts to avoid bankruptcy.
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  So they were indeed in that situation that he's going to pass.
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  So you'll see a lot of foresight in forthcoming editions.
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  A comment on loyalty.
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  So he's approached by Drexel Burnham Lambert, then a well established investment bank of
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  Michael Milken fame and or in famous depending on how you see it for that set of events.
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  They want to be their Trump's investment maker, but Trump said that he's going to remain with
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  Alan Greenberg from Bear Stearns.
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  This is comment on loyalty.
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  He says, in any case, I happen to think Mike's referring to Michael Milken's a brilliant
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  guy.
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  However, Alan Greenberg is exceptional himself and I'm loyal to people who've done good work
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  for me.
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  So we should see that loyalty is an important value to Trump.
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  He wants people who are competent and who have good intentions.
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  So of course, these two don't always go together, but he wants both competence and good intentions
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  for them.
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  So that's something that he values highly.
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  He's meaning good work for him and it goes both ways.
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  He's good to the people who are good to him, both in the sense of competence and of good
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  intentions.
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  On trusting your gut instinct.
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  So see, he's going to listen.
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  So he's very open minded.
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  He's exposed to different deals and he listens to proposals, but you'll see his reaction.
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  We trust his gut instincts.
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  So he's going to say, I hear Lee and his guys out on their deal, but in truth, it doesn't
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  excite me much.
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  We'll leave it at that and I'll get it back to them.
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  This is the first example where he's looking internally to see does the deal excite him,
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  yes or no.
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  And secondly, Larry's both a bright and a nice guy.
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  He's very enthusiastic, but he doesn't convince me.
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  I mentioned that earlier in this episode, but it's worth mentioning again.
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  So he lets himself get convinced.
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  He's exposing himself to arguments and he's observing how internally is he being convinced
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  or not.
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  His trust in his instinct, in his natural instinct, which we all have, is, I don't want
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  to say full proof, but almost.
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  He really believes that his body is going to tell him the right conclusion from being
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  exposed to these arguments.
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  So he's not convinced and he's not excited.
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  We see that it's really at the gut level and this is another lesson we can take.
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  So listen to your gut.
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  And he's going to comment on the success of Calvin Klein.
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  He says he's a very talented designer, but he's also a very good salesman and businessman.
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  And it's a combination of those qualities that makes him so successful.
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  So you could be a product designer.
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  You're going to need to know sales skills and business skills to make things a commercial
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  success.
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  These are two attributes that we could probably apply to any profession.
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  So don't underestimate the power of having good sales skills.
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  And finally, responding to a fake news article by the New York Times, he says, the way I
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  see it, critics get to say what they want about my work, so why shouldn't I be able
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  to say what I want about theirs?
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  So for him, it's fair game.
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  If he's getting criticized, he can criticize back, given that there's fallible humans beyond
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  every organization and they can also make mistakes.
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  To summarize, don't let personal preferences affect your business judgment.
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  Don't waste yours or someone else's time.
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  Go straight to the point.
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  Keep things brief.
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  Think of second order consequences and incentives.
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  Cultivate the courage to speak up your convictions even when it may be unpopular.
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  Think right price and cash flow.
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  Cultivate the ability to see through the essence of a deal as fast as possible.
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  Be loyal to those who are loyal to you.
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  And listen to your gut.
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  I hope you enjoyed this episode and see you on the next one.
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  Thanks.
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  NEXT comme.