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SkyBridge Anthony Scaramucci: Masters in Business (Audio) · Masters in Business

• 0:03
  Speaker 1: This is Master's in Business with Barry Ridholts on Bloomberg Radio. Hi,
• 0:08
  Speaker 1: this is Barry Ridholts and you're listening to Masters in
• 0:11
  Speaker 1: Business on Bloomberg Radio. The podcast portion a little background.
• 0:17
  Speaker 1: I know Scaramucci, or as he's widely known, the Mooch,
• 0:21
  Speaker 1: for a good couple of years. Um, we've done a
• 0:24
  Speaker 1: number of shows together, We've been at various conferences together.
• 0:28
  Speaker 1: But the way I kind of first got to know
• 0:31
  Speaker 1: who he was, I've called him the man who rescued
• 0:35
  Speaker 1: Dell and as well here in the conversation. He's very
• 0:39
  Speaker 1: self effacing and he's all about we the team. When
• 0:42
  Speaker 1: he was at Goman Sacks, it was the team. And
• 0:45
  Speaker 1: when he was at UM other places like new Berger
• 0:49
  Speaker 1: and Berman or Lehman Brothers, it was all about the team.
• 0:52
  Speaker 1: But I'm gonna share a little bit of info that
• 0:55
  Speaker 1: he was too monest to talk about. You know, when
• 0:58
  Speaker 1: when Dell ran into some trull in the early nineteen nineties,
• 1:02
  Speaker 1: he was a young kid. He was a hotshot CEO,
• 1:05
  Speaker 1: one of the youngest CEOs of an SMP company ever,
• 1:09
  Speaker 1: and they ran into a bunch of trouble. You know,
• 1:12
  Speaker 1: HP kind of retooled and went after them. Ibm UM
• 1:15
  Speaker 1: became a better competitor, and at the same time their
• 1:20
  Speaker 1: CFO began dabbling in the currency markets something as it
• 1:24
  Speaker 1: turned out that he was wholly unqualified to two and
• 1:29
  Speaker 1: del The company lost hundreds of millions, if not billions
• 1:33
  Speaker 1: of dollars that they simply didn't have to lose, and
• 1:36
  Speaker 1: they really needed a cash infusion. And my understanding, and
• 1:40
  Speaker 1: this is second and third hand and based on some
• 1:43
  Speaker 1: old research and some old conversations, was nobody was especially
• 1:47
  Speaker 1: enthusiastic about getting this deal done. Um Anthony said. If
• 1:51
  Speaker 1: he wasn't there, it would have happened. Somebody else would
• 1:53
  Speaker 1: have picked up the ball. I'm less convinced of it.
• 1:56
  Speaker 1: I think that he was a guy who was sort
• 1:59
  Speaker 1: of an odd fit at Harvard Law to Goldman Sachs
• 2:02
  Speaker 1: investment banking, not exactly the usual candidate. And I think
• 2:06
  Speaker 1: that he was looking around for something that he understood
• 2:11
  Speaker 1: and he could pick up and run with that nobody
• 2:13
  Speaker 1: else really did. And he had was impressed with Michael
• 2:17
  Speaker 1: Dell as a person, and he understood the situation as
• 2:21
  Speaker 1: to the trouble the CFO had created by engaging in
• 2:24
  Speaker 1: these currency hedges that all went bad, and so he
• 2:28
  Speaker 1: decided to pick up the ball, and with a great
• 2:32
  Speaker 1: Rolodex and a great network and a very personable way
• 2:36
  Speaker 1: about him, essentially rescued Dell as a company, managed to
• 2:42
  Speaker 1: get a lead, managed to raise money, managed to get
• 2:45
  Speaker 1: the deal done. But what's fascinating about the discussion with
• 2:51
  Speaker 1: Scaramucci is that he for a guy who is as
• 2:55
  Speaker 1: wildly successful as he is on pretty much every level.
• 2:59
  Speaker 1: The company, he's running, the conference, he's running, the resurrection
• 3:03
  Speaker 1: of Lewis ruck Kaiser's Wall Street Week. By just about
• 3:06
  Speaker 1: any measure, he's a tremendously successful guy. The conversation we
• 3:11
  Speaker 1: have is all about failure. He discusses how he was
• 3:15
  Speaker 1: fired by it from Goldman Sachs. He discusses how when
• 3:18
  Speaker 1: he first launched Skybridge, it was pretty much a disaster.
• 3:22
  Speaker 1: It wasn't happening the way they had hoped, and then
• 3:25
  Speaker 1: the financial crisis had come along. But the the thing
• 3:29
  Speaker 1: that we hear over and over again in all the
• 3:32
  Speaker 1: stories that he tells is that each subsequent failure is greeted,
• 3:38
  Speaker 1: if that's the right word, as an opportunity, as a
• 3:41
  Speaker 1: learning expense, as a learning situation, as as as a
• 3:45
  Speaker 1: chance to pivot and try and do something new and different,
• 3:51
  Speaker 1: to rise from the ashes, so to speak, and Skybridge
• 3:55
  Speaker 1: is a perfect example. He tells the story of how
• 3:57
  Speaker 1: originally they started out as a hedge fund seating company
• 4:02
  Speaker 1: and that really wasn't going especially well when the financial
• 4:05
  Speaker 1: crisis hit, and in the attempt to raise some seed
• 4:09
  Speaker 1: capital from City Group, ended up essentially recognizing that they
• 4:14
  Speaker 1: had to get rid of their hedge fund practice. It
• 4:16
  Speaker 1: was a liability and they were really retooling dramatically, and
• 4:20
  Speaker 1: so Mooch as he's known, ended up picking up a
• 4:24
  Speaker 1: couple of billion dollars in assets, really very inexpensively, and
• 4:29
  Speaker 1: parlayed that into their nearly uh ten billion dollar fund
• 4:33
  Speaker 1: of funds now and runs a very straightforward approach. Hey,
• 4:39
  Speaker 1: if you're looking for us to beat the market, if
• 4:40
  Speaker 1: you want to generate alpha, if you're looking for all
• 4:43
  Speaker 1: those sort of things, that's not what we're gonna do.
• 4:45
  Speaker 1: That's not what we're capable of doing. He's pretty straightforward
• 4:49
  Speaker 1: in not over promising, and therefore he doesn't under deliver.
• 4:53
  Speaker 1: So I babbled on long enough. I think you'll find
• 4:55
  Speaker 1: this to be a really really interesting conversation. My interview
• 4:59
  Speaker 1: with guy Bridge Capitals Anthony Scaramucci. This is Masters in
• 5:06
  Speaker 1: Business with Barry Ridholts on Bloomberg Radio. My guest today
• 5:11
  Speaker 1: is Anthony Scaramucci. You may know him as the Mooch.
• 5:15
  Speaker 1: He is the founder of Skybridge Capital and the Impress
• 5:19
  Speaker 1: Sario behind the Big Salt Conference, which takes place every
• 5:23
  Speaker 1: year in Las Vegas. Anthony, Welcome to Bloomberg Barry. It's
• 5:28
  Speaker 1: a pleasure to be here. Thank you for having me.
• 5:30
  Speaker 1: So you're at Goldman Sachs in the nineties, coming out
• 5:32
  Speaker 1: of Harvard Law. You are summarily dismissed from Goldman What
• 5:37
  Speaker 1: do you do with your career then? So, now it's
• 5:39
  Speaker 1: a Friday afternoon. I go home very rejected, and I
• 5:42
  Speaker 1: wake up on Monday dust myself off. I have a
• 5:46
  Speaker 1: roll of quarters because we didn't have cell phones back then.
• 5:49
  Speaker 1: I took a train back into the city. I started
• 5:52
  Speaker 1: pumping quarters into stay phones and I was calling my
• 5:55
  Speaker 1: buddies asking for help, and finally I reached the fellow
• 5:59
  Speaker 1: was a great friend of mine. He said, hey, listen,
• 6:01
  Speaker 1: there's a job offer and an opening at Goldman Sacks.
• 6:06
  Speaker 1: I said, are you kidding me? He said, in the
• 6:07
  Speaker 1: sales area. I said, okay, that's probably better suited for
• 6:10
  Speaker 1: my skill set. So I called my old boss who
• 6:14
  Speaker 1: had just fired me. His name is Michael Facetel. He
• 6:17
  Speaker 1: built the building that we're in. He was the CEO
• 6:19
  Speaker 1: of Vernado Realty, went on to become CEO Vernado Realty Trust.
• 6:22
  Speaker 1: I said, Michael, you gotta help me get this job
• 6:25
  Speaker 1: in sales at Goldman. Uh and so he put a
• 6:27
  Speaker 1: call in for me. I got interviewed. There were many
• 6:30
  Speaker 1: interviews later, they offered me a job on March. So
• 6:34
  Speaker 1: I was out of Goldman from February one to March.
• 6:40
  Speaker 1: But I got rehired two months about two months. So
• 6:43
  Speaker 1: so there's an ironic thing. I got to keep the
• 6:45
  Speaker 1: eleven thousand dollars seven check, thank god, grand months and
• 6:50
  Speaker 1: I got and I got myself a new job at Goldman,
• 6:52
  Speaker 1: which is better suited for me. So so the lesson
• 6:55
  Speaker 1: for younger viewers out there is, try to go for
• 6:58
  Speaker 1: the jobs that you think you're well suited for, not
• 7:01
  Speaker 1: the ones that you think are the sexy job. Don't
• 7:05
  Speaker 1: breed in security in your own personality. Go for the
• 7:07
  Speaker 1: stuff you think so you stay at Goldman for a
• 7:09
  Speaker 1: couple more years. But eventually, and I think it's ninety six,
• 7:13
  Speaker 1: you end up leaving to launch Oscar Capital. That's correct.
• 7:17
  Speaker 1: What was Oscar Capital like? So it was Andrew Bozart,
• 7:20
  Speaker 1: So his name was bo s. My first name, I
• 7:23
  Speaker 1: make last name is S. C. A. R. We dropped
• 7:25
  Speaker 1: the be called it Oscar Capital, worst name in financial
• 7:29
  Speaker 1: services history. Every time we had a meeting people for
• 7:32
  Speaker 1: our year affiliated with Oscar Meyer the hot dog company.
• 7:35
  Speaker 1: You know, Oscar the grouch. But we built a one
• 7:37
  Speaker 1: billion dollar registered investment advisor that had a small hedge fund.
• 7:42
  Speaker 1: We had a very good relationship with Fidelity. We were
• 7:44
  Speaker 1: part of the advisor referral program. I think New Burger
• 7:48
  Speaker 1: wanted to be in that business with Fidelity, so that's
• 7:50
  Speaker 1: why they They contacted Greg Fleming, who was the M
• 7:53
  Speaker 1: and a banker at Mary Lynch. He's now the president
• 7:55
  Speaker 1: of Morgan Stanley. Greg was our merger banker and we
• 7:59
  Speaker 1: did the d all six weeks after the nine eleven
• 8:02
  Speaker 1: terrorist attack, really in two thousand one. So you have
• 8:04
  Speaker 1: gone for five years. Now you get bought by New
• 8:07
  Speaker 1: Burger and I think it's too and I'm assuming for
• 8:11
  Speaker 1: a billion dollars in a U M there's a number
• 8:14
  Speaker 1: of ways of calculating that um multiple of sales or
• 8:19
  Speaker 1: how how did they figure out I'm perfectly understand if
• 8:23
  Speaker 1: you want to blurt out the number, but what was
• 8:26
  Speaker 1: the formula that we're playing with? It was at times sales. Yeah,
• 8:29
  Speaker 1: you know, I'm a I'm an open guy, but I
• 8:31
  Speaker 1: did sign a confidentiality. It was a reasonable multiple. I mean,
• 8:36
  Speaker 1: I think of earnings of of revenue, how do they
• 8:38
  Speaker 1: they do? Yeah, it was multiple of revenues. But I
• 8:40
  Speaker 1: think I think the interesting thing about it is, I mean,
• 8:42
  Speaker 1: none of us were crying when we when we did
• 8:44
  Speaker 1: the deal, But I think the interesting thing about it
• 8:47
  Speaker 1: is you have to make sure if you're ever going
• 8:48
  Speaker 1: to do a deal like that on your own company
• 8:50
  Speaker 1: and you're gonna sell it, you gotta make sure you
• 8:52
  Speaker 1: sell it to people that are similarly situated personality wise.
• 8:56
  Speaker 1: Thank god that was the case for us. I sold
• 8:59
  Speaker 1: the business to a guy named Bob nats Up and
• 9:01
  Speaker 1: Jeffrey Lane. They were the two senior guys at New Burger,
• 9:04
  Speaker 1: and they lived up to their promises. They were great people.
• 9:07
  Speaker 1: New Burger then went on to sell New Burger Berman
• 9:11
  Speaker 1: to Lehman Brothers and so That was an interesting point
• 9:14
  Speaker 1: in my career because I had worked at Goldman Sachs
• 9:16
  Speaker 1: and now we were all migrating over to Lehman Brothers.
• 9:19
  Speaker 1: And I became a managing director of Lehman Brothers in
• 9:23
  Speaker 1: October of two thousand and three. You know, we we
• 9:26
  Speaker 1: had Jack Rivkin on the show some months ago. He
• 9:29
  Speaker 1: was at Lehman, left more or less, got fired, joined
• 9:33
  Speaker 1: New Burger, joined New Burger, and ends up coming back
• 9:36
  Speaker 1: to UH Actually his time at Lehman the first time
• 9:40
  Speaker 1: became a Harvard Business School. He took them from last
• 9:46
  Speaker 1: to first place the research similar situation ends up at
• 9:49
  Speaker 1: New Burger along with your friends. Gary Kaminsky was a
• 9:52
  Speaker 1: New Burger for and his dad, Gary and his dad
• 9:56
  Speaker 1: and his brother Michael and Gary Kamitsky, and I go
• 9:59
  Speaker 1: back to two where one of his best friends from
• 10:05
  Speaker 1: the town Ulit that he grew up in was one
• 10:06
  Speaker 1: of my roommates in college at Tufts. So I've known
• 10:09
  Speaker 1: Gary forever um and it was really a lot of
• 10:12
  Speaker 1: fun to work with Gary at Newburger. So in the
• 10:15
  Speaker 1: last thirty seconds we have how can you compare the
• 10:19
  Speaker 1: culture at Lehman with the culture of Goldman Sachs very
• 10:22
  Speaker 1: very different places. Uh these things he evolved differently over time.
• 10:26
  Speaker 1: So I'll just talk about the culture. I remember at
• 10:28
  Speaker 1: Goldman inclusive, team oriented. The pronoun use was we, the
• 10:33
  Speaker 1: pronoun use was our, uh, and you had to pass
• 10:36
  Speaker 1: the ball. You did way better Lehman. They had one
• 10:39
  Speaker 1: eye on the outside world and they had one They
• 10:42
  Speaker 1: had one gun trained to the outside world, and they
• 10:44
  Speaker 1: had one gun trained on each other. You see that.
• 10:47
  Speaker 1: That's a little bit more divisive. You kill to play
• 10:50
  Speaker 1: sort of. And the other problem they had, and I
• 10:52
  Speaker 1: do respect them, and I'm sorry that they're gone, but
• 10:55
  Speaker 1: the other problem that they had they had Goldman Sachs envy.
• 10:58
  Speaker 1: Well so did everybody else. They'd sit at the conference
• 11:01
  Speaker 1: table and say, well, we're just as good as Goldman
• 11:02
  Speaker 1: as this, We're just as good as Goldman at dad,
• 11:04
  Speaker 1: And I remember thinking, hey, who cares what you're just
• 11:06
  Speaker 1: as good at. Focus on yourselves and let's not have
• 11:10
  Speaker 1: this relative comparison. I think it's a good message for
• 11:12
  Speaker 1: younger people about their own lives. Right If if you're
• 11:14
  Speaker 1: at a conference table when someone is saying that over
• 11:16
  Speaker 1: and over again, the potential client is thinking themselves, maybe
• 11:20
  Speaker 1: I should check out Goldman. My days were numbered. When
• 11:22
  Speaker 1: I raised my hand at an m D meeting, I said, guys,
• 11:25
  Speaker 1: why are we so focused on Goldman? I can guarantee
• 11:27
  Speaker 1: that they're not that focused on you. And that was
• 11:31
  Speaker 1: that was not a politically astute thing to say at
• 11:35
  Speaker 1: that moment, but it was honest that it was true. Yeah,
• 11:37
  Speaker 1: but you know, that was another reason why I had
• 11:39
  Speaker 1: to look on and see if I could start another company.
• 11:41
  Speaker 1: I'm Barry Ridhult. You're listening to Masters in Business on
• 11:44
  Speaker 1: Bloomberg Radio. My guest today is Anthony Scaramucci of Skybridge Capital.
• 11:48
  Speaker 1: Let's talk a little bit about your early days at Goldman,
• 11:52
  Speaker 1: and I recall way back. You're telling a story that
• 11:55
  Speaker 1: I found absolutely fascinating about when you were rotating through
• 12:00
  Speaker 1: of the different departments and you found a sort of,
• 12:03
  Speaker 1: if I memory serves correctly, a kind of orphaned deal
• 12:07
  Speaker 1: that people really kind of were neglecting with some startup
• 12:11
  Speaker 1: company called Dell Computer. Well, Dell at that time wasn't
• 12:14
  Speaker 1: a startup, you know. Michael started the business and eight
• 12:17
  Speaker 1: four uh he in college, he went public and eighty
• 12:20
  Speaker 1: eight through Goldman Sachs. In the summer of three, Michael
• 12:28
  Speaker 1: had gotten into a little bit of trouble with his
• 12:30
  Speaker 1: laptops the introduction of his laptops. The batteries weren't working well. Uh,
• 12:34
  Speaker 1: they were actually catching fire, and he had to stop
• 12:36
  Speaker 1: the production and he had a little bit of a
• 12:39
  Speaker 1: cash bleed and a little bit of a spin out. There.
• 12:42
  Speaker 1: One thing Michael Dell said to me, in order to
• 12:45
  Speaker 1: become Michael Dell and Dell Computer Corporation, there were about
• 12:48
  Speaker 1: eight thousand decisions that he had to make and he
• 12:50
  Speaker 1: had to get about seven thousand, nine hundred of them right.
• 12:54
  Speaker 1: And it's an interesting thing. And so he was in
• 12:56
  Speaker 1: a tailspin. And one of his best skills, he's incredibly
• 12:59
  Speaker 1: commercial guy, was that he needed a little bit of help.
• 13:02
  Speaker 1: He need a little bit of financing and so and
• 13:04
  Speaker 1: this isn't so long after they had the currency issue
• 13:07
  Speaker 1: that the currency hedge, and basically that was a commodation
• 13:12
  Speaker 1: to dead bet and it wasn't what Michael did. But
• 13:16
  Speaker 1: what can we call it? I can't call him Michael,
• 13:18
  Speaker 1: but you you know, listen, I I call him Michael,
• 13:21
  Speaker 1: but you know he is Mr Dell. I mean, the
• 13:22
  Speaker 1: guy is a masterful guy. He should be on your
• 13:25
  Speaker 1: show way more than me. But but to tell you
• 13:28
  Speaker 1: this story, it's twenty two years ago, but I remember
• 13:31
  Speaker 1: it very well. It was mid August, most of Wall
• 13:34
  Speaker 1: Street was on vacation. Michael came into the conference room.
• 13:39
  Speaker 1: I got called into a meeting by one of the
• 13:41
  Speaker 1: capital markets people. I was on the institutional sales desk
• 13:44
  Speaker 1: at the time, looking over the deal UH. And then
• 13:49
  Speaker 1: they asked me, look, we're gonna put a convertible bond together.
• 13:53
  Speaker 1: Do you think some of your clients would have an
• 13:55
  Speaker 1: interest in this convertible bond? And I went out and
• 13:59
  Speaker 1: call several white guys who were on vacation. I said, listen,
• 14:03
  Speaker 1: this thing has a very low premium meanings will convert
• 14:06
  Speaker 1: into a lot of equity. It has a high coupon UH,
• 14:10
  Speaker 1: and I really think this is a good deal. And
• 14:12
  Speaker 1: people looked at the financials and said, well, you know,
• 14:14
  Speaker 1: the financials a little shaky. I said, they are a
• 14:17
  Speaker 1: little shaky, but this guy is not shaky. This is
• 14:21
  Speaker 1: a betting. Michael is a steward of this business. All
• 14:24
  Speaker 1: businesses go through some hiccups. This is an opportune time.
• 14:28
  Speaker 1: When he gets this cash onto his balance sheet, He's
• 14:31
  Speaker 1: gonna retool the product cycle. He's gonna freshen up and
• 14:34
  Speaker 1: strengthen his balance sheet, and I think you guys gotta
• 14:39
  Speaker 1: make this investment. And so long story short, and listen,
• 14:42
  Speaker 1: this is a team approach. I'm out here running the
• 14:45
  Speaker 1: flag up for myself, but Goldman Sachs went out and
• 14:48
  Speaker 1: raised him. Uh. I don't know. It had to be
• 14:51
  Speaker 1: about two and fifty million dollars a lot of money
• 14:53
  Speaker 1: at that time. UH, and Dell went off to the races.
• 14:56
  Speaker 1: If you look at that short, one of the great
• 14:58
  Speaker 1: stocks of the ninete andies from the apple of its death, no,
• 15:03
  Speaker 1: no question. And one of my institutional investors who I'm
• 15:07
  Speaker 1: still very very close to, just retired from the Alfred P.
• 15:10
  Speaker 1: Sloan Foundation. His name is Bill Peterson. UH remembers that
• 15:14
  Speaker 1: deal fondly because he said it was the top performing
• 15:18
  Speaker 1: name for him over a five year period of time
• 15:21
  Speaker 1: that he held the stock. And so a combination, like
• 15:23
  Speaker 1: I said earlier in our conversation, a little bit of
• 15:25
  Speaker 1: providential luck, good timing, But that helped me build a
• 15:29
  Speaker 1: relationship with Michael, and I just have an enormous respect
• 15:32
  Speaker 1: for him. Was speaking with Anthony Scaramucci of Skybridge Capital,
• 15:36
  Speaker 1: talking about the time Goldman Sachs essentially rescued Dell Computers.
• 15:42
  Speaker 1: So let's talk a little bit about Michael Dell. He's
• 15:45
  Speaker 1: been fairly active. Um, not so much him, but MSK
• 15:50
  Speaker 1: Ventures is MST ms D m s K is the
• 15:53
  Speaker 1: whole something else. MSD Michael S. Dell UM is a
• 15:57
  Speaker 1: fairly substantial venture cap role operation. Are you still in
• 16:01
  Speaker 1: touch with him much? Do you? How often do you
• 16:03
  Speaker 1: bump into it? I'm actually in touch with him less. Uh.
• 16:07
  Speaker 1: I see him once in a while at the World
• 16:09
  Speaker 1: Economic Forum in Davos, Switzerland. He's obviously super busy raising
• 16:13
  Speaker 1: his family as m I, and he's got deaf and
• 16:15
  Speaker 1: he's also taken del He's got a private company that
• 16:18
  Speaker 1: he's dealing with now, which I predicted some point we'll
• 16:21
  Speaker 1: probably go public again. But MSD Capital is I think
• 16:24
  Speaker 1: a very diversified UH portfolio. In addition to venture private equity,
• 16:30
  Speaker 1: they've got long portfolio, fixed income portfolio, and him and
• 16:34
  Speaker 1: his team there have done a masterful job of managing
• 16:36
  Speaker 1: his money. And I'm pretty sure they've taken into outside
• 16:39
  Speaker 1: money at this point. Are we gonna see Michael Dell
• 16:42
  Speaker 1: at a SAULT conference anytime? So you know, we haven't
• 16:45
  Speaker 1: gone in the CEO direction, but you know he's a
• 16:47
  Speaker 1: terrific guy to have it an event like that. So
• 16:51
  Speaker 1: let's talk a little bit about Skybridge Capital because we
• 16:55
  Speaker 1: really haven't touched on that. UM. That was post Lehman
• 17:00
  Speaker 1: when you decided, all right, I've had enough of this,
• 17:03
  Speaker 1: I've offended all the right people. It's time to make
• 17:06
  Speaker 1: head for the exit. You launched Skybridge Capital in what
• 17:10
  Speaker 1: year was that? It was March March of two thousand
• 17:13
  Speaker 1: and five five, and so I had worked at Lehman
• 17:16
  Speaker 1: from October of two thousand three to March of two
• 17:18
  Speaker 1: thousand five. UM, a lot of guys were departing from
• 17:22
  Speaker 1: the Lehman senior management team. I went to the guy
• 17:25
  Speaker 1: that I was working for. I said, listen, I didn't
• 17:28
  Speaker 1: grow up here in this organization. Guys that are in
• 17:30
  Speaker 1: I was forty one at the time, and I said,
• 17:34
  Speaker 1: you guys that have grown up here twenty years that
• 17:35
  Speaker 1: are now in your forties are super tight with each other.
• 17:39
  Speaker 1: I'm not in yourr an outsider within. I'm an outsider.
• 17:43
  Speaker 1: These guys had a strong culture and it was a
• 17:45
  Speaker 1: good culture, different from Goldman and but you have a
• 17:48
  Speaker 1: little bit of an immune system because I'm transplanted in
• 17:51
  Speaker 1: from new Berger Berman so and I'm doing renunal rejection.
• 17:54
  Speaker 1: Rejected tissue. Is that I was rejected tissue and no problem.
• 17:58
  Speaker 1: It could have been personality issues too. But but but
• 18:00
  Speaker 1: but in fairness of them, well, but you know, I
• 18:02
  Speaker 1: know you long enough that I know you're kinda you
• 18:06
  Speaker 1: get along with pretty much everybody. You know, you're really
• 18:09
  Speaker 1: rubbed that many people when you're when you're opinionated in
• 18:13
  Speaker 1: a politically correct or politically neutral organization. Uh that's uh, well,
• 18:19
  Speaker 1: you know what your your elbows for somebody like you
• 18:22
  Speaker 1: or me or elbows may not be that sharp given
• 18:24
  Speaker 1: the neighborhoods that we both grew up here. But when
• 18:26
  Speaker 1: you're in that sort of corporate environment where everybody's wearing
• 18:29
  Speaker 1: a white shirt, Uh, you know, and you have an opinion,
• 18:32
  Speaker 1: it may not be something that people super like about you.
• 18:35
  Speaker 1: And so I think the more successful guys, and God
• 18:38
  Speaker 1: blessed them, they have a way of talking and a
• 18:41
  Speaker 1: way of navigating those situations that you know, I wasn't
• 18:46
  Speaker 1: super successful at. Having said that, Uh, Richard s Fold
• 18:50
  Speaker 1: Dick Fold do have an enormous amount of respect for Uh.
• 18:53
  Speaker 1: He gave me ten million dollars a balance sheet capital
• 18:56
  Speaker 1: put it into our fund. A gentleman by the name
• 18:59
  Speaker 1: of Jared Way he helped me get that done. He
• 19:01
  Speaker 1: was on the senior relationship management team there at Lehman,
• 19:04
  Speaker 1: so they see you very much. Day Goldman's seeds outgoing
• 19:08
  Speaker 1: traders as well. They did. They put ten million dollars
• 19:12
  Speaker 1: of their balance sheet into our fund, which helped me
• 19:15
  Speaker 1: get the catalyzation. If you will have that fund started.
• 19:18
  Speaker 1: And I'm Barry Ridhults. You're listening to Masters in Business
• 19:21
  Speaker 1: on Bloomberg Radio. My special guest today is Anthony Scaramucci
• 19:26
  Speaker 1: of Skybridge Capital. Anthony is the gentleman behind the resurrection
• 19:31
  Speaker 1: of an iconic television show, Lewis Rukaiser. Wall Street Week
• 19:36
  Speaker 1: with Louis Rukaiser was on for twentysomething years, thirty years.
• 19:42
  Speaker 1: It's how a lot of people today of our generation,
• 19:46
  Speaker 1: or maybe a few years younger, first discovered investing Wall
• 19:49
  Speaker 1: Street stocks back in the day. What made you think
• 19:53
  Speaker 1: of bringing the show back. It's an amazing show and
• 19:57
  Speaker 1: I've seen almost all of the film library a half
• 20:00
  Speaker 1: hour show over thirty five years. Lewis Rukaiser, classic guy.
• 20:05
  Speaker 1: I think He was a master at explaining complex things
• 20:10
  Speaker 1: in a way that regular people outside of our industry
• 20:14
  Speaker 1: battery can understand. And I don't want to say simplify them,
• 20:17
  Speaker 1: because these are very complex things, and sometimes when you
• 20:20
  Speaker 1: try to simplify something complex, you really don't get it
• 20:23
  Speaker 1: at all. He never dumbed it down. He just gave
• 20:26
  Speaker 1: He gave it rust in the viewer to but Button
• 20:30
  Speaker 1: made it understandable. Liz Ane Sanders was on our show
• 20:33
  Speaker 1: this past week. Had a great story where she was
• 20:37
  Speaker 1: very nervous the first time she met lu She was
• 20:39
  Speaker 1: sitting in the chair. He said, are your parents in
• 20:41
  Speaker 1: our business? And she said no. He says, I'll tell
• 20:44
  Speaker 1: you what we're gonna go on the air in a
• 20:45
  Speaker 1: few minutes, but I want you to talk to your parents.
• 20:48
  Speaker 1: I want you to explain the concepts that we're discussing
• 20:51
  Speaker 1: to your mom and dad. If you do that, we're
• 20:53
  Speaker 1: gonna have a terrific show. And that's the spirit of
• 20:56
  Speaker 1: what we're trying to capture with the return of Wall Street.
• 20:59
  Speaker 1: So Wall Street Week, that's so, that's funny you mentioned
• 21:02
  Speaker 1: that because my wife's an our teacher. My mother was
• 21:05
  Speaker 1: a real estate agent, and that was always the goal. Hey,
• 21:07
  Speaker 1: if you can make a real estate agent and an
• 21:09
  Speaker 1: art teacher, if you can remove the jargon and speak
• 21:12
  Speaker 1: in ways that they can understand it well, then anybody
• 21:16
  Speaker 1: can understand it. And and and this is a good
• 21:18
  Speaker 1: segue because I do think that some of the punditry
• 21:21
  Speaker 1: on business television is intimidating, and some of the punditry
• 21:25
  Speaker 1: on business telligence is for the impression of other pundits.
• 21:29
  Speaker 1: They want to impress each other while they're talking to
• 21:31
  Speaker 1: each other. And so what Louis Rukeyser did was he
• 21:35
  Speaker 1: waxed away all of that stuff barr and he really
• 21:37
  Speaker 1: just tried to deliver high, thoughtful content. And so that
• 21:41
  Speaker 1: show laid dormant for about ten years. UH. Gentleman by
• 21:45
  Speaker 1: name of Jeff Salkin had actually bought the rights to
• 21:47
  Speaker 1: the show. He had a website up called Wall Street
• 21:50
  Speaker 1: Week um, and but he had not really figured out
• 21:53
  Speaker 1: how to bring the show back on the year and
• 21:56
  Speaker 1: to transform the brand. UH. And so he came to
• 21:59
  Speaker 1: see eight. I had a conversation with him, UH and
• 22:03
  Speaker 1: Maryland Public Television, and I acquired the brand from him
• 22:06
  Speaker 1: and Matt Brand and the library. That's correct. So it's
• 22:10
  Speaker 1: the access to the archives and the library. It's the
• 22:13
  Speaker 1: likeness of Mr Ruth Kaiser, it's the great computer fond
• 22:18
  Speaker 1: digital digitization of the logo. UH. And it's also the website,
• 22:23
  Speaker 1: the Twitter page, the Facebook page. UM. This stuff I
• 22:27
  Speaker 1: think will be usually valuable if we handle it right.
• 22:30
  Speaker 1: From an auditorial perspective, I want to try to explain
• 22:34
  Speaker 1: to people what's going on. I think since your Bailout
• 22:37
  Speaker 1: Nation best seller, I think the average American is super
• 22:42
  Speaker 1: intimidated by the markets, super intimidated by the volatility. Uh,
• 22:46
  Speaker 1: they're uncertain. Uh, they're uh stashed in cash if you will.
• 22:52
  Speaker 1: And I think that it just came out more than
• 22:54
  Speaker 1: half of Americans have zero dollars exposed. So you're you're
• 22:58
  Speaker 1: supporting my thesis, and yet we both know that the
• 23:01
  Speaker 1: nation is undersaved. We're probably underslept, and we're probably overfed.
• 23:06
  Speaker 1: We've got all the dials on our dashboard wrong. And
• 23:10
  Speaker 1: so what we want to try to do is deliver
• 23:12
  Speaker 1: a message to the average American that there's a simple
• 23:16
  Speaker 1: and easy way to boost your savings, take more financial
• 23:20
  Speaker 1: control of your life. UH, put yourself on the arc
• 23:23
  Speaker 1: of the aspirational society that we all want to live
• 23:26
  Speaker 1: in and that requires you to take a little bit
• 23:28
  Speaker 1: of risk in the stock market in a balanced way.
• 23:30
  Speaker 1: It requires you to have the right fixed income exposure
• 23:33
  Speaker 1: and portfolio um and to be patient. And you know
• 23:36
  Speaker 1: you could you could spare yourself a latte a week.
• 23:40
  Speaker 1: That's five dollars a week. That's two underd and sixty
• 23:43
  Speaker 1: dollars a year and lo and beholds you're building a
• 23:46
  Speaker 1: little nestag so you can work at Bloomberg in this
• 23:48
  Speaker 1: free Well, that's another great show about Bloomberg. Let me
• 23:53
  Speaker 1: ask you a question about that archive. Are you gonna
• 23:55
  Speaker 1: any plans to put that online? What are you gonna
• 23:57
  Speaker 1: do with all these So so if you go to
• 23:59
  Speaker 1: Wall Street week dot com, you will see archival uh
• 24:03
  Speaker 1: stuff on the on the on on there. We also
• 24:06
  Speaker 1: have it up on YouTube. We're we're finding new nuggets,
• 24:11
  Speaker 1: new treasure every single day as we mind that archive.
• 24:14
  Speaker 1: So you just had Jeff Gunlock and Liz and Saunders
• 24:17
  Speaker 1: were two names I recognized last week. John, Well you
• 24:20
  Speaker 1: have coming up in the coming weeks. Well, uh where
• 24:23
  Speaker 1: if you look at the SALT conference list, it will
• 24:26
  Speaker 1: give you a really good cross section of what we're
• 24:29
  Speaker 1: trying to do. We want uh, policymakers, hedge fund managers,
• 24:35
  Speaker 1: we want possibly actors, music composers. You say, jeez, why
• 24:39
  Speaker 1: do you want that? Well, you know what, everybody in
• 24:41
  Speaker 1: that group has a financial plan. And what the am
• 24:45
  Speaker 1: mortal lou Ro Kaiser would say to you is that
• 24:48
  Speaker 1: the show has to be about the way the world works,
• 24:53
  Speaker 1: because your money world and the way the world works
• 24:56
  Speaker 1: are completely intersected. And we know that from federal reserve policy,
• 25:00
  Speaker 1: we know that from governmental policy. And so I'm gonna
• 25:02
  Speaker 1: try to bring a very broad cross section of guests
• 25:06
  Speaker 1: to the program. I'm Barry Ridholtz. You're listening to Masters
• 25:09
  Speaker 1: in Business on Bloombug Radio. My guest today is Anthony
• 25:12
  Speaker 1: Scaramucci of Skybridge Capital and Wall Street Week. Let's let's
• 25:16
  Speaker 1: talk a little bit about Skybridge Capital. It's become quite successful.
• 25:21
  Speaker 1: It originally began as a hedge fund seating shop. Is
• 25:26
  Speaker 1: that right? You were looking to identify emerging managers. Yeah,
• 25:30
  Speaker 1: my my original concept and for the entrepreneurs out there,
• 25:33
  Speaker 1: what happens is you start with a plan and then
• 25:35
  Speaker 1: you have contact with the enemy and you have to
• 25:37
  Speaker 1: switch your plan. And so I had and that's the
• 25:40
  Speaker 1: great Mohammad was it um. Mike Tyson said, everybody has
• 25:44
  Speaker 1: planned to the punch in the face, and so most
• 25:47
  Speaker 1: generals know once they have contact with the enemy, the
• 25:49
  Speaker 1: plan goes out the wayside. But but for me, I
• 25:52
  Speaker 1: had a seating idea. I was gonna back early stage managers,
• 25:56
  Speaker 1: take GP steaks in them, and then uh literally have
• 26:00
  Speaker 1: our LPs participate in the growth of the earning streams
• 26:04
  Speaker 1: of these managers. Great looking on paper, but it's a
• 26:08
  Speaker 1: little bit like a venture capital situation, and seed hundreds
• 26:12
  Speaker 1: of them. To find that we didn't have enough money
• 26:14
  Speaker 1: to seed hundreds of them, we seeded ten. We seeded
• 26:17
  Speaker 1: them in the years two thousand and six and seven,
• 26:20
  Speaker 1: the early part of two thousand eight, so we were
• 26:22
  Speaker 1: in a barrel going over Niagara Falls and so uh.
• 26:26
  Speaker 1: Which interesting is that one of those funds is doing
• 26:28
  Speaker 1: quite well today, which you still we stole own a
• 26:30
  Speaker 1: small interest in. But that seating business itself, we had
• 26:35
  Speaker 1: to make a decision to dismantle it. And so I
• 26:38
  Speaker 1: was By the way, the tech folks h call that
• 26:40
  Speaker 1: a pivot. So you pivoted from seed in. Yeah, that's
• 26:42
  Speaker 1: an elegant way to say that you're failing and got
• 26:44
  Speaker 1: to come up with some other idea. And so so
• 26:46
  Speaker 1: that's what we had to do. And I'll tell you
• 26:49
  Speaker 1: that our seating business, I would describe it as the
• 26:52
  Speaker 1: old movie Apole thirteen. It was a successful failure in
• 26:56
  Speaker 1: the sense that the seating business was the lunar module
• 26:59
  Speaker 1: that we lived in as we tried to figure out
• 27:02
  Speaker 1: what we're gonna do to crawl back into the command
• 27:04
  Speaker 1: module and get back to Earth. And so, uh, we
• 27:07
  Speaker 1: had a bleeding asset, tons of redemptions, and there was
• 27:11
  Speaker 1: a period barrier looking straight in the face and tell
• 27:14
  Speaker 1: you that I thought we were going out of business.
• 27:17
  Speaker 1: And I remember in March of two thousand nine, with
• 27:20
  Speaker 1: the dow at about six d the SMP had approximately
• 27:24
  Speaker 1: six sixty. I thought, this is it, and uh it was.
• 27:28
  Speaker 1: That was a good time we made. We made two
• 27:30
  Speaker 1: decisions there. At number one, we started the Salt Conference.
• 27:34
  Speaker 1: President Obama said now is not the time to go
• 27:36
  Speaker 1: to Las Vegas, and all the TARP recipients canceled their
• 27:40
  Speaker 1: conferences on Las Vegas. Uh. That upset the mayor of
• 27:43
  Speaker 1: the city. I called him Oscar Goodman, and I said, listen,
• 27:47
  Speaker 1: I want to bring a hedge fund conference to your
• 27:50
  Speaker 1: great city. And so he put me in touch with
• 27:53
  Speaker 1: Michael Milken. He put me in touch with the former governor.
• 27:56
  Speaker 1: I got to meet Steve Winn and we put the
• 27:58
  Speaker 1: first Salt conference is it may have two thousand nine
• 28:02
  Speaker 1: in the Encore Hotel, which is part of the Wind Complex.
• 28:05
  Speaker 1: I tell the story that way because we were really
• 28:08
  Speaker 1: on our knees and I thought, okay, maybe we all
• 28:11
  Speaker 1: go into the conference business. There's a huge void in
• 28:13
  Speaker 1: these things. Uh. And people said to me, well, how
• 28:16
  Speaker 1: is the conference business tie into your seating business. I
• 28:19
  Speaker 1: didn't have a great answer, but I knew that there
• 28:22
  Speaker 1: was an opportunity. I said, well, maybe we'll have a
• 28:25
  Speaker 1: lot of hedge funds there and we could populate our
• 28:27
  Speaker 1: seating business. But what it really turned out to be, Uh,
• 28:31
  Speaker 1: it turned out to be a great networking opportunity. And
• 28:34
  Speaker 1: in the network I discovered that City Bank needed to
• 28:38
  Speaker 1: sell many of its non core assets. So let's let's
• 28:42
  Speaker 1: put this into the right context, because I really love
• 28:45
  Speaker 1: this story. So it's in the midst of the financial crisis.
• 28:49
  Speaker 1: We're bottoming. But you know, three or four people, me
• 28:52
  Speaker 1: and two other guys know, but nobody else. Nobody else
• 28:55
  Speaker 1: got They've got a plastic mouth brace that I've just
• 28:58
  Speaker 1: had molded from my teeth. Because I'm in the middle,
• 29:01
  Speaker 1: and I've been told by many of my former colleagues
• 29:04
  Speaker 1: at Goldman and Lehman that you know you're you're going
• 29:07
  Speaker 1: out of business life demon you're done. But they were
• 29:10
  Speaker 1: probably right, But courage stand there. But that's a fantastic
• 29:16
  Speaker 1: opportunity that you capitalize. In hindsight, it was a fantastic opportunity.
• 29:20
  Speaker 1: At the time, many people had passed on the deal. Yeah,
• 29:24
  Speaker 1: because they they had put the fund of Funds unit
• 29:27
  Speaker 1: into what's called City Holdings, which was their place for
• 29:31
  Speaker 1: dissolution or disposition, and so it was very hard for
• 29:35
  Speaker 1: that terrific asset management team to more eight billion dollar
• 29:39
  Speaker 1: how much money was in that well, No, at that
• 29:41
  Speaker 1: time there was one billion dollars of discretionary money in
• 29:45
  Speaker 1: that portfolio. I went to Michael Corbett, who has become
• 29:48
  Speaker 1: a personal friend. He's a terrific guy. He was running
• 29:51
  Speaker 1: City Holdings at the time. I wanted to buy his
• 29:54
  Speaker 1: seating business. Another big lesson to our listeners, think way
• 29:59
  Speaker 1: bigger than that. He looked at me and said, Hey,
• 30:01
  Speaker 1: I can't sell you that seating business. I can sell
• 30:04
  Speaker 1: you the entire fund of funds business. And I blinked
• 30:09
  Speaker 1: and gulped and probably blanched white, and said, oh my god,
• 30:13
  Speaker 1: how am I gonna pay for that? But I looked
• 30:16
  Speaker 1: at him with a poker face and said, you're on.
• 30:18
  Speaker 1: I'd like to buy that business. And so it was
• 30:20
  Speaker 1: at a desperation. It was a hail Mary pass late
• 30:24
  Speaker 1: in the fourth quarter. But all of that money that
• 30:27
  Speaker 1: I earned from the sale of our first business to
• 30:30
  Speaker 1: new Burger Berman, I liquidated those assets and I brought
• 30:34
  Speaker 1: them to Bear to buy the thing from City Bank.
• 30:36
  Speaker 1: I told my oldest son, whatever in errorge, you thought
• 30:39
  Speaker 1: you were getting from your dad, Well you're now long
• 30:41
  Speaker 1: skybirds through your eyeballs. You better hope I don't blow
• 30:44
  Speaker 1: up the bridge. And so we got that deal done
• 30:48
  Speaker 1: on the thirty of June two thousand and ten. Brought
• 30:52
  Speaker 1: twenty four people over. Uh. It's five years later, twenty
• 30:56
  Speaker 1: three of those twenty four people are still with us.
• 30:59
  Speaker 1: We've add more personnel. Our discretionary assets went from a
• 31:02
  Speaker 1: billion dollars under management to nine point three billion in
• 31:07
  Speaker 1: the five year period of time. And because there was
• 31:10
  Speaker 1: a void in the conference space. Our conference also has
• 31:14
  Speaker 1: done reasonably well over that period. Okay, so now I
• 31:17
  Speaker 1: have to throw a yellow card on you because your
• 31:20
  Speaker 1: conference hasn't done reasonably well quote unquote. So you mentioned
• 31:24
  Speaker 1: my book. It came out in two thousand and nine,
• 31:27
  Speaker 1: and you had me out to Vegas to be on
• 31:30
  Speaker 1: a panel with Austin Goulsby, who was the former former
• 31:34
  Speaker 1: Council of Economic Advisor chairman. I forget the Congressman's and
• 31:38
  Speaker 1: a few other people on that panel, and I have
• 31:40
  Speaker 1: to tell you that was one of the hottest conferences
• 31:44
  Speaker 1: I had ever gone to. You had Bill Clinton as
• 31:48
  Speaker 1: I'm getting the yellow car because I'm understanding, totally understanding,
• 31:52
  Speaker 1: and I wasn't. By the way, Bill Clinton listeners the
• 31:55
  Speaker 1: halfway like me. Remember I'm a hedge fund guy, so
• 31:57
  Speaker 1: I'm obviously a social pariah out the viewers the listeners
• 32:01
  Speaker 1: are sort of like me. Well, but you're you're as
• 32:04
  Speaker 1: an individual, you're fairly charming a character. As a character,
• 32:08
  Speaker 1: I think people who you call yourself the mooch, not
• 32:11
  Speaker 1: a lot of people. That was a that was a
• 32:13
  Speaker 1: high school football name. My last name, Scaramuci, not you
• 32:17
  Speaker 1: people call me the mooch, But some of the guests
• 32:19
  Speaker 1: you've had at Sault. So this year is Ben bernanke. Yes.
• 32:22
  Speaker 1: The year I was on a panel, it was Bill Clinton.
• 32:25
  Speaker 1: The year after it was George Bush. I remember Bill Clinton,
• 32:29
  Speaker 1: not that far removed from quadruple bypass, walking into a
• 32:33
  Speaker 1: very hostile room of about hedge fund managers. And basically
• 32:39
  Speaker 1: by the time he was done, if he would have
• 32:42
  Speaker 1: said and that's why I'm running for president and I
• 32:44
  Speaker 1: wanted you to write a fifty check, he would have
• 32:46
  Speaker 1: would have walked out of that room with twenty millions up.
• 32:49
  Speaker 1: Super popular guy, not only here in the United States
• 32:52
  Speaker 1: but globally. But I will tell you this, President Clinton
• 32:55
  Speaker 1: made our conference unbelieved because because in in two thousand
• 32:59
  Speaker 1: nine we had a smaller conference, uh, four people. We
• 33:03
  Speaker 1: then said, okay, let's go big. And that's the magic
• 33:05
  Speaker 1: of life. You gotta think really big home go big.
• 33:08
  Speaker 1: And so I told the guys, we're gonna we're gonna
• 33:10
  Speaker 1: go after President Clinton. See if we can get him. Uh.
• 33:13
  Speaker 1: He had a guy working firm by the name of
• 33:15
  Speaker 1: Doug Band and very nice guy. Uh, And we signed
• 33:18
  Speaker 1: him up pursuing to dates that work for the president.
• 33:21
  Speaker 1: And I will tell you very upfront. He made our
• 33:24
  Speaker 1: conference because he credentialized the type of speakers that we
• 33:28
  Speaker 1: wanted to get, and so it was easier to get
• 33:30
  Speaker 1: President Bush, it was easier to get Governor Romney, it
• 33:33
  Speaker 1: was easier to get Chairman Ben BERNANKI, Uh, Secretary Rice,
• 33:37
  Speaker 1: We've got most of the secretaries of Defense. We've had
• 33:41
  Speaker 1: General Petrays, We're bringing General Keith Alexander this year, Yankees.
• 33:46
  Speaker 1: So we're really trying to bring people who we think
• 33:50
  Speaker 1: other people in our industry want to hear from and
• 33:53
  Speaker 1: to learn from. And so we've also cross section this thing.
• 33:56
  Speaker 1: So we've had people like al Pacino, We've had all
• 33:59
  Speaker 1: of our stone. We did the movie with you had
• 34:02
  Speaker 1: the guy that Catch Me If You Can was based
• 34:04
  Speaker 1: on That was one of the most fascinating conversations, great
• 34:09
  Speaker 1: great guys. How fascinating was that? Uh Frank Abig Nelly,
• 34:12
  Speaker 1: I'm sorry that's announced his name, but that was a
• 34:15
  Speaker 1: fascinating speech. That was a great story about redemption. It
• 34:18
  Speaker 1: was a great story about the mistakes that he made
• 34:21
  Speaker 1: in his life and how he tried to set his
• 34:24
  Speaker 1: life right um and failure in redemption. I think it's
• 34:30
  Speaker 1: a classic American thing. I think one of the things,
• 34:33
  Speaker 1: one of the big advantages our country has over these
• 34:35
  Speaker 1: other countries, that we accept people who are willing to
• 34:40
  Speaker 1: take enormous amounts of risk. Uh, they can fail, dust
• 34:44
  Speaker 1: themselves off and restored. This is the reason we Ford
• 34:47
  Speaker 1: in his fifties, it was like a sixth or eighth coup.
• 34:50
  Speaker 1: Look at look at Sam Walton forty six years old.
• 34:53
  Speaker 1: Two failed stores started Walt what became Walmart when he
• 34:56
  Speaker 1: was forty six, and so the greatest many of the
• 34:59
  Speaker 1: to stupendous things about our country, but one of the
• 35:02
  Speaker 1: greatest things is the culture to accept risk takers, to
• 35:06
  Speaker 1: accept failure. It's the reason why Facebook is invented here,
• 35:10
  Speaker 1: Google is invented here. Apple started here talking about failure
• 35:13
  Speaker 1: and redemption. Jobs gets fired, comes back well. We showed
• 35:17
  Speaker 1: a great scene from him in being interviewed by the
• 35:22
  Speaker 1: late Louis ru Keiser talking to Steve should he dismantle
• 35:27
  Speaker 1: the company or should he try to grow it? And
• 35:29
  Speaker 1: Steve was gung ho. He said, I'm coming back to
• 35:33
  Speaker 1: create a new spirit of innovation. We were ten years
• 35:36
  Speaker 1: ahead of our competitors back in the day. My goal
• 35:39
  Speaker 1: is to get us ten years ahead of our competitors Again,
• 35:41
  Speaker 1: it's a brilliant commentary about what you need to do
• 35:45
  Speaker 1: in life. Thank big or go home. We've been speaking
• 35:48
  Speaker 1: with Anthony Scaramucci of Skybridge Capital about the Salt Conference.
• 35:53
  Speaker 1: If you enjoy these conversations, be sure and check out
• 35:56
  Speaker 1: the rest of our chat. You can find that on
• 35:59
  Speaker 1: Bloomberg dot com or on Apple iTunes. Be shouldn't check
• 36:02
  Speaker 1: out my daily column on Bloomberg View dot com or
• 36:06
  Speaker 1: follow me on Twitter at Ridholts Anthony. Where can people
• 36:09
  Speaker 1: find you? If they want to, they can find me
• 36:12
  Speaker 1: at a Scaramucci at Skybridge Capital dot com. Uh. They
• 36:16
  Speaker 1: can also go to Wall Street week dot com and
• 36:20
  Speaker 1: they can toggle the prosper at Wall Street week dot com.
• 36:25
  Speaker 1: That's all the viewer emails or commentary about the website.
• 36:28
  Speaker 1: I read every one of those and so and I
• 36:30
  Speaker 1: try to respond to them as well. And your Twitter
• 36:32
  Speaker 1: handle is my Twitter handles at Scaramucci. Easy enough. I'm
• 36:36
  Speaker 1: Barry Ridhults. You've been listening to Masters in Business on
• 36:39
  Speaker 1: Bloomberg Radio. Welcome back to the podcast on Barry Ridholts,
• 36:42
  Speaker 1: and my guest today is Anthony Scaramucci. Anthony and I
• 36:46
  Speaker 1: know each other over the years from the street. It's
• 36:49
  Speaker 1: not exactly a big place. Let me fantastic book, Bailout Nation,
• 36:52
  Speaker 1: thank you. Let me give you a little little background
• 36:55
  Speaker 1: on on who Anthony is and how he got to
• 36:59
  Speaker 1: be where he is today. Undergraduate of Toughs, graduate degree
• 37:02
  Speaker 1: in economics onto Harvard Law, which is uh interesting that
• 37:07
  Speaker 1: you took the Harvard Law degree straight to Goldman Sachs
• 37:10
  Speaker 1: and from Goldman Sacks you eventually left to set up
• 37:13
  Speaker 1: your own funds, which long story short brought by new
• 37:17
  Speaker 1: Berg and Berman, which eventually was brought by Lehman. So
• 37:20
  Speaker 1: you've really been pretty well versed all over the street.
• 37:24
  Speaker 1: Well less has been a blessed career, and you know,
• 37:27
  Speaker 1: as a fellow entrepreneur that a lot of your success
• 37:30
  Speaker 1: is providential. You certainly have to work hard, you have
• 37:33
  Speaker 1: to relate to people well, but at the end of
• 37:36
  Speaker 1: the day you get a couple of lucky breaks too
• 37:38
  Speaker 1: that helps your career slow. I'm still I'm still working
• 37:41
  Speaker 1: on that relating to people well part. But the lucky
• 37:44
  Speaker 1: you have the radio show, I'm just the gags. You
• 37:46
  Speaker 1: must be doing a good job relating to people. Well,
• 37:48
  Speaker 1: I'm just curious. So that and you're a perfect person
• 37:51
  Speaker 1: to ask a question a bunch of questions to to
• 37:55
  Speaker 1: save that curiosity. So let me start right off the bat.
• 37:59
  Speaker 1: Harvard Law is a very storied institution, a very specific culture.
• 38:05
  Speaker 1: As his Goldman Sacks, a very different institution and a
• 38:08
  Speaker 1: very different culture. What was that transition like going to
• 38:11
  Speaker 1: law school say I'm gonna be a lawyer and ending
• 38:13
  Speaker 1: up Well, I had a you know, an interesting background.
• 38:18
  Speaker 1: My parents ever went to college. You're real come from
• 38:20
  Speaker 1: a middle class come from a middle class family. Yeah.
• 38:23
  Speaker 1: I would never disrespect my parents by telling you I
• 38:26
  Speaker 1: grew up poor, because I did not grow up poor.
• 38:28
  Speaker 1: We were resoundingly in the middle class. We had plenty
• 38:30
  Speaker 1: of food, clothing, air conditioning, heat. My dad was a
• 38:34
  Speaker 1: very Yeah we did. Actually that's why my hair is
• 38:36
  Speaker 1: so straight. But we we we had a narrow casted
• 38:41
  Speaker 1: view of the world. I didn't take the s a
• 38:43
  Speaker 1: t prep at Stanley Kaplan. I didn't really have a
• 38:46
  Speaker 1: good idea of what was going on for college placement. Uh.
• 38:50
  Speaker 1: My dad was working at a place called Gotham Sand
• 38:53
  Speaker 1: and Stone on Long Island. Uh. He built a relationship
• 38:56
  Speaker 1: with a gentleman that had gone to Toughs University and
• 39:00
  Speaker 1: the gentleman's name is Billy Tamasah. He's he's passed on now.
• 39:03
  Speaker 1: He's a terrific guy. My father came home one night
• 39:06
  Speaker 1: and said, you and your brother you're going to Toughs University. Uh,
• 39:11
  Speaker 1: we thought it was spelled t O U g H.
• 39:13
  Speaker 1: We had no idea what it was. My brother my
• 39:18
  Speaker 1: brothers a couple of years older than me. He looked
• 39:20
  Speaker 1: in the baron's book and he said, Dad, this thing
• 39:23
  Speaker 1: is most selective. I don't know how we're gonna get
• 39:25
  Speaker 1: in there. He said, well, you both have good grades.
• 39:28
  Speaker 1: My friend Billy said he went there and he loved it.
• 39:30
  Speaker 1: That's where you're going to school. I said, well, I
• 39:32
  Speaker 1: don't know is it that easy? We both applied. My
• 39:35
  Speaker 1: brother is a couple of years older than me. He applied,
• 39:37
  Speaker 1: got into U University, liked it, and I said, okay,
• 39:41
  Speaker 1: So I applied to a couple of schools, got into
• 39:43
  Speaker 1: US University, And now what do you want to do
• 39:46
  Speaker 1: with your career? Well, you know, I had no idea.
• 39:49
  Speaker 1: I read in a magazine article that lawyers A Crevass,
• 39:53
  Speaker 1: Swain and more in we're making sixty five thousand U
• 39:58
  Speaker 1: S dollars a year. I said, oh my god. Uh,
• 40:01
  Speaker 1: you know, it's about what my dad is now making.
• 40:04
  Speaker 1: And I said, I can get out of law school
• 40:06
  Speaker 1: and make almost as much money as my dad and
• 40:08
  Speaker 1: have this incredible life. I guess I thought sixty five
• 40:11
  Speaker 1: dollars a year it was more money than I could
• 40:13
  Speaker 1: ever want or need. So, very simplicitally, Barry, I applied
• 40:17
  Speaker 1: to seven law schools, uh, and I got into Harvard.
• 40:22
  Speaker 1: Harvard's down the block from Toss. I went down there
• 40:24
  Speaker 1: and made it a deposit. Right once you get into Harvard,
• 40:26
  Speaker 1: that's pretty much. Uh. The other options really fade unless
• 40:30
  Speaker 1: you're looking to specialize in something unusual. That's the story is.
• 40:33
  Speaker 1: So now I'm at Harvard and it's dawning on me
• 40:36
  Speaker 1: that I'm not well suited to be a lawyer, and
• 40:39
  Speaker 1: so always always an interesting time to discover that in
• 40:42
  Speaker 1: your second was it How soon did you realize that?
• 40:45
  Speaker 1: Because it took me. It's about my second year law school.
• 40:48
  Speaker 1: Pretty cool, I said, yeah, I don't want to be
• 40:50
  Speaker 1: a lawyer. Well, this is another classic mid eighties story.
• 40:54
  Speaker 1: You can't do this now because of the post nine
• 40:56
  Speaker 1: eleven security. But I decided that I was going to
• 40:59
  Speaker 1: be a Wall Street lawyer, and so once I put
• 41:01
  Speaker 1: the deposit down at Harvard, I went to their placement area.
• 41:04
  Speaker 1: I asked for their placement book. Uh. Not knowing a
• 41:07
  Speaker 1: lot about how the world works, I thought Wall Street
• 41:10
  Speaker 1: lawyers lived on Wall Street, and so I opened up
• 41:12
  Speaker 1: the book. I looked at number one Wall Street, which
• 41:15
  Speaker 1: is the old Irving Trust building is now National Landmark.
• 41:19
  Speaker 1: It's a law firm there by the name of use
• 41:20
  Speaker 1: Hubbard and read and I said, okay, I'm gonna put
• 41:24
  Speaker 1: my resume. I typed it up on a Panasonic typewriter.
• 41:27
  Speaker 1: I took the number four trained down to uh Wall Street.
• 41:31
  Speaker 1: I rode the elevator up to the floor. No security
• 41:35
  Speaker 1: walked in there. And I had a list of Harvard
• 41:38
  Speaker 1: a lumps that were there, and so I was like, hey,
• 41:41
  Speaker 1: is you know Worthington, Babscomb, the thirty second here and then?
• 41:44
  Speaker 1: And the woman said yes. I said, well, I'm Antony Scaramuch,
• 41:47
  Speaker 1: I'm here to see you. Is he expecting you? I said, well, yes,
• 41:50
  Speaker 1: sort of, And she was like, okay, he comes out
• 41:54
  Speaker 1: lovely man. I said, sir, I desperately need a job.
• 41:58
  Speaker 1: I've got, you know, financially to help me with school,
• 42:00
  Speaker 1: not financially more like loans. I said, can you can
• 42:04
  Speaker 1: you can you give me a job this summer as
• 42:05
  Speaker 1: apparently I'll do anything. So coming to my office, son,
• 42:09
  Speaker 1: we sat down, we had a conversation. He says, okay,
• 42:11
  Speaker 1: I'll pay you eight dollars an hour. I said, sir,
• 42:14
  Speaker 1: could you make it ten? He looked to me, are
• 42:15
  Speaker 1: you kidding me? I said, I really need the money.
• 42:17
  Speaker 1: Could you make it ten? So I gotta paid ten
• 42:19
  Speaker 1: dollars an hour. I worked seventy hours a week. Uh.
• 42:23
  Speaker 1: This was back in the day where Continental Airlines was
• 42:26
  Speaker 1: buying People's Express, which was a new work based discount airliner.
• 42:30
  Speaker 1: And I worked on that merger all summer and I
• 42:33
  Speaker 1: remember thinking to myself, oh my god, this I'm not
• 42:36
  Speaker 1: well suited for this um And so I went to
• 42:39
  Speaker 1: Harvard Law School thinking I was not going to be
• 42:41
  Speaker 1: a lawyer. Thanksgiving Day, I told my parents that I
• 42:47
  Speaker 1: wanted to leave law school. Now. When I was going
• 42:50
  Speaker 1: to Harvard, my mother thought it was Hartford Law School.
• 42:53
  Speaker 1: So when we were packing the car, she said, uh,
• 42:57
  Speaker 1: we're going to Hartford. I said, no, mo bus, she said,
• 43:00
  Speaker 1: We're gonna We're gonna Cambridge. She says, no, no, No,
• 43:02
  Speaker 1: he's in't Harvard Law School and Hartford. I said, no, no,
• 43:05
  Speaker 1: it's Harvard and Harvard are very different. And so anyways,
• 43:08
  Speaker 1: my parents didn't care whether it was Harvard Law School
• 43:11
  Speaker 1: or Harvard Law School. They wanted their son to be
• 43:13
  Speaker 1: a lawyer. And so when I told my mom I
• 43:15
  Speaker 1: wanted to quit law school like a Jewish mother, by yeah,
• 43:20
  Speaker 1: the Italian, I forget about it. It was a very
• 43:22
  Speaker 1: historionic event. I said, no problem, I'll finish law school.
• 43:27
  Speaker 1: And then I was something else, desperately seeking a job,
• 43:29
  Speaker 1: and so I read it several articles about Goldman. Uh.
• 43:33
  Speaker 1: But I made a classic career mistake that young people
• 43:36
  Speaker 1: make is that I went for what I thought was
• 43:39
  Speaker 1: the coolest and the hottest job. Maybe that's a job
• 43:42
  Speaker 1: at Google today, maybe that's a job at Facebook. But
• 43:45
  Speaker 1: back in our day, the hottest, coolest job was investment
• 43:48
  Speaker 1: banking or McKenzie consulting. And uh, even better than that,
• 43:53
  Speaker 1: because the real estate market was super hot to be
• 43:55
  Speaker 1: a real estate investment banker. And so you know, I
• 43:58
  Speaker 1: wanted to be the kid at the Harvard graduation, at
• 44:00
  Speaker 1: the cocktail party to tell people I got the hottest
• 44:04
  Speaker 1: and the coolest job, and so I went and sought
• 44:07
  Speaker 1: that job, got that job. I went to that party
• 44:10
  Speaker 1: and bragged about it with my amazing insecurity at that time.
• 44:14
  Speaker 1: I went to work at Goldman Sacks, and eighteen months
• 44:18
  Speaker 1: later I was summarily fired. I got fired from Goldman Sacks.
• 44:22
  Speaker 1: I'm February one. I started there in August fourte uh.
• 44:29
  Speaker 1: And the purpose of the reason I got fired was
• 44:31
  Speaker 1: three reasons. Super uh terrible at the job. Number one.
• 44:37
  Speaker 1: Number two, we were going into a real estate recession
• 44:40
  Speaker 1: and the firm was making extreme cutback and the combination
• 44:42
  Speaker 1: of me not being even though he was working very hard,
• 44:45
  Speaker 1: I didn't have the skill set and the recession. Uh.
• 44:49
  Speaker 1: They gave me a pink slip to give me an
• 44:50
  Speaker 1: eleven thousand dollar severance check, and they told me I
• 44:53
  Speaker 1: had to leave, and I was devastated. I can imagine
• 44:56
  Speaker 1: by the way, I'm gonna say this now, there's all
• 45:00
  Speaker 1: sorts of stuff you said. First, I'm gonna flip he's
• 45:02
  Speaker 1: got like nine phones and they're all lighting up with emails. First,
• 45:06
  Speaker 1: I think you're very very self effacing and understating some
• 45:12
  Speaker 1: of the things that you've done. So the story I
• 45:15
  Speaker 1: heard with you and Dell was that it was the
• 45:18
  Speaker 1: middle of the summer, and nobody at Goldman was really
• 45:21
  Speaker 1: paying attention that in the scheme of things, that hundred
• 45:24
  Speaker 1: fifty or two was a relatively small deal and there
• 45:28
  Speaker 1: were bigger fish to fry. There were multibillion dollar mergers.
• 45:31
  Speaker 1: There was all sorts of stuff going on, and that
• 45:34
  Speaker 1: was I don't want to say orphan, because Goldman Sex
• 45:36
  Speaker 1: doesn't orphan a deal, but there was a lot of other, hotter,
• 45:41
  Speaker 1: bigger things going on. But it's not really me being
• 45:44
  Speaker 1: self effacing, because you have to understand the machinery and
• 45:47
  Speaker 1: the capability of Goldman Sacks today in if if I
• 45:52
  Speaker 1: was not at the firm, that deal would have happened
• 45:55
  Speaker 1: with with or without me. And I'm not saying that
• 45:57
  Speaker 1: in itself effacing way. I'm just talking about the wonderful
• 46:02
  Speaker 1: organization and the uh, the people, the depth of the
• 46:06
  Speaker 1: bench at Goldman's ax. But I will say this, I
• 46:10
  Speaker 1: took a big liking to Michael Dell, and I admired
• 46:13
  Speaker 1: Michael Dell, and I remember teasing him. I said, jeez,
• 46:16
  Speaker 1: you know, you did everything wrong. I did everything right.
• 46:20
  Speaker 1: And I remember him looking at me, what do you
• 46:21
  Speaker 1: mean by that? Anthony. I said, well, I listened to
• 46:23
  Speaker 1: my mom and went to college. I listened to my mom.
• 46:26
  Speaker 1: I went to law school. You dropped out, You got
• 46:29
  Speaker 1: into a fight with your parents over dropping out. You
• 46:32
  Speaker 1: were building computers in your dorm room. I was selling
• 46:35
  Speaker 1: T shirts. Okay, you went on to be worth a
• 46:37
  Speaker 1: go jillion dollars wealthiest. God bless him, and I hope
• 46:41
  Speaker 1: he gets the number one. But the point is, you know,
• 46:44
  Speaker 1: he was a guy that I really looked up to,
• 46:47
  Speaker 1: and I said, you know what, He's gonna turn this
• 46:49
  Speaker 1: thing around. And I believed it, and so I definitely
• 46:52
  Speaker 1: went out there to try to convince my clients of that.
• 46:54
  Speaker 1: So I heard this story third hands from other people,
• 46:58
  Speaker 1: and I've asked you about this over the years. So
• 47:00
  Speaker 1: the way this story came to me was sort of,
• 47:04
  Speaker 1: I don't want to use the word orphan, but not
• 47:07
  Speaker 1: the most you know, not the one that was flashing
• 47:09
  Speaker 1: red on Goldman's investment banking desk. You kind of found
• 47:13
  Speaker 1: it and said, oh, this is a really interesting deal.
• 47:16
  Speaker 1: You're the guy that lots of people gave sort of
• 47:19
  Speaker 1: a lukewarm Yeah. Well, if you get a lead, which
• 47:22
  Speaker 1: is sort of a cowardly thing we all hear when
• 47:24
  Speaker 1: you're raising money for something, well, who's the lead, who's
• 47:27
  Speaker 1: the who's good, the who's the which means who's the
• 47:30
  Speaker 1: guy that's going to do the heavy lifting, the due diligence.
• 47:33
  Speaker 1: So I don't look like if it goes south, at
• 47:36
  Speaker 1: least I could say, well, look who the lead was.
• 47:38
  Speaker 1: They got it wrong also, and that you're the one
• 47:41
  Speaker 1: who reached out to people that I believe it was
• 47:43
  Speaker 1: t I A Kraft. Well, you know, it's so funny
• 47:47
  Speaker 1: you say that because the guy is working at t
• 47:49
  Speaker 1: I A Kreft. Now his name is Bill Regal and
• 47:52
  Speaker 1: but he's he was they were. The leader was JP Morgan,
• 47:56
  Speaker 1: investment manager. Bill's working at Kreft. Now he's a tremendous guy.
• 48:00
  Speaker 1: And uh, but that was the lead. That was enough
• 48:02
  Speaker 1: to get convinced everybody else. You really, you really did
• 48:05
  Speaker 1: do your research, because that's twenty that's twenty two years ago.
• 48:09
  Speaker 1: But Bill, Bill looked at the deal, he said, well,
• 48:12
  Speaker 1: the financials are pretty crummy, but the story is good.
• 48:16
  Speaker 1: I said, well, forget about the story. This guy can
• 48:18
  Speaker 1: execute okay. And this business, like most technology businesses, are
• 48:22
  Speaker 1: gonna have fits and starts. But he's got a great
• 48:25
  Speaker 1: forward game plan, and so you know, and the credit
• 48:28
  Speaker 1: goes about at the end of the day. It's one
• 48:30
  Speaker 1: thing to serve something up, but this guy had to
• 48:33
  Speaker 1: pull the trigger and make the investment. And so but
• 48:36
  Speaker 1: you now you're in the sales department. The other guy
• 48:39
  Speaker 1: who basically said, hey, there's nothing on Wall Street that's guaranteed.
• 48:44
  Speaker 1: This is a home run. This is you have to
• 48:46
  Speaker 1: participate in this. What they put in fifty or a
• 48:48
  Speaker 1: hundred something like that, and it was ten They did
• 48:53
  Speaker 1: ten percent of the deal. And now you're really getting
• 48:56
  Speaker 1: me to remember the whole thing. And so once they
• 48:58
  Speaker 1: got ten percent of the deal, like you're saying about
• 49:00
  Speaker 1: Wall Street, they were a big name anchoring the deal.
• 49:04
  Speaker 1: And then people started saying, wait a minute, there might
• 49:06
  Speaker 1: be something here, and then orders started flowing. And then
• 49:10
  Speaker 1: you've worked in these places and so have I. And
• 49:12
  Speaker 1: so what happened was they were anchoring the deal and
• 49:16
  Speaker 1: the capital markets people wanted to cut them back on
• 49:19
  Speaker 1: the allocation. And so that was a little bit of
• 49:22
  Speaker 1: a pushing and shoving match. And somewhat when we've got
• 49:24
  Speaker 1: all this somewhat politically incorrect because I got I got
• 49:28
  Speaker 1: in there and and roughed it up a little bit.
• 49:30
  Speaker 1: Can't you can't do that? Can I do that? And
• 49:33
  Speaker 1: so you know, and that was probably not the most
• 49:36
  Speaker 1: politically astute thing for me to do, but I really
• 49:39
  Speaker 1: felt I needed to be a strong advocate for those
• 49:41
  Speaker 1: guys that got in early, and it was the right thing.
• 49:43
  Speaker 1: And but but they and they got the full load
• 49:45
  Speaker 1: of the allocation, which ended up being a great thing
• 49:48
  Speaker 1: for them in their investment portfolio. So so it's an
• 49:51
  Speaker 1: interesting story, um, but it goes back to something you
• 49:55
  Speaker 1: and I know, and it's a universal truth about business.
• 49:58
  Speaker 1: Business is about relationships, and business is about as Buffett says,
• 50:03
  Speaker 1: it takes twenty years to build your reputation. But start
• 50:06
  Speaker 1: with the principles of fairness, start with the principles of
• 50:10
  Speaker 1: doing the right thing for the other guy in the room, uh,
• 50:13
  Speaker 1: and not trying to take the last nickel out of something. Uh.
• 50:16
  Speaker 1: And you'll see that your career will grow and people
• 50:18
  Speaker 1: will make bets on you. So speaking relationship, what was
• 50:22
  Speaker 1: your at that point? Like, By the way, the reason
• 50:25
  Speaker 1: I know as much as I do about that deal
• 50:28
  Speaker 1: is I've described you to people. When people say to me,
• 50:31
  Speaker 1: who's this guy Scaramucci. Mooch is the guy who saved
• 50:35
  Speaker 1: Dell back in the early nineties. Yeah, I know there's
• 50:37
  Speaker 1: a there's a bit of hyperbolea but but that's how
• 50:41
  Speaker 1: I describe it. But since you mentioned relationships, what's your
• 50:46
  Speaker 1: relationship like subsequent with Michael Dell. Is he involved in
• 50:50
  Speaker 1: any of your other deals? He was? He was an
• 50:52
  Speaker 1: original investor in Skybridge. Uh. But great anchor. Yeah, great
• 50:59
  Speaker 1: Michael rate anchor investment. Uh and uh, very very grateful
• 51:03
  Speaker 1: for him for being an original anchor alongside of Merrill
• 51:06
  Speaker 1: Lynch and alongside of Lehman brothers. But the the Meryl
• 51:11
  Speaker 1: was an investor the first the first couple of investors
• 51:15
  Speaker 1: were Michael Dell, uh, Merrill Lynch, uh Lehman. There are
• 51:20
  Speaker 1: a few others like that, the the Quate Investment organization. Uh.
• 51:24
  Speaker 1: So we had a really good stable list of investors. Um.
• 51:28
  Speaker 1: And but Michael is no longer investor because we're out
• 51:30
  Speaker 1: of that seating business. And he did a masterful job
• 51:35
  Speaker 1: with a group of partners building his own family office,
• 51:38
  Speaker 1: which is arguably one of the best family offices in
• 51:40
  Speaker 1: the world. And so so he doesn't really need sky
• 51:42
  Speaker 1: Bridge to run his money. But we've remained friends. He's
• 51:46
  Speaker 1: a very very good guy, incredibly charitable him and his wife.
• 51:51
  Speaker 1: Uh and uh. I have a prediction which I think
• 51:53
  Speaker 1: when del Re emerges from its private equity position private
• 51:58
  Speaker 1: company position, I think it will flourish again as a
• 52:01
  Speaker 1: public company. So and I think Michael Stolen in the
• 52:04
  Speaker 1: halftime here at at Michael's probably fifty, I think he's
• 52:08
  Speaker 1: got a good thirty four year run to go here.
• 52:10
  Speaker 1: MSD Ventures is capital Capital is someone in the neighble
• 52:14
  Speaker 1: to twenty or thirty billion dollars the size of the
• 52:17
  Speaker 1: Yale endowment. That's pretty substantial. I'm not sure they've done
• 52:21
  Speaker 1: a masterful job that that place got started in and
• 52:25
  Speaker 1: uh where I could be wrong. And so it's almost
• 52:30
  Speaker 1: twenty years old, and they've done a masterful job of
• 52:33
  Speaker 1: helping Michael with and his family with their investments, to
• 52:36
  Speaker 1: say the least. So, so we talked a little bit
• 52:39
  Speaker 1: about how you got into the financial services industry. Really
• 52:43
  Speaker 1: you're just knocking on doors. I don't know if you
• 52:46
  Speaker 1: could do that today. But you also talked about some
• 52:50
  Speaker 1: early mentors. Who are the people that were early and
• 52:54
  Speaker 1: influential in your career that that you remember fondly. Well.
• 52:58
  Speaker 1: I mean, there's many of them are still very close
• 53:00
  Speaker 1: friends of mine. Bob cash Rignano, who ran the Goldman
• 53:03
  Speaker 1: Zax training program. UH. Bill Groover, who ran the training
• 53:07
  Speaker 1: program before Bob, who's now a professor at Bucknell University. UH.
• 53:12
  Speaker 1: I would tell you that Bob, Matsa and Jeff Lane
• 53:15
  Speaker 1: are very close to me. Those are the guys that
• 53:17
  Speaker 1: were from new Berger Berman that bought my company. Andrew
• 53:21
  Speaker 1: KA Bosar Jr. Who was the co founder of Oscar Capital,
• 53:25
  Speaker 1: but really the senior partner there. I was his junior partner.
• 53:29
  Speaker 1: I would say without Andrew K. Bosar Jr. I don't
• 53:32
  Speaker 1: think I would have had the courage Barry to leave
• 53:34
  Speaker 1: Goldman Sachs when I did. I always dreamt about having
• 53:38
  Speaker 1: my own business, but I think Andy provided me with
• 53:41
  Speaker 1: the security and the financial stability. And I sort of
• 53:44
  Speaker 1: knew that going into partnership with him, because he's such
• 53:47
  Speaker 1: a naturally good person UH would lead to good things
• 53:51
  Speaker 1: for me. UM and so I have to pay a
• 53:53
  Speaker 1: huge tribute to him. UH. John Weinberg, the legendary John Weinberg,
• 53:59
  Speaker 1: who I had the opportunity to be his private banker
• 54:02
  Speaker 1: for a few years. He was the CEO of Goldman.
• 54:04
  Speaker 1: He retired in I had some great aphorisms I'll remember
• 54:08
  Speaker 1: the rest of my life. One was some people grow
• 54:11
  Speaker 1: berry and other people swell, and you better figure out
• 54:15
  Speaker 1: who you are, okay. And I think that was a
• 54:17
  Speaker 1: very interesting thing about life and not getting too full
• 54:20
  Speaker 1: of yourself. Uh. The other thing you to say is
• 54:23
  Speaker 1: that trees do not grow to the sky. I've never
• 54:25
  Speaker 1: seen a tree hit the moon. So be careful because
• 54:29
  Speaker 1: markets are cyclical. Uh, markets get exuberant. He was a very,
• 54:34
  Speaker 1: very wise, earthy guy. Uh. That really shaped the culture.
• 54:39
  Speaker 1: Him and John Whitehead really shaped the culture of Goldman
• 54:42
  Speaker 1: Sacks and really explained to people that you're gonna do
• 54:46
  Speaker 1: a lot better if you can work on the team,
• 54:48
  Speaker 1: figure out what your strengths and weaknesses are. Don't be insecure,
• 54:51
  Speaker 1: don't try to go after the credit if you will,
• 54:55
  Speaker 1: but pass the ball. And so I look at those
• 54:58
  Speaker 1: people as great mentors of mine. I've probably left out ten.
• 55:01
  Speaker 1: I don't want to make this like an Academy Awards speech.
• 55:04
  Speaker 1: I probably left out ten other people. But what we
• 55:06
  Speaker 1: know about life, you can't do it on your own.
• 55:08
  Speaker 1: You gotta ask people for help. Ben Franklin once said
• 55:12
  Speaker 1: several hundred years ago, if you want a friend, you
• 55:16
  Speaker 1: gotta ask the person for a favor. And what typically
• 55:18
  Speaker 1: happens is once you ignite that person's willingness to help you.
• 55:22
  Speaker 1: And I'm in the camp that most people are good
• 55:24
  Speaker 1: natured and they can go out of the way to
• 55:26
  Speaker 1: help you, they will. Michael Milken, who I don't talk
• 55:30
  Speaker 1: to every day, but I sort of feel like I
• 55:32
  Speaker 1: can pick up the phone, God forbid, if there was
• 55:34
  Speaker 1: a health issue in my family, Michael would be there.
• 55:37
  Speaker 1: One of my partners at a prostate cancer scare, I
• 55:41
  Speaker 1: picked up the phone and called Michael. He spent an
• 55:43
  Speaker 1: hour on the phone with my my colleague. Uh. He's
• 55:46
  Speaker 1: a great man. I've tried to be a charitable donator
• 55:49
  Speaker 1: to his healthcare charities. He's a guy that if I
• 55:53
  Speaker 1: had to make a big decision, I would call him
• 55:56
  Speaker 1: and I would ask him for his advice. And so
• 55:58
  Speaker 1: my message to our listeners is, if you want to
• 56:01
  Speaker 1: make a friend, ask for the favor. Push the envelope
• 56:04
  Speaker 1: a little bit. Let's talk about um, not just mentors.
• 56:09
  Speaker 1: What investors influenced how you your career went on? Who
• 56:14
  Speaker 1: who did you look at everybody says, well, Warren Buffett
• 56:17
  Speaker 1: was really influential, But anybody that perhaps people may not
• 56:21
  Speaker 1: know quite as well. Um, what investors did you find
• 56:25
  Speaker 1: really influential and seminars, you know, the classic investors like Buffett,
• 56:30
  Speaker 1: or Monger or Phil Fisher. I think everyone's gonna talk
• 56:33
  Speaker 1: about those guys, Phil Fisher. Um. Phil, Phil Fisher is
• 56:38
  Speaker 1: ken Fisher's dad, Ken Fisher's Fisher investments. But Phil was
• 56:43
  Speaker 1: the real champion. And this is Charlie Munger's persuasion of
• 56:46
  Speaker 1: Mr Buffett, who was buying cigar butts that were half smoked,
• 56:50
  Speaker 1: and he was buying them at a discount, picking them
• 56:52
  Speaker 1: up off the streets, so to speak. He convinced Mr
• 56:56
  Speaker 1: Buffett to start buying growth orientated companies at fairer prices.
• 57:00
  Speaker 1: And don't be super concerned about that huge value orientation.
• 57:04
  Speaker 1: Make sure you're in a great business that as a
• 57:05
  Speaker 1: moat around it that can excel. Uh and and and
• 57:08
  Speaker 1: Warren Buffett and Phil Fischer and these guys were more
• 57:11
  Speaker 1: focused on how companies perform and not necessarily how stocks trade.
• 57:18
  Speaker 1: They're more focused on investing as opposed to day trading.
• 57:22
  Speaker 1: And so those guys are a huge influenced to me. Um,
• 57:25
  Speaker 1: but I'll tell you something that may or may not
• 57:27
  Speaker 1: surprise you. Uh. For my career, I'm more interested in
• 57:31
  Speaker 1: the Steve jobs is. I'm more interested in the guys
• 57:34
  Speaker 1: that the Richard Branson's or that the people I call
• 57:37
  Speaker 1: the holy Trinity of disruption, which would be Ted Turner,
• 57:41
  Speaker 1: Howard Schultz, and Richard Branson. Why am I so interested
• 57:45
  Speaker 1: in those guys? This year? I do have Richard this year. Uh,
• 57:49
  Speaker 1: they are breaking new ground. Uh. I'll tell you something.
• 57:53
  Speaker 1: I'm in a commodity business fund of funds management years. Uh,
• 57:58
  Speaker 1: several hundred of those sorts of things. Who else is
• 58:00
  Speaker 1: in a commodity business. Well, there's a company that makes
• 58:03
  Speaker 1: five products. They make a smartphone, a tablet. They used
• 58:06
  Speaker 1: to make an MP three player, They have a hardtop
• 58:09
  Speaker 1: and a laptop. Now they're gonna have a watch, Okay,
• 58:12
  Speaker 1: And they still make the MP three players, just just
• 58:14
  Speaker 1: no longer a hard drive. It well well, well yeah,
• 58:18
  Speaker 1: well they've and they've also built it into the iPhone.
• 58:20
  Speaker 1: But but Apple Computer, with those five commodity products, Barry
• 58:23
  Speaker 1: and everybody in the world is making those products, particularly
• 58:26
  Speaker 1: everybody in Asia. Apple Computer has turned itself into the
• 58:30
  Speaker 1: largest market capitalized company because they understood how to take
• 58:34
  Speaker 1: a commodity and turn it into an experience. You walk
• 58:39
  Speaker 1: into their stores, you're on their their app store, you're
• 58:43
  Speaker 1: in their eyebook store, you're on their iTunes store. All
• 58:46
  Speaker 1: of a sudden, you're in their ecosystem. You feel hipper,
• 58:50
  Speaker 1: you feel cooler. You're fifteen to eighteen year old daughter
• 58:54
  Speaker 1: wants that phone versus the others. And they turned a
• 58:57
  Speaker 1: commodity into an experience. Howard Schultz, he turned a commodity
• 59:02
  Speaker 1: coffee that you and I went to the Landmark Diner
• 59:04
  Speaker 1: room Manhasset and bought for twenty five cents in a
• 59:07
  Speaker 1: Greek diner coffee cup. He turned that into an experience.
• 59:11
  Speaker 1: I walk in there. Now it's got earth tones on
• 59:13
  Speaker 1: the floor, there's a green apron. I'm speaking in their
• 59:16
  Speaker 1: language about ordering something that I used to pay five
• 59:20
  Speaker 1: cents for that I'm spending four dollars for. Uh. There's
• 59:23
  Speaker 1: some good folk music in there, and I'm super happy
• 59:25
  Speaker 1: about the whole thing. And so so what I look
• 59:28
  Speaker 1: for these guys too. I'm gonna, by the way, I'm
• 59:30
  Speaker 1: gonna combine the two. I take the Starbucks app. Yeah,
• 59:34
  Speaker 1: and go exactly, and you got and I don't even
• 59:36
  Speaker 1: reach into my pocket. You go to pay for this yourn.
• 59:39
  Speaker 1: That's the funny thing is your phone is always out
• 59:41
  Speaker 1: your while it's buried somewhere. Well, that's the other and
• 59:45
  Speaker 1: that's Apple pay and and and so so from me,
• 59:47
  Speaker 1: he was, no, exactly, that's Starbucks is card on there.
• 59:51
  Speaker 1: But my my, my point is Richard Branson big commodity.
• 59:56
  Speaker 1: Last fifty years air travel. Look at what he did
• 1:00:00
  Speaker 1: to air travel, the colors to change. He turned those
• 1:00:04
  Speaker 1: planes into an experience for the customer. We turned a
• 1:00:09
  Speaker 1: coffee shop. Howard Schults turn a coffee shop into experience
• 1:00:13
  Speaker 1: with the customer. Sky Bridge, we are trying to turn
• 1:00:17
  Speaker 1: our investment thesis and our performance into an experience for
• 1:00:21
  Speaker 1: the customer. We wanted to come to the Salt Conference
• 1:00:24
  Speaker 1: and learn from some of the smartest people in the
• 1:00:25
  Speaker 1: world what's going on in the world. We wanted to
• 1:00:28
  Speaker 1: tune into our television show Wall Street week and get
• 1:00:31
  Speaker 1: a thirty minute Salt conference every week. We want them
• 1:00:34
  Speaker 1: to be investors of ours, and we want to help
• 1:00:37
  Speaker 1: make them long term investors. You know you've heard this before,
• 1:00:42
  Speaker 1: but maybe your your listeners haven't if you take the
• 1:00:46
  Speaker 1: following two choices. Would you like ten thousand dollars a
• 1:00:49
  Speaker 1: day or would you like a penny that I hand
• 1:00:52
  Speaker 1: to you that doubles every day. So I'll give you
• 1:00:55
  Speaker 1: ten thousand dollars a day for thirty days, or I'll
• 1:00:58
  Speaker 1: hand you a penny and it will double every day
• 1:01:00
  Speaker 1: for thirty days. What do you want that? I got
• 1:01:02
  Speaker 1: the math background, so I know I want that doubling penny. Yep.
• 1:01:05
  Speaker 1: And so that doubling penny yields about five point four
• 1:01:08
  Speaker 1: million dollars. If you're in your car, don't google it.
• 1:01:10
  Speaker 1: But if you're at home, go to Google and look
• 1:01:13
  Speaker 1: up a penny doubling every day for thirty days, and
• 1:01:16
  Speaker 1: you'll see the spreadsheet come up. And what you'll find
• 1:01:19
  Speaker 1: about life. If you can get people to think about
• 1:01:22
  Speaker 1: their money going to work for them and compounding gradually
• 1:01:25
  Speaker 1: in the marketplace, uh, it'll mean a more financially stable society,
• 1:01:30
  Speaker 1: a more financially a stable and secure future for the individual.
• 1:01:35
  Speaker 1: And this is something that I'm very passionate about. A skybridge.
• 1:01:38
  Speaker 1: We're gonna try to make that broader and more open
• 1:01:41
  Speaker 1: for the average person. So let's talk a little bit
• 1:01:43
  Speaker 1: about your buddy Gary Kaminski, yea who I'm I know.
• 1:01:47
  Speaker 1: He lives the next town over from me. You actually
• 1:01:50
  Speaker 1: don't live that far from me either. I just moved
• 1:01:53
  Speaker 1: a little east. So there must be there must be
• 1:01:55
  Speaker 1: something in the water from Long Island and all its
• 1:01:57
  Speaker 1: big males living in the same area Togain. It's it's
• 1:02:00
  Speaker 1: not that far. We have a mutual friend, Jim McCann
• 1:02:03
  Speaker 1: who was on the show that's great far from where
• 1:02:05
  Speaker 1: you live as well. I'm a partner of his in
• 1:02:07
  Speaker 1: the New York Mets, by the way. So he's a
• 1:02:09
  Speaker 1: great human being. And Jim's son, Matthew, has worked at
• 1:02:13
  Speaker 1: Skybridge for the last decade, one of the first employees
• 1:02:16
  Speaker 1: that so we had him on the show. By the way,
• 1:02:18
  Speaker 1: I talk about his new charity that he's he's wonderful,
• 1:02:21
  Speaker 1: and he's like, you know, we're really not ready to
• 1:02:23
  Speaker 1: talk about that yet. Jim, I wanted you to. Let's
• 1:02:27
  Speaker 1: raise you a little money. It's like later, okay, it's
• 1:02:30
  Speaker 1: it's uh And it's actually a wonderful local charity. Wonderful guy.
• 1:02:34
  Speaker 1: I'm looking forward to seeing what that goes. But let's
• 1:02:36
  Speaker 1: talk about Kaminsky. He would go in that mentor role
• 1:02:39
  Speaker 1: model camp too. By the way that no, I mean
• 1:02:42
  Speaker 1: Jim Gary. Gary's a contemporary. He's a very close personal friend.
• 1:02:47
  Speaker 1: Before I left to launch my firm. Yeah, I had
• 1:02:50
  Speaker 1: dinner with Jim and and said, here's what I'm thinking about.
• 1:02:53
  Speaker 1: There's a few people like that in my life. Another
• 1:02:56
  Speaker 1: guy is Ed Mandel David Sure and basically said here's
• 1:03:01
  Speaker 1: what I'm thinking about. And each of them, from a
• 1:03:04
  Speaker 1: very different philosophical approach, gave me very good advice, very
• 1:03:08
  Speaker 1: complimentary advice, but from a different angle. And and McCann
• 1:03:13
  Speaker 1: is one of the how do you describe him? He's
• 1:03:16
  Speaker 1: just very easy going and very insightful, and he's got,
• 1:03:20
  Speaker 1: like you and I do, a pretty thick New York
• 1:03:22
  Speaker 1: Long Island accent, and he sort of surprises you because
• 1:03:27
  Speaker 1: what comes out of out from that accent is a
• 1:03:30
  Speaker 1: little different than I think a lot of people expect.
• 1:03:33
  Speaker 1: He's a he's a wonderful human being. And he took something, uh,
• 1:03:37
  Speaker 1: and this is what I love about life, and great
• 1:03:40
  Speaker 1: American entrepreneurs can take nothing and turned it into something. Literally,
• 1:03:46
  Speaker 1: he took a queen's flower shop and turned it into
• 1:03:48
  Speaker 1: an internationally recognized iconic brand. And so when I sat
• 1:03:52
  Speaker 1: down with him uh m and acid had dinner with
• 1:03:55
  Speaker 1: him when I was starting Skybridge. Uh he gave me
• 1:03:58
  Speaker 1: a lot of good advice and he said, hey, my
• 1:04:00
  Speaker 1: son will come in an intern for you. And this
• 1:04:02
  Speaker 1: is a great story. The kid worked for me for
• 1:04:04
  Speaker 1: three months, fell in love with him, and I offered
• 1:04:07
  Speaker 1: him a permanent job. The thing is, I couldn't offer
• 1:04:10
  Speaker 1: him the permanent job until I was confident that we
• 1:04:12
  Speaker 1: were raising the capital. But once we got the capital
• 1:04:14
  Speaker 1: in place, I turned him out and said, hey, we
• 1:04:16
  Speaker 1: got to offer your permanent job. He's there for ten years.
• 1:04:19
  Speaker 1: And so I not only oh Jim some of the
• 1:04:22
  Speaker 1: benefit of his great advice, but he also put his
• 1:04:25
  Speaker 1: first second born son in my office. So I'm very
• 1:04:28
  Speaker 1: grateful for that too. So let's talk about Kaminski. So, so,
• 1:04:32
  Speaker 1: Gary is a dear friend. We've known each other forever.
• 1:04:37
  Speaker 1: Gary has a wonderful way on television. He's very quick
• 1:04:40
  Speaker 1: on his feet about particulate, very fast. Uh He's got
• 1:04:45
  Speaker 1: a real expertise behind. Like I don't know if you
• 1:04:49
  Speaker 1: look at the same way when I watch other people
• 1:04:51
  Speaker 1: on TV and look, you and I have been doing
• 1:04:54
  Speaker 1: CNBC and Fox and Bloomberg for for decades, I watched
• 1:04:58
  Speaker 1: somebody on TV and ten seconds it's like this guy
• 1:05:01
  Speaker 1: doesn't know what he's talking about, or this guy is
• 1:05:03
  Speaker 1: trying to be outrageous to make a call, or like
• 1:05:06
  Speaker 1: you and I, I assume are kind of critical. And
• 1:05:09
  Speaker 1: when you see somebody like Kaminsky on TV right away
• 1:05:13
  Speaker 1: you say, oh, this is a real depth and knowledge.
• 1:05:15
  Speaker 1: Back here to remember. So he's a money man. I
• 1:05:17
  Speaker 1: mean he was running billions and billions of dollars at
• 1:05:21
  Speaker 1: New Berger Berman. Uh, he's one of the best money
• 1:05:24
  Speaker 1: managers of our generations. That it was a Darmoul brad
• 1:05:29
  Speaker 1: m d brilliant guy. Still working at New Burger with
• 1:05:34
  Speaker 1: his other brother Michael. They have a great team there.
• 1:05:38
  Speaker 1: Full disclosure. They manage some of my retirement money and
• 1:05:41
  Speaker 1: my family trust. I have an enormous respect for the
• 1:05:43
  Speaker 1: Kaminski family as investors. But here's something that Gary has
• 1:05:48
  Speaker 1: been absolutely brilliant about. And you and I a decade,
• 1:05:51
  Speaker 1: but Gary has been on Tellers for twenty five years. Amazing.
• 1:05:55
  Speaker 1: His first time on TV, I think he was well, yeah,
• 1:05:58
  Speaker 1: well yeah, let's let's let's put him back. I call
• 1:06:01
  Speaker 1: him Grandpa Gary. Now, just to tease him. But but
• 1:06:04
  Speaker 1: but he's Uh, he's been a great friend. But he's
• 1:06:07
  Speaker 1: an insightful guy. Here's the thing I find that we
• 1:06:10
  Speaker 1: have to be careful of as pundits. We don't want
• 1:06:12
  Speaker 1: to just provide information to people. We want to provide
• 1:06:15
  Speaker 1: them insight and what context with them exactly context, what
• 1:06:19
  Speaker 1: to do with the information. There's nobody better on television
• 1:06:23
  Speaker 1: than Gary Kaimisky and doing that. And I'll tell you
• 1:06:25
  Speaker 1: another thing about Gary Kaminski. Uh, the guests want to
• 1:06:29
  Speaker 1: be on the show, Uh, in large part because of him. Well,
• 1:06:34
  Speaker 1: let me put it to you this way. I think
• 1:06:35
  Speaker 1: he knows these guys a lot better than me. A
• 1:06:36
  Speaker 1: lot of these people you know. And I have some
• 1:06:39
  Speaker 1: close friends in the hedge fund community and some close
• 1:06:41
  Speaker 1: friends as a result of Salt but being on television
• 1:06:44
  Speaker 1: twenty five years and interviewing different money managers over that
• 1:06:48
  Speaker 1: span of time. He had his own television show about
• 1:06:51
  Speaker 1: five years ago. Uh. He has a whole code array,
• 1:06:54
  Speaker 1: a whole broad deep rolodex of people that I think
• 1:06:58
  Speaker 1: are fascinating that I'm looking forward to having the opportunity
• 1:07:01
  Speaker 1: to interview on our show. At the time of Gary Show,
• 1:07:05
  Speaker 1: which was the name of it was Strategy Session, right.
• 1:07:08
  Speaker 1: I thought it was the best show on the CNBC lineup,
• 1:07:11
  Speaker 1: but they had put it at the wrong time. It
• 1:07:13
  Speaker 1: wasn't a lunch hour show. It was either a seven
• 1:07:16
  Speaker 1: am show or a four pm After the Bell show.
• 1:07:19
  Speaker 1: But in the middle of the day it didn't find
• 1:07:21
  Speaker 1: its audience. And it was very smart and very well done.
• 1:07:24
  Speaker 1: Well listen. I mean, there's a lot of different things
• 1:07:27
  Speaker 1: that go on in these places in terms of how
• 1:07:29
  Speaker 1: you make decisions about leaving a show on the air
• 1:07:32
  Speaker 1: or not. And so one of the things that Gary
• 1:07:35
  Speaker 1: and I Skybridge what we thought we would do is
• 1:07:37
  Speaker 1: we would make the show ourselves. This way, we could
• 1:07:40
  Speaker 1: show the show whenever we wanted. You can go to
• 1:07:42
  Speaker 1: Wall Street week dot com and watch it. We are
• 1:07:46
  Speaker 1: televising it on Fox affiliates because I am a contributor
• 1:07:49
  Speaker 1: to Fox Business and Fox News. But now that's something new,
• 1:07:53
  Speaker 1: because you weren't always a contributor. No, no, I had.
• 1:07:56
  Speaker 1: I had a prior relationship with CNBC, and that was
• 1:07:59
  Speaker 1: for a couple of a good couple of years, a
• 1:08:01
  Speaker 1: couple of years, but they were a spot. Now I know.
• 1:08:04
  Speaker 1: Bloomberg is a sponsor of the conference wasn't CNBC at
• 1:08:08
  Speaker 1: one time CNBC. Well, you know, I think there's a
• 1:08:12
  Speaker 1: couple of guys coming from the internet side, but I
• 1:08:14
  Speaker 1: think the the television side this year will be Fox
• 1:08:17
  Speaker 1: Business in Bloomberg and listen. You know, the truth of
• 1:08:20
  Speaker 1: the matter is, um, I have fallen in love with
• 1:08:24
  Speaker 1: Roger Ales and Bill Shine. Roger has done and we
• 1:08:28
  Speaker 1: wanna talk about an entrepreneur, I gotta put him up
• 1:08:31
  Speaker 1: there with the other ones we were referencing. Fox is
• 1:08:33
  Speaker 1: a giant. But you just think about what Roger Ayles did.
• 1:08:37
  Speaker 1: He started something from absolutely nothing, um. And he'll tell
• 1:08:41
  Speaker 1: you himself that people were throwing eggs and tomatoes at
• 1:08:44
  Speaker 1: him and Rupert Murdoch scoffing at the idea that they
• 1:08:46
  Speaker 1: were going to take on CNN. Can I tell you
• 1:08:49
  Speaker 1: look at look at what he's done. He's one of
• 1:08:51
  Speaker 1: my intellectual heroes. I don't agree with the politics of
• 1:08:55
  Speaker 1: of some of the crazy that we run into on
• 1:08:58
  Speaker 1: some of the more radical shows on Box, but when
• 1:09:01
  Speaker 1: you look at it strictly from a business perspective, they
• 1:09:04
  Speaker 1: may be the most successful cable television channel ever. Well, listen,
• 1:09:08
  Speaker 1: I I think that there are crazies on the left.
• 1:09:11
  Speaker 1: There are crazies on the right, and I know, but
• 1:09:14
  Speaker 1: MSNBC has no influence. Foxes enormously. People scoff at the
• 1:09:19
  Speaker 1: tagline fair and balance, but I always tell people who
• 1:09:22
  Speaker 1: aren't watching it, go watch it because it is fair
• 1:09:25
  Speaker 1: and balance. They are bringing a ton of Democrats on
• 1:09:28
  Speaker 1: the show. They are bringing a ton of left leaning people.
• 1:09:32
  Speaker 1: I would argue with the fair and balance but from
• 1:09:35
  Speaker 1: but there's no But there's no argument from a business perspective.
• 1:09:40
  Speaker 1: They are the most one of the if not the
• 1:09:42
  Speaker 1: most successful. Watch Bill O'Reilly's show for one week and
• 1:09:45
  Speaker 1: you tell me where he's not fair and balance? So
• 1:09:47
  Speaker 1: what's pretty fair? Independent guys? So let me tell you
• 1:09:50
  Speaker 1: this is an interesting digression. But Bill O'Reilly when he
• 1:09:55
  Speaker 1: first started, was kind of described as the wild man
• 1:09:58
  Speaker 1: of Fox. And now how Bill O'Reilly is essentially the
• 1:10:02
  Speaker 1: adult supervision. He is the closest thing to fair and
• 1:10:06
  Speaker 1: balanced on Fox. When you compare him, he's practically statesmanlike
• 1:10:12
  Speaker 1: against some of the other I'm not going to mention
• 1:10:16
  Speaker 1: people by name, but some of the more extreme shows,
• 1:10:18
  Speaker 1: and you know, every now and then there's some really listen,
• 1:10:21
  Speaker 1: I'm I'm a I'm a declared Republican and so I
• 1:10:24
  Speaker 1: but that's a transition for you as well. Well. No,
• 1:10:27
  Speaker 1: I've always been a Republican, but my law school classmate
• 1:10:31
  Speaker 1: was a couple of years behind me. Barack Obama when
• 1:10:33
  Speaker 1: he ran for the presidency two years behind you, was
• 1:10:36
  Speaker 1: that right, two years behind me? I did support him
• 1:10:38
  Speaker 1: in two thousand and eight, and so, as a good
• 1:10:40
  Speaker 1: Roman Catholic, I'm paying penance now to the to the
• 1:10:43
  Speaker 1: Republican Party for doing that. But but so you know, listen,
• 1:10:45
  Speaker 1: I don't want to spend the whole time talking about Fox.
• 1:10:48
  Speaker 1: I'm in love with the network. Uh. I think they
• 1:10:50
  Speaker 1: do a massiful job. I think that Brett Bear Special
• 1:10:54
  Speaker 1: Report is among the best news uh that can be
• 1:10:57
  Speaker 1: delivered out there. Show me a better news program. I
• 1:11:00
  Speaker 1: do think that they are fair and balanced. Not to
• 1:11:02
  Speaker 1: say that they don't have right leaning shows, but they
• 1:11:05
  Speaker 1: have a lot of left leaning individuals on there. And
• 1:11:08
  Speaker 1: I think that the reason why people are watching them
• 1:11:11
  Speaker 1: and Quinnipiac backs is up they were entertaining. Well. No,
• 1:11:14
  Speaker 1: they voted in the most trusted news organization in the
• 1:11:17
  Speaker 1: United States when they had a pole So we don't
• 1:11:20
  Speaker 1: we we don't have to you and I disagree possibly
• 1:11:22
  Speaker 1: about some of this stuff, so that I like them.
• 1:11:25
  Speaker 1: So let's tall. I have an enormous amount of respect
• 1:11:27
  Speaker 1: for Roger rails Well and Bill Shine for that man.
• 1:11:29
  Speaker 1: So let's talk a little bit about your involvement with
• 1:11:32
  Speaker 1: Barack Obama, because there's a wonderful arc when people talk
• 1:11:36
  Speaker 1: about who is Anthony Scaramucci? So you support your former
• 1:11:40
  Speaker 1: Harvard Look classmate he gets elected. In two thousand and eight,
• 1:11:46
  Speaker 1: we're in the midst of a financial crisis. Lo and behold,
• 1:11:50
  Speaker 1: there's a lot of chess beating about Wall Street. Um.
• 1:11:53
  Speaker 1: I try to be as objective as possible in bail
• 1:11:56
  Speaker 1: Out Nation because I didn't want to write the book
• 1:11:59
  Speaker 1: that there's a story to that. Bill Fleckenstein's Greenspan's Bubble
• 1:12:03
  Speaker 1: had come out and it was wildly successful for a
• 1:12:06
  Speaker 1: business book, and uh mcgroy hill had gone to him
• 1:12:09
  Speaker 1: and said, okay, now let's do something on bear Sterns.
• 1:12:12
  Speaker 1: And he goes, hey, man, I just finished one book
• 1:12:14
  Speaker 1: and I need a few years to you know what
• 1:12:16
  Speaker 1: it's You've written super hard. You know, it takes a
• 1:12:18
  Speaker 1: year or two to recover. So they asked him, who
• 1:12:20
  Speaker 1: who else is writing on this? Oh? That's easy. Ridholtz
• 1:12:22
  Speaker 1: has been running about Baron Lehman for a year or two.
• 1:12:25
  Speaker 1: You should go talk to him, And I said, no,
• 1:12:27
  Speaker 1: no exaggeration, half half a dozen times. I don't want this.
• 1:12:30
  Speaker 1: So anyway, I tried to be objective, which is a
• 1:12:34
  Speaker 1: real challenge. But the reason I bring that up within
• 1:12:38
  Speaker 1: the context is there was a lot of beating on
• 1:12:41
  Speaker 1: Wall Street. And look, you and I have both been
• 1:12:43
  Speaker 1: in this industry for twenty plus year. You know that
• 1:12:47
  Speaker 1: there's a handful of people in every firm that blows
• 1:12:50
  Speaker 1: up that a response. My favorite example is a I
• 1:12:53
  Speaker 1: G was seventy employees, two people in the financial products division,
• 1:12:59
  Speaker 1: and of those two people, a dozen were responsible for
• 1:13:03
  Speaker 1: all of the damage. So when people are beating on
• 1:13:05
  Speaker 1: Wall Street, they're beating on the headlines, or they're beating
• 1:13:09
  Speaker 1: on a guy like Dick Fold, but the people at
• 1:13:13
  Speaker 1: Lehman Brothers didn't cause it to blow up. One of
• 1:13:15
  Speaker 1: which leads me to the line, Hey, Barack, you're beating
• 1:13:19
  Speaker 1: us like a pinata. That's that's where I wanted to
• 1:13:22
  Speaker 1: go with That was a that was a tough line
• 1:13:23
  Speaker 1: for me. So I was at the museum at a
• 1:13:26
  Speaker 1: town hall meeting, Susan Krakaur, who is now my producer
• 1:13:29
  Speaker 1: for formerly producer at CNBC and a big demand money
• 1:13:33
  Speaker 1: and Fast money, long television background. Uh, she's our producer
• 1:13:37
  Speaker 1: for Wall Street Week and a partner of mine. She
• 1:13:41
  Speaker 1: basically called on me to ask a question of the president.
• 1:13:43
  Speaker 1: He recognized me immediately from law school. We got a
• 1:13:46
  Speaker 1: little of a bantam while I also supported him, and
• 1:13:48
  Speaker 1: I said, well, Mr President, when are we going to
• 1:13:50
  Speaker 1: stop whacking Wall Street with a pinata stick? Well, one
• 1:13:54
  Speaker 1: thing you learned is as an Italian American, you shouldn't
• 1:13:57
  Speaker 1: use the word whack on live television. That's one thing
• 1:14:00
  Speaker 1: you learned. And you know the president as a bully pulpit,
• 1:14:03
  Speaker 1: and so he bullied me with the pulpit, and so
• 1:14:05
  Speaker 1: that was fine, But that wasn't the reason why I
• 1:14:08
  Speaker 1: switched back to the Republican. But let's talk about one
• 1:14:12
  Speaker 1: second and then we'll come back to the Republicans and
• 1:14:15
  Speaker 1: I will have a discussion because I'm an ex Republican.
• 1:14:18
  Speaker 1: But you um that when viral that line blew up,
• 1:14:22
  Speaker 1: It was on The Daily Show, was on Fox, it
• 1:14:24
  Speaker 1: was on CNN, that basically was everywhere. What was that like? Well,
• 1:14:30
  Speaker 1: you know, let me tell you something. I was lit
• 1:14:32
  Speaker 1: up by the left wing blogs and YouTube. That clip
• 1:14:36
  Speaker 1: was on YouTube YouTube a few million views. You know.
• 1:14:39
  Speaker 1: Jon Stewart had some funny lines about me that my
• 1:14:41
  Speaker 1: teenage children still give back to me over the last
• 1:14:45
  Speaker 1: four or five years. But what I would say to
• 1:14:47
  Speaker 1: you about that experience is uh, something that you should
• 1:14:51
  Speaker 1: never read with people write about you. That's probably a
• 1:14:53
  Speaker 1: good idea, but don't. But I did read a comment
• 1:14:57
  Speaker 1: where somebody said to me that I was an elitist
• 1:14:59
  Speaker 1: because I was. I didn't realize that Wall Street was
• 1:15:02
  Speaker 1: this great sinning society and Barack Obama was the popular savior,
• 1:15:06
  Speaker 1: and I was an elitist because I was a member
• 1:15:09
  Speaker 1: of the Wall Street community, like it's a monolithic exactly.
• 1:15:12
  Speaker 1: And I remember thinking to myself, my god, this person
• 1:15:15
  Speaker 1: thinks I'm gonna leaders. I grew up in a middle
• 1:15:17
  Speaker 1: class family on Long Island in Port Washington. My parents
• 1:15:21
  Speaker 1: didn't go to college. How am I an elitist? And
• 1:15:23
  Speaker 1: then it dawned on me, Barry, that the person that
• 1:15:27
  Speaker 1: wrote that was right, that I had actually become an
• 1:15:31
  Speaker 1: elitist because I was insulating myself with super wealthy people
• 1:15:36
  Speaker 1: managing the money of super wealthy people going to fancy
• 1:15:39
  Speaker 1: pants country clubs and fancy pants restaurants, and I was
• 1:15:43
  Speaker 1: losing touch with some of the things that the middle
• 1:15:48
  Speaker 1: class of the United States and the lower middle class
• 1:15:50
  Speaker 1: are suffering with. And so that whole experience for me
• 1:15:54
  Speaker 1: was hugely valuable because when I worked for Governor Romney
• 1:15:58
  Speaker 1: on the two thousand twelve election, I asked for the
• 1:16:02
  Speaker 1: opportunity to travel and got an opportunity to see some
• 1:16:05
  Speaker 1: of the small towns in the United States that are
• 1:16:08
  Speaker 1: frankly suffering. We've got a wage depression or stagnation. We
• 1:16:14
  Speaker 1: have a disposable income decline over the least six or
• 1:16:17
  Speaker 1: seven years. And you know it goes back decades, but
• 1:16:22
  Speaker 1: the last six or seven years I had an eight
• 1:16:24
  Speaker 1: percent drop. That's fairly steep. And so the point of
• 1:16:27
  Speaker 1: me bringing all this up is that we have to
• 1:16:31
  Speaker 1: come up. But this is not a left or right discussion.
• 1:16:34
  Speaker 1: This is a right or wrong discussion. Or as Scott
• 1:16:37
  Speaker 1: Walker said in a dinner on Sunday night, it's not
• 1:16:40
  Speaker 1: a red or blue thing. It's a red, white and
• 1:16:44
  Speaker 1: blue thing. And the point being is that we have
• 1:16:47
  Speaker 1: to come up with the right policy directives. The right initiatives, corporations,
• 1:16:51
  Speaker 1: small businesses. We have to figure out a way to
• 1:16:56
  Speaker 1: close that income gap. We have to figure out a
• 1:16:59
  Speaker 1: way to grow the po. I I'm not a big
• 1:17:01
  Speaker 1: believer in the redistribution theory. I don't think that's ever
• 1:17:04
  Speaker 1: worked in history. We have a lot of laboratory documentation
• 1:17:08
  Speaker 1: about that not working. Uh, And so we have to
• 1:17:10
  Speaker 1: figure out a way to empower people. And this is
• 1:17:13
  Speaker 1: another reason not to threat it back to our show
• 1:17:15
  Speaker 1: Wall Street Week, but one of the themes and the
• 1:17:17
  Speaker 1: mission statements of the Wall Street Week is, hey, rely
• 1:17:20
  Speaker 1: on yourself. You can't rely on Social Security, you can't
• 1:17:23
  Speaker 1: be a dependent of the government. We gotta figure out
• 1:17:25
  Speaker 1: ways to help you save and build an est eg
• 1:17:28
  Speaker 1: for yourselves. So that's really a fascinating tell. I love
• 1:17:34
  Speaker 1: that arc. And you, basically, I don't know if you're
• 1:17:39
  Speaker 1: aware of what you just said, but one of your
• 1:17:42
  Speaker 1: early mentors who had said to you, are you gonna
• 1:17:45
  Speaker 1: grow or you're gonna swell? You're basically saying that pre Pinata,
• 1:17:50
  Speaker 1: you were engaging in a little swelling. Is that what
• 1:17:52
  Speaker 1: I'm hearing from? Well, I, you know, I certainly didn't
• 1:17:55
  Speaker 1: think I was engaging in swelling. But I possibly was
• 1:17:58
  Speaker 1: not only just engaging in swelling, is I was overly
• 1:18:01
  Speaker 1: insulating myself in a way where you're losing touch with
• 1:18:06
  Speaker 1: the some of the things that you need to really
• 1:18:08
  Speaker 1: focus on in your life. And so and in politics
• 1:18:11
  Speaker 1: that's huge, and in politics, but also in business. UM,
• 1:18:14
  Speaker 1: I've really tried to set up Skybridge in a way
• 1:18:17
  Speaker 1: where who's ever working at Skybridge they feel like they're
• 1:18:20
  Speaker 1: getting a good experience. We pay a percent of the
• 1:18:22
  Speaker 1: health care at Skybridge. We give the most allowable or
• 1:18:27
  Speaker 1: the maximum profit contribution to the i RA S or matching. Uh,
• 1:18:34
  Speaker 1: you know, I'm Italian. We serve a free meal every
• 1:18:36
  Speaker 1: day at lunch. If you're there for dinner, we're gonna
• 1:18:38
  Speaker 1: serve your dinner. My My whole feeling is is that
• 1:18:42
  Speaker 1: I feel that we can create a profitable enough firm
• 1:18:44
  Speaker 1: to help people with their retirement and help people with
• 1:18:47
  Speaker 1: their current healthcare and so so I really have tried
• 1:18:51
  Speaker 1: to think about these things in the most human way possible,
• 1:18:55
  Speaker 1: because at the end of the day, UM, I think
• 1:18:57
  Speaker 1: that's all we really have is the relationships that we
• 1:19:00
  Speaker 1: have with the other people around us. And so so
• 1:19:02
  Speaker 1: sometimes if you are in a tunnel, or sometimes you're
• 1:19:06
  Speaker 1: overly focused on certain things, you can lose focus on
• 1:19:09
  Speaker 1: important things. I if I gave you all my flaws,
• 1:19:12
  Speaker 1: we'd be here for six days. And there's a ton
• 1:19:14
  Speaker 1: and there's a big phone book of them. But but
• 1:19:16
  Speaker 1: one thing that the pinata experience did for me, it
• 1:19:19
  Speaker 1: was very eye opening about not overly insulating yourself. So
• 1:19:23
  Speaker 1: so let me ask you a couple of related questions.
• 1:19:27
  Speaker 1: And I only have you for another fifteen minutes or
• 1:19:29
  Speaker 1: so before your um colleague is gonna start bouncing off
• 1:19:33
  Speaker 1: the glass walls in the UH in the engineers booth um.
• 1:19:38
  Speaker 1: Is Wall Street still being treated like a pinata? Or
• 1:19:41
  Speaker 1: have we begun to move past that? Well, I think
• 1:19:44
  Speaker 1: there's a number of things that have happened, and and
• 1:19:47
  Speaker 1: not to music cliche, at one or two bad Apple
• 1:19:49
  Speaker 1: spoils a whole bunch. But what has basically happened is
• 1:19:53
  Speaker 1: the media focuses on Wall Street. It's a lot like
• 1:19:55
  Speaker 1: what Willie Sutton said about banks, because that's amount of
• 1:19:58
  Speaker 1: money is and so when the media is focusing, the
• 1:20:01
  Speaker 1: focus has been on sort of three things. The person
• 1:20:04
  Speaker 1: that's made a billion, the person that lost a billion,
• 1:20:08
  Speaker 1: and the person that stole a billion, and so it's
• 1:20:10
  Speaker 1: made a billion, lost a billion, stole a billion, and
• 1:20:13
  Speaker 1: the and the stole a billion one is the most
• 1:20:16
  Speaker 1: riveting because that's the car crash where all the rubber
• 1:20:18
  Speaker 1: necking takes place. And so what that does is it
• 1:20:21
  Speaker 1: infuses the spirit of distrust, malfeasance, malpractice. Uh. And to
• 1:20:26
  Speaker 1: your earlier point, there were probably pick the number. Most
• 1:20:33
  Speaker 1: of the people in our community are really trying to
• 1:20:35
  Speaker 1: do a good job, and most of the people really
• 1:20:37
  Speaker 1: care about their customers and are not in the rip
• 1:20:39
  Speaker 1: off business. And so uh that and are offended by
• 1:20:43
  Speaker 1: the concept of, Hey, if you have a product to
• 1:20:46
  Speaker 1: go sell, go sell it. But if you're gonna steal
• 1:20:48
  Speaker 1: from people, what is that job? You know? That seems
• 1:20:51
  Speaker 1: to be the two. If you worked inside the sky bridge,
• 1:20:54
  Speaker 1: you'd have to hear this lecture all time. You know,
• 1:20:56
  Speaker 1: my my parents and my grandparents, Uh, they love me
• 1:20:59
  Speaker 1: very much much. Uh. Many of them work with their hands.
• 1:21:02
  Speaker 1: Many many of these people were never educated. And I
• 1:21:05
  Speaker 1: always tell the people that work inside a skybridge, but
• 1:21:08
  Speaker 1: one thing they did for me is give me my
• 1:21:10
  Speaker 1: last name clean. There's not enough art, there's not enough,
• 1:21:13
  Speaker 1: not a big enough house there isn't a large enough
• 1:21:16
  Speaker 1: private plane that I need to do anything to hurt
• 1:21:20
  Speaker 1: my family or my mom and dad. And so I
• 1:21:23
  Speaker 1: really try to drive that home because I think, uh,
• 1:21:25
  Speaker 1: in leadership, the fish things from the head down. I
• 1:21:28
  Speaker 1: try to let my staff know we don't ever need
• 1:21:30
  Speaker 1: to go anywhere near any line. Our job is to
• 1:21:33
  Speaker 1: serve our customers. And I also tell the staff. Let
• 1:21:36
  Speaker 1: me tell you some there are six d people relying
• 1:21:38
  Speaker 1: on the firm. Immediately, those are the sixty people inside
• 1:21:41
  Speaker 1: the firm. And then there's all the dependence that would
• 1:21:44
  Speaker 1: be my four children, my mom and dad who I subsidize. Uh,
• 1:21:48
  Speaker 1: you know, my my employees and staff are partners. All
• 1:21:51
  Speaker 1: have children. They need to make mortgage payments, they need
• 1:21:54
  Speaker 1: to make tuition payments. We got a ton of people
• 1:21:57
  Speaker 1: relying on us, and so don't just think about your
• 1:22:00
  Speaker 1: self when you're making decisions. Think about that broad community
• 1:22:03
  Speaker 1: of people. Uh that or want you to look out
• 1:22:06
  Speaker 1: for them? All right, So in the last couple of
• 1:22:08
  Speaker 1: minutes we have, let me get to my last few
• 1:22:11
  Speaker 1: questions or a couple of questions I always ask, and
• 1:22:14
  Speaker 1: I don't want to skip um. But first a quick
• 1:22:18
  Speaker 1: hedge fund question so the rules have recently been changed
• 1:22:22
  Speaker 1: on on advertising, on marketing. How is that changing the
• 1:22:28
  Speaker 1: hedge fund world. Well, I think for right now it's
• 1:22:31
  Speaker 1: not changing the hedge fund world because most people have
• 1:22:35
  Speaker 1: elected to stay away from it because they're getting advice
• 1:22:37
  Speaker 1: from their outside councils and their internal council that the
• 1:22:41
  Speaker 1: rules are very uncertain and you don't want to hit
• 1:22:44
  Speaker 1: a trip wire somewhere where you get the the SEC
• 1:22:47
  Speaker 1: or some other regulatory agency upset with you. Um and
• 1:22:50
  Speaker 1: so I think it's hard. One thing that Skybridge did
• 1:22:53
  Speaker 1: which I don't view as necessarily advertising, is we went
• 1:22:56
  Speaker 1: into a public private partnership with the City of West
• 1:23:00
  Speaker 1: Palm Beach uh and we are the sponsors for their
• 1:23:03
  Speaker 1: bicycles share a Ride program, so like like city Bikes
• 1:23:07
  Speaker 1: Nike here and so we've got a hundred and fifty
• 1:23:10
  Speaker 1: bikes bicycles at fourteen kiosks throughout the city of West
• 1:23:15
  Speaker 1: Palm Beach. We just opened an office in Palm Beach.
• 1:23:17
  Speaker 1: Guard pretty clean. That's this, this environmentally safe. All it
• 1:23:21
  Speaker 1: is is our logo. I can't believe any compliance lawyer
• 1:23:24
  Speaker 1: would give anybody no no, no. The outside compliance people,
• 1:23:27
  Speaker 1: the inside compliance people, all thought that that was okay.
• 1:23:30
  Speaker 1: Some people call that advertising. I'm calling it branding, calling
• 1:23:34
  Speaker 1: a brand awareness. I want people to say, hey, this
• 1:23:37
  Speaker 1: seems like a pretty cool group of people. Let me
• 1:23:38
  Speaker 1: look at their website or let me check out where
• 1:23:40
  Speaker 1: they're doing uh, and then they can make draw their
• 1:23:43
  Speaker 1: own conclusions about our performance UH and the quality of
• 1:23:47
  Speaker 1: the stuff that we're doing inside the So let's let's
• 1:23:49
  Speaker 1: talk about hedge funds briefly. There's been a lot of
• 1:23:52
  Speaker 1: criticism by some people in this room um that the
• 1:23:56
  Speaker 1: performance for the whole community of edge funds has been
• 1:24:01
  Speaker 1: soft and the fees have been hard high. Obviously that
• 1:24:04
  Speaker 1: doesn't apply to everybody, but by and large, the hedge
• 1:24:08
  Speaker 1: fund and by the way, hedge funds continue to attract
• 1:24:11
  Speaker 1: lots and lots of capital. What what is the story
• 1:24:14
  Speaker 1: of of hedge fund investing today? It really depends on
• 1:24:18
  Speaker 1: what you're looking for. If you're looking for a panacea
• 1:24:21
  Speaker 1: or the perfect investment story, it's not out there, and
• 1:24:24
  Speaker 1: someone that's trying to tell you that it is, well,
• 1:24:26
  Speaker 1: chances so they'll be in jail before long. And So
• 1:24:30
  Speaker 1: I look at the hedge fund community as a group
• 1:24:32
  Speaker 1: of people are super sophisticated that have a great diversity
• 1:24:35
  Speaker 1: of skills. They can go along something in short, something
• 1:24:39
  Speaker 1: which means by and bet for something, or sell and
• 1:24:42
  Speaker 1: bet against something. They have an ambidexteriative talent. UH. And
• 1:24:47
  Speaker 1: the goal, at least the Skybridge goal is to try
• 1:24:50
  Speaker 1: to get a high single digit return with one third
• 1:24:53
  Speaker 1: of the volatility of the SMP. I'm not allowed to
• 1:24:55
  Speaker 1: talk about my performance on a radio show, but people
• 1:24:58
  Speaker 1: can go to our website and figure it out. Uhclosure
• 1:25:01
  Speaker 1: and that sort of stuff. But we but we I
• 1:25:04
  Speaker 1: will simply tell you that I believe in the industry.
• 1:25:07
  Speaker 1: I'll say tell you that we went from one billion
• 1:25:10
  Speaker 1: to nine point three billion dollars in discretionary assets in
• 1:25:13
  Speaker 1: five years because we are doing a service to people
• 1:25:18
  Speaker 1: who want a stable return with less volatility. If they're
• 1:25:22
  Speaker 1: looking for us to outperform the market, it is not
• 1:25:25
  Speaker 1: our product. I would not recommend it. If they're looking
• 1:25:27
  Speaker 1: for us to do something that we cannot do, I
• 1:25:30
  Speaker 1: certainly try to tell them that I would not recommend it.
• 1:25:32
  Speaker 1: But there's been softness in the broader industry because of
• 1:25:36
  Speaker 1: the macroeconomic policy driven by the Federal Reserve. The low
• 1:25:40
  Speaker 1: interest rates have crushed the long short manager, and so
• 1:25:44
  Speaker 1: for your listeners, that's the manager that's taking bets on
• 1:25:47
  Speaker 1: the long side and taking bets against companies. What's happened
• 1:25:52
  Speaker 1: is because of the liquidity, those markets are rising, and
• 1:25:55
  Speaker 1: so the shorts are going up on those managers, and
• 1:25:57
  Speaker 1: they have mediocre performance. They make up of the industry barry,
• 1:26:02
  Speaker 1: and so so when the monetary policy starts to normalize,
• 1:26:06
  Speaker 1: I predicted that group of people will do better. But
• 1:26:10
  Speaker 1: those are really the people that the stories are being
• 1:26:12
  Speaker 1: written about. We we we are a different group, You're
• 1:26:15
  Speaker 1: a different target. We have very low exposure along short
• 1:26:18
  Speaker 1: managers right now because of the Federal Reserve monetary policy.
• 1:26:22
  Speaker 1: We're more exposed to structure credit, more exposed to event
• 1:26:25
  Speaker 1: driven activism and things like that, both of which I
• 1:26:29
  Speaker 1: think are well situated for the current economic climate that
• 1:26:32
  Speaker 1: we're in. But I'll tell you right now, macro managers
• 1:26:35
  Speaker 1: and long short managers. If you add the fort which
• 1:26:38
  Speaker 1: is long short plus the fifteen which is macro, roughly
• 1:26:42
  Speaker 1: two thirds or six of our industry is woefully underperforming
• 1:26:47
  Speaker 1: due to current Federal Reserve monetary policy. So I expect
• 1:26:50
  Speaker 1: more negative articles to be written about the industry, but
• 1:26:52
  Speaker 1: it's not telling the whole story. So before I get
• 1:26:55
  Speaker 1: to my last two questions, I'm gonna give you this
• 1:26:57
  Speaker 1: will be the speed round. A few quick questions. Who's um,
• 1:27:01
  Speaker 1: it's pretty clear the Democrats in the nominate Hillary. Who's
• 1:27:04
  Speaker 1: gonna come out of the Republican primary process? Well, I'm
• 1:27:07
  Speaker 1: I'm working super hard for Scott Walker and full disclosure.
• 1:27:10
  Speaker 1: And so I'm so you're raising money. We've had several
• 1:27:15
  Speaker 1: events from this week in New York. We did an
• 1:27:17
  Speaker 1: event from in Naples, Florida. We've done many events in
• 1:27:20
  Speaker 1: my office already. Uh. Scott has become a dear friend. Uh.
• 1:27:25
  Speaker 1: And I tell you that I think he would be
• 1:27:27
  Speaker 1: an incredible president and he would be the guy that
• 1:27:30
  Speaker 1: I would hire to do the job of fixing many
• 1:27:33
  Speaker 1: of our problems. What what about the heat coming off
• 1:27:35
  Speaker 1: of Rubio right after the big GOP. Don't dislike him.
• 1:27:39
  Speaker 1: I think he's very talented. He's a very articulate, very charismatic,
• 1:27:43
  Speaker 1: great public speaker. I think he's woll versed on a
• 1:27:45
  Speaker 1: lot of the farm I don't have I I've adapted. Uh.
• 1:27:51
  Speaker 1: The eleventh commandment of Ronald Reagan is that shall not
• 1:27:54
  Speaker 1: say a negative thing about a fellow Republican and so
• 1:27:57
  Speaker 1: so for me, I like Senator Rubio. Uh. And I'll
• 1:28:00
  Speaker 1: make a prediction here on your show. Hopefully you'll invite
• 1:28:03
  Speaker 1: me back. If Governor Walker gets the nomination, I expect
• 1:28:08
  Speaker 1: Marco Rubio to be as vice president. Really, that's that's fascinating.
• 1:28:12
  Speaker 1: So last two questions I asked these of all my guests,
• 1:28:16
  Speaker 1: and they always engender a really interesting uh set of answers.
• 1:28:21
  Speaker 1: You know you've been in this business quarter century, coming
• 1:28:24
  Speaker 1: on starting your second quarter century. You know, what do
• 1:28:27
  Speaker 1: you see as the next major shift in the financial
• 1:28:30
  Speaker 1: services industry. I think that the there will be a
• 1:28:35
  Speaker 1: there'll be a further electronic shift. I think advice is
• 1:28:39
  Speaker 1: going to be coming over the smartphone. Advice is going
• 1:28:41
  Speaker 1: to be coming over the LinkedIn like in Facebook, like apps. Um.
• 1:28:46
  Speaker 1: I think the generation that you and I made, which
• 1:28:49
  Speaker 1: is our sons and daughters, are more comfortable with the
• 1:28:52
  Speaker 1: computer interface, less comfortable with the written word in the
• 1:28:57
  Speaker 1: magazine or a newspaper. And so I think that there
• 1:29:00
  Speaker 1: will be more efficiencies created in the advice giving side
• 1:29:05
  Speaker 1: of financial services, no question about that. And and here's
• 1:29:08
  Speaker 1: my favorite question. I get to ask, and you're really
• 1:29:10
  Speaker 1: a perfect got to ask this. What do you know
• 1:29:13
  Speaker 1: today about investing, about the market, about this industry that
• 1:29:18
  Speaker 1: you wish you knew when you started? Well, you know,
• 1:29:22
  Speaker 1: I was investing in biotechnology call options when I started,
• 1:29:27
  Speaker 1: because you see, Barry, I was a guru in biotechnology,
• 1:29:31
  Speaker 1: even though I didn't have any scientific background, and so
• 1:29:34
  Speaker 1: I was absolutely certain that certain drugs we're gonna get
• 1:29:36
  Speaker 1: through their Phase three trials and so forth. And I
• 1:29:39
  Speaker 1: lost about fifty or sixty thousand dollars of money that
• 1:29:42
  Speaker 1: I didn't need to lose at that time or want to.
• 1:29:45
  Speaker 1: And so I really wish I could have told my
• 1:29:48
  Speaker 1: younger self, uh to stick with that simple computational table
• 1:29:53
  Speaker 1: known as compound interest. Shoot for a seven eight nine
• 1:29:56
  Speaker 1: percent return. The turtle wins the race to five years. Unfortunately,
• 1:30:01
  Speaker 1: when you're our age, you know, they go by very quickly.
• 1:30:04
  Speaker 1: When you're young, they think you're they're forever away. But
• 1:30:07
  Speaker 1: if you just stick to a very steady, healthy, low
• 1:30:11
  Speaker 1: leveraged investment discipline, you will get yourself and your family
• 1:30:15
  Speaker 1: to the promised land. I wish I had known that
• 1:30:18
  Speaker 1: back then. My first ten years on Wall Street, I
• 1:30:22
  Speaker 1: spent trying to be the smartest person in the crowd,
• 1:30:26
  Speaker 1: doing the stupendous thing, finding the long shot that was
• 1:30:29
  Speaker 1: gonna make me a hero on a golf course where
• 1:30:31
  Speaker 1: I get bragged to somebody that I always tend to
• 1:30:33
  Speaker 1: want on something when I was Oh, for a hundred,
• 1:30:37
  Speaker 1: if you will, And so I would tell people and
• 1:30:40
  Speaker 1: my younger self be patient. The turtle wins the race.
• 1:30:44
  Speaker 1: The truisms of a Warren Buffett or Charlie Munger, Uh,
• 1:30:48
  Speaker 1: they exist today, they existed fifty years ago, they'll exist
• 1:30:51
  Speaker 1: fifty years from now. Uh. And you're not smarter than
• 1:30:54
  Speaker 1: your grandparents. You're not smarter than your parents. You may
• 1:30:57
  Speaker 1: be more technologically adept, but follow those well steeped principles.
• 1:31:02
  Speaker 1: We've been speaking with Anthony Scaramucci of Skybridge Capital, host
• 1:31:06
  Speaker 1: of the Salt Conference and Wall Street Week. My name
• 1:31:10
  Speaker 1: is Barry Rihults. If you enjoy this conversation, be sure
• 1:31:13
  Speaker 1: and look up an Inch ro Down an Inch on
• 1:31:15
  Speaker 1: Apple iTunes. You can see the other forty such conversations
• 1:31:18
  Speaker 1: we've had over the past year. Check out my daily
• 1:31:22
  Speaker 1: column on Bloomberg View dot com or my Twitter feed
• 1:31:25
  Speaker 1: at Ridhults. You can find Anthony Scaramucci on Twitter at Scaramucci,
• 1:31:30
  Speaker 1: or at Wall Street week dot com or Skybridge Capital
• 1:31:34
  Speaker 1: a Scaramucci, Skybridge Capitol dot com or prosper at Wall
• 1:31:37
  Speaker 1: Street dot com. I'm Barry Rihults. You've been listening to
• 1:31:40
  Speaker 1: Masters in Business on Bloomberg Radio