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