Book of the Month 06-20

June 2020 – We’re are back this month with CIO Scott Morrison’s bookshelf recommendation – What it Takes: Lessons in the Pursuit of Excellence by Stephen A. Schwarzman.

I read Stephen Schwarzman’s What It Takes: Lessons in the Pursuit of Excellence, published in late 2019, to better understand how one builds an outstanding investment firm, a feat Schwarzman accomplished at Blackstone. As a fellow investment business entrepreneur, it was interesting to read about his business successes, but even more valuable to read about his mistakes and/or mistakes of his colleagues (such as the sale of Larry Fink’s mortgage securities unit, which is now Blackrock, the largest asset manager in the world).

Blackstone is a global private equity behemoth, but it was not always the financial titan it is today. Financial deregulation in the 80’s helped with the fund’s timing, but what helped drive Blackstone’s success was the ability of the fund to make bold purchases on cheap asset and cleverly managing risks – first through Black Monday in 1987, then again during the 2008 crisis.

Similarly, Wealhouse also launched in 2008 right around the crisis. We were able to successfully take advantage of the market dislocation and continue to look for valuable opportunities today. Since the economy descended into chaos back in March, due to the on-going COVID-19 pandemic, I believe we can learn from Schwarzman’s many lessons during these hard times and persevere triumphantly for our investors on the other side.

Wise Words

“Since you can tackle only one personally defining effort at a time, it’s important to pursue a goal that is truly worthy of the focus it will take to ensure its success.”

“The best executives are made, not born. They absorb information, study their own experiences, learn from their mistakes, and evolve.”

“Our duty is to create long-term value for our investors, the companies and assets we invest in and the communities in which we work.”

“People who succeed in finance must start with repetitive practice before they can ever hope to achieve mastery.”

“…the most important asset in business is information. The more you know, the more perspectives you have and the more connections you can make which allow to anticipate issues.”

“Pete and I thought of the people we wanted to run these new businesses areas as “10 out of 10’s.” We had both been judging talent long enough to know a 10 when we saw one. Eights just do the stuff you tell them. Nines are great at developing and executing good strategies. You can build a winning firm with 9’s. But people who are 10’s sense problems, design solutions, and take the business in new directions without being told to do so. Ten’s always make it rain.”