Episode 191: "Lessons from the Street: Stephen Schwarzman's Book Prompts Bill to Compare Insights into the World of Money” with John Tamny

In this episode, my friend John Tamny interviews me about legendary Wall Street leader and Blackstone founder Stephen Schwarzman’s book What It Takes: Lessons in the Pursuit of Excellence. There are many fascinating insights and lessons in Steve’s book which we can all benefit from. 

A few highlights:

• Steve Schwarzman started Blackstone with a unique strategic plan.  There’s a tremendous lesson in how he approached building his firm. 

• For any young man or woman who wants to build a business, or any type of organization, Steve Schwarzman’s book would be a great place to start learning about “what it takes.”

• When Steve Schwarzman tells his team “don’t lose money” it’s about a mindset. Think through the downsides, what Jay Pritzker called “the horribles.” Both, in part, became billionaires from thinking this way.

• One of my favorite Steve Schwarzman Rules: “Worrying is an active, liberating activity. If channeled appropriately, it allows you to articulate the downside in any situation and drives you to take action to avoid it." Great advice.

• Private equity’s been demonized by a lot of people with agendas and who know nothing about it. True, it’s a competitive and tough business, but it’s created a lot of value over the past 4-5 decades. Look at the record.

• Do companies become woke because their young woke new hires demand it? Disney employees clearly seem to be running the asylum, not its CEO. Is this also true for Wall Street?

• One of ways our culture has changed, and not for the better, it that we seem to have lost the ideal of pursing excellence. In my private equity experience, making an investment successful was exhilarating.

• Under President Xi, China’s becoming “uninvestable” for Western businesses. Even Chinese private equity investors say China’s turned hostile to capitalism. No longer simply a competitor, China’s turned enemy. 

• In “What It Takes” Steve Schwarzman writes that had we not had FAS 157 mark-to-market accounting, the meltdown we had in 2008 would not have happened. I agree. 

• One history’s great ironies is that Dodd-Frank, the bill to supposedly cure the ills of the 2008 meltdown, is named after Barney Frank and Chris Dodd, who pushed banks to drop their underwriting standards to promote housing.

• When you’re running an investment company there’s a real tension between the roles of CEO and CIO (chief investment officer). It’s a balancing act you must get right to succeed.

John Tamny is Vice President of Freedom Works and editor of Real Clear Markets, and author of the terrific book, When Politicians Panicked, which is about the government mishandling of the coronavirus pandemic. John’s other books includeWho Needs the Fed, Popular Economics and The End of Work.

          He asks some tough, penetrating questions and we hope you’ll find the answers illuminating. Steve’s book holds many many stories and lessons about “what it takes” to be both a leader and investor. 

          Hope you’ll listen in.