Ken Langone - The American Dream - [Invest Like the Best, EP.368]

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1:29 My guest today is Ken Langone. Ken is a legendary American businessman best known for his co-founding of Home Depot. He is also a former director of the New York Stock Exchange and a passionate philanthropist. He shares with us a lifetime worth of wisdom building Home Depot into a powerhouse and prioritizing his employees above all else. He says he still bleeds orange to this day.

1:50 You'll hear as he recounts his business endeavors his strict belief in keeping your word and And his true pride in his country what he knows to be the land of opportunity. We discuss his work with Ross Perot, the idea of an upside down hierarchy, and the power of loyalty. For anyone who may find it easier to follow along, we have a transcript of the episode on joincolossis.com. Please enjoy this conversation with Ken Langone.

2:12 So Ken, it's hard to know where to begin a conversation with you given the number of interesting things that you've done across your life, your career. I saw when researching your history so many interesting early anecdotes with you establishing yourself, especially in your work with Ross Perot. And I always found Ross to be such an interesting character in business history. I'd love to hear the story of you taking his business public. and what that represented to you at an early stage of your career and what it was like to work with him. I happen to be at a Mardi Gras ball in Washington and at the party

2:48 I met a fellow they have a guy Jack Hype. And he and I hit it all. He was telling me that he was partners in a company that was getting ready to go public. And they had Aliber. And I said to him

3:02 Is there any chance I can get a Chance to pitch my firm. The B the other writer's shoe that I can do. We had a good time that night. Drank a little bit. Raise a little hell.

3:13 Monday he called me up and he said, You got an appointment in Dallas. At eleven thirty on Wednesday. Two things I want to tell you. Don't be late. You got thirty minutes.

3:24 Well the third of that leave. And don't swear. 'I'dn't swear like a saw a sail it. At this point. So I took

3:33 Two kids would be at what's one. I say kids, I was only thirty three myself. And we went down to Dallas. The scariest thing was exactly at eleven thirty. I got to know it's all of this.

3:47 There was sitting behind a big desk. He's the mere look. And Ah, fellows. More.

3:57 Hi all doing. I said, We're doing fine, Mr. Perot. I said this is Roger Green, this is Duke Glenn. So We should um Illustr the frogs. that he met with Goldman Sachs, Merrill Lynch, white well.

4:10 Shit a pee body you Every one of the top voters of Wall Street Was there to see ya? He talks nonstop the twenty nine and Golman says this, Merrill says that. Channel says that. Why Well says that.

4:23 And he says. What do you think of that? I'm looking I got thirty seconds left. I don't miss the proof. I think I'll just Take advantage of the time I've got to say goodbye and I hope you'll see me again sometime.

4:35 What do you mean? I w Jack Hyde told me I had thirty minutes and right. By my calculations three minutes. Forget that. Come on to things. And I thought to myself.

4:45 Well I'm gonna blow the thirty minute rule. I might have to go all the way. Mr. Pro, that's the biggest powerful shit I've ever heard in my life. What do you mean? I think Mr. Perose's whole process is fairly so.

5:00 You gotta pick somebody who's gonna tell you what. He thinks you can sell your stock more. And your bet is can it Go on that number. I said

5:09 It's that simple. All the talk they have about working the market, knowing the market, doing it's all those things. Wow. That's interesting, he said. Let's talk a little bit more. We talked. Until one o'clock. Wow.

5:23 Try million. Two guys. I was on a front seat. Yeah, the big Bone Lincoln. He was driving us all over Dallas.

5:31 We've gotta go back on it three thirty plane in the afternoon. Yeah, I figured I'm not gonna So this comedian We were looking for a drugstore. We could buy shaving gear and toothbrush. Yeah, stuff like maybe even a T shirt. 'Cause we brought nothing downwards.

5:44 We finally found a place. State at a hotel. He was gonna make a decision by the following Friday. And he called up. He said, I'd like to get knowing a little bit better. He said, Come on back down. So I went back there.

5:56 And we talk and we talk and we talk. I had not seen one number. On how much his sales were, what his earnings were, nothing. So he invited me back down. You get a chance, come on back down. Like, go dear sure. So the third time I went down, I went down a long.

6:11 He picked me up at the airport. We're driving back to his office. Can Have you given that thought to what you think we're worth? Mr Perot, I said first of all, I said.

6:21 I haven't had the benefit of your numbers. Let's assume the numbers are great. Sh. Can I get some kind of relevance? God was all of us in me.

6:31 He had a closet and on the inside of the closet door. Yeah, But short. I didn't know what the numbers were. All it was was a chart. of the percentage growth.

6:41 Of the earnings? And of the sales. And it was doubling every year. And I said to him, I knew what the business I by now I got a good understanding.

6:51 I should based on those numbers and if I could be made comfortable that they can continue that way for a while. I would argue you come before the harder time journalists. What? Yeah, about a hundred times right. Are you sure? I swore us.

7:04 I'm not sure of anything, I'm sure of this. Those numbers or what you say? I had no idea whether it was five million or nine million. Well it turns out. It was seven million of revenues. And three million are pre-taxed profit. It was a staggering watch.

7:18 And The clear prospects. that it continued suscent. So You th I wanna think about it.

7:26 I left. About What he had done was she was calling all the other firms up. So okay. What do you think about Morris?

7:34 They settled that around thirty times. Now when it May. Call me up at least it would be uh Are you comfortable with what you said as your rose?

7:44 I'll say it again. that you can continue this progression. You just do simple math. You gotta cut them all every year. I too.

7:53 Do it's not gonna take long to get this thing down to twenty five time during it. But I should I won't be able to tell you that until I can get a better fix on the business. So he said, Well come on down, bring some God down Let's get to know each other better and talk about

8:06 How we do things. He brought it up on you guys. One after the other, I swear to God. Yeah, some kind of a machine. They created these guys. It was unbelievable.

8:17 One more talented than the other. One man. Common sense. Plain spoken. Gentlemen.

8:25 No forget he had a best coat, white suit. White shirts. No tassel over. Wing tip shoes, highly shine. No facial hair. Military style haircuts.

8:38 And the more I Got exposed the more excited I got. So he th Okay, well let me think about it. This comes in the June, two weeks later, we call it again. Mitch Horn and I have been talking.

8:49 One of the things we expect of people You know, we tattoo we're optimistic people. And very frankly he said Mich and I are a little worried. That you don't show much enthusiasm. I'm going, what the

9:03 I said, Who is I'll be on next plane down. What are you talking about? I said I've never seen that in the like this, but I told you that. Well I know I thought Russ, I'm coming down. No no don't come down. He's you know, with tax teams have a good rule here. Well ain't if you got a good

9:17 Sets you more, you're a good text and I god damn it. You guys were paying me yes too, okay? So anyway He gives me the deal. The rest of Wall Street is stunned. PC Railroad Find House.

9:30 Getting the most sort after piece of business probably gonna last five or ten years. And We go through the whole process. He wants the how to do it. I go, Russ, I'm gonna make the one promise I didn't take before. I'm personally going to be on every meeting with every investment. That's what I intended to deliver. You sure oh I know.

9:47 Call me up. At the very end. So I do. He's gonna give me the business one of the foreman walk. G H Walk. There was a guy there by there at Cherry Lodge who he knew who he liked. Well I tried.

10:00 That We're gonna do the deal harder time, Johnny. She said we're us. We'll go to a harder time journey. So Ross called me up and said that he'd got this call and How do I feel about having a partner? As a row, let me ask you question.

10:14 And then you and I or I Racing speed club going two hundred miles an hour. I got the steel wheel and you got the brakes. We're sitting next to each other. How long people are gonna hit the wall, because we're gonna hit the wall.

10:26 I said, Ross, well I'm going to go two hundred miles an hour. I got control of the clutch, steering wheel shift. Everything. Or I get in that car. I'm standing rushed.

10:36 Wanna get him the deal. If you're more comfortable with them, you can give it to them, I'm gonna be around. I'm sure we'll figure a way out for you and meet it. You were the one that made him go from seven to a hundred you're my man. Let's go. We spent a whole summer getting the prospectus together and the more I learned about it, the more excited I got.

10:55 I had a home monkey. Now back then New York State out of stock transfer. You soul stock? It was the tax.

11:03 And the way you get around it with an underwriting You go through the tunnel. After midnight. On the day of the deal? Sign all the papers in Jersey. Then drive back in.

11:13 So the deal was done, and sure it was legal. The night before the anner ready, Elaine and I and Margle and Ross had dinner at twenty one. We got to know each other that summer. We really hit it personally well. By the way, I tell you. One of the great joys of my life was his friendship.

11:29 Uh this is a slide. One of the great honors of my life was when I got the call from the family Ross. Doing it. They'd like me to deliver the eulogy at his funeral. Wow.

11:39 Me. So anyway. We're driving through the tunnel. Elaine. went home'cause our kids ought to go to school the next day we had three kids.

11:47 So We're in a literacy. By the way. The limousine driver was always the witness signing the paper. So this was the whole legal stuff. So we're driving through the town.

11:58 It was a s back seat where you had two seats looking at each other. Wargo and Ross are looking ahead. I'm setting up With my back to the front. Looking at that.

12:09 Well, he should borrow. All the other guys on Law Street Tallin out is one he's gonna back away from what he said he's gonna do. What are you talking about, Russ? Well I'm told again! This is when you guys say sorry, Ross. I miscalculated. I can't do it at the hundred times, Ernie. I gotta do it at a lower number.

12:25 What are you talking about? 'Cause I suppose this one you're gonna tell me I'm not getting a hundred times earning. I said, how'd you know that? Same on you, Mario! I said, how's she know that?

12:35 What it means? I'm not gonna do it. I'm sorry, so I'm sorry. See Margo, there you are, there are a lot of like up here. They get us covered boys up here and they pick us clean. That's it. When

12:47 Wait, Does a hundred time journey mean that much to you? Yeah, right, it's just that's you put your hand out your words, your bot. Means a lot to me, not just the number, but the fact you kept your word. I said, Who us, look.

13:00 The last thing I want is another happy client. We'll do it at a hundred time, Jeremy. Yeah, my well. So more gold. I wake it more.

13:10 Well he was a little bit of a tizzy. She says to me, God bless Wah was she show up. She will, Ken, what were you gonna do with that? I was gonna do it a hundred and fifteen times, journey, but the only one's a hundred time journey, it's so people with me. We did it at a hundred fifteen times.

13:27 And by the way, it went from sixteen to twenty four first day. So it was a very successful deal. And that deal For lack of a better way to describe it, put me on a map. The most important thing of all was

13:39 He was a man who when you delivered to him, you kept your word. He never forgot it. So he became Perhaps my storage is that I was a young kid, thirty three. I never done another right.

13:51 That friendship has lasted. All through his life, and now with his family as well. What about his style? Do you feel is most lacking in the world of leadership today.

14:05 If anything. Integrity. That's it. Man the man was maniacal. About keeping his word.

14:13 And The second thing would be loyalty. If you Promised two and delivered for. You never forget it.

14:21 And this will be it. One of my favorite ideas of yours is this notion of leaving more on the table for the other guy than you think the other guy thinks he deserves. Did that

14:32 Come from Ross? Let me see where that came from. That came from my experiences as a poor kid. When I realized

14:41 If somebody expected this of me. I gave him that plus something. And To me. The order negotiating is not say who best who

14:50 The auto negotiating to me is to get a deal for yourself. But make sure the guy you're dealing with. feels he got more than he thought he was gonna get or he should get. Hundred time journey is to one hundred and fifteen times earnings. I can't think of a deal I've done.

15:05 where I couldn't have got more than I got. That's okay. Because The element of trust is the most precious thing.

15:14 And live. If I trust my doctor But he's gotta do the right thing for me. There's a better chance he's gonna be more candid with me. The more willing

15:24 to try and help me whatever my condition is, or a friendship or a marriage. I don't care what it is. I'll give you I'll give you a first. I did a deal with a guy. I bought a company. He negoti he was a tough negotiator. He negotiated back.

15:38 Yeah. And I guess she gave it her every point. Got done around nine thirty at night, my office. I should know you say or happy couldn't be happy. Okay. I saw that. Let's go back.

15:49 I'll drop you up. Hotel. Pick it up in the morning, we'll have breakfast, we'll talk to water. It's okay. So the next morning I pick'em up. We're driving to my office.

15:58 You said can I be asked. I said please don't. He's uh I'm sorry, he's I reflect on this, I don't think. Uh this is a good enough idea for me as I'm entitled. That's all I've got skiers. That's okay.

16:11 Where do you think? This thing is the fish. The o. He tells me. It's okay, you got it.

16:18 Yes. Tell me what you want. You got it. I got overtly something else. I will never miss you again. You blogging card all day yesterday.

16:27 You assured me at the end of the day It was exactly what you wanted, you were fairly treated. I said, I can't think at one point I didn't see you. I said I'm sorry. You got what you want on this deal.

16:39 But I never wanted the business we can look at. And I feel strongly about that. Um The best test of Won't he is. I never had a fear of

16:49 Clorium. Or a potential partner to deal. Saying something bad about me. Because Okay.

16:58 Okay. You'll see where I started sitting where I am right this minute. And it's okay to bargain for it. But when you're done, you're done. Um

17:08 He was shy. I thought you got your deal. You got exactly what you want. Die. Frankly, I said I thought you had a great deal last night, but Obviously you thought there might be more on the table, so I won't disappoint you.

17:21 Whether that comedy turned out to be a home run. Okay. So That's the philosophy of life. I pride myself on that.

17:29 I think there's nothing more precious in my life. Other than my family that my work. Was there an early formative experience, like a specific experience that most Taught you that lesson. How did you come to that conclusion? Sounds like at a really young age.

17:44 My mother at all. They were humble. Uneducated. But incredibly honorable people. But

17:51 Just how they live their lives. That was really weird. It was chiseled home to it. Chiseled home to me. Yeah, keep your word. Work as hard as you can and give it all you got.

18:02 Yeah. L by the golden rule? One of the things that I feel strongly about. And I'm very forthright about my job.

18:10 Because That's what all shot. Then I had a good fortune. Mean this lovely lady. She was sixty and I was eighteen.

18:19 We got married, she was eighteen and I was twenty. Almost sixty eight years later was still hanging around the ship. That's pretty good. What's the key to doing that well? Happy fights, but not a carry gludge.

18:30 Don't go to bed, but Two kids. Truly love each other and The trauma success wouldn't change. I hope it hasn't. I urge my kids to be

18:40 J wine to be authentic. That have to me very important be or Life and business is a repeat game. The story you just told about not doing the second deal with that guy. created successful financial outcomes seems to have been by holding

18:56 Longer than anybody else. My love. Loyalty. If I would like to be remembered for work. Only one thing.

19:05 I'd like to be remembered that I was a loyal friend. A loyal husband, a loyal father. Whatever you want. Loyalty isn't short supply. The world has become very transactional.

19:18 Maar heb ik daar ook wel iets blitsen. Wish I would say yes, I could tell you right. He ain't coming back from war, I can tell you right now, he ain't coming back from war. I got his air screen. And it was a fight that I loved every single second.

19:32 But they're People were saying to me. But I showed my own to the the grass, so I said, No, and that can spot it. It wasn't just loyalty.

19:41 It was the facts. The facts were that the whole committee, or nine of us, always about to get out of the sweeping give them these paper. Which by the way will magnify because Every previous chairman of the stock exchange.

19:56 Never had a tenure chart of more than ten years. So I know when you got these. The other year five years, six years, seven years, but Dick Grasso started at the exchange at eighty two dollar and fifty cent a week. Union Court. Union Court.

20:11 Well from that all the way to the ch how I guess what, he had thirty seven years of service. Or you put the yard stick to that. Woo! Oh. That's what you wanted. He created it that way.

20:24 To get people to stay. Look what he did. Well he took over the X twelve hundred listings. When he got the bullet in his head, he had twenty eight hundred. He made all of us. I bought seats for seventy two thousand dollars apiece.

20:37 I got eight million dollars. Well each one of them. I'm not better to deal with that. We are guys on the floor exchange morale. The whole key of the exchange was lifted.

20:48 But people say well that was loyalty. Yeah, it was loyalty, but more importantly Who's being loyal. To the truth. I knew the truth. The truth was Every single member of that committee knew exactly

21:01 That was a sad thing to me, that I'm high powered guys. That with it under the skies that's it. Bring'em on, baby. I'll show you how work. Okay? Bring'em on. We did we got it.

21:14 Where is that? I didn't want that. When Cuomo replaced him as A G And one The Court of Appeals

21:23 Found in our favor seven zero. Call me, call me up. And it was a Wednesday. That's when the decisions came out. He said to me, You know, he said I'm I don't know, give me some advice.

21:36 He said, I'm thinking about peeling it. I might he's lost. I know I know he's playing with my head. He says, I'm thinking of appealing you. What do you think? I've two things I think. Nouvel one. The most joyous thing I could hear is the fact you gotta repeal it that the game goes on.'Cause I'm having a hell of a time with my life.

21:54 Another two. You haven't got the balls to look the other. He and I became good friends, by the way. So Well T C short World.

22:04 The idea about loyalty rings through the Home Depot story in such an incredible way. Like so many stories of people kinda like Grassos starting as a cashier and becoming, you know, a senior executive. I would just love to hear the beauty of the long term at Home Depot, as you've experienced it as a co founder and now

22:22 incredibly long term holder of that business. The most precious thing home people has. All the kids on all floor. The R shapeers are. We had what we call the most

22:33 Corporations have a trial. That the base And the point at the top. And the point at the top is where the CEO is. And the base

22:43 Higher employee is. We turned it upside down. We should have the most important person in the company. If of course that comes in touch with the customer. That customer.

22:54 That's what he wants. At a fair price. And feels he's got great service. You've never gone any place else again. The most precious part of that.

23:03 You know? I couldn't kid anybody under eighty eight. I'm eighty eight years old. You under radiate, you're a kid. So I'll get pissed off. Those kids.

23:13 Really challenging jobs. They need to learn what they're selling. They don't have the luxury of Not being able to handle the difficult Customer?

23:22 They have crazy hours. Most of them store right at the bar with our leg. College education. And those kids made this copy. If there's one thing home beep must go for it.

23:33 It's our service. Big thing. We give you great prices, no question about that. We're always in stock, no question about that. We have every imaginable item to want to give a category. You gotta select it.

23:45 But the thing that holds all together. There's a kid that's dealing with you. I need your first. This is a good friend of mine. Customer.

23:54 His force it was trippy. Meaning that the washer. That's VL. So water got through.

24:03 What about? And drip drip drip drip. Three o'clock in the morning and your wife catch you and says Go fit the four I can't sleep the trip is keeping me awake. Guy gets up in the morning.

24:18 He goes to the whole people store, how they make. Seth McKin, I need a new one of these. Recess us to him. The new one of what? He said I need a whole new stamps. Like it's not so you need a wash.

24:31 More. Yeah. Little glassy and bags. The shortest size washes. Can't say it.

24:37 Twenty five cents or Takes it off the pay. Opens it up, gets the right size, wash it. As a screen driver, Takes it off, unscrews the screw.

24:49 Takes a bail washer out. Takes the good truck, wash it, puts it in. What's the screw back in? And he says to the guy here, Go where Woolware. Guys what I L E he said nothing. He said happy it came to old people.

25:02 The wife wants it to the kitchen. You've got to go to one of these fool food joys. Kiss it and bad guys. We're going to make right.

25:12 They went back, they found my kid. Kid brought'em over to the kitchen designer. Well we sold kitchens. We got hundred thousand dollar kitchen over it. That's the value.

25:22 Do we make it effort to Train the kids. Make an effort to treat them failing. Last year unilaterally we raised wages one billion dollars. Why?

25:34 'Cause we really feel for our kids. They own stock. Well I guess I could say I made some money. Just a bit. I'll tell you this. The greatest

25:44 number of a wall to me. It's got my network. We have three thousand kids that are still working for the company today. Three thousand of them. They started out pushing courts and From a lot.

25:56 They multi millionaires. And it's still working for the company. You want to talk about culture carries? Trust me. That's the value of treating your people right and taking care of. We do everything we can for it.

26:08 And they know it. What? in the history of Home Depot went the most wrong. And how Did you fix it?

26:17 Well The thing it won't most rule. With a mindset. That costs was more important than the culture.

26:25 How do we fix it? We change leadership. Yeah. Right. All right.

26:32 Two thousand three, two thousand four. That point we were uh twenty three, twenty four years old. But I have a club. founder of the company.

26:42 Why? Right. Restore it. The culture. He led by example.

26:47 No doubt about it. His selection as CEO. was I think the smartest decision and I take great pride in that personally. 'cause when we were kind of we decided that we had it goes different ways.

27:00 by the way get bought credit. First four years were cut. Everything he touched, he made it better. Okay. However, once we got past that four years he started it.

27:10 Now get a little Too aggressive. I don't like the Yeah, we've the coach. Frida was not a popular choice. It's a natural.

27:20 The reason Frank is so natural. If he embraces the list of values. Even me could have. One year Frank didn't even want to take a bonus. No, I don't think

27:30 We're just getting this thing going right out on it, but F I to least what is it? Free full of house. Graduate of Harvard.

27:40 Columbia Law School graduate. Clerk to Justice Stevens of the Supreme Court. Going on it in the year. Number two or three guy, I think. Falling of energy.

27:50 Some people to work on strategy. And nerdy shot a guy immediately. He'll have to get a prize for me. A picture of Sartorial's planet, okay. And I say that because I call them.

28:01 I mean that's right, Sharm. What you see is what you get. And I talk about being authentic. The as best example of authenticity I could Magic.

28:11 So Culture is there is it. Interesting aside. When I was at the joy. Then why are you medical setup?

28:19 Places that are shameless. Ope. Gorale was terrible. They just merge their hospital with outside eye. Ironically is an example of that thing.

28:29 each side, but it was true on the other side. They were getting a bad ass, though we were getting to Two bad hospitals. Made it one thing One huge bad aspect.

28:39 The element of distrust is powerful. So I took the job, I went I said the boy look me to do this like. Wanted to champion us. Well it did, yeah. I was okay more than I want the hospital back.

28:53 I'm about to say the burst. I think that would be easy. We did it. And I think we own people we birdie and a lot of myself and Pat. We put this culture a place they want.

29:08 We love it. We led it. I tell people here I had highly educated Double degree, triple degree, doc.

29:16 And the same thing I did with a six eight year old kid that barely got out of high school. With this. Professional highly accomplished. Fabulous stock. the same way and it works.

29:27 Just guess what? The eating bees. Yeah, the day. Gotta. Celebrate. How will these people on the floor? They are the key to the

29:35 This is the Magic shorts. Okay. This is a secret source. Not so much a secret. But it takes effort. It takes time for you.

29:43 Try to do everything you can. to let these kids know that they really matter that they can make a difference. That they are can't. Share with us your idea. Share with us. You'd be amazed at the number of great ideas we had.

29:55 We implemented the stores. It came out of the more wide of it. Shit to barely get out of high school. We encourage that to be open, but Come express themselves. I give you for instance.

30:06 We will be a store in Elmont. So the Wednesday before the stores got all when I'm in there. No they can. 'The way he said that.

30:15 You somebody in this cutney? Yeah. Come on, I'll show you something. I'm curious, were you guys born stupid or did you come? Oh yeah, yeah, it's

30:24 Maybe it's a combination of both. You don't want these kids to feel Intimidated a threat. You wanna get it out of their head. It's just Okay.

30:34 So he takes me over and he shows me a big cardboard box. It's on the floor. At the bottom. Of Iraqi. And in the box.

30:42 Or a bunch of plungers. We got stopped up to that. If you put your hand in that box You think you were in a coal mine, you come out black. So

30:51 Nobody sees the plunges. Now. Think of this. You don't wake up on a Saturday morning and say, let's go to whole deep on my punch. It's three o'clock in the morning.

31:01 The toilet's stopped up and you haven't got to plunge it. You get your ass to the home depot store as soon as it opens to get the punch. So the k the kid I'm okay. What would you do? If I get pipe hooks.

31:14 Like in a gun store, yeah, they show guns on the wall. And I put the plunges at the end of the thing on a rack. Why don't you do it? Is that Yeah, I think why can't you?

31:23 I such a good idea, why don't you do it? Okay. Saturday at eleven o'clock, the store's now open. Two people. Come on, come here, come here, come here.

31:34 Like well. There's no plodges in there. Pipe cooks. I Oh, you put them back in the box? No, they don't!

31:42 Hey Arnie, three odds. Why don't you go back three three fifty four? Hey on it, we need a plunge. I don't have a plunge. You made it an impulse it up.

31:50 I was out of the mind. Yeah, they pay got out of high school. You don't know where you're gonna find a gem. But you're never gonna find them if you don't look for'em

31:59 What do you think? Was the reason you've been able to hold on to these investments these positions for so much longer than everybody else. So the average length of your investments is thirty five years or something crazy like that. Stop at forty two years. Forty two years. Sorry. I don't want to take that. 'Cause I'm still.

32:18 I mean the loyalty investment positions. What I tell you Yeah, you're loyal to you loyal, what? Look. I got my lily stock.

32:26 Two years before Home Beeple was found. And a little medical device chucked the paperwork. I got to know the magic people. I liked them. You know, they were solid midwestern people. The guy that I negotiated the deal with. Was a tough son of a bitch.

32:41 By the name of Jean Step? But I had such admiration and respect for G I had no doubt. that Lily would turn out to be a great company. Now.

32:52 It didn't hurt. Then if I'd sold a stock I'd have had a hell of a tax. My court basis The little device company I took over at a proxy fight. Ready? Had a market cap.

33:04 The millionaire towns. Yeah. I don't want it, got a million and a half dollars. Louis gave us fifty million dollars. That was approximately five May of seventy two.

33:15 Lily gave us A million and a half shares of lowly stock. Or thirty seven fifty a share of our stock. Yeah, roughly that. And Louis paid a dividend. So the dividend was an ice state. A little bit of a

33:29 Well Lily Stock has split over those all those years. From seventy seven to now, sixteen to one. So the three year and a half shares. Six, nine. It's twenty four million shares.

33:42 Okay. You ready out? eighteen billion. Three hundred and sixty million dollars. Now catch this.

33:51 Lily stock. From seventy seven to Oh true. One from thirty seven who got to his eyes a hundred and all. From O two

34:00 The eighteen. The stock did nothing. It was a a one oh nine and oh two, and it was one oh nine and Eighteen. How I

34:09 Going back. The seventy seven, November thirty, seventy seven. Until last August. Counting the dividend. Including sixteen years or nothing.

34:20 They cut down the fifteen percent a year. You're a home run. Very stock I own compounded at fifteen percent. I spent a lot of time with companies. I get to know the management.

34:31 My first and my major and my principal concern is People. I bet on Pee. Got. Home depot position now I got literally forty seven years.

34:41 People I got. Forty six. JP Morgan. I bought the warrants, but I bought'em way back I got my JP Morgan stock today.

34:50 Sixteen years. I got my pocket out. Sixteen years. They're puppies, too. They're still babies. I got a new position called

34:59 Option shareholders. I bought it six years ago. I'll be there with him. Long as the management stays Quality people. Well the prospects in the business

35:10 Oh great. It's like by wife. These guys you get married three and four times. How do they remember who to what to call them, what name to use? I mean can you imag Jane, Merry, bye, bad. Why it was simple.

35:23 And Holding on to these situations. No. The food I ate as a kid is still my favorite food. Peasant food.

35:32 What's your death row meal? Pastifajal. What's your last pasta vigal? I've got all me, uh beans. Clint Parmesan. Fried peppers and potatoes Oh god, they could fried pepper and potatoes.

35:44 I my mother got she was so quick. But those are my favorite foods. I got a little dive in Port Washington like The Marios? Great pizza.

35:54 Bowl of pasta fajoli or a bowl of Got all on beans. Man, it's like dying to go into heaven. What do you love most about capitalism? I love that title of your book. If you had to sum it up, what do you love most?

36:07 The good it does for me a card. Good. Look at our society. Look at every other country that move towards socialism. Look what's happening. Venezuela, Cuba, Argentina. Look at them.

36:20 Brazil. Okay, you are Good work. I look.

36:24 A poor kid. Organization. With a shot at the grass ring? You may never get it. Well he's gonna do a lot of good along the way, even if he didn't get it.

36:34 Well I'll give you a four instance. You got a call one day, Jim. We opened our first More Allen in in the late eighties. I walked the store. He was working at one of our first stores on the island. Bam ten minutes just to the market that he've got to come see you today.

36:49 Okay. And I have a rule, home people employees can forest very call me. It was another call we can get as we thought I'll call you back again. The kid comes in on the same day. Hi Mark, what's up?

37:02 This is what I wanted to let you know. I thought you should know. He said. The spawning. I got a call for my marrowage. Okay. that my Home Depot stock is now worth a million dollars.

37:13 I'm a billionaire. That's found. Yeah, only thing is shut down. He said, I pay my parts more before. I paid my mortgage off.

37:23 My two kids are in college. I'm a millionaire. Do you know The impact that had on that general people in the store. He did it, I can do it.

37:32 They gotta work on it. You gotta have. Things that don't always work. I She got six months to tell you all my bad deals.

37:40 That really isn't a home run. Oh, I'd be happy if they were breaking it, but You gotta get off the plate and take a sway. You ain't gonna hit the ball every time you're gonna have a few strikeouts. That's twite.

37:51 But where's capitalism do? I think it always promised me. B. Aponus sun, capiteri working sun? Not a very good student.

38:02 I thought it was best suit. Look at what capitalism allowed me to do. You can't take out Wiley. That's happy duty, start. What did you see

38:11 most commonly in the opportunity around Home Depot or other stuff that you got involved with early on. Beyond the people. Like I know you were optimizing for Amazing people. Was it just that? That's ninety five percent.

38:24 You weren't doing Store fragmentation calculation for Mm. You get into a bare idea with a great guy. The great guys gotta tell you it's a bad idea, we made a mistake.

38:35 M O R. That I mean, I haven't got a crystal ball. But that's The key. Jesse Haddock was a golf coach.

38:44 Week four. One time I asked Jesse, what do you look for on a high school kid? Well the one thing I never do is I don't mess with their sway. If what they had doing And there was also there.

38:58 Why gives them my attached I give my attached to because I got a very bracket. I'll leave him alone. I don't know. So I look for the kid that gets a line on a part three.

39:09 And actually all goes back and buried. Yeah, I look for his jail. And that's about it. I look for a management guy. Bernie Maupse.

39:17 Five at forty nine years old, no money. A mortgage. No health insurance. Alright, let's go. Let's do it. Let's start it. What same thing.

39:28 By fire. Same thing. You took bankruptcy. You want people can bounce. More people do go back. They got fighting. Hey.

39:37 Okay, that didn't work, but I'm going to give it a shot again. All people. You realize you have a walk capital approximately. Four hundred billion dollars. Where do you pay dollars?

39:48 That's a lot of money. Hm. Not bad. What bad deal most stands out in your memory? We don't have six months, sadly, but we got a few minutes. What bad deal is most memorable?

39:59 I did a deal. But I got by virtue of there was an article in Fortune Magazine, yeah pro deal. I title of the article, The Fastest, Richest Texan Ever. Back parole.

40:11 And in that article he was Incredibly generous. in describing me. The guy called me up. Mm-hmm.

40:20 A bar, New York, outside of Watchester. They were building it. Module homes. Yeah, I wanna see it.

40:27 Yeah, blew my mind. I got so caught up with the moment. What they would do were. I failed. Myself.

40:35 Just take a step back and talk about the pee. And I didn't. And to go out a hot hand. Nothing I could do. uh people were gonna jump on.

40:44 Those guys ended up all going to jail. Fortunately. I didn't know anything about it. They left me to deal for Lightly seven it was bad year.

40:53 They left me and they went to Maryland Lynch. It's all about reputation. Always is and always will be. Nothing matters to me more. It was a map but you cheap my word.

41:04 Curious how the hospital thing resolved. It was a mess when you showed up. And you oversaw it for a long time. And it's one of the best ever. We got a culture that won't stop.

41:16 We're not all selling this. We got three and a half billion dollars cash in the bank. The greatest thing of all We took over a run down, broken down hospital in Brooklyn called Luther Hospital. The zip code has the highest percentage

41:31 of welfare patients in the United States. It's the poorest Zip call in the country. We don't make a nickel on that hospital. But that hospital on a song was now right number one.

41:42 We have three house. Whoa, Alan Brooklyn And Manhattan. We put all those three in separately.

41:49 All three of them separately got A. Number one. How gonna we do we're we're kicking ass and taking names like you can't believe. Is it all culture? Hundred percent. Oh, wait a minute. Whoa, whoa, whoa, whoa, whoa, whoa, whoa.

42:02 Culture. And making sure you bring the very best with you. as you regret that culture. We're number one in brain surgery. Well, number one in urology.

42:12 The top ten and burst of every special you can name. Urology. Dermatology, you name it. We're there. How do we do it?

42:21 We celebrate these people. We pay them well. Okay, we pay them well. But with delivery of product Second amendment.

42:30 A guy shot me the other day at a restaurant. I own a peaceful restaurant down here in Bulgaria. Call Gallagher is it's unbelievable. That there's a good example. The kid that runs Gallig is in sixty seven, I call the kid. He bought that restaurant that was doing six million a year in two thousand and twelve.

42:44 Last year we did third million of business. One restaurant. Call them right. This year he's gonna do thirty three, thirty four million dollars in business. It's all about people.

42:54 No. All I can say to you is Actually all the time. Under promise and over to a liver. Well it's always about the people.

43:02 And if you get those people to go, you gotta take good care, you gotta be fair with them. It's critical. I had a restaurant the other way comes to me before they go. You must have. Your husband saved my wife's life.

43:15 That's a pretty strong statement. If you no telling you. It's got tears coming down. I should get or you think newspaper like that. And we think she always have somebody. How do we do it?

43:26 Who the hell are you and grab a guard? They think I'm a white job. I walk in and I say I was security guy. You happy? Yeah, I'm happy. You like it, I love it. Well if you ever got a problem, I hope you know I am phony up.

43:40 And I prefer that you call me Ken, by the way. Mystery is a barrier. That blocks you from Authenticity with each other. Call me whatever you want, just don't call me late for anymore. Okay. That would piss me off.

43:53 The last question I ask everybody Is what is the kindest thing that anyone's ever done for you? Oh God. I've got so many current things done for me. I can't count.

44:04 I'll give you a free instance. You're one thing. I worked in a butcher shop as a kid. Among my many jobs. I had two or three jobs we talked.

44:13 Fight that worked in the bush shop. And the guy that ran a bush shop didn't know I worked for the supermarket down the street. A down parking. Actually, the shelves up the store closed nine o'clock at night. Why known that it was a competitive.

44:27 Anyway. Next to that. Which a shop was a liquor store. And The orange family room.

44:33 Maybe we had five Jewish families in town. Ross. When you want it. Good man. Kind of me. Suddenly.

44:41 Hey Kitty, she wanted a couple of bucks. I should say sure. Couple of bucks that kill you for a couple. What do you want me to do? I got cardboard boxes that like it comes in. I put'em up. Yeah, a little porch.

44:53 Back up a stool. This is a garbage shop, we won't come and make it. You gotta take them down. Hundred and fifty yards where there's a spot where they pick them up. Well you gotta do it the boxes.

45:04 Yeah, yeah, right. I'll give you a Dollar a week. Do two nights a week, fifty cents. Okay.

45:10 You got it, man. But three weeks after I'm doing one day I'm carrying the boxes. The guy on a garbage truck. It's the uh putting the boxes by no see breaking the boxes up. What are you doing with the boxes?

45:22 Oh, he should uh worth a lot of money. Yeah, he should I break'em up or I tie them up or I take'em to the job yard. And they buy scrap paper. Yeah, probably get. Three bucks a day.

45:35 Who can Yeah. So you're back all the way, absolutely. Garantio. I should

45:41 If you let me break the boxes up. Stracking about a power on it because the box is broke. You got a lot of space. I'm gonna tie them up with twine. And

45:51 We haven't got payment. Why not? It's'cause I'll be able to sell it. Okay. Two to four. Make it three, four, five dollars a week. Show the bikes?

46:00 Fight to you after that. I'm more prepared like a store. He said, Hey. Clear. So here you're going to college.

46:08 I said, Yeah. Takes me in yeah, a car. Yeah, no. Opening to the back.

46:15 The back. The shot in the back of Garney. Here's a counter here's like a shovel. Back of that shelf. Yeah, a little desk.

46:24 Wait, that is book you. Takes out a gobble. He says, he said. Who might need that. You put a dollar a week.

46:33 To the envelope. For all those weeks I was Sean my someone's You talk about kindness? There have been so many people who have been so kind to me, I can't count.

46:45 People could. Talk about kindness. If you gave me a month, I couldn't have enough time to list all the people. That have been good to me, kind of. That's one of the reasons I believe in God.

46:55 I really do. That's me. Your story Your book All your ideas, they're wonderful.

47:02 Remember this? Most important thing back book covered. An American story. It only happened in America. This is the genius of America. But a poor kid rough around the edges like me.

47:15 Could do okay. That whole promise. Not to the matter board. Now with a sober spoon in my mouth, just a chance to live in this great country. Was already

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