Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy, Ken Langone
[00:00:00] S0: What did you see most commonly in the opportunity around Home Depot or other stuff that you've got involved with early on beyond the people? Like I know you were optimizing for amazing people. Was it just that? [00:00:00] S1: That's 95%. [00:00:00] S0: You weren't doing store fragmentation calculation for...
· Patrick O'Shaughnessy, Ken Langone
[00:00:00] S0: You weren't doing store fragmentation calculation for... [00:00:00] S1: No, no. You get into a bad idea with a great guy, the great guy's going to tell you it's a bad idea, we made a mistake. They move on. Not everything is going to harm you. I haven't got a crystal ball. But that's the key. Jesse Haddock was a golf coach at Wake Forest. One time I asked Jesse, what do you look for in a high school kid? He goes, the one thing I never do is I don't mess with his swing. If what they had going and their results of their play gives them my attention, I give him my attention because he's got a great record. I leave him alone. I go, what do you look for, Jesse? He said, "I look for the kid that gets a 9 on a par 3." And then on the next hole, goes back and birdies. I look for resilience, and that's about it. I look for a management guy. Bernie Marcus, fired at 49 years old, no money, a mortgage, no health insurance. All right. Let's go. Let's do it. Let's start it. Arthur, same thing. Pat Farrah, same thing. He just took bankruptcy. You want people who can bounce. You want people who can come back. They got fight in them. They've got hey, okay, that didn't work, but I'm going to give it a shot again. Home Depot, look at it. You realize Home Depot today did a market cap of approximately $400 billion. $400 billion, shit, that's a lot of money. [00:00:00] S0: Not bad. What bad deal most stands out in your memory? We don't have 6 months sadly, but we've got a few minutes. What bad deal is most memorable?
· Patrick O'Shaughnessy, Ken Langone
[00:00:00] S0: Not bad. What bad deal most stands out in your memory? We don't have 6 months sadly, but we've got a few minutes. What bad deal is most memorable? [00:00:00] S1: I did a deal that I got by virtue. There was an article in Fortune magazine after the Perot deal. The title of the article, The Fastest Richest Texan Ever, Ross Perot. And in that article, he was incredibly generous in describing me. And the guy called me up from Avon, New York outside of Rochester. They were building modular homes in a factory. I went out to see it, and it blew my mind. I got so caught up in the moment, in what they were doing. I failed myself just to take a step back and talk about the people. And I didn't. But because I had a hot hand, there was nothing I could do that people weren't going to jump on. Those guys all ended up going to jail. Fortunately, I didn't know anything about it. They left me after we did the deal for them. 1970, it was a bad year. They left me and they went to Merrill Lynch. It's all about reputation. Always is and always will be. Nothing matters to me more than if I were to manage to keep my word. [00:00:00] S0: 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.
· Patrick O'Shaughnessy, Ken Langone
[00:00:00] S0: 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. [00:00:00] S1: We're #1 in America. We've got a culture that won't stop. We're hitting on all cylinders. We got $3.5 million cash in the bank. The greatest thing of all, we took over a run down, broken down hospital in Brooklyn call Lutheran Hospital. The ZIP code has the highest percentage of welfare patients in the United States. It's the poorest ZIP code in the country. We don't make a nickel on that hospital. But that hospital on its own was now ranked #1. We have three hospitals, Long Island, Brooklyn and Manhattan. We put all those three in separately. All three of them separately got A, #1. How good are we to get one? We're kicking ass and taking names like you can't believe. [00:00:00] S0: Is it all culture?
· Ken Langone
[00:00:00] S1: 100%. Oh, wait a minute, woah, woah, woah, culture and making sure you bring the very best with you as you embrace that culture. We're #1 in brain surgery. We're #1 in neurology. We're in the top 10 in virtually every specialty you can name. Urology, dermatology, you name it, we're there. How do we do it? We celebrate these people. We pay them well. Okay? We pay them well, but we're delivering a product second to none. A guy stopped me the other day at a restaurant. I own a piece of a restaurant down here in Boca called Gallaghers. It's unbelievable. There's a good example. The kid who runs Gallaghers -- and he's 67, I call him kid. He bought that restaurant. It was doing $6 million a year in 2012. Last year, he did $30 million in business. One restaurant, home run. This year, he's going to do $33 million, $34 million in business. It's all about the people. Now all I can say to you is, I'd say all the time, under-promise and over-deliver. But it's always about the people. And if you get those people to know you're going to take good care, you're going to be fair with them, it's critical. I ate at a restaurant the other night. He comes to me. And he's coming and going, you're Mr. Langone? Yes, I am. Your hospital saved my wife's life. That's a pretty strong statement. He said, "No, no, no, I'm telling you." He's got tears coming down his face. I said, you just made my day. You made me feel like I'm somebody. How do we do it? Go to NYU and grab a guy. They think I'm a wack job. I walk in and I see security, a big security. You happy? Yes, I'm happy. You like it? I love it here. Look, if ever you got a problem, I hope you know who I am. Call me up. And I prefer that you call me Ken by the way. Mister is a barrier that blocks you from authenticity with each other. Call me whatever you want. Just don't call me late for an Uber. Okay? That would piss me off.
· Patrick O'Shaughnessy
[00:00:00] S0: The last question I ask everybody is, what is the kindest thing that anyone's ever done for you?