Transcription
But what caused the financial success was not extreme Mobility. You know, I have a good mind, but I, I'm way short of Prodigy, and I've had results in life that are prodigious. And that came from tricks I just learned, a few basic tricks from people like my grandfather.
What were those tricks? Kind of now everybody's leaning in, wanting to know. It's too late for you old [Laughter] guys. Yeah, anyway, the uh, no, there are all kinds of tricks that I just got into by accident in life. One, I invert all the time. And when I, I was a weather forecaster when I was in the aircore.
How did I handle my new assignment? Being a weather forecaster in the aircore is a lot like being a doctor that reads x-rays. It's a pretty solitary; you're in the hanger in the middle of the night and drawing weather maps and you're briefing Pilots, but you're not interfacing with a bunch of your fellow men very much. And so I figured out the minute I was actually making weather forecasts for real Pilots, I said, "How can I kill these Pilots?" Now that's not the question that most people would ask, but I want to know what the easiest way to kill them would be so I could avoid it. And so I thought it through in reverse that way, and I finally figured out, I said, "There are only two ways I'm ever going to," I was in the ferry command, "There are only two ways I'm going to kill a pilot: is I'm going to get him into icing his plane can't handle, and that will kill him; or I'm going to get him someplace where he's going to run out of gas before he can land because all the airports are sucked in." And I just was fanatic about avoiding those two hazards. If Kobe Bryant had had somebody like me, he'd still be with us. It was so stupid to kill, kill yourself that way. And, but just that basic, I may have learned that from my grandfather. My grandfather would say to him when I'm swimming, he'd say, "Swim as long as you want, but stay near the shore." Well, but you can laugh, but no, he was a very wise man.
Exactly. Yeah, what I'm, what I'm hearing you say is that you, as a discipline, look at what the risk is on the other side of the situation and you avoid that. That's one of the rules, right?
Well, it's, it's just, it's, it's like a lot of practical problems in algebra; if you invert, you can solve it easily, and if you don't, you can't solve it easily.
Exactly right. And so, of course, and I had that trick very early. And and most people say, "How can you please tell us what you do to save India or to help India?" And of course, I would approach it differently. I'd say, "What could I do which most easily hurt India?" Approaching it in reverse that way, I got better results. You look at the vulnerabilities.
Yeah. Yes. And and I have a whole bag of tricks like that. I've been to the ROTC both in high school and college, and the irtc taught me to fire mortar shells or shells, one shot over, one shot short, and then kapow. Well, I never shot any damn shells, but I've been using that mental trick all my life. That's why, how I determine what size to make something, over and under, and kapow. And so I just got a bag of tricks, and I got the right bag of tricks early, and of course, it's been of enormous help to me.
Let me give you an example. I had a client once when I was a young lawyer, and he owned a bunch of hilly Ranch Land on the edge of civilization, not very far from here in Southern California. And the Edison Company came through, and they wanted a new easement through his land. They already had some easements, and he hired the leading appraiser in Orange County, real estate appraiser, and said, and he had the idea that he should have $250,000 for the easement from the Edison Company. And this leading appraiser, who was very pompous and very old and and uh very distinguished, and he told him, "No, I'm sorry, it's only $125,000 value in your damn Ranch." And so he came to me and said, "Charlie, can you talk some sense into this elderly appraiser?" And so I looked at his problem and I totally, what I thought how he was doing his own appraisal wrong. I'm not a real estate appraiser; he is. And what he had done is what he was taught to do in appraisal school. He thought the problem through in two dimensions, and he figured out from comparable sales what the value per acre was, and he computed the acreage, and he had something a little bit on the, on the damage the easement would do to the remaining property. And so, but it's all done in two dimensions. And I said to this appraiser, "You got to do this in three dimensions. You know, God gave us three dimensions." And I said, "If they put the utility Towers, big transmission line Towers, which is why the, is it's going to freeze the grade. And the logical way to develop your land is to lop off the top of the hills and put them in the valley. That's the way Highland is developed, and they're doing enormous damage to, to you by freezing the grade." And he said he wouldn't change a damn thing. So I said to my elderly client, "I think you have to fire this twit, and I will hire you an appraiser who can think." And so I got him $600,000, which wasn't at all hard because I was dealing with a bunch of honest engineers at the Edison who did think in three dimensions. But again, that's so simple, but you'd be surprised how many lawyers would screw that one up. Inter, and and of course people like that appraiser who didn't know his own business very well because he didn't pay attention to the fundamentals, those people are always with us. And if you just have the mental trick of constantly going back to the basics, it's pretty basic Insight that are you conscious that a geometrical problem in a real world is three-dimensional? Are you conscious of the rules, or are they just there?
Well, it's so habitual with, yeah, I understand that, and I revolve possibilities, and I rag problems hard, and if they don't yield, I come back and what, what, and and so this is just a bag of tricks, and it enables a non-prodigy man to get prodigy results.
Uh, remember you last summer you bought Anadarko, Big Oil Company? Yes. And uh, you described, I think you just gotten back from being with Warren for the weekend. Yeah. And uh, you were describing that you didn't do all the analytics and you didn't do all of the research, but you used your bag of tricks, and you flew out to Omaha. You and Warren spent the weekend. You called up the president of the Bank of America, got the money, made the deal.
No, I didn't go to Omaha. Or where did you go?
No, no, I stay, we have a telephone.
Okay. Okay, you talk. Okay, you talked to Warren about it anyway.
Yeah, but you made it in about two days, and it was like, no, no. Okay, Warren didn't need, Warren and I have been together so long that just one grunt, we can speak a volume. And and no, it's perfectly obvious the Permian Basin is our number one oil reservoir, and we don't have another like it. And it's perfectly obvious you have a preferred stock that you have an advantage over everybody else and plus an upside. And so we've done this kind of thing before too. So of course we did it. And and and it's not very difficult, but you're right, are all kinds of organiz, endless due diligence, and that we knew enough to act based on the rules, and why they were in a hurry. Yes. But but you don't need perfect; if you're 96% sure, that's all you're entitled to in many cases. And I see these people doing this due diligence, and the weaker they are as thinkers, the more due diligence they do, and of course, it's just a way of laying an inner insecurity, and of course, it doesn't work. You, you've got to be able to, to quickly understand how much brains does it take to know the Permian Basin is America's best oil? It's layer after layer after layer. You know, we, there is no, nothing like comparable. Yes. And if you have an 8% dividend off the top, if from a perfectly reputable place of very talented people, the woman who runs that is a production engineer, she's good. And and they get better results in that shale than other people. And so it's, it's a no-brainer. At least it's a no-brainer if you don't make it hard. But I see people, if you in America now, they do these leveraged buyouts, and these firms do what they call due diligence, and they will send armies of young lawyers out at high rates per hour, rive through all the purchasing orders at a place like Esri. Don't even think about it.
No, I'm not thinking about, but they, but they, but my point is they don't, Esri wouldn't, no, you don't have to look through the purchasing orders right to know that Esri is a good business. And I don't think people are that insecure mentally ought to be in positions of decision-making.