July 18, 2024 • 39 mins
In this captivating episode, Leon Cooperman, a veteran in investment and philanthropy, shares the intriguing story of his professional life. From his early days at Goldman Sachs to founding Omega Advisors and later managing his wealth through a family office, Lee provides a comprehensive overview of his journey.
Throughout the episode, Leon shares the pillars of his success, focusing on the blend of hard work, good fortune, and a keen sense of intuition. His stories not only highlight his professional milestones but also shed light on the wisdom he's gathered along the way.
Leon opens up about his motivations behind wealth accumulation, which, interestingly, have little to do with personal gain. Instead, he finds fulfillment in using his resources to support causes close to his heart, with a special emphasis on education and healthcare.
Listeners are treated to exclusive insights into Leon’s cautious views of current economic conditions and his conservative stance on technology and innovation in investing. His stories and advice paint a picture of how strategic thinking and a commitment to higher causes can blend to create a fulfilling and influential life.
Tune in to gain a rare glimpse into the mind of one of the finance industry's most influential figures, understanding his perspective on the intertwining of success, responsibility, and the potential impact of future economic challenges.
00:00 - Introduction and Background
00:58 - Core Principles of Success
05:48 - Balancing Intuition and Data
07:14 - Influence of Parents and Upbringing
09:17 - Defining Moments and Career Changes
12:00 - Philanthropy and Giving Back
14:37 - Enjoying Making Money and Giving It Away
19:23 - Lessons for Success
26:06 - Giving Back and Philanthropy
29:07 - Concerns about the Economy
30:06 - Financial Crisis and Government Spending
32:05 - Investing Strategy and Technology
34:34 - Dealing with Setbacks in Investing
35:28 - Opinions on Bitcoin
36:28 - Personal Hobbies and Interests
Leon on Socials:
https://www.linkedin.com/in/leon-cooperman-8ab35024/
Jon on Socials:
IG: @streetschultz
FB: Jon Schultz
LinkedIn: jonschultz1
www.jonschultz.com
Throughout the episode, Leon shares the pillars of his success, focusing on the blend of hard work, good fortune, and a keen sense of intuition. His stories not only highlight his professional milestones but also shed light on the wisdom he's gathered along the way.
Leon opens up about his motivations behind wealth accumulation, which, interestingly, have little to do with personal gain. Instead, he finds fulfillment in using his resources to support causes close to his heart, with a special emphasis on education and healthcare.
Listeners are treated to exclusive insights into Leon’s cautious views of current economic conditions and his conservative stance on technology and innovation in investing. His stories and advice paint a picture of how strategic thinking and a commitment to higher causes can blend to create a fulfilling and influential life.
Tune in to gain a rare glimpse into the mind of one of the finance industry's most influential figures, understanding his perspective on the intertwining of success, responsibility, and the potential impact of future economic challenges.
00:00 - Introduction and Background
00:58 - Core Principles of Success
05:48 - Balancing Intuition and Data
07:14 - Influence of Parents and Upbringing
09:17 - Defining Moments and Career Changes
12:00 - Philanthropy and Giving Back
14:37 - Enjoying Making Money and Giving It Away
19:23 - Lessons for Success
26:06 - Giving Back and Philanthropy
29:07 - Concerns about the Economy
30:06 - Financial Crisis and Government Spending
32:05 - Investing Strategy and Technology
34:34 - Dealing with Setbacks in Investing
35:28 - Opinions on Bitcoin
36:28 - Personal Hobbies and Interests
Leon on Socials:
https://www.linkedin.com/in/leon-cooperman-8ab35024/
Jon on Socials:
IG: @streetschultz
FB: Jon Schultz
LinkedIn: jonschultz1
www.jonschultz.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:12):
Every successful person got there by goingthrough tough times. Success is a hard
ass teacher who likes to knock youaround along that journey. You know,
it takes real guts to not giveup and keep going. Well, here's
stories about failures and how these leadersflip the script to create success. I'm
(00:32):
John Schultz. Join me, andlet's discover how success is never really overnight.
So welcome to the John Schultz Podcast. We have a great guest today.
Everyone's gonna know him, but I'mgonna introduce him anyway because that's what
(00:53):
I do. Mister Leek Hooperman.Welcome, Thanks for being here, my
pleasure, John, Thank you.Right. So, Lee was at Goldman
Sachs for twenty two years investment research, co chair of investment committee for that
spent a lot of time there,and then in two thousand, actually in
(01:15):
nineteen ninety one, he founded OmegaAdvisors, which also managed money for other
people till twenty eighteen. And thenin twenty eighteen he said enough is enough
and he pulled all the money thathe's made in his life and gave the
rest back. And he has OmegaFamily Office, which obviously is still doing
(01:38):
really well. So we're going tolearn about lee today. So the first
question I have is what do youthink attributed to your success? Because you
got so much of it and you'vehad so many years doing it, what
do you think some of the coreprinciples are for that? I would say
three things I would respond to.One is hard work and luck, which
(02:00):
doesn't require much explanation, and thethird is intuition. And so the intuition
requires some explanation. So I givetwo examples of intuition when I'm asked that
question. The first example of intuitionis back in the mid sixties, if
you finished your major and minor incollege in three years, you were allowed
to count your first year of medicalor dental school toward your fourth year of
(02:23):
college. You get a separate degree. So in the summer of nineteen hundred
and sixty three, I went tothe University of Pennsylvania and I took physical
chemistry, which finished off my major, and I enrolled in the University of
Pennsylvania School of Dentistry in August ofnineteen sixty three. After eight days,
I start to wonder if I waspushing myself in a direction that was fully
(02:44):
committed. You know, it's easyto shake that off. Now when you
hear the words, it was verytraumatic. I paid room and board for
a year. I paid tuition fora year. My dead may rest in
peace was walking around saying, myson the dentist. I had to go
to the dean of the dental school, Plainton, I want to go back
to undergraduate school to finish off myfourth year. Unincumbent by any commitment.
(03:05):
He was very nasty about the wholething, making decision up in eight days
I've met making the decision. Ibasically want to reflect on it for the
next year and make sure I'm fullycommitted. I don't want to go to
dental school for three or four yearsand find out at the end of the
day I didn't want to be adentist. The only guy that understood the
troubm I was going through was GlennT. Nigrin, the dean of Hunter
(03:27):
College under graduate school part of theCity University, and he had improved my
matriculating back into school and he said, very heroic decision, of course you
can come back. So when Iwent back, I had all electors available.
I took ten courses in economics,got ten a's. I found that
what interested in me, and Inever looked back. So I never went
back to dental school. Except sofirst example of intuition was making a decision.
(03:53):
And over the years, many peopleget engaged, get married, and
their wedding is maybe a couple ofweeks after they started having second questions.
They said, well, the invitationsare out, we can't back out.
They went up getting divorced a yearlater. So I made a heroic decision
worked at my benefit many many yearslater. I give lectures at college campuses
(04:14):
and I meet with students. Itell them the only way to be successful
is a do you love and lovewhat to do. So I've never looked
at what I did. It's hardwork. I enjoyed what I did and
doing my second example of intuition.You know, I'm very very anal.
You told me the tile in athree fifty five. I died in a
three fifty five. Okay, Andso one of the few times in my
(04:35):
life I passed the deadline without actingwas I got a job offer from Goldman
Sachs in nineteen hundred and sixty six. I don't want this to sound self
serving, but was very attractive package. When I was at business school,
I had straight a's I was.I had the Bosture Journal Student Achievement Award.
(04:56):
I was remember Beta Gamma Sigma,which is a Wall Street you know,
the fancul arm Beta Campus five BetaKappa. I had a six month
old child. I knew what Iwanted and I was dead broke. And
I had sixteen job offers in nineteensixty six, and the four of them
were superior to Goldman's financially, andI passed the deadline for acting on the
(05:19):
offer. And the guy who mademe the offer, Bob, the m
fourth who's down deceased, caught meup and he says, Lee, we
just but we haven't heard for you. What can we say? I said,
Bob, I like everybody I metat Goldman. I'm dead broke.
I have a student loans repay.I was a six month old child.
But I liked everybody I met,and I have four offers for more money.
(05:40):
The offer was for twelve thousand,five hundred dollars a year, and
I said I was very familiar tothe compound interest tables. I asked him,
I make twenty five thousand dollars ayear for five years, which was
a quoted with a fifteen percent compound, and he said, if you work
hard at keeping those clean, Ithink you do it. He said,
okay, I'll take the job.I went to Goldman for less money.
A lot of people wouldn't do that, but that was the right decision because
(06:00):
Goldman and murdered. It was oneof the few firms that didn't change the
name over one hundred and fifty years. And when I joined the firm,
they were maybe making five million dollarsa year. The year I was admitted
to the partnership. Nine years laterin nineteen seventy six, the firm earned
forty million. The year I retired, after being a part of fourteen years,
the firm made one point nine billion. And I was there for that
(06:23):
whole run, from forty million toone point nine billion. It's amazing.
Say, hard work, luck andintuition. Hard work, Yeah, and
I get that. But because you'vebeen doing it so long, and I
know a lot of the younger peoplewill want to hear this, right,
you were investment in research. It'snumbers. You said, you're anal.
I mean, like, so you'reconstantly looking for data and why and you're
(06:44):
you know, you're like you said, obviously you're always on time, but
you're always looking for the right answer. How do you balance intuition with data?
Well, and by of the investmentprocess, you know, I always
point to Ben Graham, who wrotethe book in nineteen fifty four, Cold
Intelligent Investor, and he said,managements are evaluate twice in the investment decision
making process. Once to the numbers, which return equity, growth rate,
(07:09):
industry position, profit margins or functionthe quality of management. And then secondly
you evaluate management and face to facediscussion and try to figure out whether they're
both shooting you or tell you thetruth. You know, and so there's
a certain indite you have to havea certain amount of common sense. Sejo
is common sense right, because youcan get lost in it otherwise, And
(07:30):
I think that's that there's no exactanswer. Like the theme of everyone I've
had on this podcast is everyone hadto use their intuition even if it was
wrong. They knew what they didn'twant to do the next time. So
I agree with you, Yeah,mistakes so totally. So your family,
I mean, you grew up inthe South Bronx. How would your parents
(07:56):
describe you? Because I also seea theme from people of like how they
what they learned from their parents.You know, some things stuck with them
over the years. What would yousay they would say about you, and
what were some of the things thatyou felt have stuck with you your whole
life and have helped you in yourin your life and career. Well,
(08:18):
I would say my mother was atypical housewife, not to not to dominate
my life. My father was anextremely hard worker, a very generous man
within his own means. My fathercame to America at the age of twelve
of Warsaw, Poland as a plumber'sapprentice. He actually died carrying a sink
up a four story tenement doing ajob for doing a favor for a friend
(08:41):
he should have been doing but shehad a heart problem. That's why he
was retired. And he had aheart attack carrying the sync up four story
tenement in Florida and died. Sowhat I learned from my dad is hard
work and generosity and good nature,and I obviously that kept with you your
whole career, right, I meanto me, business you sort of have
(09:05):
to have a win, win,even though you know it's otherwise deal doesn't
go through. But well, youhave to have student philosophy. And you
know, like I said, whensomething that sounds too good to be true,
you are geor is not true.Do I have an investment today in
a company that fits that description?The investment seems so fabulous that there's something
(09:28):
wrong with it. So, fromyour early days at Goldman Sacks obviously to
launching Omega, you know you've hadtremendous success. What do you consider the
most defining moments and why you didthat lately? Obviously you were loyal to
the firm, you spent there along time. What made you want to
(09:48):
make a change, and you knowyou obviously did so. Well, it's
it's a long story, but I'lltell you the story. Okay, you
had a little influence I had atGoldman for ten years. I was telling
Goldman to make a big mistake bynot going into accid management. I was
a man ahead of my time forten years. They told me, Lee,
you don't understand. Goldman is amajor broker to the institutions, and
(10:09):
we believe brokeers to broke whs youmight manage to do my management? Don't
compute your customer, I said,wake up with smell roses merrilynch Acid Management,
webs TOI division kid at Peabody CSFBasset management, you know, and
everybody's get into the business. Theone firm that was not in the business
was their arts training rival, SalmonBrothers. And then one day Solomon announced
(10:31):
that Bob Solomon Junr my contemporary wasleaving the research department and start Salmon Brothers
asset Management. And Bob Ruben SteveFreeman, who were then co heads of
the firm, call me and said, look, we make made a mistake.
Are you willing to leave research andstart an ascid manager business? Now
again this is not self serving,but I had climbed them out. And
(10:52):
when I took over Goldman Research innineteen seventy two as a manager of the
department, who were unranked in research, and when I was in nineteen ninety
eight nineteen ninety I guess when Ileft, we were number one in financial
world, number one, number onebrandish research. And I also was a
firm's portfol strategist. So I said, I had a role as a orchestra
(11:16):
leader in running the department. AndI also was a soloist in terms of
being a first strategist, and sobeing number one in both categories, I
was ready for a new challenge.And I say, with a big smile
on my face, I made amistake and said yes. The reason I
made a mistake is Goldman's a terrificfirm and they understood assets in the management
times fee equal revenue. I wasmore interested in performance of those assets,
(11:41):
less interested in gathering a lot ofassets. So after a year, I
saw godma want to be on theroad all the time raising new money,
and I wanted to manage the moneyto find good stocks. So I decided
to retire. And when I decidedto retire, I told the firm I
believe in though blessed Oblieg. Itold the firm that basically, if they
(12:03):
say my going into the hedge frombiddiness with the violation and not compete,
I wouldn't do it. And theywere very realistening and listen, we don't
want to go into that business.Uh so, how can we say you're
violating, you not compete. Wehope that you would use Goblin as your
prime broker. Say, I wouldnot do anything but that, And then
I agreed to be consultants to Goldlinfor the one year that's amazing how things
(12:26):
change. Right, But you are, you were ahead of your time,
and it just seems also like you'rewhen you you know, conviction, I
guess is everything too besides all theresearch intuition, then you have to have
real conviction on it. And Iknow you're I know you're like very into
education and you feel that's part ofyou know how you can create success?
Well, you know, I workvery hard, and I give away all
(12:48):
the money. I've taken two givingpledges, one with Warren Buffer and Bill
Gates, the other one with theguy Bam and Mike Levin. It's worried
towards Jewish causes. So I've agreedto give my eleven half my net worth
and I'm giving warm buffet and boothgates to the other half. So I'm
giving away two fifties or one hundredpercent. So I'm working for charity and
(13:09):
two of my family's interests or education, particularly helping eat a city kids even
up to the odds and give thema chance to know. I know you
do that in Newark, right,which we have holdings in Nework. We
love Newark with the parks. Iguess you're rebuilding actually the one in education.
I gave this is an interesting too. I created something called Coopman and
(13:30):
College Scholars. So if you livein Esse County, New Jersey, principally
in Newark, you have a showthe initative, enroll in a free three
week pre college program designed by FranklinMarshall, and you're academically qualified. I'm
big in giving not giving people fish, but teaching them how to you know
fish. So I gave twenty fivemillion dollars and I told them when I
(13:52):
gave them twenty five million dollars,I say, I know the statistics.
I've worked to office money statistics.I gave the first with a million.
There's thirty five percent of New constlekids went to college, only five percent
graduated. I'm not spending this kindof money for five percent graduation rate.
So six years later, my firstcohort graduated and we had a seventy three
(14:13):
percent graduation rate. So I gavea a second twenty five million, and
I named them in my will.They you know what you call it a
I'm losing it out of the word, but you know I'll come back to
it. We now have a fiftymillion dollar fund that funds a thousand kids
(14:37):
going to college and Newark, andI give a large amount of money to
say Bartabas Medical System. They droppedthe Saint for jew so it's now called
Koopam and Barnabas. I gave moneydown here in Boca Regional, so,
you know, education and healthcare tomy interests, and it's designed to help
(14:58):
people cheaper. I've achieved. What'smore fun? Giving it a wire?
Making it a good question? Ienjoy both. I tell young kids the
only way to be successful is tolove what you do and do what you
love. So I enjoyed what I'mdoing. I like making money for two
reasons, not for a personal breed. I live very modestly. I drive
(15:20):
a hun Die. I could afforda rose voice. You know. I
can afford anything I want, butthere's nothing that I want. I'm married
to the same woman for fifty nineyears. We met in a sophomore here
to Hunt to college in the Bronx, and we got married when we graduated
in nineteen sixty four. And weboth have a similar philosophy. And material
(15:41):
possessions brings with as much aggravation aspleasure, so we're less as more.
And I figured out many years ago, it's four things you could do with
money. Not to lecture, butthis is my view. The first you
could do money is spending on yourselfby cars, homes, planes. Now
the new rage is sports teams.I'm not particular interested in sports, and
I'm not interested in material possessions.I'm a lesser's more kind of guy.
(16:07):
I think material possessions brings with airaggravation as much as pleasure. In fact,
I have two homes, one NewJersey, one down here in Florida.
I'm a Florida resident. I wouldlike to sell my home in New
Jersey. My wife won't let me. Very regiciant to change. It's roots.
You guys have roots. You can'tjust yeah, I get it.
We have a lot of friends inFlorida, and I like to climate down
here. Like the lifestyle better.Yeah. I think the thing you do
(16:30):
it might give to your children.If you have a lot of money,
giving your kids all your money isa mistake. You deprive them of self
achievement. I have two boys thatare very achieved, one graduate Standford five
bait as an MBA for Wharton,a very successful money manager. His brother
that's a PhD and environmental sciences.He's a scientist, So I don't want
to give all my money to mykids. I gave them enough to help
(16:52):
them out, but I didn't givethem all my money. The third thing
you do with money gives the government, but only a fool gives the government
money. They don't have to payyour tax to be on volunteer and pay
more. The fourth thing you dowith money is recycle back in society and
try to make the world of thatplace. That's what I've chosen to do
with my resources. So I workedvery hard, but I giving the money
away and I enjoyed giving it away, and I enjoyed making it. I
enjoyed making for two reasons. One, you know, one of my heroes
(17:17):
in life is ken Lango, Likeconsider one of the funniest human beings have
ever met, and my only envyof Kennon. He has a lot more
money than me to give away,but you know, he's a real gentleman,
and we both have similar roots.His father was a plumber in Long
Island. My dad was a plumberin the Bronx. That's amazing. And
(17:37):
you both love hospital systems because you'reboth very involved in the healthcare industry.
Well healthcare, and he's done alot. You know, he's got you
know, big numbers. He gavethree million dollars at YU. They gave
another one hundred million dollars to createa free medical education, which was very
much needed. Yeah, that wasinteresting. I guess there's a college.
I guess her name was missus goddessmanjust gave billion dollars away from widow.
(18:02):
Yeah, that was That was aninspirational moment. I'll tell you, you
know, so you're you've been inthis very long. You're still doing it
well, I do. I telleverybody I'm like him and Roth from God's
Father too. Right before they shothim at the airport, he said,
I'm a retired executive living on apension. So I tell you I'm gonna
(18:23):
retired my manager living on an investmentincome. The bad news is I no
longer have the big income anymore thatI used to have. I gave that
up. The good news have nopressure if I make money in the market
or lose money my own money.If you're managing other people's money, there's
a lot of pressure on you toperform and deliver good results. No,
I get it, but you youstill have to how do you like how
(18:45):
did you keep up the learning partfor the young people? Like you don't
have a million people around you givingyou information. You do it. You're
very self sustaining. Guy read Iread a lot and I have common sense.
Like I said, I read alot, and I talked to a
lot of people that are smarter thanme. I try to synthesize by learn.
(19:06):
I have two analysts working with me. They feed me ideas and I
review their thinking, and they proposedand I dispose. Besides ken Lanngal like,
who would you say? We're keymentors people that pushed you know,
made you feel like you could doit in a different way. I feel
I've had those in my life inJohn Weinberg and the whole Gold and Sex
(19:29):
culture of giving back a generosity.You know, sy Lewis at bear Stearns,
Bob Menushia, who ran trading atGold. I learned a lot from
him about how markets work. Butyou know, I was just very fortunate
to be surrounded by high quality,good people and with your giving back.
Do you like mentoring now as well? Or is it it's been a lot
(19:52):
of time when youngsters giving talks tocolleges and I share my whole learning process
with them. You know, infact, hold on one second. I
give them a handout where I tellthem some of the lessons I've learned in
life, and I'll share it withyour audience. Yeah, share them please.
(20:15):
I told them that every time Iinterviewed somebody when I was in business,
no longer in business, I toldthem about the parallemle of the lion
and the gazelle. Every morning inAfrica, a gazelle wakes up, it
knows it must run fast, andthe fastest lion or it will be killed.
Every morning a lion wakes up,it knows it must outrun the slowest
gazelle will start with death. Doesn'tmatter whether you were a lion or a
(20:38):
gazelle. When the sun comes up, your beat be running. So why
do I talk about that beginning moneymanaging business? Well, we charged about
one percent of the profits. Thereare ten thousand quality mutual funds that will
manage your mine for one percent orless. So if you're going to charge
your people, your your client's apremium fee, you have to deliver a
(20:59):
premium performance. I tell them thatgazelle and the lion story. And then
the second that I tell them whatAndrew Carnegie said nineteen hundred. I wish
to have as my epithet. Herelies a man. I edited him a
little bit, because I say aman or a woman back at nineteen hundred,
women who were not part of thelabor force. Here lies a man
or woman who wise enough to bringinto his service men or women who more
(21:21):
than he knew, more than hetrying himself with smart people, share the
bounty equably and fairly, and don'tworry about people being stronger than you.
You want people stronger than you.Then I talk a bit about integrity.
So this is Reverend Billy Graham's words. Wealth has lost, nothing is lost,
but health has lost. Something islost. When character is lost,
(21:42):
always lost, Reverend Billy Graham.Okay, Then other things I tell them,
I said I have. I havereal life stories in this. Okay.
The first test of a gentleman isexpect for those who can be have
no possible valued him. Many manyyears ago, I'll mention his name favorably.
(22:07):
Ken Lan gone and deceased, goldsack salesman and myself took out a
money manager for dinner. The purposeof the dinner was Ken was gonna lay
and the money manager's lap the newaccount. When Ken saw how the money
manager treated the waiter, he neverbrought the subject up because you know,
Ken is a guy that treats peopleabove and below him the same way.
You know, and he's just areal gentleman. And the second variation of
(22:32):
that is, no matter how educated, talented, rich or cool you believe
you are, how you treat peopleultimately tells all. So you know,
I'm an advocate of treating people thesame way above and below you and just
be nice. I don't even knowwho the hell you are. I'm doing
this webcas listen your I met youthrough a friend and my friend said,
(22:53):
you know, uh, Lee justwants to help people, so he's going
to do it and you don't evenknow me. And I appreciate that,
and hopefully I'm going to get toknow you when I come visit Kenny and
come down. You forgot one thatI think you say from Kenny Rodgers,
you know the gambler. You gotto know when to hold them and then
when to fold them. Yeah,I folded because you know, the SEC
(23:15):
created a problem with my business.They lost the case. I didn't do
anything wrong. But you know theinstitutions there, they're they're fire aim ready.
So I lost lives, tootion money, and more and more of the
money was managing with their own money. And basically I decided it wasn't worth
the candle to put up with allthe crap that you have to put up
(23:37):
with registration, et cetera. AndI gave back the money and resort to
manage my own money. So Isay I want to make money for two
reasons. One is I'm naget likeeverybody else. I want to be right.
So if I losing money in themarket, that means I got it
wrong. I don't want to getit wrong. And number two, I'd
like to give away more money.My only envy that we started then the
Kinland gunpath, I never finished thought. My only envy of ken Lenngngn is
(24:02):
he has not spout money to giveaway, and he will give it away
other things. I tell the kidsyou. Aristyle three thousand years ago said
tolerance and apathy are the last virtuesof a society. Be engaged, you
know, don't be a bump ona log, speak out, and the
similar theme. Martin Luther King Jr. Our Lives begin to end the day
(24:26):
would become silent about things that matter. So I preach engagement and involvement.
I have three grandkids. One isvery much into helping others. And you
know, she posed the questions thatRabbi Hello asked. Okay, and the
(24:48):
questions are, if I'm not formyself, then who will be for me?
For others? Then who am I? If not, they will win.
Those are the questions that Rabbi hellelasked. And my granda Courtney answer
the questions. So, if you'renot for others, no one will be
for you. If you if youare for others and others will be for
you, you will show others howto be for more than themselves. They
(25:12):
will therefore be for you. Thetime is always now, it's now,
We're never. I love that.Yeah it's Courtney Cooperman. No, that's
a good one. That's the bestone. Man. Well, there are
others, you know. Henry Ford, while on Buffett, you know,
say the same thing. Henry Fordsays the best way to make money in
(25:32):
business and not to think too muchabout making it. You know. So
I went to Goldman for less moneyand uh, you know, well you
want with your God I mean,I think, you know, wishing part
of the state. It's intuition becauseand most of the time, even the
intuitions, it's in the right direction, but it's not always completely right either.
(25:53):
You learn as you go along,and you've got to be willing to
make a wrong move to make aright mode. I think Pablo Picasso attributed
to him, said, the meaningof life is to find your gift.
The purpose of life is to giveit away. So I found my gift.
I was able to contract profits inthe market. It's a good business.
I take those profits and returns andI recycle back into society. And
(26:18):
so I'm living up to a publiccoasto observed, and you're doing a lot
of it. I mean, well, I've been very fortunate. I've been
very fortunate, you know. II went to college for twenty four dollars
semester. I met my wife forfifty nine years in our sophomore year.
(26:38):
It's the Cuniversity of New York rightnow. The tuition is about six thousand
dollars a year, which is alot of money for these young kids totally.
So you know, we have theCooper and College scholars Fund in Newark
and then I have given a lotof money to hunt the college to create
financial aid, and then I haveaddresses a success program. These kids are
(26:59):
getting their college greeze, we givethem some money to be properly dressed when
they go out an interview for ajob. It's it's I think it's so
cool, right because like all theselittle things just for success. You know,
we can give in so many waysthat are necessary. It's not just
always a big thing. It's justfinding finding how you can help someone,
one person at a time, andscale that. But with things that people
(27:22):
don't realize are necessary. Yeah,twenty five years ago, I couldn't even
spell the word philanthropists, let alonebe one. Now everybody says I'm a
philanthropist. You know, I'm justdoing what I think is right. Yeah,
No, you're it's good. It'sgood. Listen, it feels good.
Twelve years ago, I had dinnerwith Warren Buffett and Bill Gates and
the Giving Pledge, and I saidto Warren, if you're talking to wealthy
(27:45):
people, asking for half, isnot asking for enough? Or is the
request original? In nineteen hundred,Andrew Colin said, who dies rich dies
disgraced? Nineteen thirty two inch inturtles that you make a living by what
you get, you make a lifeto what you give. In nineteen sixty
one when President Kenny was great atPresident, that's not what you you can
do for your country. That's notwhat your country. And if you ask
(28:06):
what you can do for your country, and I said to him, I'm
Jewish, and I Santa Tom,and you measurement that b hasaway gives the
difficult in you and I I'm notgiving my money to Bill and Linda Gase
to give away. I'm going togive my money. Those organizations and institutions
have made a difference to me andmy family and my lifetime. So we
give a lot within the community,and we give a lot to education,
and we give a lot of thehealthcare. Do you have do you have
(28:26):
like a photographic memory for quotes.I've never heard anyone be able to riff
off these quotes. It's not thefirst podcast I've done. Well, listen,
it seems like you've been practicing becauselike I, you know, I
love quotes myself, but I can'tremember. I mean, you're remembering the
year they were even like like puton the market. It's amazing. I
(28:48):
wrote that letter one on Buffett andI'd use it on a few occasions.
Look, we have we have realproblems in the country, and we have
to all pull together, you know. Yeah, but and what do you
like with him now? Like again, you've lived through way more than me.
My grandmother was born in nineteen ohfive. You know, I look
back at what she happened in nineteeneight. What's that? My father was
(29:11):
born in nineteen oh eight. Yeah, so you know, I mean that
my grandmother and she lived one hundredand three, so she like she saw
everything. She saw depression. Yeah, it's a good fact, right for
you. My father died at seventy. My older brother I was very close
with, died at eighty five.I'm eighty one, you know, and
I think the statistics say, ifyou make it past sixty five and cancers
(29:34):
and get you on average, you'llmake it to eighty five. So I
got four years left to do.Now you got more. There's innovations coming.
Come on. I'm you're always positive, be positive. Yeah, Well
it's hard, and I'm positive aboutmy life, A positive I've done.
But I'm a little concerned about theenvironment. I think we're heading for a
(29:56):
financial crisis. So why give me, give me your thoughts spending my like
drunken, sayde Just listen to Biden'sState of Union address. Now, one
thing about controlling expenditures was all aboutraising tax and wealthy people. You know,
we have a spending problem in thiscountry. You know, we're running
a definitive of two trillion dollars ayear. The debt is exploded with thirty
(30:21):
four trillion dollars interest on the debt. A loan now is about trillion dollars.
You know, when I grew upin the business in the mid sixties,
there was a phraseology crowding out andguns and butter. We have guns
and butter. We have we experiencecrowding out. We're living too comfortably.
You know, no way he knowswhen the shit hits the fan, But
(30:41):
it will, you know. Andthe reason I say, nobody knows.
In nineteen seventy two, I wasa partner of Goldman Sachs. There were
two very distinguished dead gentlemen. Theywere good friends with each other, Pete
Peterson, who was deceased and HenryFowler, who's formerly Secretating Treasury. He's
also deceased. They used to runfull page ads in the Wall Street Journal
New Times. They paid the costsat their own pocket and they learned the
(31:03):
public to the evils of the budgetdeficit. So here we are now,
fifty or sixty years later, andwhere's the consequence. We have the lowest
interest rates in the history of theworld. So it's not mattered. And
one of these days it's going tomatter. And when it matter is we'll
have a convinancial crisis that will leadto a change in leadership. I caught
a Mansion and Romney on the TVtube a bad a month ago. We
(31:27):
were talking about Simpson bowls and theneed for doing something about the budget and
they said with Simpson bows had itwas the right idea, but nothing was
done about it. The problem nowfive six, seven years later is three
times greater. We do nothing.Yeah, really, it's skyrocketed. I
(31:48):
mean, it's very sad, verysad. So what's so okay? So
you don't feel I mean, you'vegot to grow out of it. I
mean, and a question for you, with all this new innovation and technology
that's been going on the last fifteenyears, did you embrace that in investing
or a technology guy. I'm aguy that plays the business cycle. I
(32:14):
say, every recession sows the seatsthe next business recovery. Every business recovery
sows the seats the next recession.So I'm not technology oriented, even though
I have a scientific science background,and I observed it in somebody's innovation somebody
else's obsolescence. So you know,in two thousand, the word then was
(32:35):
the Internet, and Cisco was threehundred times earnings, and then in two
thousand and one, two thousand andtwo, they dropped ninety percent in price
in Cisco, and I think theInternet has lived at where everybody expected to
do, and in Cisco is nowstill below what it was in two thousand
and then you have the nifty tofifty of nineteen where JP morgan Us Trust
(33:01):
ruled the roost there for lots.It was only one type of stock,
a gross stock, and they don'tcare what they paid. They were buying
gross stocks at forty fifty sixty timesearnings. Opek raised the price of well
tenfold. We've gone to a recessionand those stocks collapsed and it took a
decade for some of them to recover. So I think we're in a bit
(33:22):
of a bubble period. Well,look at AI and like Nvidia and all
the chips. I mean, yeah, I'm not qualified to comment on AI.
Everybody seems to think it's very real. I don't know if it's revolutionary
or evolutionary. I don't know.I think the world would be better off.
I've tried a little bit of AIand it's very amazing. Yeah,
(33:45):
well, it's like it's like whenthe inter first started. You need to
build use cases on top of it. Right, it's not just the thing,
you know it'll happened. The questionis how do you spend your money?
And like I said, I tendto be value orinted. I have
a heavy position and energy. They'reselling it three times cash flow. They're
yielding, you know, five tosix percent. Most of them have very
(34:07):
little debt because you can't borrow moneyas an energy company. And my guess
is if I buy a three timescare flow yilding six percent, I'll get
lucky. What was your I guessmoment where you felt you went in something
(34:28):
and it just blew up and howdid you get through it? Everybody experience
the setbacks in their investment career andwhat determines your success and how you handle
the setbacks so you know, yougot to pick yourself off the ground and
you know persevere. Yeah, Igreat. So what about bitcoin? I
(34:50):
take the easy way out in bitcoin, I say that if you don't understand
bitcoin, the media old I'm eightyone. I don't understand bitcoin. I
have very nominal involvement. But whatabout goal like? Is it a store
like? Like? What's goal like? That's a store of value? You
can make more of it half?For thousands of years, bitcoin hasn't okay?
And uh, you know, CharlieMunger is a smart guy, lived
(35:10):
in ninety nine, passed away recently. He said with rat poison. I
think Warren Buffer said he wouldn't giveyou twenty five cents for the bitcoin in
the world. I haven't agree withJamie Diamond. They shout out, or
we don't need any competition for theUS dollar. We have a lot of
debt to sell. It's not inour interest to have a competitive currency.
But he is what it is.You know, to people that like it,
(35:31):
say that if everybody wants to putone percent of their wealth in bitcoin,
it goes up a lot. Butwhy would they want to put one
percent in bitcoin? And why theywant to own it? What do you
do with it, right, Butisn't everything like serve a belief system anyway?
I mean from products services, confidenceand plays the port role in security
(35:52):
evaluation. But when you own it, shares the stock the company you owner,
share the brick mortar machinery that producesgoods and services. It's tangible,
tangible exactly. And you know theaverage common stock is only two percent.
You know you can't get to yieldat a bitcoin. You're being on someway
else buying it from you at ahigher price. So being that you had
(36:15):
this long career and you're still workingharder than you ever do, giving money
away, making money, I lovethat. It's a good balance any other
hobbies, like what what do you? What else do you do? I'm
a very boring guy. I usedto walk a couple miles a day with
my older brother. He passed awayand I developed it's a very severe case
(36:36):
of my ris's having trouble walking.I think I'm going to Panama on Monday
for some stem cell injections. Ohokay, good, correct my problem?
Who knows? All? Right?One last question because I'm just curious if
you could, if you could havechosen anything else, would you've chosen anything.
Now that you've been in the samething for so long, is there
anything else you would have done?Probably in real estate where you use other
(36:57):
people's money. Yes, leverage,Yeah, it's not always good, but
you know, rates have definitely affectedour industry. But it's tangible and you
can use leverage properly. Just can'toverleverage. That's the that's the issue.
Yeah, well everything is cyclical.I remember in the sixties where Prudential real
Estate for Prissive, the Potential realEstate fund was closed for redemptions and then
(37:21):
you got to do a very strongrun. Yeah, Cycicle, you gotta
understand capitalism. Excess returns attracts competition. I got to believe every boardroom in
America they're looking at the video successand we're going to want to put over
capacity in semis questions. Whether it'sa year or two years or three years
away. It's just you know,with all these data like if you're gonna
(37:42):
have AI, you have to havethis new data center power to compute.
Yeah, I owned Virtue. Ohwe're at ten bucks. It's seventy five
dollars today. It's up every day. You know, I was I can
tell you is everybody going to thedata sent to business, you know,
excess returns to track capacity and capital. Yeah, return drive it out.
(38:07):
I mean, I'm old enough tosay it's my third cycle and like these
are the times. You know,it's a reset, so people, some
people are gonna have issues and you'llbe able to find you know, bargains
and opportunities. So absolutely that's interestingto bet to business. So I want
to thank you so much. Sinceyou didn't know me and you did this
and you're always well, you're seeinga smart fellow with good questions, and
(38:30):
I appreciate your time and give mesome visibility. I mean the point in
my career where I'm not worried aboutvisibility. I like Tom a little bit,
but it's always nice to be visible. I always say it's it's always
nice to hear other people's opinions.And yet you know, so I appreciate
it. Thank you, my pleasure. Thank you very much for having me
(38:51):
Hi John Schultz here. Thank youso much for tuning into this week's episode.
Would really appreciate it. If youwould like comments, subscribe and share
with your friends. Looking forward tobeing with you soon.
Every successful person got there by goingthrough tough times. Success is a hard
ass teacher who likes to knock youaround along that journey. You know,
it takes real guts to not giveup and keep going. Well, here's
stories about failures and how these leadersflip the script to create success. I'm
(00:32):
John Schultz. Join me, andlet's discover how success is never really overnight.
So welcome to the John Schultz Podcast. We have a great guest today.
Everyone's gonna know him, but I'mgonna introduce him anyway because that's what
(00:53):
I do. Mister Leek Hooperman.Welcome, Thanks for being here, my
pleasure, John, Thank you.Right. So, Lee was at Goldman
Sachs for twenty two years investment research, co chair of investment committee for that
spent a lot of time there,and then in two thousand, actually in
(01:15):
nineteen ninety one, he founded OmegaAdvisors, which also managed money for other
people till twenty eighteen. And thenin twenty eighteen he said enough is enough
and he pulled all the money thathe's made in his life and gave the
rest back. And he has OmegaFamily Office, which obviously is still doing
(01:38):
really well. So we're going tolearn about lee today. So the first
question I have is what do youthink attributed to your success? Because you
got so much of it and you'vehad so many years doing it, what
do you think some of the coreprinciples are for that? I would say
three things I would respond to.One is hard work and luck, which
(02:00):
doesn't require much explanation, and thethird is intuition. And so the intuition
requires some explanation. So I givetwo examples of intuition when I'm asked that
question. The first example of intuitionis back in the mid sixties, if
you finished your major and minor incollege in three years, you were allowed
to count your first year of medicalor dental school toward your fourth year of
(02:23):
college. You get a separate degree. So in the summer of nineteen hundred
and sixty three, I went tothe University of Pennsylvania and I took physical
chemistry, which finished off my major, and I enrolled in the University of
Pennsylvania School of Dentistry in August ofnineteen sixty three. After eight days,
I start to wonder if I waspushing myself in a direction that was fully
(02:44):
committed. You know, it's easyto shake that off. Now when you
hear the words, it was verytraumatic. I paid room and board for
a year. I paid tuition fora year. My dead may rest in
peace was walking around saying, myson the dentist. I had to go
to the dean of the dental school, Plainton, I want to go back
to undergraduate school to finish off myfourth year. Unincumbent by any commitment.
(03:05):
He was very nasty about the wholething, making decision up in eight days
I've met making the decision. Ibasically want to reflect on it for the
next year and make sure I'm fullycommitted. I don't want to go to
dental school for three or four yearsand find out at the end of the
day I didn't want to be adentist. The only guy that understood the
troubm I was going through was GlennT. Nigrin, the dean of Hunter
(03:27):
College under graduate school part of theCity University, and he had improved my
matriculating back into school and he said, very heroic decision, of course you
can come back. So when Iwent back, I had all electors available.
I took ten courses in economics,got ten a's. I found that
what interested in me, and Inever looked back. So I never went
back to dental school. Except sofirst example of intuition was making a decision.
(03:53):
And over the years, many peopleget engaged, get married, and
their wedding is maybe a couple ofweeks after they started having second questions.
They said, well, the invitationsare out, we can't back out.
They went up getting divorced a yearlater. So I made a heroic decision
worked at my benefit many many yearslater. I give lectures at college campuses
(04:14):
and I meet with students. Itell them the only way to be successful
is a do you love and lovewhat to do. So I've never looked
at what I did. It's hardwork. I enjoyed what I did and
doing my second example of intuition.You know, I'm very very anal.
You told me the tile in athree fifty five. I died in a
three fifty five. Okay, Andso one of the few times in my
(04:35):
life I passed the deadline without actingwas I got a job offer from Goldman
Sachs in nineteen hundred and sixty six. I don't want this to sound self
serving, but was very attractive package. When I was at business school,
I had straight a's I was.I had the Bosture Journal Student Achievement Award.
(04:56):
I was remember Beta Gamma Sigma,which is a Wall Street you know,
the fancul arm Beta Campus five BetaKappa. I had a six month
old child. I knew what Iwanted and I was dead broke. And
I had sixteen job offers in nineteensixty six, and the four of them
were superior to Goldman's financially, andI passed the deadline for acting on the
(05:19):
offer. And the guy who mademe the offer, Bob, the m
fourth who's down deceased, caught meup and he says, Lee, we
just but we haven't heard for you. What can we say? I said,
Bob, I like everybody I metat Goldman. I'm dead broke.
I have a student loans repay.I was a six month old child.
But I liked everybody I met,and I have four offers for more money.
(05:40):
The offer was for twelve thousand,five hundred dollars a year, and
I said I was very familiar tothe compound interest tables. I asked him,
I make twenty five thousand dollars ayear for five years, which was
a quoted with a fifteen percent compound, and he said, if you work
hard at keeping those clean, Ithink you do it. He said,
okay, I'll take the job.I went to Goldman for less money.
A lot of people wouldn't do that, but that was the right decision because
(06:00):
Goldman and murdered. It was oneof the few firms that didn't change the
name over one hundred and fifty years. And when I joined the firm,
they were maybe making five million dollarsa year. The year I was admitted
to the partnership. Nine years laterin nineteen seventy six, the firm earned
forty million. The year I retired, after being a part of fourteen years,
the firm made one point nine billion. And I was there for that
(06:23):
whole run, from forty million toone point nine billion. It's amazing.
Say, hard work, luck andintuition. Hard work, Yeah, and
I get that. But because you'vebeen doing it so long, and I
know a lot of the younger peoplewill want to hear this, right,
you were investment in research. It'snumbers. You said, you're anal.
I mean, like, so you'reconstantly looking for data and why and you're
(06:44):
you know, you're like you said, obviously you're always on time, but
you're always looking for the right answer. How do you balance intuition with data?
Well, and by of the investmentprocess, you know, I always
point to Ben Graham, who wrotethe book in nineteen fifty four, Cold
Intelligent Investor, and he said,managements are evaluate twice in the investment decision
making process. Once to the numbers, which return equity, growth rate,
(07:09):
industry position, profit margins or functionthe quality of management. And then secondly
you evaluate management and face to facediscussion and try to figure out whether they're
both shooting you or tell you thetruth. You know, and so there's
a certain indite you have to havea certain amount of common sense. Sejo
is common sense right, because youcan get lost in it otherwise, And
(07:30):
I think that's that there's no exactanswer. Like the theme of everyone I've
had on this podcast is everyone hadto use their intuition even if it was
wrong. They knew what they didn'twant to do the next time. So
I agree with you, Yeah,mistakes so totally. So your family,
I mean, you grew up inthe South Bronx. How would your parents
(07:56):
describe you? Because I also seea theme from people of like how they
what they learned from their parents.You know, some things stuck with them
over the years. What would yousay they would say about you, and
what were some of the things thatyou felt have stuck with you your whole
life and have helped you in yourin your life and career. Well,
(08:18):
I would say my mother was atypical housewife, not to not to dominate
my life. My father was anextremely hard worker, a very generous man
within his own means. My fathercame to America at the age of twelve
of Warsaw, Poland as a plumber'sapprentice. He actually died carrying a sink
up a four story tenement doing ajob for doing a favor for a friend
(08:41):
he should have been doing but shehad a heart problem. That's why he
was retired. And he had aheart attack carrying the sync up four story
tenement in Florida and died. Sowhat I learned from my dad is hard
work and generosity and good nature,and I obviously that kept with you your
whole career, right, I meanto me, business you sort of have
(09:05):
to have a win, win,even though you know it's otherwise deal doesn't
go through. But well, youhave to have student philosophy. And you
know, like I said, whensomething that sounds too good to be true,
you are geor is not true.Do I have an investment today in
a company that fits that description?The investment seems so fabulous that there's something
(09:28):
wrong with it. So, fromyour early days at Goldman Sacks obviously to
launching Omega, you know you've hadtremendous success. What do you consider the
most defining moments and why you didthat lately? Obviously you were loyal to
the firm, you spent there along time. What made you want to
(09:48):
make a change, and you knowyou obviously did so. Well, it's
it's a long story, but I'lltell you the story. Okay, you
had a little influence I had atGoldman for ten years. I was telling
Goldman to make a big mistake bynot going into accid management. I was
a man ahead of my time forten years. They told me, Lee,
you don't understand. Goldman is amajor broker to the institutions, and
(10:09):
we believe brokeers to broke whs youmight manage to do my management? Don't
compute your customer, I said,wake up with smell roses merrilynch Acid Management,
webs TOI division kid at Peabody CSFBasset management, you know, and
everybody's get into the business. Theone firm that was not in the business
was their arts training rival, SalmonBrothers. And then one day Solomon announced
(10:31):
that Bob Solomon Junr my contemporary wasleaving the research department and start Salmon Brothers
asset Management. And Bob Ruben SteveFreeman, who were then co heads of
the firm, call me and said, look, we make made a mistake.
Are you willing to leave research andstart an ascid manager business? Now
again this is not self serving,but I had climbed them out. And
(10:52):
when I took over Goldman Research innineteen seventy two as a manager of the
department, who were unranked in research, and when I was in nineteen ninety
eight nineteen ninety I guess when Ileft, we were number one in financial
world, number one, number onebrandish research. And I also was a
firm's portfol strategist. So I said, I had a role as a orchestra
(11:16):
leader in running the department. AndI also was a soloist in terms of
being a first strategist, and sobeing number one in both categories, I
was ready for a new challenge.And I say, with a big smile
on my face, I made amistake and said yes. The reason I
made a mistake is Goldman's a terrificfirm and they understood assets in the management
times fee equal revenue. I wasmore interested in performance of those assets,
(11:41):
less interested in gathering a lot ofassets. So after a year, I
saw godma want to be on theroad all the time raising new money,
and I wanted to manage the moneyto find good stocks. So I decided
to retire. And when I decidedto retire, I told the firm I
believe in though blessed Oblieg. Itold the firm that basically, if they
(12:03):
say my going into the hedge frombiddiness with the violation and not compete,
I wouldn't do it. And theywere very realistening and listen, we don't
want to go into that business.Uh so, how can we say you're
violating, you not compete. Wehope that you would use Goblin as your
prime broker. Say, I wouldnot do anything but that, And then
I agreed to be consultants to Goldlinfor the one year that's amazing how things
(12:26):
change. Right, But you are, you were ahead of your time,
and it just seems also like you'rewhen you you know, conviction, I
guess is everything too besides all theresearch intuition, then you have to have
real conviction on it. And Iknow you're I know you're like very into
education and you feel that's part ofyou know how you can create success?
Well, you know, I workvery hard, and I give away all
(12:48):
the money. I've taken two givingpledges, one with Warren Buffer and Bill
Gates, the other one with theguy Bam and Mike Levin. It's worried
towards Jewish causes. So I've agreedto give my eleven half my net worth
and I'm giving warm buffet and boothgates to the other half. So I'm
giving away two fifties or one hundredpercent. So I'm working for charity and
(13:09):
two of my family's interests or education, particularly helping eat a city kids even
up to the odds and give thema chance to know. I know you
do that in Newark, right,which we have holdings in Nework. We
love Newark with the parks. Iguess you're rebuilding actually the one in education.
I gave this is an interesting too. I created something called Coopman and
(13:30):
College Scholars. So if you livein Esse County, New Jersey, principally
in Newark, you have a showthe initative, enroll in a free three
week pre college program designed by FranklinMarshall, and you're academically qualified. I'm
big in giving not giving people fish, but teaching them how to you know
fish. So I gave twenty fivemillion dollars and I told them when I
(13:52):
gave them twenty five million dollars,I say, I know the statistics.
I've worked to office money statistics.I gave the first with a million.
There's thirty five percent of New constlekids went to college, only five percent
graduated. I'm not spending this kindof money for five percent graduation rate.
So six years later, my firstcohort graduated and we had a seventy three
(14:13):
percent graduation rate. So I gavea a second twenty five million, and
I named them in my will.They you know what you call it a
I'm losing it out of the word, but you know I'll come back to
it. We now have a fiftymillion dollar fund that funds a thousand kids
(14:37):
going to college and Newark, andI give a large amount of money to
say Bartabas Medical System. They droppedthe Saint for jew so it's now called
Koopam and Barnabas. I gave moneydown here in Boca Regional, so,
you know, education and healthcare tomy interests, and it's designed to help
(14:58):
people cheaper. I've achieved. What'smore fun? Giving it a wire?
Making it a good question? Ienjoy both. I tell young kids the
only way to be successful is tolove what you do and do what you
love. So I enjoyed what I'mdoing. I like making money for two
reasons, not for a personal breed. I live very modestly. I drive
(15:20):
a hun Die. I could afforda rose voice. You know. I
can afford anything I want, butthere's nothing that I want. I'm married
to the same woman for fifty nineyears. We met in a sophomore here
to Hunt to college in the Bronx, and we got married when we graduated
in nineteen sixty four. And weboth have a similar philosophy. And material
(15:41):
possessions brings with as much aggravation aspleasure, so we're less as more.
And I figured out many years ago, it's four things you could do with
money. Not to lecture, butthis is my view. The first you
could do money is spending on yourselfby cars, homes, planes. Now
the new rage is sports teams.I'm not particular interested in sports, and
I'm not interested in material possessions.I'm a lesser's more kind of guy.
(16:07):
I think material possessions brings with airaggravation as much as pleasure. In fact,
I have two homes, one NewJersey, one down here in Florida.
I'm a Florida resident. I wouldlike to sell my home in New
Jersey. My wife won't let me. Very regiciant to change. It's roots.
You guys have roots. You can'tjust yeah, I get it.
We have a lot of friends inFlorida, and I like to climate down
here. Like the lifestyle better.Yeah. I think the thing you do
(16:30):
it might give to your children.If you have a lot of money,
giving your kids all your money isa mistake. You deprive them of self
achievement. I have two boys thatare very achieved, one graduate Standford five
bait as an MBA for Wharton,a very successful money manager. His brother
that's a PhD and environmental sciences.He's a scientist, So I don't want
to give all my money to mykids. I gave them enough to help
(16:52):
them out, but I didn't givethem all my money. The third thing
you do with money gives the government, but only a fool gives the government
money. They don't have to payyour tax to be on volunteer and pay
more. The fourth thing you dowith money is recycle back in society and
try to make the world of thatplace. That's what I've chosen to do
with my resources. So I workedvery hard, but I giving the money
away and I enjoyed giving it away, and I enjoyed making it. I
enjoyed making for two reasons. One, you know, one of my heroes
(17:17):
in life is ken Lango, Likeconsider one of the funniest human beings have
ever met, and my only envyof Kennon. He has a lot more
money than me to give away,but you know, he's a real gentleman,
and we both have similar roots.His father was a plumber in Long
Island. My dad was a plumberin the Bronx. That's amazing. And
(17:37):
you both love hospital systems because you'reboth very involved in the healthcare industry.
Well healthcare, and he's done alot. You know, he's got you
know, big numbers. He gavethree million dollars at YU. They gave
another one hundred million dollars to createa free medical education, which was very
much needed. Yeah, that wasinteresting. I guess there's a college.
I guess her name was missus goddessmanjust gave billion dollars away from widow.
(18:02):
Yeah, that was That was aninspirational moment. I'll tell you, you
know, so you're you've been inthis very long. You're still doing it
well, I do. I telleverybody I'm like him and Roth from God's
Father too. Right before they shothim at the airport, he said,
I'm a retired executive living on apension. So I tell you I'm gonna
(18:23):
retired my manager living on an investmentincome. The bad news is I no
longer have the big income anymore thatI used to have. I gave that
up. The good news have nopressure if I make money in the market
or lose money my own money.If you're managing other people's money, there's
a lot of pressure on you toperform and deliver good results. No,
I get it, but you youstill have to how do you like how
(18:45):
did you keep up the learning partfor the young people? Like you don't
have a million people around you givingyou information. You do it. You're
very self sustaining. Guy read Iread a lot and I have common sense.
Like I said, I read alot, and I talked to a
lot of people that are smarter thanme. I try to synthesize by learn.
(19:06):
I have two analysts working with me. They feed me ideas and I
review their thinking, and they proposedand I dispose. Besides ken Lanngal like,
who would you say? We're keymentors people that pushed you know,
made you feel like you could doit in a different way. I feel
I've had those in my life inJohn Weinberg and the whole Gold and Sex
(19:29):
culture of giving back a generosity.You know, sy Lewis at bear Stearns,
Bob Menushia, who ran trading atGold. I learned a lot from
him about how markets work. Butyou know, I was just very fortunate
to be surrounded by high quality,good people and with your giving back.
Do you like mentoring now as well? Or is it it's been a lot
(19:52):
of time when youngsters giving talks tocolleges and I share my whole learning process
with them. You know, infact, hold on one second. I
give them a handout where I tellthem some of the lessons I've learned in
life, and I'll share it withyour audience. Yeah, share them please.
(20:15):
I told them that every time Iinterviewed somebody when I was in business,
no longer in business, I toldthem about the parallemle of the lion
and the gazelle. Every morning inAfrica, a gazelle wakes up, it
knows it must run fast, andthe fastest lion or it will be killed.
Every morning a lion wakes up,it knows it must outrun the slowest
gazelle will start with death. Doesn'tmatter whether you were a lion or a
(20:38):
gazelle. When the sun comes up, your beat be running. So why
do I talk about that beginning moneymanaging business? Well, we charged about
one percent of the profits. Thereare ten thousand quality mutual funds that will
manage your mine for one percent orless. So if you're going to charge
your people, your your client's apremium fee, you have to deliver a
(20:59):
premium performance. I tell them thatgazelle and the lion story. And then
the second that I tell them whatAndrew Carnegie said nineteen hundred. I wish
to have as my epithet. Herelies a man. I edited him a
little bit, because I say aman or a woman back at nineteen hundred,
women who were not part of thelabor force. Here lies a man
or woman who wise enough to bringinto his service men or women who more
(21:21):
than he knew, more than hetrying himself with smart people, share the
bounty equably and fairly, and don'tworry about people being stronger than you.
You want people stronger than you.Then I talk a bit about integrity.
So this is Reverend Billy Graham's words. Wealth has lost, nothing is lost,
but health has lost. Something islost. When character is lost,
(21:42):
always lost, Reverend Billy Graham.Okay, Then other things I tell them,
I said I have. I havereal life stories in this. Okay.
The first test of a gentleman isexpect for those who can be have
no possible valued him. Many manyyears ago, I'll mention his name favorably.
(22:07):
Ken Lan gone and deceased, goldsack salesman and myself took out a
money manager for dinner. The purposeof the dinner was Ken was gonna lay
and the money manager's lap the newaccount. When Ken saw how the money
manager treated the waiter, he neverbrought the subject up because you know,
Ken is a guy that treats peopleabove and below him the same way.
You know, and he's just areal gentleman. And the second variation of
(22:32):
that is, no matter how educated, talented, rich or cool you believe
you are, how you treat peopleultimately tells all. So you know,
I'm an advocate of treating people thesame way above and below you and just
be nice. I don't even knowwho the hell you are. I'm doing
this webcas listen your I met youthrough a friend and my friend said,
(22:53):
you know, uh, Lee justwants to help people, so he's going
to do it and you don't evenknow me. And I appreciate that,
and hopefully I'm going to get toknow you when I come visit Kenny and
come down. You forgot one thatI think you say from Kenny Rodgers,
you know the gambler. You gotto know when to hold them and then
when to fold them. Yeah,I folded because you know, the SEC
(23:15):
created a problem with my business.They lost the case. I didn't do
anything wrong. But you know theinstitutions there, they're they're fire aim ready.
So I lost lives, tootion money, and more and more of the
money was managing with their own money. And basically I decided it wasn't worth
the candle to put up with allthe crap that you have to put up
(23:37):
with registration, et cetera. AndI gave back the money and resort to
manage my own money. So Isay I want to make money for two
reasons. One is I'm naget likeeverybody else. I want to be right.
So if I losing money in themarket, that means I got it
wrong. I don't want to getit wrong. And number two, I'd
like to give away more money.My only envy that we started then the
Kinland gunpath, I never finished thought. My only envy of ken Lenngngn is
(24:02):
he has not spout money to giveaway, and he will give it away
other things. I tell the kidsyou. Aristyle three thousand years ago said
tolerance and apathy are the last virtuesof a society. Be engaged, you
know, don't be a bump ona log, speak out, and the
similar theme. Martin Luther King Jr. Our Lives begin to end the day
(24:26):
would become silent about things that matter. So I preach engagement and involvement.
I have three grandkids. One isvery much into helping others. And you
know, she posed the questions thatRabbi Hello asked. Okay, and the
(24:48):
questions are, if I'm not formyself, then who will be for me?
For others? Then who am I? If not, they will win.
Those are the questions that Rabbi hellelasked. And my granda Courtney answer
the questions. So, if you'renot for others, no one will be
for you. If you if youare for others and others will be for
you, you will show others howto be for more than themselves. They
(25:12):
will therefore be for you. Thetime is always now, it's now,
We're never. I love that.Yeah it's Courtney Cooperman. No, that's
a good one. That's the bestone. Man. Well, there are
others, you know. Henry Ford, while on Buffett, you know,
say the same thing. Henry Fordsays the best way to make money in
(25:32):
business and not to think too muchabout making it. You know. So
I went to Goldman for less moneyand uh, you know, well you
want with your God I mean,I think, you know, wishing part
of the state. It's intuition becauseand most of the time, even the
intuitions, it's in the right direction, but it's not always completely right either.
(25:53):
You learn as you go along,and you've got to be willing to
make a wrong move to make aright mode. I think Pablo Picasso attributed
to him, said, the meaningof life is to find your gift.
The purpose of life is to giveit away. So I found my gift.
I was able to contract profits inthe market. It's a good business.
I take those profits and returns andI recycle back into society. And
(26:18):
so I'm living up to a publiccoasto observed, and you're doing a lot
of it. I mean, well, I've been very fortunate. I've been
very fortunate, you know. II went to college for twenty four dollars
semester. I met my wife forfifty nine years in our sophomore year.
(26:38):
It's the Cuniversity of New York rightnow. The tuition is about six thousand
dollars a year, which is alot of money for these young kids totally.
So you know, we have theCooper and College scholars Fund in Newark
and then I have given a lotof money to hunt the college to create
financial aid, and then I haveaddresses a success program. These kids are
(26:59):
getting their college greeze, we givethem some money to be properly dressed when
they go out an interview for ajob. It's it's I think it's so
cool, right because like all theselittle things just for success. You know,
we can give in so many waysthat are necessary. It's not just
always a big thing. It's justfinding finding how you can help someone,
one person at a time, andscale that. But with things that people
(27:22):
don't realize are necessary. Yeah,twenty five years ago, I couldn't even
spell the word philanthropists, let alonebe one. Now everybody says I'm a
philanthropist. You know, I'm justdoing what I think is right. Yeah,
No, you're it's good. It'sgood. Listen, it feels good.
Twelve years ago, I had dinnerwith Warren Buffett and Bill Gates and
the Giving Pledge, and I saidto Warren, if you're talking to wealthy
(27:45):
people, asking for half, isnot asking for enough? Or is the
request original? In nineteen hundred,Andrew Colin said, who dies rich dies
disgraced? Nineteen thirty two inch inturtles that you make a living by what
you get, you make a lifeto what you give. In nineteen sixty
one when President Kenny was great atPresident, that's not what you you can
do for your country. That's notwhat your country. And if you ask
(28:06):
what you can do for your country, and I said to him, I'm
Jewish, and I Santa Tom,and you measurement that b hasaway gives the
difficult in you and I I'm notgiving my money to Bill and Linda Gase
to give away. I'm going togive my money. Those organizations and institutions
have made a difference to me andmy family and my lifetime. So we
give a lot within the community,and we give a lot to education,
and we give a lot of thehealthcare. Do you have do you have
(28:26):
like a photographic memory for quotes.I've never heard anyone be able to riff
off these quotes. It's not thefirst podcast I've done. Well, listen,
it seems like you've been practicing becauselike I, you know, I
love quotes myself, but I can'tremember. I mean, you're remembering the
year they were even like like puton the market. It's amazing. I
(28:48):
wrote that letter one on Buffett andI'd use it on a few occasions.
Look, we have we have realproblems in the country, and we have
to all pull together, you know. Yeah, but and what do you
like with him now? Like again, you've lived through way more than me.
My grandmother was born in nineteen ohfive. You know, I look
back at what she happened in nineteeneight. What's that? My father was
(29:11):
born in nineteen oh eight. Yeah, so you know, I mean that
my grandmother and she lived one hundredand three, so she like she saw
everything. She saw depression. Yeah, it's a good fact, right for
you. My father died at seventy. My older brother I was very close
with, died at eighty five.I'm eighty one, you know, and
I think the statistics say, ifyou make it past sixty five and cancers
(29:34):
and get you on average, you'llmake it to eighty five. So I
got four years left to do.Now you got more. There's innovations coming.
Come on. I'm you're always positive, be positive. Yeah, Well
it's hard, and I'm positive aboutmy life, A positive I've done.
But I'm a little concerned about theenvironment. I think we're heading for a
(29:56):
financial crisis. So why give me, give me your thoughts spending my like
drunken, sayde Just listen to Biden'sState of Union address. Now, one
thing about controlling expenditures was all aboutraising tax and wealthy people. You know,
we have a spending problem in thiscountry. You know, we're running
a definitive of two trillion dollars ayear. The debt is exploded with thirty
(30:21):
four trillion dollars interest on the debt. A loan now is about trillion dollars.
You know, when I grew upin the business in the mid sixties,
there was a phraseology crowding out andguns and butter. We have guns
and butter. We have we experiencecrowding out. We're living too comfortably.
You know, no way he knowswhen the shit hits the fan, But
(30:41):
it will, you know. Andthe reason I say, nobody knows.
In nineteen seventy two, I wasa partner of Goldman Sachs. There were
two very distinguished dead gentlemen. Theywere good friends with each other, Pete
Peterson, who was deceased and HenryFowler, who's formerly Secretating Treasury. He's
also deceased. They used to runfull page ads in the Wall Street Journal
New Times. They paid the costsat their own pocket and they learned the
(31:03):
public to the evils of the budgetdeficit. So here we are now,
fifty or sixty years later, andwhere's the consequence. We have the lowest
interest rates in the history of theworld. So it's not mattered. And
one of these days it's going tomatter. And when it matter is we'll
have a convinancial crisis that will leadto a change in leadership. I caught
a Mansion and Romney on the TVtube a bad a month ago. We
(31:27):
were talking about Simpson bowls and theneed for doing something about the budget and
they said with Simpson bows had itwas the right idea, but nothing was
done about it. The problem nowfive six, seven years later is three
times greater. We do nothing.Yeah, really, it's skyrocketed. I
(31:48):
mean, it's very sad, verysad. So what's so okay? So
you don't feel I mean, you'vegot to grow out of it. I
mean, and a question for you, with all this new innovation and technology
that's been going on the last fifteenyears, did you embrace that in investing
or a technology guy. I'm aguy that plays the business cycle. I
(32:14):
say, every recession sows the seatsthe next business recovery. Every business recovery
sows the seats the next recession.So I'm not technology oriented, even though
I have a scientific science background,and I observed it in somebody's innovation somebody
else's obsolescence. So you know,in two thousand, the word then was
(32:35):
the Internet, and Cisco was threehundred times earnings, and then in two
thousand and one, two thousand andtwo, they dropped ninety percent in price
in Cisco, and I think theInternet has lived at where everybody expected to
do, and in Cisco is nowstill below what it was in two thousand
and then you have the nifty tofifty of nineteen where JP morgan Us Trust
(33:01):
ruled the roost there for lots.It was only one type of stock,
a gross stock, and they don'tcare what they paid. They were buying
gross stocks at forty fifty sixty timesearnings. Opek raised the price of well
tenfold. We've gone to a recessionand those stocks collapsed and it took a
decade for some of them to recover. So I think we're in a bit
(33:22):
of a bubble period. Well,look at AI and like Nvidia and all
the chips. I mean, yeah, I'm not qualified to comment on AI.
Everybody seems to think it's very real. I don't know if it's revolutionary
or evolutionary. I don't know.I think the world would be better off.
I've tried a little bit of AIand it's very amazing. Yeah,
(33:45):
well, it's like it's like whenthe inter first started. You need to
build use cases on top of it. Right, it's not just the thing,
you know it'll happened. The questionis how do you spend your money?
And like I said, I tendto be value orinted. I have
a heavy position and energy. They'reselling it three times cash flow. They're
yielding, you know, five tosix percent. Most of them have very
(34:07):
little debt because you can't borrow moneyas an energy company. And my guess
is if I buy a three timescare flow yilding six percent, I'll get
lucky. What was your I guessmoment where you felt you went in something
(34:28):
and it just blew up and howdid you get through it? Everybody experience
the setbacks in their investment career andwhat determines your success and how you handle
the setbacks so you know, yougot to pick yourself off the ground and
you know persevere. Yeah, Igreat. So what about bitcoin? I
(34:50):
take the easy way out in bitcoin, I say that if you don't understand
bitcoin, the media old I'm eightyone. I don't understand bitcoin. I
have very nominal involvement. But whatabout goal like? Is it a store
like? Like? What's goal like? That's a store of value? You
can make more of it half?For thousands of years, bitcoin hasn't okay?
And uh, you know, CharlieMunger is a smart guy, lived
(35:10):
in ninety nine, passed away recently. He said with rat poison. I
think Warren Buffer said he wouldn't giveyou twenty five cents for the bitcoin in
the world. I haven't agree withJamie Diamond. They shout out, or
we don't need any competition for theUS dollar. We have a lot of
debt to sell. It's not inour interest to have a competitive currency.
But he is what it is.You know, to people that like it,
(35:31):
say that if everybody wants to putone percent of their wealth in bitcoin,
it goes up a lot. Butwhy would they want to put one
percent in bitcoin? And why theywant to own it? What do you
do with it, right, Butisn't everything like serve a belief system anyway?
I mean from products services, confidenceand plays the port role in security
(35:52):
evaluation. But when you own it, shares the stock the company you owner,
share the brick mortar machinery that producesgoods and services. It's tangible,
tangible exactly. And you know theaverage common stock is only two percent.
You know you can't get to yieldat a bitcoin. You're being on someway
else buying it from you at ahigher price. So being that you had
(36:15):
this long career and you're still workingharder than you ever do, giving money
away, making money, I lovethat. It's a good balance any other
hobbies, like what what do you? What else do you do? I'm
a very boring guy. I usedto walk a couple miles a day with
my older brother. He passed awayand I developed it's a very severe case
(36:36):
of my ris's having trouble walking.I think I'm going to Panama on Monday
for some stem cell injections. Ohokay, good, correct my problem?
Who knows? All? Right?One last question because I'm just curious if
you could, if you could havechosen anything else, would you've chosen anything.
Now that you've been in the samething for so long, is there
anything else you would have done?Probably in real estate where you use other
(36:57):
people's money. Yes, leverage,Yeah, it's not always good, but
you know, rates have definitely affectedour industry. But it's tangible and you
can use leverage properly. Just can'toverleverage. That's the that's the issue.
Yeah, well everything is cyclical.I remember in the sixties where Prudential real
Estate for Prissive, the Potential realEstate fund was closed for redemptions and then
(37:21):
you got to do a very strongrun. Yeah, Cycicle, you gotta
understand capitalism. Excess returns attracts competition. I got to believe every boardroom in
America they're looking at the video successand we're going to want to put over
capacity in semis questions. Whether it'sa year or two years or three years
away. It's just you know,with all these data like if you're gonna
(37:42):
have AI, you have to havethis new data center power to compute.
Yeah, I owned Virtue. Ohwe're at ten bucks. It's seventy five
dollars today. It's up every day. You know, I was I can
tell you is everybody going to thedata sent to business, you know,
excess returns to track capacity and capital. Yeah, return drive it out.
(38:07):
I mean, I'm old enough tosay it's my third cycle and like these
are the times. You know,it's a reset, so people, some
people are gonna have issues and you'llbe able to find you know, bargains
and opportunities. So absolutely that's interestingto bet to business. So I want
to thank you so much. Sinceyou didn't know me and you did this
and you're always well, you're seeinga smart fellow with good questions, and
(38:30):
I appreciate your time and give mesome visibility. I mean the point in
my career where I'm not worried aboutvisibility. I like Tom a little bit,
but it's always nice to be visible. I always say it's it's always
nice to hear other people's opinions.And yet you know, so I appreciate
it. Thank you, my pleasure. Thank you very much for having me
(38:51):
Hi John Schultz here. Thank youso much for tuning into this week's episode.
Would really appreciate it. If youwould like comments, subscribe and share
with your friends. Looking forward tobeing with you soon.
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