Founders - #84 Aristotle Onassis

Episode Date: August 11, 2019

What I learned from reading Onassis: The Definitive Biography by Willi Frischauer. ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. Buy a book: All the books featured on Founders Podcast

He thinks in terms of acceleration of progress and has achieved it. Only his quiet authority suggests that this is the same man who has for years figured in the headlines of English, French, Italian, Spanish, Greek, German, and American newspapers. Predictable labels attached to unpredictable stories describing him as the mystery millionaire, the merchant adventurer, the golden Greek. About his multi-million dollar deals, real or imagined, financial writers never cease speculating.

However fascinating the true facts of his life, inventive minds keep developing new permutations to titillate the imagination with artificial ingredients. Onassis is not an officer of any corporation, domestic or foreign, but an owner holding stocks of corporations which give him control. Control over interests worth an estimated $500 million. This is the insurance value of his fleet, but the figure is liable to change from month to month.

And Onassis himself can sometimes only estimate the exact total. It is not easy. The total is made up of some 85 companies in 10 or more countries, which apart from owning assorted real estate and considerable subsidiary properties and enterprises, operate all the tankers under the Onassis flag and employ the huge labor force which serves Onassis' interest on land and sea and in the air. At any one time, several projects in the pipeline demand the chief's personal attention. The new supertankers under construction, new air travel techniques under exploration, new financial ideas require constant study of economic trends, political developments, legal contingencies, and business practices which vary from country to country.

Sailors are said to have a girl in every port. Ship owners and airline operators have a problem on every seaboard. Okay, so that's from the beginning of the book that I read this week, the one I'm going to talk to you about today, which is just named Onassis. It's by Willie Frischar. I don't know how to pronounce this last name. And it says it's the definitive biography, the fascinating life of this awesome figure whose wealth and power have made him a legend, including the dramatic story of his marriage to Jacqueline Kennedy. And this book, before I jump into the rest of the book, it's actually recommended and sent to me. The link was sent to me by a listener. And I actually ordered the original version.

So holding in my hand is the first version printed in 1968. And it smells like it's from 1968 too. What I find fascinating, if you follow Founders Podcast on Twitter, I talked about this week, but in the upper right-hand corner, it has the original price and it says the original price was 95 cents. So I decided to start with that section of the book because I think it gives you a good overview of the chaos, maybe the controlled chaos in which he operated. And I think the way his businesses were structured, this perpetual chaos, has something to do with the chaos of war that

he experienced as a very young person. So I'm going to spend a lot of time talking about that today because I found it very fascinating. We're going to see traits as a young Onassis navigates the perils of war. Traits that I feel like the way he thought and the way he navigated that situation is very entrepreneurial in nature. But first, I just want to start with some personality and then his MO is modus operandi. And it says, unlike other tycoons, he dislikes an entourage. He says it's undignified for people to be kept hanging around waiting for command and invariably he travels alone and without luggage he has suits shirts shoes waiting for him wherever he goes um so just talks about his chaos uh it's going to

give you an idea of his chaotic travel uh he's got like they said 85 85 plus different companies in almost i think on every single continent actually so it just talks about he he pulls up on his yacht in new york um and then it says london assumes that onassis is about to take off from paris for new york no news on this end new york says his new york office but he turns up in london instead he was kind of just like a specter just traveling the globe constantly no one knew where he was going and i think he did that intentionally while a car waits to take him to the airport, a telephone conversation changes his plan.

So he moves extremely. I think one of the things right off the rip that you're going to learn from Onassis is the value of speed. This guy was really, really fast. Blackouts on his movements are accidental rather than deliberate. But if he's pressed too hard

about definitive dates and places, he is liable to plead. Please do not pin me down. so the only thing i could say i talk about that a lot in this book and i think something i learned from him is the value and always focusing on the most valuable thing you could be doing at that time so he didn't have a strict schedule he just said what's the most important problem i need to to to solve and he dedicate that and then he. Okay, what's the next problem? And inevitably, different problems would pop up constantly because he has such a wide and chaotic organization. I'm going to use that word a lot, I think, today. And so he's not like, oh, I know where I'm going to be next Tuesday. It's like, well, it depends on

what's the most important way I could spend my time. i think that is uh is something that we can all apply as well um he says he knows every inch of the way uh so he talked he's talking about um right now we find him in his home on the islands of greece or one of his homes um he says this canal he explains everything greek launches him on an historical geographical eth ethnographical lecture interspersed with items of topography and mythology and he talks about this was this canal was a religion you built for alexander the great i put that part in there because he's constantly learning and so this this serves him later in life because he uh he studies a lot of history studies a lot of uh like political history military history and then he keeps an eye on what's going on. Obviously, his business was built in shipping,

which is hugely affected, as we've seen with the other entrepreneurs that we've covered that operate in shipping. So I guess I should back up before I get there. If you remember the podcast I did on the invisible billionaire, Daniel K. Ludwig, in that book, he's also mentioned in this book, interesting enough, so that's another example of this whole idea of books at original lengths, but in that book, it talks a lot about his competition with Aristotle Onassis, and then this other Greek, which is actually Onassis'

brother-in-law, and good luck if I'm pronouncing his name correctly. It's Stravos, I don't even know how to pronounce, I can barely pronounce words in English. There's no way I'm going to be able to pronounce names in Greek. But in any event, in the Ludwood book, The Invisible Billionaire, it talks about Onassis, it talks about Stravos. And then in this book, it also goes into both a little bit of Daniel Kay and a lot of his rivalry, his bitter rivalry with his brother-in-law, which I'll cover more in a minute. It's very bizarre because they hate each other, but they're married to sisters.

So it's bizarre. Anyways, the whole point about him knowing history winds up— I couldn't understand because the book kept referencing churchill it talks about how he was obsessed with churchill he had all the books written about churchill he winds up being really good friends and this is a the like an anonymously anonymously i don't know how to pronounce that word either in in this book is his relationship his very close relationship uh in the last few years that churchill was alive uh which i'll also talk about actually i'll just read this part to you real quick because the book starts out talking about how he is in present day, and he's

around 60 years old when this book is written. Churchill's like 80, I think 80, maybe 79, something like that. It says he's playing host to Sir Winston Churchill. That's why I was, after several pages, like, why why they keep talking about Churchill turns out they wind up becoming really good friends um he's who's enjoying his nautical holiday he's he's on um Onassis's private yacht it's one of the largest yachts in the world called the Christina which is named after Onassis's daughter and he says a love of the sea a deep sense of history admiration reciprocated by paternal affection unites these two men of vastly different backgrounds adding a curious footnote to the glorious story of Churchill's life

so I just think in general that it's beneficial not only to your life to learn and study from history but in conversation you just become much more interesting to talk to and because Onassis and Churchill both had a deep love of history and it was a primary hobby of theirs studying it they were able to build a bond later in life interesting enough that the author here here Willie goes into details of what Churchill's schedule was later in life because he spent a lot

of time on Onassis's yacht and I'm just going to take a quick tangent here but and he'd have breakfast at 9 a.m and he'd he'd finish breakfast with a glass of whiskey which i thought was hilarious and then he'd read he wouldn't leave bed so he'd have breakfast in bed and then he'd read 200 pages that's the first thing he did every day he'd read 200 pages mostly of history uh, politics, stuff that he was interested in. And then he'd go out and get his day started. So I thought that was very fascinating. All right, so I want to spend a lot of time in Onassis' early life. We've talked about this before.

A lot of these entrepreneurs have to overcome some form of adversity early on in life. I don't know if any of you had to overcome more adversity than Onassis. And so that's why I want to spend some time talking to you about this. First, we're going to talk about his dad. They have great names, by the way. I mean, his name's Aristotle. How great is that? His dad was Socrates. So we're going to talk about that here first. He says, Socrates Onassis was by now an established merchant dealing mainly in tobacco, but also in grain and hides and offering his customers from the surrounding countryside storage and banking facilities

of sorts so they're in they live in this place called Smyrna which based on this other research I did was that I guess is now modern day Turkey and they're going to get caught in the I think it's the Greco-Turkish War. So this is a little background of how their life was right before this war, which is going to come in and devastate his family. So a lot of people are going to die and he's got to flee the country. So Socrates at the age of 26 met Penelope. That's, or excuse me, he didn't meet her. That's when Onassis' mom named Pen Penelope, dies. So at the age of 26, Penelope died as a result of a kidney operation. Aristotle was only six. So this is before the war. He loses his mom. This is the first tragic event in his life, one of many. Aristotle Onassis says that he was brought up

by his grandmother. Remember his grandmother because she's going to befall tragedy as well. Aristotle was a quiet, sad little boy who solely missed his mother. Okay, so his father was a merchant, entrepreneur, another word for that. And he wanted to teach him business, a young Aristotle business. But interesting enough, Aristotle wasn't interested yet. Aristotle's only inclination at this time ran towards sports. He sailed, rode, swam, and played water polo, and so Socrates is talking to his son. He says, what are you going to be, a fisherman or a boatman? Because remember, they're Greek, so that's their occupation, um like their occupation their expected

occupation i should say it has something to do with the sea uh neither was an occupation worthy of aristado he said which turns out he changes his mind obviously um he was 14 when he was in line for a place in the greek national water polo team to compete in the olympic games he's focused on sports at this time it was a great honor but his father put his foot down the expedition would interfere with the boy's studies he said and he would not allow him to go so another disappointment it was a huge disappointment but his father's stern regime paid dividends in spite of his preoccupation with sport aristotle's they call him aristotle i'm going to call him aristotle made good progress at school his quick grass and his extraordinary memory made up for time spent in other pursuits.

He learned to speak English and soon knew enough French and Italian. I think he winds up knowing. So he knows English, French, Italian, Greek, and I think one other language as well. Okay, so he's a teenager at this time. He hasn't had a mom for almost 10 years. And this is the start of the Greco-Turkish War. And this is going to come right to his front door, literally. So it says, Turkish progress was so rapid, meaning they're invading where he lives, that any plans Onassis' brothers, meaning his dad and his dad's family, made for the future were quickly overtaken by events. Socrates gathered

his family around him in his house by the sea. Aristotle Onassis was still four months away from his 17th birthday, and he went to sleep knowing that this was the last day of his youth. So what they're talking about there is you can see the Turkish ships in the harbor right by their house, and they're going to invade the very next day. Aristotle was awoke to the thunder of guns. Aristotle and his father had their first inkling of disaster when looking out from behind the curtains, they could see the city being swallowed up in thick, dark smoke. But what registered most in Aristotle's mind was his father's somber face and the despair in his eyes.

So Socrates, remember, a lot of times, you're not going to reach your full potential unless you're, in many cases, you're forced to. And this is an early example of that in Aristotleotle's life because at 16 years old he's like okay there's no more time to be a boy i now have to grow up and i have to take care of my family not only does he have to take care of families uh that's a secondary he has to make sure he survives first so a ton of people that they know are going to get killed right now through socrates and estes did not speak aristotle could sense his deep anxiety family and property

were in danger here you could say that again the business he had built up over the years was liable to be wiped out his father appeared to weaken and aristotle seemed to gain strength and maturity he had reached a stage when he was full now this is interesting so his father wanted him remember he wanted him to be in business but he also wanted to be an educated person so he wanted to go send him to school at oxford in england and so he had to be in business, but he also wanted to be an educated person. So he wanted to send him to school at Oxford in England. And so he had to reach a stage when he was fully qualified to enter Oxford. This was his father's dearest wish. However bitter the thought, he realized that this dream had vanished.

Never mind, father, he said. If we survive, I'll show find a job and help keep the family going. He did not know it then, but this was exactly what would happen. So now the war breaks out and people are being killed right in front of him. He said, Aristotle saw men being dragged from their homes and taken away. Many were put up against a wall and shot in cold blood. Remember, he's 16 years old. So while I'm telling you this story, think about what you were doing when you were 16. And imagine having to go through this. Others were hanged from trees.

He's literally in a war zone. And in lampposts. Grown men were begging for their lives. Women were screaming for help. Children watching, too numb to cry. It talks about this river by their house. Floating in the water could be seen clusters of severed heads of young Greek girls tied together by their hair like a bunch of coconuts. Fate was even more gruesome. Now, I had a hard time reading this part. So some of them stay in the city they're in. Some of them try to run. His uncle, who's involved in

politics, tries to run 40 miles away. He gets caught, and they, you know, think about if you've ever studied any kind of what happens in war, like when they say they're tried by the military court, this is not like what you may be used to. It's like, oh, okay, four months from now I'll have a trial, and maybe I'll be sentenced six months after that. No, the trials happen really fast. They're found guilty, of course, because it's an invading army, and they're hung right away.

So that happens to his uncle. Boom, his dad's brother's dead. Now, it gets even worse. Some people are sent off to concentration camps in the interior of the island. Fate was more even gruesome. And this is, I can't pronounce the name, but this is Socrates, so his aunt, so Socrates, Onessa's sister, and her husband, right? So that would be Aristotle's aunt and his child, which would be his niece,

had sought sanctuary in a church. They're in a little Greek town a little ways away. 500 Greek men, women, and children would huddle together in prayer when the Turks set the church on fire. Every last man, woman, and child perished in the flame. So he's already lost, let's say, half a dozen family members, and the war just began. They're dead immediately.

Socrates Onassis, this is his dad, was arrested and lodged in prison. Now what do you think is going to happen to him? Aristotle was filled with a nagging fear for his father's health and life. There was little he could do at the moment. He was now the only man in the family and was racking his brains for a way to cope with his new responsibilities. Aristotle was left on his own.

He did not know where he would spend the night because they came and kicked him out of the house and they start putting the Turkish soldiers into the houses previously occupied by not only Onassis' family, but everybody in the neighborhood. So now this is where he figures he starts acting almost entrepreneurial, right?

The Turks wanted alcohol. They were the central command. I don't know what their version of it, but let's say in the American army, it would be like the general forbade the Turkish soldiers to drink, right? So the Turkish soldiers wanted to get around that. They wanted alcohol. And Aristotle is like, well, if I can figure out, and it was really hard to get at the time, if I can figure out how to get it, I can ingratiate myself with them. And maybe

like I can show that I'm useful. One, they'll let me live. And two, I may be able to rescue my father. Okay. So what happens is he meets a Turkish soldier. He's like, you want alcohol? I can get it. Don't worry about it. So he goes around with the Turkish soldier and he goes to all the other people he knew because he was from a rather prominent family on the island they lived on. And all of them are like, no, I don't have alcohol. I don't have alcohol.

And he didn't understand because they were staring at Aristotle like they weren't verbalizing it, but their body language and their eye contact was like, what are you doing? Like, what are you doing? And he realized, oh, they're not going to help me when I have this Turkish soldier here. So he goes back later on by himself, explains what he's trying to do to family, friends, and they finally give him some alcohol, even though it was extremely valuable time they'd make it themselves and they were hiding it so um then he goes and gives it to um the turkish soldiers he starts getting like a pass they give him like paperwork that in case he's stopped by soldier it means like don't kill him like he's he's okay to

be on the streets he says the transaction was not only early evidence of Aristotle's native talent for dealing with intricate problems of supply and demand under adverse circumstances. What mattered most at this time was his acquisition of a second protector. So this is in addition to the paperwork he has from the Turkish army. He makes friends with this U.S. vice consul. So it's an American part of the Allied forces in the embassy there that basically starts looking after him. He says this puts him in a position among Greeks in Samaria in 1922. Each of his guardian angels, both the American and the Turkish, gave him what's called a laissez-passer, bearing his name in photograph. The Turkish pass enabled him to move freely about the city.

Even more important, the American permit allowed him to access the U.S. Marine Zone. That's important to remember that because that's how he's going to wind up escaping. Obviously, he survives this. We know he survives this. Okay, so during this whole time, he visits his dad, trying to get him out of there, and then his dad's being held, and they don't know what's going to happen. And then one time he goes to visit his dad and his dad's like, listen, they take people away every morning and then we never see him again. What the hell's happening? Well, you can probably guess what they're doing. They're killing them. And they realized this was actually true and verified because one guy they take away,

he's like 45 years old at the time. They put him in front of a judge. Judge is like, okay, you're guilty. You're going to hang him. They put the rope on his neck and they're like, the guy you're looking for is 20 years old. I don't look 20. Like you have this wrong. So the judge looks at the paperwork like, oh crap, this guy's right. We're looking for a 20 year old. There's no way this guy's 20. So take him back to the cell. He goes back to the cell and tells everybody, hey, if they take you away, they're going to kill you um so eventually um eventually uh aristato is able to to to i guess bribe would be the right way he was able to to he's able to visit the the jail where his father and other people in his family and friends are are um are being held and he's able to go back and forth so he's sneaking in money for them so they can pay off the guards. He's sneaking out communications.

He winds up getting caught doing this, though, right? So he has to, they're like, oh, this guy, like, now it doesn't matter that you have this pass, you're going to be in jail. And so he winds up going for a walk with a soldier supposed to transport him from one part to another. And he winds up, the soldier wasn't paying attention he falls back a little bit and runs full speed to the u.s military zone and they they're like they says he runs as fast as he can non-stop for like 15 minutes he gets there um so now he's in

the u.s marine zone and he meets the the consul this guy's name is consul parker is how they reference him in the book um but so he goes to the office he hides in uh the consul. This guy's name is Consul Parker is how they reference him in the book. So he goes to the office. The consul hides Aristotle in the office, but the Turk army shows up. And they're like, we know you have this guy. And the consul's like, no, we don't. Well, the Turks aren't going to have, they're not going to start a war with Americans. So he says, the Turks were unconvinced, but there was nothing they could do. They did not dare search the consul's office. As soon as they were gone, Parker released Aristotle. He produced an American sailor's uniform.

So this is how he's going to get out, right? Produced an American sailor's uniform for the youngest to put on, took him to the harbor, and put him on aboard a U.S. destroyer. So he's able to escape the war zone with his life because of this one guy, and he escapes aboard a U.S. destroyer. Now this is the interesting part. So before he got caught smuggling all the stuff by the Turkish military, he winds up going to the family safe, taking out some money. I think it was like $20,000 to $40,000 and basically paying for his father's, like bribing to get his father released, right? But the family is mad and Aristotle's humiliated and this is when he starts seeking freedom and then this is where he says,

looking back on his life, that ambition is born because this is very much, the book I'm working from is very much like an autobiography of Aristotle because he's working he's the one talking to Willie and Willie Willie Frischar or whatever however pronounce his name is getting a lot of information from Aristotle he's doing this because you know like many cases when you reach an advanced age you want to start telling your story and making sure it's documented but what I couldn't i just couldn't imagine i'm going to read this to you but they're mad because they're like oh well you gave them 25 000 we needed that money because we've lost everything but your father and your uncle were going to be acquitted anyways but it's like you didn't know that though it was just really silliness on from from this

perspective so it says at a family conference he had asked aristotle to give an accounting of the cash and securities he had salvaged and full details of his expenditures. This is after his dad was released. The largest item in the transactions for which young Aristotle was responsible was the, I'm going to just convert to dollars here, $25,000 he had paid for his father's release. Both his father and uncle, Uncle Homer, more great Greek names, right, thought an exorbitant totally unnecessary outlay because they contended socrates onassis had already been acquitted and would have been released in any case but again why you they were killing people left and right i would i buy some

insurance it's okay if i spend that money aristotle was very upset never before he felt so humiliated and never ever after the injury to his pride produced a reaction, and later he said that the anger and frustration of this period of his life gave birth to the ambition and drive, which later took him to the top. He was anxious to get away and took the traditional Greek way out. I shall keep no more than, this is a direct quote from Aristotle to his father, I shall keep no more than $250 of what's left,

and I'll emigrate. His angers were coupled with an urge toward adventure. Above all, he wanted to remain his own master. Remember we talk about this, like the motivation. Why do so many people, why are so many people interested in entrepreneurship also like so weird? Why are there misfits to use Steve Jobs term?

Like why, why? What is, why is there such an overlap there? And I think a lot of it has to do with the feeling of control over your own life and it's hard to have control of your own life if you don't control how you make money in the world and and as a result of that also how you spend time how you spend your time um and since most of your half of your waking time ostensibly is going to be spent on work you know if you want to control over your time, then that means you learn how to become an entrepreneur. Which is where we are watching,

and I guess listening would be a better term, of Aristotle learning how to do that right now. He wanted to remain his own master as he'd been in those past few months. Remember, he was by himself, nobody around. And he just has to survive. He wanted to stand on his own two feet and prove himself. Once the decision was made, he lost no time.

So there's that speed. He takes a long time contemplating. Reminds me kind of like how Charlie Munger describes the process at Berkshire Hathaway, that a lot of the time is spent learning, learning, analyzing, analyzing, thinking, thinking. You would look at them and think they're doing nothing, and yet when they have an opportunity before them, they make a decision really, really fast and move on immediately. Aristotle, as far as I can tell from this book, was the same way.

Okay, so he's headed to Argentina, which is, he actually becomes a nationalized citizen of Argentina. And on his journey to Argentina, he learned something that's very, very valuable. And let me look. I don't want to mess this up. So let me pull up this quote. It's one of the most famous Steve Jobs quotes. And, okay, here it is. I'm going to read this to you real quick. This is Steve Jobs talking.

When you grow up, you get told that the world is the way it is. And your job is to live your life inside the world. Try not to bash into the walls too much. Have a nice family life. Save a little money. But that is a very limited life. Life can be much broader when you discover one simple fact. Everything around you that you call life was made up by people that were no smarter than you.

You can change it. You can influence it. You can build things that other people can use. You can poke life, and something will pop out of the other side. So what is Steve Jobs telling us? He's telling us that life is malleable and most people think it's just rigid. It's like, oh, I was born here. This is what I have to do. Okay, I'm going to go. They tell me to go to school. I'm going to go to school. I'm going to go get a job. I'll get married. I'm just going to wait till I die. Steve Jobs is like, no, no, that's the wrong thing. You can change it. You can mold it. That is maybe the most important thing, meaning the most important thing

to realize because it affects everything else. It's very like a meta skill, right? To shake off this erroneous notion that life is there and you're just going to live in it, embrace it, change it, improve it, make your mark on it. Once you learn that, you'll never be the same again. The reason I bring that up is because in this section of the book When he's on this boat, has no money, no family He's by himself, he's still a kid He's a kid He realizes that everything is malleable So he's poor

He's in what they call the steerage passengers And he's basically in the hull of the ship And it says, steerage passengers received one meal a day they ate either standing up or squatting on the floor space was cramped the smell appalling you can imagine why this smells so bad i'll let you fill that in and so kind of related to this next sentence sanitary conditions were primitive so onassis is in this what does he do um he realizes they're like well if you pay another 20 bucks you could transfer to a cabin where you share with six other people but like you're not the whole right well he doesn't have the 20 dollars so he says the alternative was an was a

personal approach to the purser which is this guy running the section they're in, which is the course he chose. Reinforcing his plea with a $5 bill, meaning a bribe, he sweet-talked, as he puts it, and somehow persuaded the purser to let him stay in the aft part of the ship. So he's realizing, okay, these are the guidelines they're giving everybody else. The vast majority of the people on the ship are not thinking like entrepreneurs, right? They're like, oh, okay, well, that's it. I have to stay down here. And if I want somewhere else, I have to pay $20. Entrepreneurs realize what Steve Jobs has told us.

One of the most important things that you need to learn in your life, and you'll never be the same once you internalize this. Everything is malleable. You can manipulate life. You can poke it. Something will change. Your actions have an effect. And so a young Aristotle realized like, oh, okay, well, people, like, it's not rigid.

I have to convince one person. And people are, like, they're prone to change their mind. They will respond to, like, personal requests if you do it in a right way. Here, let me be real nice to the guy, sweet talk him and give him a little money. And then maybe it's not guaranteed to work, but it increases my chances of working and it wound up working for him. All right, so he arrives in Argentina, has no money.

This is his first job. It's often a job at a wage of 25 cents an hour. Remember, this guy winds up being, I tweeted out a section from the book this week. He winds up, his company is all combined, let's say 30 years from where we are in this story. He's starting out at 25 cents an hour, eventually makes about 50 million dollars a year we're going to see the same traits that make you successful when you have a large company uh are the same traits that make you successful when you're just starting out and it says it was his first ever job and he attacked it with gusto he was asked by the manager whether they would be willing to work overtime aristotle onassis was not sure what this implied his boss he was

working at this place called western Electric, by the way. It's like a telephone exchange, which was very manual back in the day. His boss explained that anyone prepared to work after 5 o'clock would be paid time and a half. Aristotle promptly volunteered. And so they asked, how many hours will you work? And he says, hours. Aristotle's reply was, all night.

At this rate of pay, he was prepared to work 24 hours a day. With one stroke, he and his friends were rich, quote unquote. He now earned three times the amount he needed to pay his way. So what he figured out was, like, these are my monthly expenses, and so I need to make sure I hit this every month. Eventually, rather quickly, he winds up, for every month he works this way he buys three more months of expenses this is more examples of his resourcefulness greatest description of entrepreneurs i think comes from paul graham he says paul graham he says they're relentlessly

resourceful and aristotle definitely fits into that he says another suggestion for young onassis would he care to become a telephone operator arist Aristotle was all for it and involved only a few days training. He learned quickly and soon he had mastered the mechanics. Three weeks later, he saw another chance to better himself. So again, realizing I just need to get, I'm on one vine. I need to swing to the next, right? I'm not going to let go of the vine I'm on until I know I can grab the other one. I'm going to keep waking my way up and keep focused on progress.

So he starts out 25 cents an hour. Then he does time and a half. Then he becomes a, um, then, um, he becomes a telephone operator. And now three weeks later, saw another chance to better himself. Would you mind switching to night work? His boss asked him, he starts getting more money because he's working overnight. And then what happens? He realizes, well, if I'm working overnight, I don't need my bed. I can rent my bed out. This is what he liked about night work. It left him his days free to explore new avenues of advancement. Remember, he's focused on advancing.

He sublet his bed to a fellow Greek who slept in it while he was on night shifts. It was around a lot of other poor people, realizing, hey, most people, they want an apartment or a place to live just because they have a place to sleep at night. So I'm going to give this guy my bed for cheaper and he can get an apartment since, and it's just added money to me because I'm working. He made a study of local, this is his first business. He winds up manufacturing cigarettes, interesting enough,

actually importing tobacco. Oh, what he does here is really, really smart. He made a study of local cigarette manufacturers who might become his customers. I should back up. His father, he fell out with his father, wound up through telegrams and letters. They wound up repairing their relationship and he's like, hey, dad, you can import tobacco. Why don't you send me some? And then I sell it, I mark it up and sell it to the Argentiniansians so he said it made a sort of local cigarette manufacturers who might become his customers and with his first consignment set on a tour of their purchasing departments although he tried hard he did not get very far with his new venture at best he was asked to leave his samples behind and await a decision he left dozens of samples but never heard from any of the buyers there was

no point in banging his head against a brick wall okay so before i continue there's two examples this is the first one of are probably the most important thing you're going to learn from aristotle onassis is the same way i use another charlie munger quote invert always invert and that when you have a problem to solve which is basically what running a business is um you it's it makes sense in charlie munger and warren buffett's advice and then we're going to see this in aerostato and nasa's actions is to start at the problem and work backwards most people don't do that most people are doing what he did oh i need to sell tobacco let me go knock on some doors but he's not getting anywhere that way so this is the first example and then i'm going to tell you the second example which is what arguably no not even

arguably is what caught what what created all of his vast wealth which which is still probably 15 years from this time but isn't an example a small example of that so the no i left myself was aristotle's unusual but effective sales technique used to break into the tobacco industry. He decided that obviously the better approach was to start at the top. This is what he does. Check this out. This is very, very smart. Remember, he's going, they're saying, okay, yeah, leave some samples and you'll hear back. They don't give a crap about them. They don't ever hear back. So he's like, all right, I got to find a different way in. Choosing the firm which seemed to offer the best chance of a sale, he made it his business to track down the managing director. Okay so that the boss of the people that he was originally paying sales

calls to uh this guy named juan juan uh became the young tobacco salesman's principal target early mornings he posted himself at the entrance of the of juan's office standing there without saying a word looking at they call him i'm just gonna keep saying a word, looking at Juan when he arrived, and incidentally looking rather sorry for himself. On alternate days, he transferred his lonely vigil to the important man's home, taking up position at his door. So he's just basically stalking this guy at his home and his office. Wherever the hapless Juan went, Aristotle Onassis was waiting for him, a sad and silent youngster.

After a fortnight of this exercise, Juan would not have been human had he not begun to wonder what this was all about. If it was a battle of perseverance between two unlikely protagonists, Aristotle Onassis emerged as the clear winner. His strange sales campaign was about to enter the third week when Juan could no longer restrain his curiosity and confronted his silent pursuer. Who are you? He asked in a

tone of mixed sympathy and exasperation. What are you doing here? What do you want? I'm trying to sell tobacco was the simple answer. Aristotle complained that he had not been given a fair chance. The tobacco he had to offer was of excellent quality. Juan was amused. You ought to go to my purchasing department, he told Onassis. Remember, that's where Onassis has been. He had already tried this, but just inverting makes all the difference in the world. We're going to see that here. This was all the unorthodox tobacco salesman wanted to hear. It was one thing to call on a buyer of his own but an entirely different matter to be in the position to say that he had been sent by the managing director

same exact thing one sentence changes everything the next morning when he presented himself at the purchaser's department on the authority of the boss his samples were carefully examined and found to justify all the claim of his tobacco he received an order worth ten thousand dollars check that out he's making 21 i guess make a little bit more than that but 25 cents an hour he started at 25 cents an hour this is like a year later he got an order worth ten thousand dollars that's insane uh the tobacco arrived two months later his reward remember he's just a salesperson he's so he's just a salesperson. So he's basically a broker in this situation, right?

Was the usual 5% commission, the magnificent sum of $500, the first money Aristotle and Nassus had earned other than a wage per hour. All right, so he made $500. If you do the math, at 25 cents an hour, that's 2,000 hours. It's basically an entire year's worth of salary working full-time. So right there, you have an entrepreneur that's born. He was already worth a few thousand dollars, but was far too cautious. This is another, he was frugal, at least at the beginning of his life he was.

But was far too cautious to give up his bread and butter job at the telephone exchange or leave his boarding house for more luxurious quarters. So in other words, he was making money, but he was acting. He was keeping his burn rate low, his personal burn rate low, and he was just saving, saving, saving money because he realized you're not going to get ahead in life if you spend every dollar you have. So then he's now, he's still working. So he does this for quite a while. He works at the telephone company and is brokering tobacco sales.

Then he branches off and does another business. And he decides, hey, I could take tobacco and I can hire cigarette rollers because they were doing it by hand at this time. And he starts adding, I think, like different ingredients, like rosemary and stuff like that. And his idea is I'm going to make cigarettes targeted at women. And so he starts out successful when he only had, you know, like a tiny, tiny office, tiny, tiny manufacturing center

with two people doing this. He winds up growing too fast and it winds up failing. So he was employing 30 men in his small factory, but there were no profits. Rather than go broke, he swallowed his pride and closed the place. The failure of his first independent venture was a bitter pill to swallow.

I actually think that was a really good idea because he's making a lot of money importing and selling tobacco. So if you're losing money, you're taking time away. When he gets older, he's got a lot of help. People can run his companies and everything else. But right older, he's got a lot of help. People can run his companies and everything else. But right now he's doing a lot of it himself.

So closing down was a smart move. And this is, I'm going to fast forward a few years. This is Aristotle at 23 years old. It says Aristotle, I don't know what that word is, but it means summed up or added up the profits of his first four years in business. From the modest beginning of a $10,000 order for tobacco, he'd gone on to average a turnover of best a quarter million dollars a year.

In these four years, the total profit from commissions, which came to the precocious 23-year-old businessman, amounted to $1 million. So he made a million dollars by the time he was 23. He was desperately anxious to learn, but he didn't rest on his laurels, right? I told you at the beginning that he was constantly learning, constantly studying, constantly trying to get better. He was focused on progress all the time. This is the same thing.

He needs more skills. He was desperately anxious to learn. He employed a teacher to improve his French and Spanish, and he took English lessons with another. He was ambitious, acquisitive, conscious of his own talent, and increasingly fascinated by the creative possibilities of big business. Okay, now I just want to point your attention to this one sentence. So he's very successful. His dad has health problems. He visits, goes back, visits his family, and he picks up on something. This one sentence, I think, the note of myself was stressors help you grow. I think it's the worst idea for entrepreneurs

or people that are interested in doing anything out of the norm. Not just for entrepreneurs. I just use entrepreneurs because all the entrepreneurs I study all put themselves either voluntarily and, in many cases, involuntarily in stressful situations. Stressors help you grow. Now, not chronic stress, but I think it's the worst idea for people to seek comfort. It's a bad idea because there's no growth.

There's no advancement. There's no reaching your potential when you're comfortable. And I think that applies to your work, your physical fitness, your relationships, anything. So he says something here that I think is really interesting. He says at a very young age, he's talking about like he was supporting his family, sending money back. He had paid for younger people, younger family members, education. And he's still a young kid. He's in his 20s now. But he says something. He says at a very young age age i had the responsibilities of a chief of a tribe meaning that either you have two opportunities you're gonna you're gonna shrink from from uh the the situation you're in and and

fail and let everybody down or you're gonna you're going to push forward and develop the skills needed to succeed and that's what he did and it made me think of this tweet i saw this week by the science account um and this account name is massimo but it says um when scientists started biosphere they're making like this you know what a biosphere is i don't have to tell you when uh when scientists started biosphere 2 project in 1991 they could not understand why trees fell over before they matured so they're in this dome they're hidden from the natural stress of life. That's how I want you to think about this, right? They later figured out they suffered from weakness

caused by a lack of stress normally created in response to winds in natural condition. So the winds, right? Think of the winds from the trees as a stress experience at a young age makes them stronger, deprived of that stress, and they fall over. People are the exact same.

So don't seek comfort. Onassis, I mean, there's no description of his early life that you would say is comfortable. Even when I tell you about the pace that he lived life at, he had luxuries around him. Of course, he's super wealthy, but he pushed the pace. He was not resting on his laurels. He was not sitting in comfort. Okay. So remember, he starts out, he builds his first small fortune in the tobacco industry. But this is when he starts thinking about the shipping industry and um this is well this is how aristotle thought about a shipping industry or i thought about the shipping industry

um so he's living in bruno sarris the foreign minister summoned him he wants to becoming what's called a consulate so let me just read this it was really at this moment he assumed he assumed office as consul that a ship owner was born. So he's got a basically almost like I guess it's a political appointment or diplomatic duty is what they call it between Greece and Argentina. So his first days as the consul coincided with the beginning of the world economic crisis and shipping being a barometer of economic conditions was badly affected. So more stress. And what they're talking about we're at the beginning of the worldwide great depression um so he has to he's basically responsible for the relationship uh because at this time greece is sending a lot of exports to argentina how do they get them there at this time of course it's

through shipping so this is how he's exposed to the shipping industry kind of has an in from the very beginning he has to deal with stuff like crew disputes conflicts with port authorities and all manners of problems came within his province the shadow of current difficulties could not dim the glamour of shipping and he says something great later on in life where people like oh aren't you worried he's got a long career and as such you're going to go through multiple uh economic growth periods and economic contractions and he's like it's all he's like no he's got a long career. And as such, you're going to go through multiple economic growth periods and economic contractions. And he's like, no, he's like, why aren't you worried? At this time, his company is losing $40,000 a day or something like that.

This is way in the future. He's like, why don't you sell off all your assets? He's like, the company is worth $300 million. Like this is, he's like, recessions, I think is the word he uses. He goes, it's all part of the game. I think it's a very healthy way to think about it. Not, oh my God, this is the end of the world, people jumping off of buildings.

It's, oh, this is normal. This happens all the time. And part of the game, part of succeeding at this game in business is being able to weather these storms successfully. Okay, so it says, his work as console enhances love of the sea, taking him one long step nearer to his ambition more than anything else aristotle nasus wanted to own and run ships and from the dream and the idea was only a short step to uh to the intention and the plan to persuade himself that the plan was sound he went in for what he called a little little mental

gymnastics this is actually really smart how he decides he's going to get involved in the shipping industry. In his mind's eye, he visualized a ship with a capacity of half a million cubic feet of grain, which might have cost $1 million to build in 1920. That's 10 years earlier from the point we are in the story. Now in the year 1930, such a ship could be bought for $30,000. So it might have been $1 million in good times. Now we're in financial calamity could be bought for $30,000. So it might have been $1 million in good times.

Now we're in financial calamity, so it's $30,000. Although it had run less than half its lifespan. As an importer always concerned with storage, he calculated that it would cost six or seven times that amount, at least $200,000, to build an open storage hangar, just a roof without walls, not counting the price of land so he's like what if i just buy it now and i store the ship because the expenses is you could lose your your shirt if you're running like you're paying all these expenses and you have no inventory right

so he says a 10 year old ship was good for another decade would be a floating warehouse for the price of a rolls royce to anastas recalling his reasoning, it had a sound built-in safety factor. Even if his arithmetic proved faulty, nothing was lost. So what he's saying is, I'm going to buy the assets now, and I'm not going to use them. No other people were thinking like this at the time. It's really bizarre. Because at that time, the ship's going to be sold for scrap and would have felt, have fetched twice the amount invested. So again, not only is he doing something smart, he's okay the expense shipping is a dangerous business but it's it's uh it's dangerous because you have all these daily expenses and if you don't have cargo right you're gonna lose a lot

of money every day but if i buying ships for pennies on the dollar and i just wait till the economy improves i have nothing to lose because what the ship would scrap if i just said i'm gonna destroy the ship and sell off its parts it it's going to fetch twice what I pay. So I've capped my downside. I have no downside, no upside. You can't go wrong, he told himself. But continuing his monologue on a cautionary note, he took into account that while only $30,000 was needed to become a ship owner, operating the ship could easily result in a loss of $10,000 in one round trip. He had seen it happen time and time again breaking the back of many ship owners so he studied the industry

and realized where the downfall was since he did not need a floating warehouse but very much wanted to own a ship he came to the conclusion that it would be sound business to buy a bunch of second hand ships cheaply at this time of economic depression but most important to keep them laid up for one two or maybe three years and then move them, which means when the economy picked up. Moving them is when you're actually operating those ships. Ships were constantly in his mind. I must get into the business, he kept saying. So essentially he gets his first ships for 1% of their original costs.

Okay, so I'm going to see, obviously we know he makes his money in shipping. I'm going to get to the point where I tell you how he expands so rapidly by working backwards, which I mentioned earlier. But this is just, again, a reminder of how chaotic life is and how random it can be. One sick cook led Aristotle to one of his greatest competitive advantages and also one of the things that he gets criticized most for doing Aristotle and Estes received a message that the ship he's using an all Greek crew flying under Greek flag so the think of think of ships as many businesses and where they're registered it's like

if you register your business in you know california or new york whatever the case is a lot of obviously u.s corporations are registered in delaware because of certain benefits well uh ships are the same way and you could register them everywhere that's why you see a lot of the american cruise companies they're american companies but their assets are in the bahamas or something else they're called flag of convenience and we're going to see him use this tactic more than, what, 60 years ago, something like that. So he receives a message that the ship could not proceed to Copenhagen because the Greek consul refused clearance until Greek seaman was found to replace the ship's assistant cook who had fallen ill and been taken to a hospital. So what they're saying is they have all these union rules. It's not like a union, but it's typical like that.

It's like regulations. It's like you cannot move this entire ship, and you can't just replace the cook with any guy in Copenhagen. You have to fly in a Greek. Bizarre rules, right? A technicality, one man out of a crew of 30 was holding up the ship. What happens when you hold up ships? You cost tons and tons of money every day.

And threatening to upset a carefully worked out schedule, Aristotle Onassis decided to personally intercede with the consul, who happened to be an old friend and former schoolmate. But the consul insisted on the letter of the law. A Greek cook would have to be brought in as a replacement. Onassis pleaded with his friend. His was an unreasonable request, he explained. There was no air connection, meaning no airport to get him to, and it might take a week or more before

another Greek cook could come from Athens. Surely he won't hold up a whole ship with valuable cargo over a small matter like this. Well, of course they do. Their answer was the same. They're not budging. He left the consulate and went to work. By telephone and telegram, he contacted the agents, instructing them to register the ship without delay under the Panamanian flag. Within hours, the formalities were completed. So he's transferring assets from Greek to Panama. Panama doesn't have these regulations.

With one stroke of his pen, Aristotle Onassis not only freed himself of the restrictive practices which threatened to delay his ship, for the first time he availed himself of the considerable advantages of Panamanian facilities, which simplified shipping procedures at a time when technical and legal complications were piling up for ships under most flags. So let me just explain to you what's happening. Greek has a long history of shipping, right? And what happens over time? You're going to say, oh, you're going to pass one rule now. And then five years later, you add another rule. And then pretty soon, 100 years, 200 years in the future, you have all these rules that may not even make sense like this. Like, why do I have to fly a guy or ship a Greek, one Greek cook, and I'm holding up

my ship for seven days? Meanwhile, you have newer countries that are trying to compete with other countries like Panama and eventually Liberia, who don't have that history. So therefore, they don't have those rules and regulations. And they get the benefit because now you can use Panamanian workers. You have more money spent directly in their country because that's where the ship is most of the time. And so you have all these benefits. Going over to the Panamanian flag as Aristotle and NASA saw,T was like reverting to the conditions that existed before World War I under all flags when supply and demand determined success or failure.

An operator was able to fix the size of the crew according to the ship's needs as opposed to just saying, hey, you need, you know, they'd have like central planning committee saying this is how many you need. You need 30 people. What if you could get the job done with seven? It doesn't matter. You still need 30. It's ridiculous. Ships knew there was no overmanning nor feather bedding is what they called it.

Owners employed people who were good at their job, discarded those who were not skilled or efficient. That's another thing. You couldn't really fire people. Besides, a ship under the Panamanian flag was not subject to exchange regulations and could trade in any currency. This is another huge advantage he has. Last but not least, taxes were negligible.

In fact, taxes were non-existent. So this is an example of him studying and learning, and then he had the confidence in himself and his abilities to go in his own direction. Most tankers at this time were 9,000 tons. He decided to make 15,000 tons. This is a little bit about that. Onassis was reaching the end of a meticulous investigation into the possibilities and economics of the tanker business.

He wants to transport. Instead of doing dry goods, now he's going to do oil and stuff, which had occupied him for some time. The financial opportunities were tempting enough, but another motive gave a strong impetus to his plans. By tradition, the Greeks concentrated on dry cargo ships, considering tankers, business-wise, a hazardous proposition. That's a lot of money in oil at this time. Now Onassis decided to go into tankers business-wise a hazardous proposition but it's a lot of money in oil this

time now nasa's decided to go into tankers in a big way so he realizes does the math it's like everybody's building 9 000 he's one of the first people to build 15 000 because he realized the economics are better um i just need to bring this up because this his quick restless personality is mentioned a lot um and i the note of, I wonder if his impatience was exacerbated by living through war and realizing that, you know, when you have friends and people die prematurely, you realize, oh, life's not guaranteed. I need to move as quick as possible. Oh, and I forgot to mention what happened to his grandmother.

So his grandmother winds up escaping on a ship by herself, right? She gets away. And they can't find her. They can't find her. They're worried about her. Remember, his mom died. And so this is the person that raised him his grandma was like eight years old at the time she's she goes to like another island it might be another greek island to escape

the war that's happening and they realize other people escaping realize that she has money in her purse like gold and other stuff so she's climbing it on a ladder, and as she's doing this from a ship, they start trying to grab her purse and stealing from her. And eventually, she's eight years old, and they throw her off the ladder, and she dies. So unbelievable. More tragedy added to the young life of Aristotle Onassis. So this is a description of Onassis.

One sentence, a sailor's restless quest for change and the impatience of a quick silver mind. Let's see. I have a bunch of notes here. I don't know what they mean. It's war intrudes again, do what you can with what you have and problems are just opportunity and work clothes let's see what that what that note meant uh to a shipping man and a greek who had seen who had seen three wars between his sixth and his 16th year not to mention uh not to speak of the gruesome aftermaths these were a momentous deeply stirring events the economic consequences were as grim what year am i in this is this this might be oh yep world war ii okay 1940 uh so says oh i'm not i now i

understand what happened uh germans basically he's got a bunch of uh ships in europe and they get uh they get basically they're like you're not moving these ships out of the harbor so they're just stuck so this is uh this brings a total of his immobilized tonnage up to 50 000 tons for an independent owner a tremendous fleet to be completely removed from his control a tremendous amount of tons after 15 years or now we're 15 years of him being a ship owner of almost unimpeded progress these were the first real setbacks in the career of aristotle on nasa's they were cruel blows so that's what i meant the war is messing up his business so what does he do well i can't i'm not a country i'm not going to go fight the germans so i have to focus do what i can with

what i have now with his european takers immobilized in the baltic he was forced to turn his attention to american-based ships that's a nasus apart from looking after the ships he reorganized his tobacco business and arranged for tobacco from brazil and cuba to replace the asian supplies which were cut off by the war at sea so that's it like i have a big problem i'm going to focus on making my american and other uh ships as profitable as possible and then hey uh my tobacco business is getting interrupted by war. Okay, I'll just import from a different country. He has no control over war, but you can control over how you react.

The opposite of relentlessly resourceful is wasteful, and then he also preferred his organizational structure to be decentralized. So it says Onassis felt that he might be taking charge of a company. Oh, so he's, they have this giant Argentine, Argentinian navigation company, him and another giant ship owner. The government's trying to get him, these two guys to invest. And he's thinking about it for a while. And then he's like, wait a minute, I've identified a potential problem. And this is really smart on his behalf. He says, Onassis felt that he might be taking charge of a company which was so big that the government could not be indifferent to its future

and the prospects of thousands of employees. So that's very opposite. He had a bunch of companies, but they're all decentralized and small, right? Just the ownership was similar. There was bound to be, to say the least, interference. Onassis came to the conclusion that the risk was too great. And so what happens, like five years later, there's an economic depression

and the government takes over that company, which could have ruined his investment. And then this is what I meant about the opposite of relentlessly resourceful is wasteful. He says, Onassis, who has never cut himself off completely from his early years of struggle, cannot watch waste with indifference. Okay, now I want to get to probably the most important thing that ever happened to him.

And this is what I meant about Charlie Munger's quote, Invert, always invert. At the time, you have, this is after World War II, you have a bunch of these old warships. Remember Daniel K. Ludwin, the invisible billionaire, made his money doing almost the exact same thing as what Onassis is doing and that's buying these old ships retrofitting them so they can uh transport oil right but aristotle he's making a little bit of money he's doing well but he can't he he can't grow his remember he has i think the largest private uh winds up having

the largest private fleet in the world if I'm not mistaken and But how do you get that if no one will lend you money? So he's going around all these banks there first of all there They don't want to deal with a foreigner so he has to do these agreements where like you have to have an American agent So 51% the company has to be owned by American he can control the other 49% This winds up coming back to bite him because they're saying that there was like fake this winds up coming back to bite him because they're saying that there was like fake basically like he was lying he could really controlled it even though and interesting enough some of his lawyers that set up this ownership agreement wind up working for the american government and

prosecuting him he gets out of it with a fine but i thought that was really fascinating but um he realized like these guys no one will lend me any money what the hell what am i gonna do like i don't have the money to buy all these tankers So he works backwards. What is he trying to do? Right? I want to i'm going to a bank I say hey, I want to buy these old, uh, these used american ships Uh, and I don't think it's just american but ships from world war ii I'm going to retrofit them and i'm going to carry oil and that's how i'm going to make money, right? And the banks like get lost. So what does he do? He works backwards just like he did with

getting into selling tobacco. He goes to the oil companies, works out the deals and says, you know, this is we're going to agree upon this price. Let's say whatever the case is. And I'm going to read you the numbers here in a minute. And I'm going going to say I have this contract, but I don't have the ship yet Right, so then he takes this contract because we're at the time and a lot of these the largest companies in the world At this time are oil companies So that's completely different. So then he takes that contract goes back to the banks and said hey Look what I have here if you'll lend me no money to buy the ship I have an agreement saying in for five years.'re gonna pay me X amount of money this is guaranteed

money it's coming from the oil companies think they're gonna run out of money no they have more assets than almost everybody else in the world and this causes him to be able to expand his fleet massively just by working backwards so please learn from this all right ready it was a single obvious solution a ship of 30,000 tons made $120,000 a month. A five-year charter amounted to 60 monthly installments. And not only that, the bank, the contract specifies, hey, you're going to be paid $120,000 a month for six months. Or excuse me, for six years.

No, for five years, sorry. For a total of $7.2 million. The bank is comfortable because the oil company is saying, I'm paying this dude $120,000 a month. He's going to be able to pay you back. So he basically erases their risk in their eyes, at least. This then was the proposition he put to the Saccone Oil Company. The Saccone Oil Company is what is today mobile.

I guess, isn't mobile Exxon now? I forgot the exact. You can look it up if you're interested. But you know how they were broken up and they're constantly like all derivatives of standard oil at some point, if I'm not mistaken. So he says, give me a firm commitment. He presented his complicated preposition in the shape of a simple simile. The wealthy and powerful. This is Onassis,

the wealthy and powerful oil companies were in relation to his ships what a tenant was in respect of the house he occupied. This is not a quote, but I meant this is how

he described it to people. The wealthy and powerful oil companies were in relation to his ships what a tenant was in the respect of the house he occupied for which he had undertaken

to pay rent. If the tenant was Rockefckefeller remember standard oil onassis suggested persuasively it did not matter whether the roof of the house had holes or was gold plated if rockefeller agreed to pay the rent that was good enough for anyone lending money on the house it was the same with ships do you see his analogy there it's like my tenant is rockefeller do you think he's not going to pay me i I'm getting paid. Eventually, the oil companies consented to this construction and their assurance to pay come hell and high water was a commitment which he gave the oil companies absolute security and established a principle which made shipping finance history. So this is what Daniel Lugwig

uses. Onassis uses Stravos, which I might cover in the future, his brother-in-law winds up dying in Switzerland at the age of 86 with a net worth of $22 billion, mainly from using this idea as well. With this insurance in his pocket, Aristotle Onassis hurried to Metropolitan Life Bank for the best part of the year in time devouring negotiations. The two men had been exploring this deal, arguing, fencing, moving forward. So basically, for over a year, he's been trying to fight and get money not working now once he does this now the climax was a hand it was a matter of a few minutes think about it going in the opposite

direction the starting you know the logical way from the beginning to the end takes a year it doesn't get anywhere works backwards close the deal in a few minutes when onassis produced a new formula, they agreed to give him the blessing of the loan, provided there was a firm commitment by the oil company to pay in all circumstances, which there was. This was now no more than a formality. His exhilaration was more like, he was super happy at this time,

obviously you could imagine, was more like that of a man who had solved a problem, like the triumph of a scientist who had discovered a new formula this is the formula he built his what his his business on for the banks there was then think about from their their perspective he's just solved a huge problem for the banks and now he's he's added a new asset class for them so they love it too for the banks there was suddenly a new field for investment and one by one financial institutions abandoned their opposition to putting money into shipping.

The dollars began to roll in. The Onassis formula opened the gate to an outflow which eventually rose to $2 billion. And then I just want to, on the same page, there's something here that I think is really important, that you need to have perseverance and belief in the inevitable, thinking about why you're working in the field you're working in. In his case, he just thought this was inevitable.

Aristotle and Onassis had not the slightest intention of submitting to this defeatist group or this defeatist view, what it means that there's a limit. Everybody's telling him at this time there's a limit. Like, oh, you know, we went from 9,000 tons to 15,000 tons. Now we're at 18,000 tons. Aristotle, you're trying to get us to go to 28,000 tons. Like this is not possible. And Onassis, not only did he not believe it wasn't impossible,

he thought it was inevitable. He's like the economics make too much sense, and ships can keep getting bigger. They're going to get bigger. And so this is how he's thinking about that. He says, Aristotle Onassis had not the slightest intention of submitting to this defeatist view. For more than a decade,

he had been obsessed with the idea that the future of transportation was in bigger and bigger ships. And the opposition of the oil companies did nothing to undermine his faith in this new development, which he thought was inevitable. So he's ahead of the curve.

And if you're ahead of the curve and you know what's happening, you just wait. And eventually, they're talking about 28,000 ton ships. Eventually, it gets to like 100. I think he builds one that's like 106,000 tons. So way bigger.

Remember, when he starts out, it's like 9,000 tons. Almost 10x what they thought was possible. This is an example that knowing human nature pays dividends. Though he could be pugnacious and persistent, Onassis had little of the hard-faced, unyielding tycoon in his mental makeup. Besides acceding to reasonable requests where others were likely refused seemed a sound investment in human relations which made many friends so he's playing a long game here he's not gonna uh like when he's doing negotiations he leaves something makes sure everybody walks away with something because that he's not he's not doing one-off transactions where he's just going to take everything he can. Realizes, hey, humans, the benefit of a compounding relationship

in business over a long period of time is going to make a lot more than me thinking from the short term, just trying to make maybe 5% or 10% more. So again, I think him studying history, politics, and the like, he clearly understood humans. This is what I meant earlier about how he focused on the highest value activities, and I said Berkshire does the same thing. He was already shredding the load of routine work but reserving decisions strictly for himself. So what they're talking about there is that, if you remember how the organization, how Berkshire Hathaway is organized,

is when they buy a company They basically just they're like you guys are running the company you do whatever you need to do and we're gonna leave you alone We're just gonna stay in Omaha. We're gonna control two things one We're gonna control the investment decisions for all the profits that the Berkshire portfolio companies make so we're gonna decide where that money goes And like right now, I think I just read Berkshire sitting I was sitting on like a hundred billion in cash or something like that. So it kind of gives you an out indication of how they, what, how they're looking at the current economy. And the second thing is we're going to control compensation because incentives are so important

for, for human behavior. And so they control two things and the rest is completely decentralized. So Onassis is like, listen, routine work, paperwork, I'll let the attorneys handle that. I'll let the people in the office handle that once we do it. But I'm going to reserve the decisions for the company, where we're putting our assets, what we're doing. That's not ever getting outsourced. That's literally my job every day. And again, he echoes, I don't know why, but he echoes, and it's interesting. I'd be very curious, because Charlie Munger is famous for reading hundreds, hundreds of biographies. I'd be very curious.

I'm sure he studied Aristotle, Onassis, because this is how one of Aristotle's partners describes Aristotle. But it's also, if you change the name of Aristotle, it's very much how Charlie Munger and Warren Buffett. It's just an echo here. It's crazy to me. Operate. So this says, Onassis is a curious man. He explores, asks a hundred questions, orders a report, asks more questions arising from it, never accepts a statement without checking. He masters the most complicated subject, then makes his decision quickly. So he thinks, thinks, thinks, and then when he's ready to act he goes full force um aristotle becomes rather famous uh infamous in some cases obviously he marries jackie kennedy towards the end of his life but he's way famous before that it's not a good thing um he didn't

really like it he also becomes indicted. There's so much in this book and in his life that I'm just going to have to leave out of the podcast because this guy moved at 100 miles an hour every day for like four decades. Like at one time, he owns like a whaling company in the Peruvian. At the exact same time, like the Peruvian Navy is attacking his ships. They confiscate it. He's under indictment by the Justice Department, and he's fighting with the prince of Monaco it's just like what what is this guy doing it's crazy but this is Aristotle on becoming famous before I used to operate quietly no one gave me a second glance which I think is the best way the press never

bothered me and I was free to come and go as I pleased now it is like being a movie star people ask for your autograph the The crackpots start writing. They start writing him letters. If I'd known what was coming out of this Monte Carlo business, publicity-wise, and they'd give me a million dollars, I would not have gotten into it. He says, if I were in the passenger business, the publicity would be worth millions. In the cargo business, it only hurts. It's like having a wonderful laugh that gives you a sore throat. When he was alive, he had to be one of the most famous, it only hurts. It's like having a wonderful laugh that gives you a sore throat. When he was alive, he had to be one of the most famous people in the world.

This is the financial performance of his 30-plus companies, and they were fast-forwarding into the 1950s. They estimated the liquidation value of his fleet between $150 and $200 million and reckoned that he had paid off more than 40% of all his mortgages, meaning mortgages on the ships. And once you pay off the mortgages on the ship, the profit margins are insane. They worked out that his net income before amortization charges was nearly $50 million

a year. And that can go up and down and it's pretty crazy. At this time Onassis spends a lot of time in Hollywood and Washington D.C. and around politics in general and he makes a statement that he says if you knew how the food was made you wouldn't care to eat it

and he talked about the show business of that and political business which he felt it's he never explicitly says it but it almost sounds like he thought they were similar like they were attracted the same kind of people and and and operate on the same dynamics which I've heard before too that there's a lot of similarities between show business and politics. Somebody said politics is show business for nerds. Onassis had little doubt that the lawyer's assessment of the Justice Department's case was correct.

What shattered him was that the indictment, this is what I was talking about earlier, and we knew this because in the Invisible Billionaire podcast I did, the Maritime Commission winds up being like basically 100% corrupt. Then it's replaced by another commission. That one becomes corrupt. But there was just all kind of bribing, wheeling and dealing.

Obviously, these are parts, listen, there's a lot to learn from Aristotle Onassis, but he's never caught doing anything. But I mean, you think about human nature, there's a very good chance that these guys were getting sweetheart deals, and they were getting them by leveraging the fallibility of humans. So this book is very much in a glowing light, but I'm kind of reading between the lines here. I'm like, okay, this guy definitely paid off people. So no one's perfect we're not idolizing these people we're learning their good ideas and then we're discarding the

bad parts um what shattered him was that the indictment had obviously been framed by attorney general herbert brownwell whose legal firm had advised him in the first instance that he was acting strictly within the law that's what i that's what i said earlier they're playing both sides told me i go ahead and do this 51, 49%. You're good. And then he moves to, he goes from private practice to government and then back to private practice. And it kind of gets like this incestuous relationship and they kind of screw him here.

If he was under indictment, why were the authorities not making a move? He was not waiting any longer. From his Madison office avenue, he sent the following telegram. So he writes to him. He goes, listen, I placed myself at your disposal during my visit to this country for any information you or your department might care to have. And he says, at this time, he took a poor view of the caliber and standards of some people in high positions and said so. So he's saying, he says, what aggravated him was that the attorney general did not even give him a chance for a talk,

not replying to his telegram. And now he's yelling. He says, this is the man whose legal firm had been paid big fees to advise me. So, you know, there's some shady stuff on both sides happening here. And he also, some of this, Aristotle makes some mistakes. He brings this on to some degree on himself. At the time, so the theory is not only that he may have paid people off but there's another theory because at this exact same time the indictment was happening in the United States is he does his deal with Saudi Arabia he's like hey the American companies just come over here they're drilling your oil they're transporting oil like why don't you do it and we'll do like a joint venture kind of thing

and he was going to take like 10 percent of their business away from them but like i just said earlier like these oil companies these american oil companies are some of the biggest and most profitable companies in the world at the time and they have a very incestuous loving relationship with the u.s government in fact it's very hard to determine where an oil company begins in the government or the oil company ends and the government begins or vice versa. So one theory is that the indictment came because they're trying to take this business to Saudi Arabia. So they're like, okay, well, you want to try to take our business. We're going to try to put you in jail. We're going to fine you.

So it says, one theory was that this indictment and the taker affair had been engineered to punish him for his alliance with the Saudi Arabians. They regarded the Saudi Arabian deal as a narcissist or revenge for his treatment by the U.S. authorities. So it's not sure which one of these is true, right? Was he punished by the Justice Department after the Saudi Arabian deal? Or is he doing the Saudi Arabian deal because he thought that he was being punished unfairly? So it depends on which perspective. We don't really know. Acting on the assumption that what is good for the United States oil companies is good for the United States, Aramco, which is the Saudi Arabian oil company,

but it's also made up, if I'm not mistaken, this time they have like these United States oil companies have like interest in it. I don't know if it's just like a payment based on like fees or if they actually own equity in it. Arm in arm with the government voiced extreme consternation. So this is the government coming after Onassis and the oil companies at the same time.

This is what I mean, you don't know where one starts and one ends. So they voiced extreme consternation. A dash of xenophobia aggravated the ugly mood. Remember, xenophobia is brought up all the time in modern day. X xenophobia aggravated the ugly mood. Remember, xenophobia is brought up all the time in modern day. Xenophobia is nothing new at all. In fact, most of this book is about the fact that you'd only get deals, like Greek would give deals to Greeks. They wouldn't mess with Argentinians and they wouldn't mess with this person. It's just a very tribalistic undertones in this entire book. A dash of xenophobia aggravated the ugly mood.

American officials were just said to be perturbed lest transportation of oil became dependent on the naturalized citizen of a country argentina which had not always readily cooperated with the west so they wanted americans in control of saudi arabian oil not an argentinian so the book goes back and forth on this for a long time this plays out for a very long time i'm just going to go to the very end um it says as he was want to do aristotle nasus was sitting on the deck of the christina that's his yacht staring out at the wide expanse of the sea he liked the loneliness of the night when all was quiet he could be alone with his thoughts for hours i do too sending them out as if it were across the ocean and over the horizon like tentacles to bring back new ideas and

solutions to old problems the subject that agitated him at this turbulent stage was the indictment hanging over his head in the united states and the civil claim linked with the criminal proceedings so they hit them both they drop they hit him with a civic charge first civil charge first and then a criminal charge as well as a result of his communion with himself in the dead of the night he decided abruptly to take the next flight to new york he did not like it like it was just weighing on him too much he He's like, I'm just going there. I'm going to face whatever happens. He's not the only one under indictment. A bunch of other people in the shipping industry are. Let me just wrap up this part of the book. The Justice Department

wanted $20 million. They settled for $7 million. The day after they settled for $7 million, they dropped the criminal charge. It we still don't know who. It sounded like both sides to me were up to some shady crap. And knowing, studying human nature as I do, they're both doing some shady things. Let's just put it that way. Okay, I need to read this part to you. Oh, man.

The shipping industry is insane. And I'm going to, hopefully this makes sense. There's a lot of numbers in here, but just bear with me because this is Aristotle describing the volatility. Volatility obviously can make a fortune and can destroy a fortune, right? But it's very hard to not become wealthy without some form of volatility. And hopefully the volatility is obviously going in your direction. So check this out about the volatility of the shipping industry. Onassis mused about the vagaries of the tanker market in which he had made his millions. This is a quote from him.

Take the last 20 years, roughly the period since the end of the war, World War II that is, he said, asking indulgence in case his memory is not accurate to the last $100,000. Immediately after the war, I'm going to omit the size of the tankers because they're not important, but the numbers are, the dollar amounts are important. Immediately after the war, a tanker, which cost the government about $2.5 million to build during the war, and having given good war service, fetched as much as $4 million. Okay, so what he's going to trace here

is that the price of the underlying assets in the shipping industry go up and down based on if you can make money with those assets, right, like anything else. So you're buying a used thing. They paid $2.5 million. They got good service out of it in war, and they're going to sell it to you for $4 million. By 1947, with a few years behind it, it could be sold for $2 million. So now it's back down to half price, right? Almost the original cost.

One year later, the price was down to $1 million. Another year, and the value was up to $3 million. So two and a half million, up to four, down to $2 million, down to $1 million, back up to 3 million. So 2.5 million, up to 4, down to 2 million, down to 1 million, back up to 3. This is a very short amount of time. So you could see if you're buying at the right time, you're going to make a lot of money. You buy on the other end, you're destroyed. By 1954, though they were now 14 years old, their value tumbled to $400,000. But with the Suez Crisis, what they're talking about there is the Suez Crisis has to do with Suez Canal. It's also known as like the Second Arab and Israeli War. Happened in the 50s.

Closes down the canal. It causes a huge boom for the shipping industry because now everybody's worried about oil transportation. And so all the prices go up, which I'll get to there in a minute. So I just, in case you haven't heard that before, I think it's rather famous, but anyways. But with the Suez crisis, 1956, all these tankers going up to a fantastic four and a half, $1 million. So let's say 4.5 million from 400,000. So almost 10X, a little over 10X, even though they're getting older, right? And on the other side of this boom comes a depression. Come 1958, 59, and they were down

to rock bottom, $200,000. So think about the volatility of this asset I'm describing to you. Before they fulfilled their 20-year lifespan, they were once more worth $400,000 each. All of these values based on their earning capacity in a freight market, which fluctuates just as crazily from a peak of $40 per ton to a low of $4 per ton. So not only the assets going up and down, but what you can make on them, of course, is going up and down. And this is Onassis. This is still a direct quote from Onassis. He says, the stock exchange fluctuations of the 20s and 30s by comparison or Monte Carlo roulette for that matter, were as mild as flutters at a church bazaar so I just want to include that part because it really does give some context to the industry that he chose to make his living in and how just

dangerous and chaotic it was which again ties into his personality um so I'm cutting out a lot of parts he starts an airline um in this case he's sitting down with the premier of greece and he does this like 500 million dollar investment into greece but i just want to grab this little part out because there's a book i don't think i've ordered it yet but it's all about the feud between just like i like comparing um if you went back and listened to the the podcast i did comparing and contrasting um the methods that elon musk and jeff bezos they're very different in how they're building rocket companies i think it'd be interesting to do one from a historical perspective

because obviously that the the race between blue origin and spacex spacex is still ongoing but i think in the future i might do a um a founder's episode just on the relationship between and the the feud between aristotle and stavros his last name is n-i-a-r-c-h-o-s so neuroshoes something like that but so just give you a preview of that in case i do that one day um he's sitting down with the premier of greece um his name is cramonalis cramonalis is one of the few people who seemed unaware that only a short while earlier onassis had given a frank and pointed account of his relations with with strava so the premier of greece is trying to get him to team up with them because they're always brother-in-law didn't

realize and so now this is aristotle really succinctly describing his relationship with him. He says, in business, we cut each other's throats, but now and then we sit around the same table and behave for the sake of the ladies, meaning their wives, the Lovano sisters, so their married sisters, who remain totally unaffected by the rivalry of their spouses. How bizarre is that? They go to war and then maybe see each other at the holidays i don't even know um but strabo onassis dies relatively young at the end this book ends

well i'll tell you the book ends it's printed when when onassis is 62 and he dies a few years later strabo survives for quite a while he dies at 86 so but i do think they're they're both interesting people that uh prior require further study real quick i just want to go tell you a little bit more about the how the suez canal as well as crisis so however you pronounce that affected onassisassis. And he basically made $60 to $70 million really quickly from that. It says, Onassis was still suffering from the after effects of the Saudi Arabian affair and the oil company's boycott. So like I referenced earlier, when he tried to take that,

about 10% of the business from the American companies from Saudi Arabia, they blacklisted him. So it says, he found it difficult to get new businesses. Because I was in the doghouse with the oil companies, he said, and could get no new charters, I had a great number of idle ships on my hands. And that's really bad because it's going to cost him a lot of money.

This is around the time he was losing about $40,000 a day. Suez was a godsend. So he has all these ships just sitting there at a time when now you need ships as soon as the canal was closed onasa ships took advantage of the skyrocketing rates his idle ships turned into mints meaning just printing money instead of facing grave difficulties his position was ideal in these circumstances look at this bastard his competitors were saying he himself said this is poetic justice. Poetic justice helped to bring off a tremendous financial coup. He estimated his profits arising out of the crisis at anything between $60 and $70 million.

But again, we go back to how crazy this industry is. But the shipping boom did not last. Unexpectedly and to the surprise of the highest authorities, Onassis continued, instead of taking an indefinite time to open up again, meaning the canal, it only took a few months to clear the canal. This had the effect of suddenly turning the whole subject upside down, but still to make 60 or 70 million dollars in a few months. None of the belligerents had won the Suez War, but the only big, so it means like neither country won the war, but the only ones that won were the big tanker operators,

Onassis, Stravos, which is his brother-in-law, Lavanos, which is another Greek rival of his, but also his father-in-law. So Stravos and Onassis marry Lavanos, who was a famous Greek shipping tycoon before Onassis and Stravos were in the business. He's like 15 or 20 years older than them. And they marry his daughters.

And Daniel K. Ludwig, the American ship owner who had built their supertankers just in time. So again, another example of books being the original links to kind of all tie to each other. And one other thing I want to tell you, speed and making the inconvenient convenient i came across this and i thought it was a really unique uh quote i haven't heard from anywhere so i want to share it with you um he was having difficulty controlling his temper

um now this is a quote from onassis people think the great advantage of the panamanian or libyan liberian flag is tag is tech is he said, speaking vehemently. Over and above taxation, but he's saying, yeah, he saves on taxes, but that's an important part. Over and above taxation, the advantage is the lack of restriction, absence of interference, meaning he likes control, or delay, and he likes speed, by governments. Free currency exchange, which helps because of the volatility of currencies,

and speed in decisions. And this quote I thought was fascinating. To compete in the most constructive way, one has to make the inconvenient convenient. Just want to read that one more time to you. To compete in the most constructive way, one has to make the inconvenient convenient. And finally, the last sentence of the book, I want to bring this to your attention. It says, the end of the story, question mark?

Not at all. Aristotle Socrates, which is the middle name, Onassis, was setting out to show that life begins at 62. He's already married to Jackie Kennedy at the time. The reason I wanted to bring that point up is because I'm sure he didn't think he'd be dead in five years from now. His son dies in a plane accident at 24.

Onassis never recovers and dies himself two years early, or two years later, rather. And his whole family had a, like, devastating. He winds up divorcing his wife. His wife dies from a drug overdose like a year or two before he dies. His daughter dies of a pulmonary, something to do with her heart, but it sounds to me like drugs too. When she was in her 30s, his son dies at 24. So it was also very tragic. But the reason I bring that up is because he's ending the book saying, oh, I'm just getting going. I have so many more ideas.

He didn't think he was going to be, even though 69 is not too young to die, it is rather, I mean, it's kind of young in that sense. But the reason I bring that up is we don't know how much time we have, so let's make the most of it. Let's go out and live the life we want to live, do the things that we want to do, and work on the things we want to work on. I'll close there. I'll leave a link in the book. It's very hard to get. I've seen this. I think you can get the book for

as little as three bucks and as much as like $95 if you're interested in it. I'll leave a link like I always do. Thank you very much for the support. I appreciate you listening and I'll be back next week with another biography of an entrepreneur.