Invest Like the Best with Patrick O'Shaughnessy - Ken Langone - The American Dream - [Invest Like the Best, REPLAY]

Episode Date: October 30, 2025

Today I am replaying my conversation with Ken Langone. Ken is a legendary American businessman best known for his co-founding of Home Depot. He is also a former director of the New York Stock Exchange and a passionate philanthropist. He shares with us a lifetime worth of wisdom, building Home Depot into a powerhouse and prioritizing his employees above all else. He says he still “bleeds orange” to this day. You’ll hear as he recounts his business endeavors, his strict belief in keeping your word and his true pride in his country, what he knows to be the land of opportunity. We discuss his work with Ross Perot, the idea of an upside down hierarchy, and the power of loyalty. For anyone who may find it easier to follow along, we have a transcript of the episode on joincolossus.com. Please enjoy this conversation with Ken Langone.   For the full show notes, transcript, and links to mentioned content, check out the episode page here. ----- This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Ramp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Ramp’s mission is to help companies manage their spend in a way that reduces expenses and frees up time for teams to work on more valuable projects. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Ramp.com/invest⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to sign up for free and get a $250 welcome bonus. – This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Ridgeline⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. Head to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ridgelineapps.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to learn more about the platform. – This episode is brought to you by⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ AlphaSense⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. AlphaSense has completely transformed the research process with cutting-edge AI technology and a vast collection of top-tier, reliable business content. Invest Like the Best listeners can get a free trial now at⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Alpha-Sense.com/Invest⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and experience firsthand how AlphaSense and Tegus help you make smarter decisions faster. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.  Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts. Sign up here. Follow us on Twitter: @patrick_oshag | @JoinColossus Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Show Notes: (00:00:00) Welcome to Invest Like the Best (00:004:00) The Unforgettable Pitch to Ross Perot (00:08:37) Winning Over Perot with Honesty and Insight (00:16:08) The Art of Negotiation and Trust (00:19:31) Loyalty, Integrity, and the Power of Keeping Your Word (00:23:51) Home Depot's Culture of Service and Empowerment (00:29:16) Frank's Authentic Leadership and Its Impact (00:31:00) Transforming NYU Medical Center (00:33:45) Ken’s Investment Philosophy: Long Hold Only (00:39:56) The Power of Resilience in Business (00:45:37) The Kindest Thing Anyone Has Ever Done For Ken

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To see what happens when you eliminate the busy work, check out Ramp.com slash Ingram. Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus Review, our quarterly publication with in-depth profiles of the people shaping business and investing. You can find Colossus review along with all of our podcasts at joincolossus.com. Patrick O'Shaughnessy is the CEO of Positive Sum. All opinions. expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion

of positive sum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of positive sum may maintain positions in the securities discussed in this podcast. To learn more, visit psum.vc. My guest today is Ken Langone. Ken is a legendary American businessman best known for his co-founding of Home Depot. He has also a former director of the New York Stock Exchange and a passionate philanthropist. He shares with us a lifetime worth of wisdom, building Home Depot into a powerhouse, and prioritizing his employees above all else. He says he still bleeds orange to this day. You'll hear as he recounts his business endeavors his strict belief in keeping your word and his true pride in his country what he knows to be the

land of opportunity. We discuss his work with Ross Perrault, the idea of an upside-down hierarchy, and the power of loyalty. For anyone who may find it easier to follow along, we have a transcript of the episode on join colossus.com. Please enjoy this conversation with Ken Langone. So Ken, it's hard to know where to begin a conversation with you, given the number of interesting things that you've done across your life, your career. I saw when researching your history, so many interesting early anecdotes with you establishing yourself, especially in your work with Ross Perot. And I always found Ross to be such an interesting character in business history. I'd love to hear the story of you taking his business public. And,

And what that represented to you at an early stage of your career and what it was like to work with him. I happened to be at a Mardi Gras Ball in Washington. And at the party, I met a fellow there by then Jack Hight. And he and I hit it off. And he was telling me that he was partners in a company that was getting ready to go public. And they had an hell of a record. And I said to him, is there any chance I can get a chance to pitch my firm to be the other writer? He said, I want to shoot, I can do.

We had a good time that night. drank a little bit, raise a little hell. Monday, he called me up and he said, you got an appointment in Dallas at 11.30 on Wednesday. Two things I want to tell you, don't be late. You got 30 minutes. When the 30 minutes are up, leave, and don't swear, because I'd been swearing like I saw a sailor at this party.

So I took two kids with me out of course, and then I said, I say, kids, I was only 33 myself. And we went down to Dallas. The scariest thing was exactly at 1130. I got in his office. And there he was sitting behind a big desk. He's diminutive. And he could go, I'm fellas.

Come on, I'll be here. I'll go chat. How you all doing? I said, we're doing fine, Mr. Perot. I said, this is Roger Green, this is Duke Glenn. So we said Adam, he lists the farms that he met with Goldman Sachs, Merrill Lynch, Whitewell, Kidder Peabody, every one of the top firms of Wall Street was there to see him. He talks nonstop, the 29th, Goldman says this, Merrill says that, Kidder says that, Whitewell says that,

and he says, what do you think of that? I'm looking at, I've got 30 seconds left. As well, Mr. Perra, I think I'll just take advantage of the time I've got with. left to say goodbye, and I hope you'll see me again sometime. What do you mean? I wrote Jack Hight told me I had 30 minutes, by my calculations, 30 minutes. Forget that. Tell me what you think. And I thought to myself, well, I'm on a bro with a 30-minute rule. I might have to go all the way. I said, Mr. Perra, that's the biggest pile of all shit I never heard in my life. And he passed. He goes back. What I mean? I said, Mr. Perot, this whole process is fairly simple. You're going to pick somebody

who's going to tell you what, he thinks you can sell your stockboard. And your bet is, can they deliver on that number? I said, it's that simple. That's all the talk they have about working the market, no in the market, there were this, all those things. He'd be, well, that's interesting. He said, let's talk a little bit more. We talked until one o'clock come on. Wow. Drive me and two guys. I was in the front seat. He had a big Baroon Lincoln, and he was driving us all over Dallas. We were going to go back on it, 3.30 playing the afternoon. Now, I figured, oh, I'm not going to throw this meeting in. We were looking for a drugstore.

We could buy shaving gear and toothbrush and stuff, like maybe even a T-shirt, because we brought nothing down at us. We finally found a place. He stayed at a hotel. He was going to make a decision by the following Friday. And he called up. He said, come on, back down. So I went back down.

And we talked, and we talked. We talked. I had not seen one number on how much. much his sales were, what his earnings were, nothing. So he invited me back down. You get a chance. Come on back down. I talked to you. I said, sure. So the third time I went down, I went down along.

He picked me up at the airport. We were driving back to his office. Ken? Have you given that I thought to what you think we're worth? Mr. Perrault, I said, first of all, I said, I haven't had the benefit of your numbers. Let's assume the numbers are great. I said, can I get some kind of relevance? He got to his office.

And he had a closet, and on the inside of the closet door, he had a graph, a chart. I didn't know what the numbers were. All it was was a chart of the percentage growth of the earnings and of the sales. And it was doubling every year. And I said to him, I knew what the business was. By now I got a good understanding. I should, based on those numbers, and if I could be made comfortable that they can continue that way for a while, I would argue your company worth a hundred times earnings.

What? They said, yeah, about a hundred times. Are you sure? I said, well, lost, I'm not sure of anything. I'm sure of this. Those numbers are what you say. I had no idea whether it was five million and I made. Well, it turns out it was seven million of revenues and three million of pre-tax profit.

It was a staggering mortgage and the clear prospects that it continued with the cent. So if I want to think about it, I left about two weeks later, what he had done with you, was calling all the other firms up and said, okay, what do you think I'm working? They settled in around 30 times. Now when did May,

call me up and he's sipping me on, are you comfortable with what you said? I said, I said, Ross, I'll say it again, that you can continue this progression. You just do simple math. You've got to cut the multiple every year by two. So it's not going to take long

to get this thing down to 25 times durings, but I said, I wouldn't be able to tell you that. until I can get a better fix on the business. So he said, well, come on down, bring some guys down. Let's get to know each other better and talk about how we do things. He brought in a bunch of guys, one after the other.

I swear to God, he has some kind of machine that created these guys. It was unbelievable, one more talented than the other. And common sense, plain spoken, gentleman. Don't forget, he had a best-called white shirts, no tassel loafers, wingtipped shoes, highly shine, no facial hair, military style of haircuts. And the more I got exposed, the more excited I got it. So he saw, okay, well, let me think about it.

This comes into June, two weeks later, he called me up again. Mitch Hahn and I've been talking. One of the things we expect of people, you know, we're optimistic people. And very frankly, he said, Mitch and I are a little worried. that you don't show much enthusiasm. I'm going with that. I said, Ross, I'll be on the next plane down. What are you talking about?

I thought, I've never seen that in the level like you. So I've told you that. Well, I know, I don't, Ross. I'm coming down. No, no, don't come down. He's saying, no, we're taxings have a good rule here. When ain't you, if you got a good sense of humor, you're a good text.

And I said, well, God damn it, you guys were paying me ass, too, okay? So anyway, he gives me the deal. The rest of Wall Street is stunned. Here's this little piece of air road findouts, getting the most short after a piece of business, probably in the last five or ten years. And we go through the whole process. He wants the hour going to do it. I go, well, I'm going to make one promise I didn't tell you before.

I'm personally going to be on every meeting with every investor. That's that I intend to build a issue. Oh, I know. He calls me up at the very end and decided he's going to give me the business. None of the friends who wanted him was G. G.H. Walker. There was a guy there by there at Jerry Lodge, who were he. knew to who he liked.

With a large hurry that we were going to do the deal at a harder time journeys, he said, Ross, we'll go to a harder time journey, and we'll be commashing. So Ross called me up and said that he'd got this call, and how do I feel about having a upon? I said, Ross, let me ask you, and I said, you and I are in a high racing speed car, going 200 miles an hour. I got the steering wheel, and you got the brakes. We're sitting next to each other.

How long people are going to hit the wall? Because I'm going to hit the wall. I said, Ross, if I'm going to go two hundred miles an hour, I got control in the clutch, the steering wheel, shift, everything, or I didn't get into that car. I understand. I said, Ross, you want to give them the deal. If you're more comfortable with them, you go to them, I'm going to be around. I'm sure we'll figure a way out for you and meet it.

Oh, sir, he said, you were the one of me to go from seven to a harder. You're my man, let's go. We spent a whole summer getting the perspectives together, and the more I learned about it, the more excited I got. had a whole money. Now, back then, New York State had a stock transfer tax for your sole stock. It was the tax. And the way you get around and under the underwriting, you go through the tunnel after midnight on the day of the deal, sign all the papers in Jersey and drive back in. The deal was done in Jersey. The night before the underwady, Elaine and I and Margo and Ross had dinner

at 21. We got to know each other that summer. We really didn't know personally well. By the way, I'll tell you, one of the great joys of my life was his friendship. And this is aside. One of the great honors of my life was when I got the call from the family, Ross, Jr. They'd like me to deliver a yield and she had a funeral. Wow. Me. So anyway, we're driving through the tunnel.

Elaine won't harm because our kids had to go to school the next day. We had three kids. So we're in a limousine. By the way, the limousine driver was always a witness signing the bank. So this was all legal stuff. I love it. So we're driving through the tunnel. It was a back seat where you had two seats looking at each other.

Lager and Ross are looking ahead. I'm sitting with my back to the front, looking at them. Well, he should borrow them. All the other guys are Wall Street tall, and now is the one that he's going to back away from what he said he's going to do. What are you talking about, Russ? Well, I'm told, Ken, this is when you guys say, sorry, Ross.

I miscalculated. I can't do it at the hundred times earnings. I got to do it at a lower number. What do you talk about? Because I suppose this is the one you're going to tell me I'm not getting a hundred times journey. I said, how'd you know that? See what I know?

I said, how'd you know that? What do you mean? I said, I'm not going to do it very long time journeys. I'm sorry. See, longer. There you are. They're all a lot of lights up here. They get us country boys up here.

They pick us clean. I said, wait a minute, wait a minute. Does a hundred time journeys mean that much to you? They're right. He says, that's just you. Put your hand out of your words you bought. It means a lot to me. Not just the number, but the fact you kept your word.

I said, Ross, look, the last thing I want is an unhappy client. We'll do it at a hundred-time journey. The AM-Luh, you will? I said, okay. So, Margo, I winked at Margo. Well, he was a little bit of a tizzy. She says to me, God bless Margo. She's sharp.

She will, Ken, what were you going to do it at? I was going to do it her 115-time journey, but it's the only once on a time journey, it's okay with me. We did it at a 115 time journeys. And by the way, it went from 16 to 24 the first day. So it was a very successful deal. And that deal, the lack of a better way to describe it, pulled me on a map. The most important day of all was he was a man who you delivered to him

and you kept your word. He never forgot it. So he became perhaps my story just that. I was the young kid 33. I never done an underwriting. That friendship has lasted all through his life, and now it was his family as well. What about his style do you feel is most lacking in the world of leadership today,

if anything? Integrity. That's it. Man, the man was maniacal about keeping his word. And the second they would be loyalty. If you promised to and delivered for it, he never forget. And this would be it.

One of my favorite ideas of yours is this notion of leaving more on the table for the other guy than you think the other guy thinks he deserves. Did that come from Ross? No. Let me tell what that came from. That came from my experiences as a poor kid. When I realized, if somebody expected this and me, I gave him that plus something. And to me, the order negotiating.

is not see who best who. The order negotiating to me is to get a deal for yourself to make sure the guy you're dealing with feels he got more than he thought he was going to get or he shouldn't get. A hundred times earnings to a hundred and fifteen times earns. I can't think of a deal I've done where I couldn't have got more than I got. That's okay because the element of trust is the most precious thing in living. If I trust my doctor but he's going to do the right thing for me, there's a better chance he's going to be more candid with me and more willing to try and help me whatever my condition is

or a friendship or a marriage. I'll tell you what it is. Oh, you know, I'll give you a for instance. I did a deal with a guy. I bought a company. He was a tough negotiator. He negotiated back. And I brought, she gave in her at every point.

Got done around 930 at night, my office. I said, now you say, oh, I'm happy. It couldn't be happy. Okay. I said, well, to you let's go back and I'll drop you up in a hotel and I'll pick up in the morning. We'll have breakfast. We'll talk to school. It's okay.

So the next morning I pick him up. We're driving in my office. He said, Ken, can I be honest with? I said, please don't. He said, I'm sorry. As I reflect on this, I don't think. This is good enough for me as I'm retired. I said, well, let's talk stairs.

And I said, okay, where do you think this thing is deficient for you? And he tells me, it's okay, you got it. What do you mean? Tell me what you want, you got it. I've got to want to tell you something else. I will never be business with you again. You bargained hard all day yesterday. You assured me at the end of the day,

it was exactly what you wanted, you were fairly treated. I said, I can't think at one point that didn't concede to you. I said, I'm sorry. You got what you want on this deal, but I never wanted the business for you again. And I feel strongly about that. and the best testimony is I never had a fear of

client or a potential partner in a deal saying something bad about me because I did okay I would go in the smoke so that I do okay you're sitting where I started and city where I am right this minute and it's okay to bargain with it but when you're done you're done

and you were shy I told me you got your deal and got exactly what you want now you got it Frankly, I said, I thought you had a great deal last night, but obviously you thought there might be more on the table, so I would disappoint you. By the way, that company turned out to be a home run. But you're okay. So that's a philosophy of life.

I pride myself on that. I think there's nothing more precious in my life other than my family than my word. Was there an early formative experience, like a specific experience that most taught you that lesson, how did you come to that conclusion? It sounds like at a really young age. My mother thought they were humble, uneducated, but incredibly honorable people. But just how they lived their lives, that was really where it was chiseled hold to me, you know, keep your work as hard as you can and give it all you got. And live by the golden rule. One of the things that I feel strongly about is I'm very forthright about my job. Because, you know, because

Because that's where it all started. Then I had a good fortune. I mean, this lovely lady, she was 16 and I was 18. We got married, she was 18, and when I was 20, almost 68 years later, we were still hanging around with each other. That's pretty good. What's the key to doing that well? Have your fights, but that's a carry a grudge.

Don't go to be a person. We were two kids and truly loved each other, and the trauma and success wouldn't change. I hope it hasn't. I urge my kids to be genuine wine to be authentic, but that can be very important being with. Life and business is a repeat game. The story you just told about not doing the second deal with that guy, even just the way you've created successful financial outcomes seems to have been by holding longer than anybody else. My loyalty, if I would like to be remembered for one day, only one thing.

I'd like to be remembered that I was a loyal friend. a loyal husband, a loyal father, whatever you want. Loyalty is in shorts of life. And he is. The world has become very transactional. My epic battle with Elliot Spitzer, which I whipped his ass, I can tell you right. He ain't coming back for more.

I can tell you right now. He ain't coming back for more. I got his ass good. And it was a fight that I loved every single second of it. But there, people were saying to me that I showed my loyalty to Dick Grass. So I said, no, and I can't. By the way, it wasn't just loyalty. It was the facts.

The facts were that the whole committee, all the mind of us, always voted unanimously to give them these pay packages, which, by the way, it will magnify it because every previous chairman of the stock exchange never had a 10-year short of longer than 10 years. So I know when you got these deals ready here, five years, six years, seven years' years' fit. Dick Grasso started at the exchange is an $82.50 a week. union cart, union work.

From that all the way to the chair, how I guess what, he had 37 years of service. When you put the yardstick to that, well, that's what you wanted. He created it that way to get people to stay.

And look what he did. When he took over, they had 1,200 listings. What he got the bulletin is that he had $2,800 in this. He made all of us. I bought seats for $72,000 a piece. I got $8 million.

us through each one of them. I mean, how bad a deal is that? We had guys that the employee exchange brought out with it. The whole key of the exchange was listings. But people say, well, that was loyalty. Yeah, it was loyalty, but more importantly, it was being loyal to the truth. I knew the truth. The truth was every single member of that committee knew exactly.

That was a sad thing to me that I'm not with high-powered guys. That with it under this guy's show, he had switched it. Bring him on, baby. I'll show you out, I'll show you out, okay? Bring him on. He did,

he got it. What was that part? I didn't want it to add. When Cuomo replaced him as AG and when the court of appeals found in our favor, 7-0,

Cuomo called me up and it was a Wednesday. It's when the decisions came out. He said to me, you know, he said, I don't know, give me some advice. He said,

I'm thinking of appealing you. I'm not. He's lost. I know he's playing with my head. He says, I'm thinking of appealing it. What do you think? Well, there's two things I think. Number one, the most joyous thing I could hear is the fact you're going to appeal it that the game goes on.

Because I'm having a hell of the time in my life. And number two, you haven't got the balls to appeal it. He and I became good friends, by the way. So, loyalty's in short supply of the world. The idea about loyalty rings through the Home Depot story. in such an incredible way. Like so many stories of people, kind of like Grasso, starting as a cashier and becoming, you know, a senior executive.

I would just love to hear the beauty of the long term at Home Depot, as you've experienced it as a co-founder and now incredibly long-term holder of that business. The most precious thing Home Depot has are the kids on the floor where the orange aprons are. We had what we call the most corporations have a triangle that the base and the point at the top. And the point at the top is where the CEO is. And the base is literally hired employees. We turned it upside down. We said the most important person in the company is the person that comes in touch with the customer. If that customer gets what he wants at a fair price and feels he got great service, he's never gone on anyplace else again. The most precious part of that equation

there, I call me, can anybody under 88 years old? You're under 88. You're a kid. They don't get pissed off. Those kids really challenging jobs. They need to learn with their seller. They don't have the luxury of not being able to handle the difficult customer. They have crazy hours. And most of them are still right at the bottom without a college education. And those kids made this come. If there's one thing Home Depot is known for, it's our service. Big thing. We give you great prices. No question about that. We're always in stock, no question about that. We have every imaginable item you want to give in category that you've got to sort of. But the thing that holds all together is a kid that's dealing with you. I'll give you it, for instance. This is a good friend of mine, customer.

His faucet was dripping. When it turned it off, it was still dripping, meaning that the washer had failed. So what it got through were the valves, put into the nozzle of the faucet, and drip, drip, drip, drip, drip, three o'clock in the morning and your wife kicked you and says

go get the force I can't sleep the trip is keeping me awake guy gets up in the morning he goes to the home depot store how long how they're name he says the kid I need a new one of these the kid says to him a new one of what

he said I need a whole new stem leak it's not you're sorry so you need a wash model me we have a little glassy in bags of assorted size washes can't tell you 25-3-a-Hu download that cheaper, takes it off the peg, opens it up,

gets the right-sized washer as a screwdriver in his apron, takes it off, unscrews the screw, takes a band washer out, takes the good drop washer, puts it in, puts it in,

and he says to the guy here, go home where a wood trip, the guy's going to go out. He said, nothing, sir. He said, happy he came to Old Depot. Three months later,

the wife wants him to the kitchen. He's only got to one of these food food, joints, kitchen and bath guys, the honor over to my friend. They went back. They found him a kid. Kid brought him over to a kitchen designer when we sold kitchens. We got a hundred thousand dollar kitchen order. That's the value. We make an effort to train the kids, make an effort to treat them failing. Last year, unilaterally, we raised wages, $1 billion. Why? Because we really feel for our kids. They own stock. Well, I guess I could say I made some money.

Just a bit. I should be. I'll tell you this. The greatest number of a wall to me is not my networking. We have 3,000 kids that are still working for the company today. 3,000. They started out pushing carts in from a lot in multi-millionaires, and they're still working for the company.

You want to talk about culture carries? Trust me. That's the value of treating your people right and taking care of them. We do everything we can't work, and they know it. What in the history of Home Depot went the most wrong, and how did you fix it? Well, the thing that went most wrong was a mindset that cost was more important in the culture. How did we fix it? We changed leadership.

That's simple. Frank came to the company. I'm going to guess around 2003, 2004. At that point, we were 23, 24 years old, but I would call Frank Blake, the founder of the company. Why? Frank restored the culture. He led by example. No doubt about it. His selection as CEO was, I think, the smartest decision, and I take great pride in that personally, because when we were confidently decided that we had those different ways of Bob. By the way, get Bob credit. the first four years, fathers would come.

Everything he touched, he made better. I agree it. However, once we got past that four years, he started it, now get a little too aggressive, and I think, got away with the culture. Fright was not a popular choice. It's a natural. And the reason Frank is a natural is he embraces the finest of values

the human being could have. One year, Frank didn't even want to take a bonus. No, I don't know. We're just getting less things. going right out on an impolence. Frank is selfless, front of all these squatters. Three-fold hours. He graduated in Harvard, Columbia Law School graduate.

Clerk to Justice Stevens in the Supreme Court. Thorne Arna in the year. Number two or three guy in, I think, parliament of energy. Comes to people to work on strategy and nerdy kind of guy you meet him. He'll never get a prize for me a picture of Sartorial Splendant, okay? And I say that because they tell them, I mean, that's Frank's charm.

What you see is what you get. And I talk about being authentic. He is the best example of authenticity I can imagine. So culture is it. Interesting aside, when I was at, they joined it, NYU Medical Center, places at a shantles. Broke, your eye was terrible. They just merged their hospital with Mount Sinai. Ironically, it is an example of bad faith.

each side, but it was true on the other side. They were getting rid of a bad hospital. So we took two bad hospitals and made it one to one huge bad hospital. The element of distrust was powerful. So when I took the job, I went, and I said, the body looked at me. You want me to do this? I'm really bad. I saw the head off.

The body was chairman. It was really bad. I believe he tell. I was okay, more than I want the hospital back. I want to sing to immerse. And it was not going to be illegal. It was a dead effect. We did it.

And I think we at home deep, but Bernie and all that myself and Pat, we put this culture in place, day one. We lived it. We lived it. I tell people here I had highly educated double degree, triple degree doctors. And the same thing I did with a 60-year-old kid that barely got out of high school with this professional, highly accomplished, fabulous doctor. Fees them the same way and it worked as guess what the universe? at the end of the day. Gotta celebrate hourly people on the floor.

They have the key to the, this is the magic source. This is a secret source. Not so much of a secret, but it takes effort. It takes time. And you try to do everything you can to let these kids know that they really matter that they can make a difference, that their opinion to share with us, you rise here, share with us. You'd be amazed at a number of great ideas we had that we implemented the stores that

came out of them and wind of it. A kid that barely get out of high school. We encourage it to be open to come express themselves. I give you, for instance, we'll be a store in Elmont. So the Wednesday, before the store's got to open, I'm in there. And the kid in the plumbing department, because after me, he said that, are you somebody in this company? Yeah.

Come on, I'll show yourself. I'm curious, you guys born stupid or you become? Okay, I said, maybe it's a combination of both. You don't want these kids to feel intimidated or threaten. You want to get it out of their head. I just, okay, so he takes me over and he shows me a big cardboard box that's on the floor at the bottom of the rack. And in the box are a bunch of plungers. You got stopped up to out.

You put your hand in that box. You think you were in a coal mine. You come out black. So what? Nobody sees the plunges. Now, think of this. You don't wake up on a Saturday morning. say, hey, Andy, let's go to the Old Depot and buy a plunger.

It's 3 o'clock in the morning. The toilet stopped up, and you haven't got to plunger. You get your ass to the Home Depot store as soon as it opens, you get the plunger. So, back to the kid, I said, okay, what would you do? He said, I'd get pipe looks like in a gun store, you know how they show guns on a wall. And I put the plunges at the end of the thing on the rack. Why don't you do it? He said, get on it?

I said, why can't you? You didn't get such a good idea? Why don't you do it? Okay. Saturday morning at 11 o'clock, the store is now open, people clamp. And I said, come on, come here, come here. It's like, well, there's no plungers in the pipe cooks. Oh, you put them back in the box? No, they're cold.

Hey, honey, three odds. Pungry, you can buy three, three, fifty, four. Hey, honey, we need a plungeer. I don't have a plunge. You made it an impulse item. That was out of the mind of the kid that barely got out of high school. You don't know where you're going to find a jam. but you're never going to find them if you don't look for.

What do you think was the reason you've been able to hold on to these investments, these positions for so much longer than everybody else? So the average length of your investments is 35 years or something crazy like that? Stop it, 42 years. 42 years, sorry, I don't want to take that. I'm stupid. I'm stupid. I'm loyal.

I'm not loyal to my investment positions. What I'm going to tell you? You know, you're loyal, you're loyal. Look, I got my lily star. two years before all the people was founded. A little medical device truck, they bought, I got to know the management people. I liked them.

You know, there were solid Midwestern people. The guy that I negotiated to deal with was a tough son of a bitch by the name of a gene step, but I had such aberration and respect for gene. I had no doubt that Lilly would turn out to be a great company. Now, it didn't hurt that if I'd sold the stock,

I'd had an hell of the tax. because my cost basis, the little device company I took over at a proxy fight, ready, had a market cap of a million and a half dollars. Got a market got a million and a half dollars. Lilly gave us $50 million. That was a proxy fight with Mayer 72. Lilly gave us a million and a half shares of Lilly stock worth 3750 a share of our stock for share, roughly that.

And Lilly paid a dividend. So the dividend was an ice thing, the little bit of income. The Lilly stock has split over those, all those years, from 77 to now, 16 to 1. So the $3.5.5 shares, $6.9, is $24 million. Okay. You ready now? $18,360 million. Now, catch this.

Lilly's stock from 77 to 2002 went from 37 who got to his eyes a hundred-n-dollar. From 2002 to 18, the stock did nothing. It was a 109 in 2002, and it was 109 and 18. However, going back to 77, November 3077, until last August, counting the dividend, including 16 years or nothing, It compounded at 15% a year. You're a home run. Every stock I own compounded at 15%. I spent a lot of time with companies.

I get to know the management. My first and my major, and my principally concern is people. I bet on people. I've got a Home Depot position now. I got a little 47 years. People I got 46 years. JP Morgan, I bought the warrants, but I bought him way back. I got my JP Morgan stock today.

16 years. I got my pocket out of him. 16 years. They're puppies. They're still babies. I've got a new position called option care holdings. I bought it six years ago and I'll be there with them. Along the management stays, quality people, along as the prospects of the business are bright, it's like my wife. These guys, you get married three and four times. How do they remember what to call them? What name do you use? I mean, can you imagine? Jane, Mary, my bad. Life is simple. And hold it out of these situations. You know, the food I ate as a kid is still my favorite food, peasant food.

What's your death row meal? Postiazzi, what's your last positive jol? It's got all in me and beans, plant parmesan, fried peppers and potatoes. Oh, God, they cooked fried pepper and potatoes. And I got my mother glad, she was so cook. But those are my favorite foods. I got a little dive in Port Washington. I could have DiMaggio's.

Great pizza, a bowl of pasta violia or a bowl of carol and beans. Man, it's like dining going to heaven. What do you love most about capitalism? I love that title of your book. If you had to sum it up, what do you love most? The good it does for mancourt.

Look at our society. Look at every other country that moved towards socialism. Look at what's happened. Venezuela, Cuba, Argentina. Look at it. Brazil. Look at the York. Look at your. Hey, look. A poor kid working his ass off with a shot at the grass ring.

He may never get it. What he's going to do a lot of good along the way, even if he didn't get it. Well, I'll give you, for instance. You got a call one day, but Jim, we opened up first-hand law island in the late 80s. I walked the store. He was working at one of our first stores on the island. Bam, Jim, and it says to the Mosswood that you've got to come see you today. Okay. And I have a rule. Home Depot employees.

I first said Bernie called me. And it was another call for a kid. I said, if I'll call you back, I got to talk to this kid. Because the kid comes in at the same day. Hi, Mark. What's up? He said, I wanted to let you know. I thought you should know. He said, this morning, I got a call from my Merrill Lynch broker. That my home depot stock. That works a million dollars. I'm a millionaire. That's balanced. He said, let me think of something else. He said, I pay. my parents mortgage up before. I paid my mortgage off. My two kids are in college and I'm a millionaire. Do you know the impact that had on that kid and all those people in the store? He did it. I can do. They got to work hard. You're going to have deals that don't always work.

And you might have you got six months to tell you all my dear deals. Everything is an home run. Oh, I'd be happy if they were breaking in it. But you're going to get out of the plate and take this way, you ain't going to hit the ball every time. It's going to have a few strikeouts. That's Dwight. But what does capitalism do? I think it all this promised me, me, a plume son, a cafeteria working son, not a very good student. Like, I was a bad student. Look at what capitalism a lot of video, you can't take out widely. That's heavy duty start. What did you see most commonly in the opportunity around Home Depot or other stuff that you got involved with early on, beyond the people.

Like, I know you were optimizing for amazing people. Was it just that? That's 95%. You weren't doing store fragmentation calculation for... Right, right. You get into a bad idea with a great guy. The great guy's going to tell you it's a bad idea and we made a mistake. Hey, more hard.

Not everything is going to hunt. I haven't got a crystal ball. But that's the key. Jesse Haddock was a golf coach at Wake Forest. One time I asked Jesse, what do you look for a high school kid? The one thing I never do is I don't mess with their sway. If what they're doing and their results of their play gives them my attention, I get my attention to it because they got a very bracket,

I leave them alone. I don't even look for it, Jesse. So I look for the kid that gets a line on a four-three. And the next little goes back in birdies. You know, I look for resilience. And that's about it. I look for a managing guy, Bernie Marcus, fired at 49 years old, no money, a mortgage, no health insurance.

All right, let's go. Let's do it. Let's start it. But same thing. By far, same thing. You just took bankruptcy. You want people who can bounce. You want people who can come back.

They got fighting them. They got, hey, okay, that didn't work, but I'm going to give it a shot again. Old Depot, look at it. You realize Home Depot today, it's got to walk the capital approximately $400 billion. $400 billion. Shit, that's a lot of money. No bad. What bad deal most stands out in your memory?

We don't have six months, sadly, but we got a few minutes. What bad deal is most memorable? I did a deal that I got by virtue of. There was an article in Fortune magazine after Pro Deal. had the title of the article The Fastest Richest Texan Ever about Perot and in that article, he was

incredibly generous in describing me. The guy called me up from Avon, New York, outside of Rochester. They were building modular homes and a factory. I went up to see it. It blew my mind. I got so

caught up at the moment for what they were doing. I failed myself to take a step back and talk about the people, but I did. And to go out a hot hand, and the stuff I could do, that people weren't going to jump on. Those guys had to the foregone jail. Fortunately, I didn't know anything about it.

They left me. We looked at a deal for them. In 1970, it was a bad year. They left me and they went to Merrill Lynch. It's all about reputations. Always is, it always will be. Nothing matters to me more that I was a member to keep in my word. Curious how the hospital thing resolved.

It was a mess when you showed up, and you oversaw it for a long time, and it's one of the best ever. We're number one in America. We got a culture that won't stop. We're heading on all solarists. We got three and a half billion dollars cash in the bank. The brandest thing of all, we took over a rundown, broken down hospital in Brooklyn called Luther Hospital. The zip code has the highest percentage of welfare patients in the United States. It's the poorest zip code in the country.

We don't make a nickel on that hospital, but that hospital on a show and was now right, number one. We have three hospitals, Long Island, Brooklyn, and Manhattan. We put all those three in separately. All three of them separately got eight. Number one, how good are we doing? We're kicking ass and taking names like you can't believe. Is it all culture?

100%. Oh, wait a minute. Whoa, whoa, whoa, whoa, whoa, culture. and making sure you bring the very best with you as you embrace that culture. We're number one in brain surgery. We're number one in neurology. The top 10 in virtually every special league can name,

urology, dermatology, you name it. We're there. How do we do it? We celebrate these people. We pay them well. Okay, we pay them well. But we're delivering a product second to none. A guy shot me the other day in a restaurant.

I own a piece for a restaurant that I didn't Boker called Gallagas. It's unbelievable. That there's a good example. The kid that runs Gallagher is in. He's 67, I call him a kid. He bought that restaurant

I was doing $6 million a year, 2012. Last year he did $30 million in business. One restaurant. Home run. This year he's going to do $33, $34 million in business. It's all about the people.

Now, all I can say to you is I'd say all the time, under promise and over-deliver. But it's always about the people. And if you get those people to know, you're going to take good care. You've got to be fair with them. It's critical. He's got in a restaurant the other night.

He comes to me, just a little bit of him. Your hospital saved my wife's life. That's a pretty strong statement. He said, no, no, I'm telling you. He's got tears coming down and said, I said, you know what you did? You said, baby right that. You made me, see, I'll wake up somebody. How do we do it?

Go down. Go to NYU and grab a guard. They think I'm a white job. I walk in, and I say, I say it was security guy, the big security guy. You're happy? Yeah, I'm happy. You like it?

Well, if you ever got a problem, I hope, you know, I am. Call me up. And I prefer they call me Canada way. Mr. is a barrier that blocks you from authenticity with each other. Call me whatever you want. Just don't call me late for an order, okay? That would piss me off. The last question I ask everybody is, what is the kindest thing that anyone's ever done for you?

Oh, God. I've not so many current things done for me. I can't count. I'll give you it, for instance. I did one thing. I worked in a butcher shop as a kid. I'm on my many jobs. I had two or three jobs at one time.

In fact, I worked in a butcher shop, and the guy that ran the butcher shop didn't know. I worked for the supermarket down the street, down parking. I said the shelves up on the store closed, 9 o'clock at night. He'd have fired me if you'd known it. It was as competitive. Anyway, next to the... Which a shop was a liquor store.

And the Ormond family were in. Maybe we had five Jewish families in town, Ross. Lenny Ormond, good man, came to me, said to me, hey, kiddies, you want a couple of bucks? I said, yeah, shoot out. A couple of bucks, I'd kill you for a couple of dollars. What do you want me to do? He said, I got cardboard boxes.

I look at it. I put him up. He had a little porch back of a store. He says, this is a garbage company. We'll come and make him. You got to take them down 150. 50 yards where there's a spot where they picked them up. You got to take the boxes.

They're there. And I said, I'll give you a dollar a week. Two nights a week, 50 cents. You got it, money. About three weeks after I'm doing, one day I'm carrying the boxes. The guy on a garbage truck is there putting the boxes, but I notice he's breaking the boxes up. What are you doing with the boxes? He says, it was a lot of money.

What are you talking about? Yeah, he said, I break him off and I tie him up, or I take him to the junkyard. And they buy this scrap paper. I'm going to see again. I'll probably get three bucks a day. Who can? Yeah. So I go back to, Lenny, I said, Lenny, you got a deal.

I said, if you let me break the boxes up, a stack of them in a pile on acre over the box that broke, you got a lot of space. I'm going to tie them up with twine, and you haven't got to pay me in it. Why not? That's because I'll be able to sell it. Okay, two to four, make it $3, $4, $4 a week.

shown in the boxes. About a year after that, I'm all prepared for liquor store. He said, hey, come here. He said, here you going to college. I said, yeah. Come on in. Takes me in. He had a counter,

and he had a little opening to the back. In the back, the shop in the back, here's a counter. He's a little like a shelf or the back of that shop. You have a little desk where he did his bookkeeper. He takes out of the double. He says, I hear you. I went to trial, and he said, who might need this? You put a dollar in a week in the envelope.

For all those weeks, I was selling my, sell on the stuff. You talk about kindness? Pang all. There have been so many people who have been so kind to me, I can't count. People are good. Talk about kindness. If you gave me a month, I couldn't have enough time to list to all the people that have been good to me, kind of me.

This one of the reasons I believe in God. I really do. That's me. your story your book all your ideas they're wonderful remember this most important thing in that book covered an american story there only happened in america this is the genius of america that a poor kid rough around the edges like me could do okay that whole promise that ain't not to the matter born now with a soapult in my mouth just the chance to live in this great country was all i needed I've so enjoyed our time together. Thanks for doing this with me. Cheers.

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