Motley Fool Hidden Gems Investing - Motley Fool Money: 08.31.2012

Episode Date: August 31, 2012

We revisit some of our favorite interviews on our Labor Day Special.  We talk about the business of lying with Dan Ariely, author of The Honest Truth About Dishonesty:  How We Lie to Everyone - Especially Ourselves.  And former Gambino family associate Louis Ferrante talks about his book, Mob Rules: What the Mafia Can Teach the Legitimate Businessman. Learn more about your ad choices. Visit megaphone.fm/adchoices

Great news! The Federal EV Rebate is back! Eligible customers get up to $5,000 with the Federal EVAP Rebate on select 2027 Volt and 2026 Equinox EV models. Visit your local Chevrolet dealer today for more details. Everybody needs money. That's why they call it money. The best things in life are free But you can give them to the birds and bees From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. I'm Chris Hill.

This week, it's our Labor Day weekend special. We'll get some career advice from a former mobster, but we start by talking about the business of lying. Dan Ariely is a professor of psychology and behavioral economics at Duke University and the author of two bestsellers, Predictably Irrational and The Upside of Irrationality. His new book is The Honest Truth About Dishonesty, How We Lie to Everyone, Especially Ourselves. Dan, welcome back. Oh, my pleasure.

So we're all liars? What is going on? Wait, wait. Not you. Not you. Other people. Other people. Oh, thank you. Thank you. So here is the question. I mean, you probably think of yourself as an honest, wonderful, caring human being, right? No question about it. No question. But if you actually went ahead during a regular day and you counted how many times you lie,

what do you think that number would be? I think it would be in the single digits. Well, I recommend this experiment, but what is clear is that we lie a lot. And what's interesting is that we lie a lot, and at the same time, we think of ourselves as honest. Now, in Japanese, there's a term. There's a term for internal truth, the real truth, and there's a term for the truth we tell other people. And not just for the Japanese, we all have this. We all have something that we trade off.

The truth is there's lots of human values. Honesty is one of them, and not all human values are compatible. So what happens when somebody asks you, how do I look in that dress? Or what happens when somebody asks you a question that would make them, the answer would make them feel bad? All of a sudden, we think differently about honesty. we trade things on differently and make a different decision. Now, imagine you're an accountant, and all of a sudden you're faced with the same dilemma

of the truth inside and the truth to the outside world. Now, how does that work? And it turns out in those cases, too, people find all kinds of creative ways to cheat a little bit and still think of ourselves as good people. Now, the origin of this book, as you write about, really goes back a full decade. that's when you got interested in dishonesty was with the collapse of Enron. What was the

problem at Enron? Was it really just the guys at the top? Because that's how it seemed to be for a lot of people. That's exactly right. When we think about Enron, we think about three terrible people who plotted and executed a large accounting scheme. But the question is, is this really a good description of what's happening? And you can say maybe that's the case Or maybe it's a lot of people who were slightly motivated to not see reality in a correct way, including consulting firms, auditor, people who worked within Enron, all kinds of people. And the reason this is an important question is that the way to solve dishonesty is different, whether it's a few bad apples or lots of us can cheat a little bit. And in the experiments we ran, we basically find that there are bad apples, but there are incredibly few of them. So just as an example, our basic experiment looks like this.

We take a sheet of paper with 20 simple math problems that everybody could solve if they had enough time. And we tell people, solve as many as you can in five minutes. People work very hard. At the end of the five minutes, we say, stop. Please count how many questions you got correctly. and now go back to the back of the room and shred your piece of paper. And then come back to me in the front of the room and tell me how many questions you got correctly.

People do this, they go to the front of the room and they say they solved six problems. But what they don't know is that we can go back into the shredder. The shredder, we fixed it so that it only shreds the sides of the page, but the main body of the page remains intact. And now we can go in and we can find how many questions people really solved correctly. And what do we find? The average solved four problems and report to be solving six.

And the way it works is that we have lots of little cheaters and very few big cheaters. So in the book, in total, I describe lots of experiments. In total, we had about 30,000 people in the experiments. And from those, about 12 were big cheaters. They basically claimed to have solved lots of the problems. And maybe they took about $150 from us. At the same time, we had about 18,000 little cheaters who each individually did not steal that much, but together they stole about $36,000 from me. And if you think about it, I think this is kind of a good reflection of what's happening in society.

Sure, there are some big cheaters out there, and it's really terrible and annoying, and every time somebody breaks into my car and steals my GPS, it's very annoying. But the reality is that the big financial devastation probably doesn't come from that. It comes from lots of good people who cheat just a little bit, many times, but it adds up very, very quickly. Now, you write about things like conflict of interest, and certainly that is something that we see at The Motley Fool in the financial services industry. To what extent does full disclosure, the whole notion that the best disinfectant is sunshine, to what extent does full disclosure really solve the problem of conflict of interest? It's actually worse, right? So it's not just that it doesn't help, it can hurt.

And here's basically the finding from the research. So imagine that you have two parties. You have a financial advisor and you have a client. And the financial advisors, if they have a conflict of interest, that of course biases their opinion. Now, I should point out that the logic for conflicts of interest is that people are doing everything consciously, right? It says that the financial advisor is planning to deceive the client. And because of that, if they only had to disclose, they would not plan to deceive the client in the same way. I think this is actually not fair to financial advisors because I think that much of the conflicts of interest is something that they themselves don't see.

If I had, you know, put two portfolios I could propose to you, one of them from company A and one of them from company B, and company B promised me some kickback. The question is, would I think to myself, oh, I'm cheating you by proposing B, or would I actually start seeing reality from the perspective of company B? And I think the second one is more likely, that I'll actually change my view of reality. But here is what happens with disclosure. So again, we have an advisor and we have a client. And the advisor exaggerates their opinion a little bit to fit with their internal financial interest. And now what happens when there's disclosure?

Now the client knows that something is fishy and they discount the opinion of the financial advisor. But at the same time, and that's good, right? That's what disclosure is supposed to do. But at the same time, the financial advisor is not necessarily staying static. The financial advisor might not behave in the same way when they disclose to when they don't disclose. And what the results find is that when people disclose, the financial advisors disclose, they actually exaggerate the opinion even more. so now the question is what is larger the extra exaggeration of the financial advisor

when they have a disclosure or the discount of the client and sadly the results show that it's the extra exaggeration of the advisor rather than the client so in this case disclosure actually makes things worse because the advisor exaggerates by a higher amount and the client doesn't understand how big conflicts of interest are. He doesn't discount sufficiently. And because of that, the client's financial situation at the end of the deal is even higher. So for people who are working with a financial advisor, what is one thing that people can do to essentially keep their financial advisors more honest? So I don't think there's one thing. First of all, I think we need to be aware of conflicts

of interest. It's really a good discussion to have with a financial advisor. By the way, it's very tough because many people have their financial advisors are friends or neighbors. They have kids in the same school. And to go to the financial advisor and said, you know, I suspect that you probably have some conflicts of interest. Let's examine them. But I think it's incredibly important, right? Because it's a little socially embarrassing, but it will be nice to do. So I think people should go to the financial advisor and figure out how many conflicts of interest they have. And then they should also make a list of a contract between the financial advisor and the individual and agree what to do with these conflicts of interest. For example,

the financial advisor could agree to never put in your portfolio stuff that he gets a kickback on. Or he can agree to never have what is called soft dollars from the people he's dealing with. Or if he does do that, that he would let you know. I think basically trying to figure out what are the exact rule of behavior. Here's the thing. Every time that we have large and unclear gray zones in terms of what is acceptable and not acceptable, people would interpret them in ways

that are selfishly good for them, even if they care about the person sitting across the table from them. So what you want to do is you want to create very strict rules about what is acceptable and not acceptable. Now, on top of that, we can look for financial advisors that have less conflicts of interest.

I think, in fact, that if people started demanding financial advisors with less conflicts of interest, financial advisors will have to deal with that and will have to change in some important ways. We can also think about how do we pay financial advisors? You know, is the percentage of asset under management a good idea? And finally, I think all the hidden fees that financial advisors have should come out. So we should be aware of what they're paying. We should agree with them up front. I don't think financial advisors will sit across the table from their client and lie to them directly. But lying indirectly with all kinds of fees and payment and back payments,

probably too many of them do too routinely. I know that you were doing these tests and essentially setting out to write a book about dishonesty. but were you surprised by the level of cheating that you did discover? And if not, what surprised you the most when you were working on the book? So the amount of cheating surprised me, how much, how prevalent it was, right? I expected to see some of it. But the two things that surprised me the most are the following. The first one is that experiment that we did on the distance from money.

So imagine the regular experiment. People work on this sheet of paper, they shred it, they come to the experimenter, they report how many questions they got correctly, and they say, Mr. Experimenter, I solved six problems, give me $6 on average. When in fact, they only solved four. The second group come to the experimenter, and instead of saying, I solved X problems, give me X dollars, they say, I solved X problems, give me X tokens.

And we paint them in pieces of plastic, and then they walk 12 feet to the side and change every piece of plastic for a dollar. Now think about this. This is a very simple thing. It's about being one step removed from money. There's a little joke that Johnny comes home from school with a note from the teacher that said that little Johnny stole a pencil from the kid who's sitting next to him. And Johnny's father is furious. He said, Johnny, I'm embarrassed and humiliated.

You never, never, never steal a pencil from the kid who's sitting next to you. you're grounded for two weeks and just wait until your mother comes and beside Johnny if you need a pencil you could just say something you could just ask and I will bring you dozens of pencils from the office now this is basically the question we asked what happened if you're one step removed from money and what we found was that people doubled their cheating right and for me this was the most disturbing result in that experiment. Because we're moving to a cashless society. We're moving to a society that has electronic wallets. We're moving to a society that has high-order representation of money, stock, stock options. We have derivatives. We have

mortgage-backed securities. And the question is, could it be that with all of this increased distance from money, people can both act more dishonestly, but feel better about their own behavior. And I think the answer is basically yes. So this actually worries me a lot. And I think that as we move to have more distance between us and the consequences of our dishonesty and the consequences of the money, we need to take extra precautions about being honest. Coming up, more with Dan Ariely, including a round of Buy, Sell, or Hold. Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money, talking with bestselling author Dan Ariely about his new book, The Honest Truth About Dishonesty.

One of the things that you discover through the tests that you put people through in this book is that when people sign their names to some sort of pledge, it puts them in a more honest frame of mind. and armed with that information, you go to the IRS and basically say, listen, why not have taxpayers sign their names at the top of the tax forms rather than the bottom? How'd that go over with the IRS? Yes. So first of all, I think the finding is just, I love the finding. I love the idea that when you get people to sign at the top of the form,

they're more honest. When they sign at the end of the form, it's over, right? People finish cheating. And it basically tells you that when you get people to think about their own morality, people behave much better, which tells you actually people are quite good and have a desire to be good. We just need to remind them about their own desire. So I went to the IRS, and the first thing I proposed was I said,

let's get people to sign at the top. And they said, well, that's illegal because the signature is for a verification. Now, in my mind, the verification is not that important. What's important is the mindset. And because of that, it's important to do it in the beginning. So then I said, why don't we do it both? Let's do it up front for a mindset and the end for verification. So they said that that's confusing. Now, if you've seen the IRS forms recently, you would know that that's really funny that they think this is confusing. The third thing I proposed was why wouldn't we have the first item on the tax return to ask people whether they would contribute $25 to a task force to fight corruption.

And I said, if people do that, not only would they have said something about their own morality, they would have put some money down, and that would have even make the statement stronger. Plus, I proposed that the people who don't want to give money to a task force to fight corruption might be good candidates for audits. But we didn't get very far with the IRS. I'm still hoping. The British government has now an Office for Behavioral Economics, and they're doing all kinds of things,

and they're going to try the signature solution as well. But we did try it with a big insurance company. And this is an insurance company that sends people a letter asking them to tell us how many miles they drove, what's the odometer reading. And some people did the regular trick, which is to fill the form and then sign at the bottom. and for some people we'd flipped it

and they signed first and then they filled the numbers and what we found was the people who signed first cheated by 2,400 miles less on average. Now we don't know if they didn't cheat at all because we couldn't go back to their actual odometers but at least they cheated much less. Now this for me is incredibly optimistic on two grounds. First of all, it means that the experiments that we do in the lab

seem to replicate in real life in some nice ways. It seems that the magnitude of cheating is about 15%, so kind of there's a similar even in magnitude. But it also means that there's all kinds of small tricks that we could do that would get people to behave much better and are actually not expensive and are simple and cheap, and we just need to implement them. All right, Dan, we will wrap up with a round of buy, sell, or hold. Let's start with buy, sell, or hold a nationwide ban on texting while driving. i i would not hold much faith in bands i think basically expecting to give people cell phones that they play with throughout the day and then expecting that they will not text and drive

is kind of like giving covering your desk with donuts and hoping that you would not eat them i think we need some better technological solution that would not will not allow people to text and driving even if they want to and finally keeping in mind your lovely wife, Sumi, to whom you give great thanks at the end of this book. Buy, sell, or hold, engaging in a policy of total honesty in one's marriage. Definitely not. This is not a good recipe for a good life. I'll tell you one thing. There's a story in Judaism that God comes to Sarah, and he said, Sarah, you're going to have a son. And Sarah said, how can I have a son when my husband is so old? And then God goes to

Abraham and said Abraham you're going to have a son and Abraham asked did you tell Sarah and God said yes and Abraham said and what did Sarah said and God says Sarah said how could she have a son when she is so old and the religious scholars have asked the questions of how can God lie how can it be that Sarah said how can I have a son when my husband is so old and God said to Abraham Sarah said how could she have a son when she is so old and the interpretation has been that peace at home, what's called in Hebrew Shlombayit

is more important than honesty The book is The Honest Truth about Dishonesty, how we lie to everyone, especially ourselves it is available everywhere it is always fascinating to talk with Dan Ariely Dan, thank you so much for being here

My pleasure, great talking to you, take care Coming up business lessons from the mob Stay right here. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Chris Hill. Forget Harvard Business School. My guest this week says, you want to learn about business? Study the mafia. Luis Ferrante is a former insider with the Gambino family.

And after spending eight and a half years in prison, he is now an author and motivational speaker. His latest book is Mob Rules, What the Mafia Can Teach the Legitimate Businessman. And he joins me now. Lewis, thanks so much for being here. Thanks for having me, Chris. I'm happy to be on your show. I want to talk about the book in a minute, but first, let's start with your own experience. What was your role in the Gambino family, and what was the primary business of the Gambino family? Well, the primary business, to answer the latter question first, the primary business is profit, making money. So that's their role in the world, period.

My role in the family was I kind of had, I guess you could say I shared three different roles at one time. I was an employee for the company, which was a guy who makes money, who earns, on commission, strictly commission, which you make, you get a piece of what you make, a piece gets kicked up to the boss. I was also a middle manager, taking orders from top guys in the family and handing them down to my crew, and I was the CEO of my own crew. So I handled, I had over a dozen guys that answered directly to me. We were like a small company within the family. We did our own thing, and we kind of like, you know, you answer to the franchise.

Wow, it's amazing. I guess I never thought of the Mafia as having middle managers. I just think of that as sort of like office parks out somewhere have middle managers. Yeah, the middle managers are usually like capos, you know, usually captains of crews. I guess that's the closest analogy you could use for them. But, yeah, it's built just like a corporation. Your underboss is a vice president. Your boss is a CEO.

And you have outside consultants. They're called consuliers. Usually there's one strong consulier in the family, but there are also a lot of guys who consult, who the boss may consult with, who the underboss may consult with. It's built just like a corporation. And in terms of your own operations for your own little business, You were, among other things, hijacking trucks, weren't you?

I was. I was the guy the family came to if they had a tip on a score. That was my thing. I had, like I said, over a dozen guys that answered directly to me. They knew their part when we had a score to take down a heist, a truck hijacking, a vault, whatever it might be. If you think about it, just imagine how funny the mob would look if somebody owed them a million dollars and came to them and said, hey, listen, I got a great tip on this vault in this warehouse. And the guy, you know, the mobster said, gee, I really don't know who I could call to do that. You know, we'd look so foolish.

So they would call me. They'd bring me in, say, Lou, this is what we got going on. Can you take care of this? And it was done. Whatever I had to do, I did. I was like a prime employee. I did my job exactly the way it was supposed to be done. And I delivered the goods.

So you end up eventually going to prison, and what changed for you in prison? How does a guy go from being an elite performer for a mob family to becoming an author of multiple books? Well, first I have to say, by the grace of God, my eyes opened up in a prison cell, and I saw that what I was doing, victimizing people, there is a violent part of the mob too, and there are victims, although it is run like a company, a corporation, aside from the violence, you could say that. But there is still violence involved. So that was the moral question.

But aside from that, with all the snitches turning bad and sending us to jail, from a business perspective, there was little room for advancement. You know, where was I going with this? I'm already facing the rest of my life in prison at the time. I ended up pleading guilty to 13 years. I reversed one of my cases in jail and got out in eight and a half years. I did study law and did that myself. But I said, hey, am I going to come out of jail and hobnob with the same gangsters that I always hobnobbed with,

who one of them is going to turn one day and then send me away again? And maybe next time they'll throw away the key, which is what they were trying to do this time. So I made the decision to change like anybody can in any field. It's like somebody who's maybe unhappy with a job they might be doing in the real world, and they say, you know, I feel like there's something better for me. And they may leave their company or their corporation and, you know, head out in a new direction, maybe even try it on their own, start a company of their own. That's basically what I did.

So when you're, you know, on the inside, you make this decision to sort of turn your life around. What leads you to the world of writing? I was locked in a cell with absolutely nothing at my disposal, nothing to do but a pen and paper and books. So I asked a friend of mine. He was actually the caretaker of John Gotti's South Queen Social Club. John Gotti was the big reigning boss at the time. And he was the caretaker of the club, and he had all these tattoos on his body,

and some of the tattoos were biblical verses. So I knew that he at least read the Bible to at least have, you know, had the knowledge to put these biblical verses on. him. So I called him up and asked him to send me books in prison, and he sent me some interesting books. He sent me Mein Kampf by Adolf Hitler, an autobiography, Caesar's autobiography, and a biography about Napoleon. So I called him up and I said, I had no idea what books to ask him for. So I said, where did you get these ideas? He said, I went to the bookstore and I told the broad at the store a little about you, and she gave me these books. I

said, what did you tell her? He said, I told her you were short and bossy. With that, she three dictators. But that was the beginning of my reading, my love of reading. It started with those three books. I understood almost nothing of what I read. When I put those books down, I struggled through them. But as I kept going, as I kept reading more and more books, I started to understand words better. I would study more vocabulary words. I would look words up, write them on a sheet of paper. And I had nothing but 20 hours a day in a cell to pursue do whatever i wanted to do so luckily i went to jail in a twisted twisted fateful way going to jail was was uh the conduit for me getting an education and and becoming a writer how i taught

myself how to write was reading uh 19th century novels uh how how does victor hugo or leo tolstoy begin and end the plot introduce a character etc i would take notes as i was reading and that's how i taught myself how to write you're listening to motley fool money my guest this week is lewis Esperante, author of the new book, Mob Rules, What the Mafia Can Teach the Legitimate Businessman. Before we get to a few of the rules, a couple of questions about the mob itself. In what industries is the mafia most prevalent? Today, Chris, I would say that they're losing their stronghold on a lot of the major industries that they once did hold. When I was coming up in the mob, a lot of the old-timers had control of the piers and the seaports.

They had control of the garment center. They had control of the waste management industry. As far as New York is concerned, Mayor Rudolph Giuliani, from a legal perspective, did a fine job in cleaning a lot of that stuff up. He really, really banged away at these profitable areas that the mob had controlled for so long and took them away from the mafia. So today, I mean, today they're probably grasping on to a few unions now. You know, I've been out of that life since I came home from prison.

I went straight. I'm a writer now. But from what I understand, they have a couple of strongholds as far as unions are concerned. The construction industry is very, very big for them. I don't believe a skyscraper rises in Manhattan without the mafia's earth-moving machinery, recycling the debris, companies that do just about everything you could think of from top to bottom, pouring foundations, etc. So, you know, they're still there, but they have lost a lot of their power

and a lot of their bigger industries. Now, at The Motley Fool, when we're looking at businesses and industries, one of the questions we like to ask as investors is, what's the opportunity here for this company? So, you know, you say they're losing their stronghold. What is the big opportunity for the mafia these days? Oh, gosh. I would say that it's in a degenerate form of what it was at one point.

So the opportunities that are out there probably have what we would have considered back then less ethical, like drug dealing and stuff like that maybe. um you know these are the the opportunities i think that'll last uh i would if i was considering the mafia as a stock i would i would see some signs to uh to sell now uh it's going to be around for a long time but uh it's competing with much bigger you know it's like almost like uh books as opposed to ebooks you know it's ebooks is doing a lot better lately than books so i mean that's the best way i could explain it you're listening to Motley Fool Money, our guest this week, Louis Ferrante, author of the new book, Mob Rules,

What the Mafia Can Teach the Legitimate Businessman. Let's talk about the book. I want to spot you up with some of the business lessons in the book and have you elaborate on them. Let's start with one, which is get your own coffee. That's great. I used an example in that chapter. That's a real prime example. I mean, there were a number of examples that popped in my head. The full chapter title is Respecting the Chain of Command Without Being a Sucker. And that's go get your own coffee.

Here in the mob, there's a chain of command. And obviously you're taught to respect your elders and you must follow that chain of command. And the penalty for not doing so is death. I mean, you could definitely lose your life if you're told an order and you don't follow that order. But you can't spend your day making coffee for the boss. You're never going to go anywhere.

And in the corporate world, you can't spend your day ordering Frappuccinos at Starbucks for the boss. So I used an example in which a high-ranking Gambino family boss was in jail with me, and he asked me to iron an outfit for him. And I told him, hey, listen, buddy, he really didn't know me. He knew he met me really on the street. There's a lot of Gambino family members. You don't know every single one of them when you're on the street. It's a large family.

i was well acquainted with the people in brooklyn and queens he was from new jersey and he said hey can you can you iron my pants me and i said hey i don't do my own pants i paid somebody you know so he asked me again and because of his high rank and he was twice my age and he had a tremendous amount of respect i guess he thought because i was a gambino guy also he could ask me to do that well i asked the guy who ironed my pants to crumple them up into a ball and press them and make them look even worse than they were. And I gave him back to him. And I said, this was the best I could do. And he got the message. And I got a laugh out of it, too. And I said, listen, no offense. I don't iron pants. I'm not here serving. I'm not here facing the

rest of my life in prison because I wanted to work in a laundromat. I could have gotten that job easily and never had worries about the FBI. So he laughed and we got along after that. And in the end, to make sure he was my friend, I used my connections at the prison the laundry to get him a brand new uniform, gave it to him, shook his hand, smiled, and he gave me tremendous respect after that. And he would never ask me to do a menial task again. So there are ways in the corporate world where if a boss is abusing you and sending you for coffee every day at Starbucks, you could let the boss, you know, get the message in a funny

way. Coming up, more mob rules with Louis Ferrante. Stay right here. This is Motley Fool Money. you're listening to motley fool money our guest this week lewis ferrante author of the book mob rules what the mafia can teach the legitimate businessman another rule from the book don't build yankee stadium just supply the concrete great chapter this this chapter is uh when the mob operates and you were asking earlier about uh the different industries that they once controlled

Maybe years ago the mob was able to obtain the huge contract to build Yankee Stadium or somehow get attached to it. Now, being that the major things are taken away from them, they still have that predatory instinct for business. And they may see, they may look at Yankee Stadium as, gee, maybe we can't get the major contract to build the stadium. But there are 100,000 ancillary needs that the stadium needs that we could provide, whether it be concrete, whether it be plastic seats, whether it be flagpoles. They could almost look at the stadium and its money-making potential, you know, and sit and ponder it. I was with mobsters who'd sit in a coffee shop if they were faced with this and say, okay, they're building a stadium smack in the middle of the Bronx.

This is our territory. How can we move in? Well, we could start by opening up sausage and pepper stands when the workers get there and hot dog stands, make sure all the workers are supplied with our food. Then we could definitely try to get some of the concrete contracts. Then we could get, oh, there's flagpoles. I know a guy, Bobby Flagpole. He sells flagpoles.

I'll get the flagpoles from Bobby, and we'll see if we can get them cheap enough that we can get the contract for flagpoles. The sign. Oh, I know Johnny Signs. Johnny Signs makes signs over in Brooklyn. Maybe we could make the Y, the A, the N, the K, the E, the double E's, and the S for the stadium sign. You know, they'll try to really, really attack that stadium from every different direction.

And there might be areas of the profitable areas that other people would turn their nose up at, and the mob will run into. You know, a mobster might say, I could supply the urinals. Let me get the bathroom contract. All I need is the urinals, and I'll have a $4 million contract just putting the urinals in. You know, so this is what the mob does, And they really, really then work hard at getting anything that could be put to use in that stadium by the main general contractor. And they work at getting those contracts.

They use their networking capabilities to get those contracts, too. And networking is huge in the mob. Every mobster has a huge list of legit and illegit friends who he could turn to to try to get something accomplished. Another lesson from the book, which is near and dear to my heart, certainly my favorite film of all time, and the lesson is leave the gun, take the cannoli, and beware of hubris. Yeah. In this particular chapter, I started out with leave the gun, take the cannolis.

When I left the mob, I left the gun behind, and that's symbolic for the violence and the cutthroat ways, et cetera. And I took the cannolis, the sweet things I'd learned along the way, the different experiences that I'd lived through, the integrity that we did share when we were doing business correctly with each other. You know, there were a number of mobsters who did business the right way, not greedy guys. We did not resort to violence all the time, and we made a lot of money doing things the right way. So that was the cannoli, the sweet things I learned along the way.

And beware of hubris. The second part of that chapter is a very, very stern warning to people who make it to the top and get a little dizzy at the heights. And the examples I used was a national leader, Adolf Hitler, who brought Germany to its ruin. I used a mafia leader, John Gotti, who pretty much, and he was a good boss, but he had a lot of character flaws, and he brought the mob to its ruin by being so flashy and causing so much attention, and then his Gambino family was dismantled by informants. I suffered as a direct result of that era.

And the last leader I used was Ken Lay, who participated in bringing Enron to its ruin. We're going to wrap up with a round of Buy, Sell, or Hold. And let's start with, this faces more and more competition, Buy, Sell, or Hold, the future of Atlantic City. Hold, briefly. Just briefly? Hold for another year or two and see where it goes. People still like a place to go.

People still like the aura of a casino. I think that e-books will not overcome books completely, although it looked as if they would for about six months or a year. It looked like no one was going to want to, you know, buy a book again. But there are still a lot of people who like to hold books in their hands, and I use that as an example for the same thing with Atlantic City. I think people are still going to want to go there, get that comp and that prime ribbed dinner that they can't get in their living room, you know, the whole, that nice Romeo and Juliet cigar

that the waitress is going to bring over with the bunny outfit. You're not going to get that in your living room. But then again, you're going to lose a lot of people. you know, who just rather sit there and do their thing. So I would hold it and see where it goes. I wouldn't sell so quickly. It's a new TV show on VH1 following some women affected by the mafia. Buy, sell, or hold mob wives.

I'm going to go by the many fan mails I've gotten from around the country who've read my first book telling me that it stinks. I'll sell. Yeah, I haven't watched it myself. I just have tremendous, my fan mails have been inundated with people say, and it's the worst show they've ever seen, so I'd say sell. Fair enough. And finally, The Hurricane is an Oscar-nominated film about a tough guy who becomes a writer in prison. Buy, sell, or hold a movie based on the life of Louis Ferrante? Buy. Put all your money on it.

And, I mean, you get to cast it. Who are you picking to play you? I was asked this in the past before. I don't know. I mean, there might be some... It was 20 years ago when I was running around on the streets before I went to prison, so it would be a young actor, maybe an up-and-comer that I haven't even seen yet. I don't even like to think about it, I'll tell you the truth, until I get that phone call. But this book has already been approached by a major actor in Hollywood to purchase Mob Rules, so who knows what'll happen. But I would buy. There has been some interest, and I've been kind of just lax with where it's going, but I may get a little more aggressive with that. The book is Mob Rules, What the Mafia Can Teach the Legitimate

Businessman. It's just out this week. It is available everywhere. Pick up a copy. It is great stuff. Louis Ferrante, thanks so much for being here. Thank you so much, Chris. I had a great time with you. That wraps up our Labor Day weekend special. You know, you can always drop us an email. Love to hear from you. Drop us an email. It's radio at fool.com. That's radio at fool.com. Tune in next week when we'll be analyzing the latest from Wall Street, including the big events Microsoft and Google have scheduled to unveil their latest products. The conversation continues online at fool.com. That's it for this edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening.

We'll see you next week. Thanks for watching!