We Study Billionaires - The Investor’s Podcast Network - TIP479: How to Invest w/ David Rubenstein

Episode Date: September 30, 2022

IN THIS EPISODE, YOU'LL LEARN: 00:03:06 - David’s current thoughts on market headlines surrounding the war in Ukraine and Russia’s chokehold on energy. 00:24:52 - David’s thoughts on the current fundraising environment. 00:32:27 - How David built Carlyle into a global PE institution. 00:36:48 - David’s early career in politics and how it led him to PE. 00:56:41 - How David approaches philanthropy. 01:01:51 - The current state of higher education and ESG policies. *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. David Rubenstein's Book, How to Invest. The Carlyle Group's Website. The David Rubenstein Show. NEW TO THE SHOW? Check out our We Study Billionaires Starter Packs. Browse through all our episodes (complete with transcripts) here. Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts.  SPONSORS Support our free podcast by supporting our sponsors: Bluehost Fintool PrizePicks Vanta Onramp SimpleMining Fundrise TurboTax Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. My guest today is billionaire and investing titan, David Rubenstein. David is most known for being the co-founder of the Carlisle Group, a now publicly traded private equity firm, which currently has $376 billion in assets under management. David is also known as the host of the David Rubinstein show and Bloomberg Wealth. He's on the board of organizations like the World Economic Forum, the Kennedy Center, the Smithsonian, Memorial Sloan Kettering, Duke University, and about half a half of the board. a dozen others. Additionally, he's an original signer of the giving pledge with Warren Buffett, Bill Gates,

and others pledging to donate the majority of their wealth. David began writing books at the age of 70 and plans on releasing one book per year. His fourth book is focused on investing. The title is How to Invest, Masters on the Craft. In the book, he interviews famous investors such as Larry Fink, Seth Clarman, Ray Dalio, Stan Drucken Miller, John Paulson, and others. The book has received praise from other billionaires such as Bill Gates and Jamie Diamond. In this episode, you will learn David's current thoughts on the market headlines surrounding the war in Ukraine and Russia's chokehold on energy, David's thoughts on the current fundraising environment, David's early career in politics and how it led him to private equity, how David built Carlisle into a global

private equity institution, the current state of higher education and ESG policies, how David approaches philanthropy, and much, much more. It's always an honor to have legends like David on our show, he's an extremely accomplished individual who maintains a high level of humility and humor in our discussion. I really hope you enjoy this one, so without further ado, here's my conversation with David Rubenstein. You are listening to The Investors Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Welcome to The Investors podcast. I'm your host, Trey Lockerby, and today we are honored to have on our show with us, Mr. David Rubenstein.

David, welcome to the show. Thank you for having me. My pleasure to be here. Well, I've been following you for a long time. I mostly see you on places like CNBC, and I've always loved your takes on what's going on in the market. So I figured we'd start there and talk about some of the bigger headlines that everyone's been hearing about, the most recent of which I would say is this chokehold on European energy that Russia seems to have.

and they're now making more money than ever, it would seem. So the Russian government has announced they'll be halting gas exports to Europe through this Nord Stream 1 pipeline, allegedly due to maintenance. But last year, this pipeline was 35% of Europe's total Russian gas imports. And winter's coming, right? So energy might be more and more in demand. So I'm kind of wanting to get a sense of how you think this issue might resolve itself and how it might continue to affect.

inflation and markets. That's a complicated question, and I would premise or preface my statement by saying that when you get predictions by anybody in Washington, see about what's going to happen six months down the road, you've got to be very cautious because nobody can predict that well. Earlier this morning, I interviewed for my own TV show, Jake Sullivan, who is the National Security Advisor, and I ask him largely the same question about how Europeans are like to hold up in terms of the fighting for Ukraine, and nobody really knows.

But here's what I can say, at least in my view. I think the West probably underestimated Mr. Putin's resilience. Probably people thought that the sanctions and all the equipment we were giving to the Ukrainians would, among other things, at least produced by this time a truce, if not in a peace agreement. That doesn't appear to be the case. Most people now think this could go on for at least another six months, because, as you suggest, Mr. Putin is now doing pretty well. He's getting a billion dollars a day coming in in oil and gas revenues.

And that's in part because the prices, you know, if not double, close to doubled from what it was before. So while he may not be selling as much, he's selling it at much higher prices, what he is selling. So I would say the concern in Europe is whether the Germans are willing to, say, have colder weather in their houses versus supporting the Ukrainians. Because at some point, Germans might say, well, you know, we like the Ukrainians, but we also like to be warm in the wintertime. Nobody really knows what's going to happen. I think it'd be embarrassing for the West if the Germans were to capitulate and basically say, we're not going to impose sanctions any longer and we really need this energy. I suspect that probably will not happen, but I do think the United States, among other countries,

has to provide more energy into Germany on the form of liquefied natural gas or other kinds of means to help heat the houses and other facilities in Germany. So the bottom line is it's too early to really know, but I think that the cutting off parts of the Nord Stream pipeline is not going to be helpful to Germany, obviously. And I suspect it will probably reduce some of the revenues that would otherwise come into Russia. Yeah, it seems like there was some demand destruction happening with energy prices going as high as they did. A lot of the markets shorted it. And then this pipeline scenario happened. And now we get a lot of margin calls and a whole mess is going on. Something around $1.5 trillion of margin calls is what we're seeing.

And I'm kind of wanting to know what you think the impact of that might look like as far as getting these maybe the money printers going again. And you were just recently on CBC saying that Britain might be in a different position if Brexit hadn't happened. So I'm kind of curious to know what you mean by that and how that plays in here. What I meant by that is that the British economy is not in great shape. As we see, the pound is getting close to parity with the U.S. dollar, which is the first time that's happened in quite some time. Nobody who voted for Brexit last time apparently is willing to say they had made a mistake, and none of the people who are against Brexit were now, are now changing their mind generally. So when I ask people repeatedly about what people have, as their views on whether Brexit is a mistake or not,

people say that if the vote were to occur again today, the vote would be roughly the same as it was. In other words, there's a small majority probably in favor of Brexit, but I don't think that it's actually helped the British economy as much as people thought. many more complications that were realized. And I think the British economy has been hurt by Brexit. At least that's my own view. In terms of the European economy, it's probably in softer shape than the U.S. economy. The U.S. economy is actually growing. I think in the third quarter, the numbers are going to show positive growth compared to the first two quarters. I'm not clear that's the case in Europe. I think Europe is slower based on the numbers that I've seen than the United

States. And I do think that the energy situation is hurting much more in Europe than it is in the United States, of course. Is the monetary debasement of any concern of yours, because, you know, as a result of the energy shortages, Germany just announced they're planning to create 65 billion euros to fighting inflation. And I'm just kind of curious what knock-on effects of that are for all of these nations that are currently involved in this shortage? Well, for all of the nations that are facing an energy shortage, it's going to cost them

more money. They're going to have to supplement the incomes of lower income individuals. it'll no doubt devalue the currency a bit. The euro is also close to parity through the U.S. dollar, and therefore the euro has been not hurt as well. So ironically, while the United States is not in the strongest economic position of the world, compared to Europe, we're in pretty good shape, compared to England, we're in pretty good shape.

And as you know, when you increase interest rates as much as you do, and we are in the United States, it tends to increase the value of the dollar. And so we're now seeing an appreciation of the value of dollar, which is obviously complicated. It certainly helps when Americans go abroad and they want to buy things abroad. Going into crypto a little bit, Russia was just saying that they may or may not be accepting crypto for payments of their energy fairly soon, therefore kind of sidestepping the U.S. monetary system we have currently and the sanctions, I guess we've been putting on them that

seem to be ineffective. So I'm kind of curious, what would happen if Russia began pricing their energy in something like Bitcoin and or even just using the network to process payments? I think Russia is interested in having the most money that it possibly can come into its coffers. And I think if they were to price their energy in Bitcoin or other cryptocurrencies, or even a basket of cryptocurrencies, I think they wouldn't get exactly as much money as they would prefer. And I suspect they'll probably find some way to have something that's dollar-based, but maybe doesn't play homage to the dollar.

But I think in basing all of billions of dollars a day in energy in Bitcoin or crypto, would probably inflate the value of crypto and Bitcoin as people would try to buy it and be able to kind of take advantage of its current usage in buying energy or paying for energy. But I think it's unlikely that that will happen. I can't imagine billions, if not tens of billions of dollars of commerce every day in energy going into a cryptocurrency format. I know that you don't personally or directly invest in something like Bitcoin, but you have positions in crypto-Fintech, such as Pax,

those. Is your philosophy sort of the during a gold rush self-shovels, or do you have fundamental concerns about the asset class because there's a historical precedent of banning things like gold in the Roosevelt era? I guess, well, remember, I'm not a young person. A younger people tend to be more adventurousome. The people that are buying cryptocurrencies, I suspect a large percentage of them are under the age of 30, if not under the age of 35. And I doubt that the many people over the age of 70 are buying cryptocurrencies because trends like this just don't usually start with people in their 60s or 70s, usually start with people younger. So I would say that I have not been a big fan of trying to figure out which of the cryptocurrencies is the most likely one

to do well. Clearly, had I bought Bitcoin when it was at 25 cents, and some people I've interviewed, I did, I'd be happy, but I didn't have that foresight. And so now what I think is the best thing for me is to find companies that are going to benefit. if crypto takes off, whichever currency takes off or a basket takes off, but not try to pick one or two or as opposed to the whole panoply of currencies that are going to benefit from things like Paxos or other companies that engage in the use of blockchain technology. As a longtime student of history, would you see what's happening on the global stage right now? Is there a particular time that it's reminding you of that you could compare to what we're

experiencing today? Well, the most dangerous words are in the investment language it is said by Sir John Templeton, this time is different. And what he meant by that is, if you say this time, we've never seen anything like this before, you're probably wrong because there's always been something that's probably been similar to this before. I can't say it's perfectly identical. But in the late 1970s, when I worked in the White House, we had inflation that was 15% or higher. We had a slow economic growth. We had high energy prices. And we had a bit of what we're having now. And that was a different situation. The U.S. economy was much more insular then. It was much more unionized. It wasn't as global economy. China was not a factor in the global economy. But I do think we're seeing some elements

that we've seen before, which is, say, high inflation, low growth, and disarray in the energy markets. You know, I'm curious about that point there, because when you were working in the Carter administration, I've heard you muse that the inflation was at your fault, so to speak, and I'm paraphrasing a little bit. I know it's a joke, but what did you mean by that exactly? and how does it look to compared to today? Well, what I meant was obviously I wasn't completely responsible for inflation being high. And actually inflation was high in the Ford administration before Carter came in. In fact, it was Ford that actually began the win program with inflation now.

There were buttons in those days. The Carter didn't really invent inflation, but it accelerated during the Carter administration. And for a lot of reasons, we had to impose very high interest rates. And as a result, the economy went into a recession, more or less, towards the end. end of their partner administration and beginning of the Reagan administration. But what I mean when I say that, it's just, you know, I was a junior White House aide. So it's obviously a bit of a joke to say that junior White House aide is responsible for inflation being 15%. But it's like kind of a self-deprecating a bit of humor, I guess, maybe not so self-deprecating in some cases. But anyway,

I was just curious about the context happening there. So I am curious about your opinions. Paul Volcker jacking up interest rates when he did. I mean, our debt was so much less back then. I think the debt to GDP ratio was in the 30s. Now we're in the 130s, right? We've got 30 trillion in debt at the moment. So do you think that tool set is still applicable, that raising interest rates like they're trying to do now? It used to be the case that the Federal Reserve took actions at its FOMC meetings, its federal open market committee meetings, and it didn't tell you what it did. You had to figure it out by seeing what was going on in the market, and they didn't have press conferences explaining it, and they didn't tip you off of what they were

going to do in the future. So, for example, Paul Volker, one weekend increased interest rates or a federal discount rate by 200 basis points. And he didn't tell anybody was going to do that. So, and they didn't really explain it that much afterwards. Today, the Federal Reserve, in part because Jay Powell is much better at this than other people, he's willing to say, here's what we think we're going to do. Here's how we might change our mind, but here's what we think we're going to do. And then after they do it, they explain it right away. And that's designed to give you much more transparency about what the federal government's doing. Paul Volker was unafraid of any political pushback.

or anything like that. He knew what he had to do, and he did it. And Carter, more or less, wasn't thrilled with it, but he supported it because he thought that was the right thing to do economically. In your new book, which we're going to talk a lot about now, it's called How to Invest. I have it right here. I really enjoyed it. It includes this interview with John Paulson in which he says that if he finds a good opportunity, he would contact you. And in addition, he stated that there could be high returns in the volatility market surrounding bonds if inflation doesn't subside. This is about a year ago. So my question is, has he called you? I've seen him many times since then. But John, as I think he said in the interview,

doesn't like to give investment tips because basically that's not his business. And it used to be that he'd manage money for third parties. Now he's only managing his own money. And I think when you're in the investment tip business, I would say legal information that you're giving out, you're really telling somebody something you think today is true. But then if somebody acts on it and you don't follow up with them and tell him you've changed your mind, the tip could not be that productive. So, John, I see him from time to time, and I'm pretty friendly with him, but I haven't gotten any quote tips from him about what he's doing. But I think he doesn't, you know, probably traffic and try to persuade people like me what to do. He kind of does it now with his own money and doesn't

feel a need to tell anybody else what he's doing. Certainly a great interview in the book. With rising interest rates and the tightening Fed policies, VCs believe that this is basically I'm hearing the worst time ever to raise capital, both for VCs and therefore entrepreneurs, considering the current uncertainty, do you find that Carlisle and maybe even your family office are less likely to make deals? Well, I wouldn't say less likely. Deals are getting done. Carlisle was announcing deals all the time. My family office is, but there's no doubt that there's a bigger gap between seller expectations and prices that buyers are willing to pay than was the case two years ago, or even a year ago. Before we had the meltdown of the markets to some extent in May of

2022, when there was a tech meltdown and the crypto meltdown and began going into June and July and so forth, sellers were willing to sell companies and they were expecting to get in, you know, epitom multiples of 13 or 14 times in a buyout context and venture. You know, people were pricing things very, very highly on companies that had no revenue. They had basically nothing except a good idea, a good plan, and maybe a good CEO. Those days were behind. behind us for the time being. Buyouts are being done at now to the extent they're getting done at a, I'd say, high single-digit multiple, EBITDA multiple, maybe low double-digit, in some cases for very good companies. The growth capital market and the venture capital market

are not frozen, but things have to really have revenue and earnings, and I think people are willing to pass on deals that they would have done a year ago or even nine months ago. A good example is Klarna. Klarna is a case where my family office was offered a chance to invest in the company at a valuation of, I forget what it was, maybe $18 billion or maybe even higher than that. And I was told that in order to go into the deal, you had to put in at least $100 million of your own money in order to get the CEO to be willing to talk to you. If you're willing to put in less than $100 million, they wouldn't at the time even talk to you. Now, as you know, Karn has gone down to roughly a $6 billion evaluation and they scrambled to raise money in the

latest round. So the world's changed and it probably will continue changing for a while. Thinking on that for a moment, I'm kind of curious, what areas of investment do you focus on through your family office and the VC as well? Well, in my family office, you know, I'm not directly involved in the investments because I have some legal constraints on what I can do. So basically, I've given my family office money and the professionals there make the decisions. But what they're doing is a lot in the healthcare area. Healthcare is now 21, 22 percent of the GDP of the United States compared to 7 or 8 percent when I work in the White House. the late 70s, financial services, fintech kinds of things, which include blockchain and crypto-related things or something we're actually looking at as well. I would say also,

you know, things in some novel areas like CRISPR technology, quantum computing technology, things that are probably five years down the road before you're likely to see some real revenue and earnings in some of these younger companies. So Carlisle tends to be more of a buyout firm in the United States, and we don't tend to do many early-stage things. I've also done it in in what I call platform deals, which is to say somebody will come along and say, back me to build a company in this area or back me to build several companies in this area. And I've done that in a number of cases and they've worked out reasonably well. On platform deals, you mentioned something recently about sports teams coming together and going

public on sort of platform structure. How far away is that? Do you see discussions like that happening currently? I do believe that will happen in the not too distant future. I think what you're going to see is baseball teams, buying basketball teams, buying hockey teams, buying British soccer teams, and ultimately you'll have a diversified revenue stream, which is very appealing to publicly traded investors. And I suspect you'll be seeing these companies also have public pension funds,

the United States, and even sovereign wealth funds investing in some of these areas, because below a certain level, I suspect the leagues will let them do that. So I think you're going to see more money coming in this area. And that's in part because sports is extremely popular right now. If you take a look at the top 50 shows in television last year, I think about 45 of them were sports shows of one type or another. So it's just people who really like live entertainment and what's more live than sports. And because betting has also become a phenomenon, more and more people are involved with betting and other kinds of things associated with sports. I think it's made it even more popular.

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Go to Shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. You mentioned healthcare. I'm kind of curious about your outlook for that because when you have people, friends of yours, even Warren Buffett, Jamie Diamond, Jeff Bezos, retreating away, you know, coming together saying,

hey, we're going to crack this code and now retreating away. What does that say for the future of the industry and what makes you so bullish on your impact? Well, when you say, retreating away, they tried, as you say, if they start a company, I think it was Amazon, JPMorgan, and Berkshire Hathaway. And they failed in their judgment to be able to create a way that was going to cut costs and provide better health care services. But that's not to say that their employees don't have health care services. They just have it at more expensive prices than maybe these companies thought would be the case. Right now, what you find, as a general rule of thumb, anywhere in the world, when people begin to get wealthy, they say, I'm happier wealthy generally than not being wealthy. And I'm happier, I want to live longer.

And when I want to live longer, I need to be healthier. How do I live healthier? Well, I exercise more. I go to the doctors more. I eat healthier food. And so I think there's a trend in the United States and around the world to kind of live longer and be healthier when you live longer. And so, therefore, that's going to produce more money going into the medical section of our economy. as people think that doctors or other medical professionals can help them live longer.

So like in your case, you look like a very young guy. And the last thing you're probably worried about is how long you're going to live. But when people get to be in their 50s, 60s and 70s, they think about a lot more and they're willing to spend a lot of money to try to live longer. Going back to fundraising, does the current environment remind you at all of when you were just starting Carlisle? And if so, is there any advice you'd give to people out there right now trying to fundraise? fundraising is very difficult at the moment because what happened in last year is that people were well let me step back it used to be that for the buyout funds and maybe venture funds it was like a presidential campaign you were really really nice to people for every four year

period of time you go out you raise money and you're like you talk to your voters and then you get in the office or you get the money and then four years later you're ready for a new fund and you're ready for a new election what happened is because money was so readily available and so many deals seemed attractive to those people who are having the money, they've invested more quickly than people they had historically done. And as a result, they had to go back and raise more money more rapidly. So instead of waiting for four years to come back, they'd come back in three years, or two years, or a year and a half.

And as a result, the people who liked the investment performance of those funds had to re-up in those funds if they wanted to stay able to invest with these people. And that meant there's less and less money available to people that are coming back every four years because people are coming back more readily. And then there's a denominator effect, which is to say that when the stock market began its meltdown, and it's now down with 20-some percent from the peak, the denominator produced less money on the behalf of the sovereign wealth funds and the pension funds. So they had less money to give out. So people are coming back more frequently. There's less money to give out. And so it makes them harder to raise money than

it was before. And therefore, people really obsessed over going into top quartile funds or funds that really could dramatically beat the market averages. And so it's become much tougher to raise money for those reasons. You seem to have this natural superpower when it comes to fundraising. And when you guys were starting Carlisle, you were really starting from scratch. And you've now gone on to build this pushing $400 billion behemoth. And your first check was for $5 million into the fund in 1987, which is roughly $13 million or so in today's dollars. Who wrote the first check into Carlisle?

And what did it feel like to get the first funds? into the firm for you? When we started the firm, we had nothing, of course, until we got four investors to put up a total of $5 million, and then we had to raise money deal by deal, which is complicated because it's hard to kind of tell somebody you're going to give them money and invest in a company when you've got to go out and raise the money.

So it was a little complicated. Obviously, when you can build anything from scratch, it makes you feel good. And anytime you get something done, when people tell you it couldn't be done, and everybody told us you can't build a private equity firm in a city like Washington, D.C., particularly my mother told me that actually said it was ridiculous.

So, you know, when you can prove that people are randomly wrong about something like that, I mean, you can actually make it successful and it makes you feel good. But if you sit on your laurels and say, look, how great I am, look what I did and nobody else did, then you're going to be overtaken by other people. I'm kind of curious. I think you just answered it there, perhaps, but when you were raising funds for Carlisle in the early days, given that you had just kind of come off of being deputy domestic policy advisor for Carter, did it give you any advantages actually being in Washington that maybe

people didn't realize at the time. Well, there's an old statement that Edward Dirksen used to give. He was the Senate minority leader in the 1960s Republican leader. And he said, when you're getting kicked out of town, get out in front and pretend you're leading a parade. What does that mean? That means take advantage of the situation you find yourself in. So I don't have a lot of experience.

Out of my partners, I don't have a lot of experience, but we're living in Washington. So if we move to New York to set up a private equity firm, people would laugh at us. Here, we could see, people might not laugh so much at the beginning, but we can say to people around the world, we understand companies heavily affected by the federal government. Obviously, a lot of companies are heavily affected by the federal government, but things like aerospace defense or healthcare or telecommunications are dramatically affected by the federal government. Because so much the spending in that area comes from federal spending. So by being able to be in Washington, we could explain what the government was doing to our investors, maybe more so than people in New York could do. you've had an interest in politics from a very early age what was the initial spark that led you to wanting to work in the white house well when i was a young boy i didn't have any money my parents didn't have any money i you know

the blue collar family but i admired somebody who was running for president named john kennedy and when he gave his famous inaugural address on november 20th 1961 i was inspired like other people to want to get in the government and get in the public service and i realized at the time that i didn't have the looks, the charm, the money, the power to be an office holder. So I thought maybe I would try to be an advisor to an office holder. And I looked up less to John Kennedy than I did to his advisor, Ted Sorensen, who was the brilliant speechwriter that helped the right profiles and courage and the inaugural address to many great speeches that President Kennedy gave.

So I did go to practice law at his firm after I graduated from law school. And I guess it was a feeling that I wasn't really going to be a candidate, but I could be an advisor and that would be, you know, something will be very appealing to me. wasn't making money. I had no interest in money at the time. I've kind of experienced something like this in a different capacity, so I'm kind of curious if achieving this aspirational goal like you did in your late 20s and being kind of six feet from stardom, if you will, from the president of the United States, did it give you a new perspective on what working in politics really meant? And did that ultimately kind

of lead to you to explore private equity instead? Well, when you work in the White House, you see the pluses and minuses of our system of government. You obviously realize that a lot of things are done not on the merits, but are done on the politics of it. You also recognize that it's very difficult to get things done. It's much easier to get something done by starting a company than getting something done and passing a bill through Congress. But I was forced to leave. So had Carter been reelected and I become, let's say, a senior domestic advisor to Carter, I probably would have stayed for another four years and then probably would have gone into a Washington law firm and so forth. But that choice wasn't available to me. We lost when I was

only 31 years old. Nobody was offering me a partnership at a law firm. So I had to go back and remake myself. And as I did it as a mid-level lawyer in a mid-sized firm, I didn't find that appealing and that interesting. And so I ultimately decided to find something else. And in the end, it seemed to be something novel and starting a business was more appealing. And I read around that time that entrepreneurs start their first companies between the ages of 28 and 37.

And if by the time of 37, you haven't started a company, you're probably not going to be an entrepreneur ever build a company. And I read that when I was 37. So I said, I better do something now. And I didn't think that the political world was so wonderful that if I went back into another White House, I'd be all that much happier than I had been just working in one White House. Have you thought about running for president along the way? And if not, I'm kind of curious about the incentives involved there because you're a master at incentives. And what is driving people or lack of drive for people like yourself to become president?

Clearly, when you're in the political world, as many people have been who have run for office, the top of the pile is being President of the United States. So it is said that every senator who looks in the mirror sees the President of the United States, and it's probably true of every governor who looks in the mirror. In my case, I, now in a situation where I've made a lot of money, people who made a lot of money will be heavily criticized. You always have to worry about your children. My children have their own independent lives now,

but I don't want them to be disrupted by something that somebody attacking me for something. I've been attacked for some things that seem crazy to me recently, and I'm not even a candidate for anything. So, no, I think also I'm probably too young to be president. I'm only 73, and I'm just not sure anybody with that inexperience is really ready to be president yet. I love it. Carlisle now has nearly 1,800 employees. I think it's north actually of 1850 at the moment. It's across 26 offices on six different continents. Considering that Carlyle was one of only a few hundred firms when you were just starting out in the late 80s, early 90s. What drove you specifically to want to globalize the company so early on? Well, maybe it was inexperienced and naivete.

I had the view that T-Roe Price, which was one of our early investors, had a global, had a brand in the United States, and they had multiple funds. If you invested with T-Roe price or with Fidelity or Vanguard, you could go into Product A or Product B and Product C. At that time, in the private equity world, the buy-out firms only had one, buyout fund and they did that and they run it, went out and raised it every four years, as I said. I said, why can't the private equity people do the same thing that the mutual fund people do,

have a buyout fund, a growth capital fund, a venture fund, a real estate fund and so forth, and take advantage of their brand name. It didn't seem like was that brilliant idea, but no one else was quite doing it then. And then I said, why not do the same thing around the world and globalize it? If I came up with the idea of kind of institutionalizing

car allow by having multiple funds and then centralizing, fundraising, accounting, tax, and so forth, and then globalizing it. And obviously, a lot of other firms have done the same thing. Blackstone, Apollo, KKR are on the same path, and some case have done it much better than we have done it. But I guess it was just a feeling that we should keep growing and we should do other things. And I can't say that I had an idea that popped in my head one day and said, you know, I'm going to change the face of the private equity world by doing this. It kind of evolved. You mentioned just a minute ago about being attacked. There was this New York

Times article that was kind of reporting on Carlisle, I would say, somewhat of an unfavorable light. It was talking about the departure of QSong Lee. And the article's claim is that private equity firms like Carlisle are still functioning as a quote unquote first generation firm. What was your take on that angle and what are your thoughts on the article as a whole? All the major private equity firms have now transitioned to a next generation of management. Carlisle may have been the first to do that in a very formalized way. We had some bumps in the road and we're now, you know, continue to transition. There'll be new leadership in the not too distant future.

But, you know, I would say the person we had is a very talented person, brilliant, and a great investor. But for a number of reasons, we decided that we're going to make a change. And so I think the firm is an excellent shape. Our investment returns are doing quite well. So I think the firm is so well known and so institutionalized and has so many dedicated investors and professionals that I don't think there's going to be any blip in our performance.

You wrote a book actually on American leaders. What leadership traits will you be looking for when Carlisle starts looking for the new hire for the CEO? Well, I said in the book that leaders tend to have these traits. They tend to be hardworking. They tend to be generally probably come from middle class to lower middle class blue collar backgrounds. They tend to read a great deal. They tend to be willing to take the blame for mistakes. They tend to share credit.

They know how to rise in the occasion when something bad happens. they really do things that they otherwise might not have been thought possible to do. We would never have heard of Abraham Lincoln if there hadn't been a civil war, probably been another mundane president, but he rose the occasion. Also, I sense that there's certain humility in great leaders. Obviously, there are leaders who are not that humble, but the ones I most admire have a fair amount of humility. So the search committee at Carlisle will be, which the search committee of the board is in charge of that, and we expect it to resolve that in the not too distant future.

Based on the private equity changes since the founding of Carlisle, what's your current outlook for the future of the industry? Well, for the last 40 years, 30 years, 20 years, 10 years, people have been saying there's too much money in private equity, the returns can't hold up, the industry is going to implode, and they've been wrong every time. So I think because of the economic incentives in private equity and because of the talented people that tends to draw, I think it's likely that the private equity performance will outperform public market average. is over an extended period of time. And as long as we outperform the public market, I think it's likely the industry will continue to grow. Whether it's at the same exponential rate we've seen from 1980 to now, I don't know, but probably will slow down, but still I think it's going to be a fair amount of growth.

There's an inspirational stat in the book about how half of the Carlisle executives are female, and you highlight one of them in the book. I'd like to understand what type of impact Sandra Horbach had on the company. For those who don't know, Sandra Horbeck is a graduate of Wellesley and Stanford Business School, spent two years in Morgan Stanley in between. And then she joined a firm called Forcman Little, which was a leading but small buyout firm in the 1980s when buyout firms were tiny little organizations. She became a star there. And then when the founder of that firm decided to slow down the growth of the firm and he would have had some medical problems ultimately died from

a brain tumor. She looked around at other opportunities. Many firms were interested in her. We were fortunate at Carlisle to get her to join our firm. She's now the co-head of our U.S. buyout effort. And I'd say she's the most senior woman in the entire buyout world, more experienced in doing buyout than any other woman. And the firm takes a lot of pride in having very senior people who are women or people of color and senior positions of the firm. And that's just part of the culture of the firm.

In your new book, you interview 23 different masters. And you have this very vast network and long career. How long was the original list and what factors led to the inclusion of the investors you feature in the book? Well, I had probably 50 people that I was targeting and some people said, I don't want to do an interview. And sometimes, you know, people were people that I couldn't get the thing that's scheduled or along my schedule and their schedule was complicated. And sometimes I thought I needed to have more diversity than just having a whole bunch of white males. And some of the people I couldn't put in the book. So I put in the audio version of the book.

In other words, there's an audio version of the book. And the publisher didn't want me to have the book more than I think, whatever it is, 400 pages or something. So I have about, I think, five interviews that are just the audio version. And the audio version of the book is the actual interviews. It's not somebody reading transcript. It's the actual interview that occurred between me and the other person. But what I was looking to do is to have different sectors. I could have had all venture firm people or all buyout firm people, but I was trying to have something in all the major investment category.

So I called it mainstream, like stocks and bonds or alternatives, buyouts. growth capital, venture capital, or what I call it cutting edge, crypto or ESG or SPACs and things like that. But I could easily have filled a book with another 20-some people who are just as talented, but just couldn't put everybody in a book. The book doesn't so much focus on practical takeaways as much as more philosophical takes, I would think. And you mentioned there's a lot of different types of investors in the book. You're not really going into discount cash flow models or the math of investments necessarily. So what were you finding when you were interviewing all of these investors across all these different crafts and what were some of the common traits?

Well, the common traits were that they tended to come from, I would say, middle class families by and large, maybe some blue collar. They tended to be pretty well educated, college degrees and graduate degrees. They tended to be pretty good with math. They tended to be willing to share credit. They tended to be willing to take the blame. They tended to be willing to go on past the deal that might go. South is get rid of it out of their mind and go into the next thing. In other words, cut their losses and go on to the next thing. They tended to be willing to go against conventional wisdom.

They tend to have a strong enough character to say, well, everybody says you can't do that, I'm going to do that. And a lot of them benefited from being willing to go against conventional wisdom. They also tend to be fairly philanthropic. All of them, pretty much not everyone, but a lot of them have made a lot of money, and they're in the process of giving a large amount of that away. So that's what they tend to have in common. Is there a particular interviewee who's made a huge lasting impression on you, both maybe for the book, but also for the TV shows where you're interviewing people as well? I know a lot of these people, and so I've known a lot of them for a long time. So when you meet somebody for the first time, you might be wowed by them or unimpressed by them, depending on the situation.

But if you've known these people for a while, it tends not to have such a strong impact. But that said, I had never really spent that much time with Stan Drucker Miller. We're on an investment committee together. And I thought his interview was extremely interesting and his philosophy of how he looks at things and also how he came into the business, which is kind of not something he really intended to do. I think talking about Michael Moritz, a brilliant person who helped build Sequoia into probably the leading venture firm in the world. And he really came from a journalist background, which was quite interesting. And I think a lot of people in the book have immigrant backgrounds. And as you know, immigrants tend to add a lot to our country.

And a lot of the people who are in this book are people who are immigrants, including Bio Elyssi, who was the leading infrastructure investor in the United States. I appreciated that you shined light on Bruce Karsh, the CIO of Oak Tree. We've had Howard on this show multiple times, and I've always enjoyed talking with him. But I learned a lot from Bruce's interview. During the conversation, he made this kind of eerie statement, I would say, about distressed debt markets becoming more attractive if interest rates. increase, economic growth slows, and easy money policies are reversed. So is now a good time to

maybe get some exposure to distressed debt? Well, I think it's probably a better time than it's been the last couple of years. Bruce, for those who don't know, was one of the co-founders of Oak Tree. He's Mr. Inside, Howard's more Mr. Outside. And Bruce had never really done an interview, but I'd served with him for about a decade on the Duke University Board. We both went to college there and he was willing to do the interview. And people who had never really seen him give an interview before were quite interested to see it. I would say distressed debt is probably coming back into favor in the next year or two or three

because obviously some tech deals haven't worked out. There's more distressed debt now or debt trading below par than there's been for many years. So I suspect it is coming back in terms of favor. Based on the learnings from these interviews, what advice would you give retail investors who may be aspiring to manage their own savings? outside of their normal day jobs? Well, the book is designed for people who are not professional investors. People might want to be professional investors, people that might want to do deals themselves

or really, as you suggest, people are going to buy funds and go into funds. And for people are going to go into funds, my advice was that you should make sure you read about what you're going to do, know what you're doing, learn how to calculate what the fees are, make sure you know who other investors are in it. But generally, my most important advice is don't put all your eggs in one basket, which is not novel, but also, you know, make sure you really know what you're doing. And put a lot of time and attention into the effort. Don't just do it because somebody told you it's a good idea or because you have a whim one

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You mentioned a lot of these investors shared higher education. And I'm kind of curious about that in education in general. It was just announced actually that Guatom Adani, who was a college dropout, just became the third wealthiest man in the world. And Bill Gates obviously dropped out of Harvard. There's a number of others, Zuckerberg, et cetera. I'm kind of curious, when you're hiring or funding a certain venture, how much do you weigh in higher education? Well, the people you just cited, the three individuals are all people that built companies and made their fortunes that way,

as opposed to people that made it as investors, quality investors. Generally, investors are people that are pretty well educated and did get their degrees. Now, of course, there are traders on Wall Street who famously are probably, you know, maybe not graduate degree holders. and so forth, or maybe not even college degree holders, but generally, people that are investing tend to have a pretty good academic pedigree and tend to value academic pedigrees. So I wouldn't say it's essential, but just like anything in life, you can say, how did Willie Mays become Willie Mays or Mickey Mantle, neither of whom had college degrees, by the way. But it's just sometimes the circumstances and facts come together and they produce somebody's

a rare talent. And it might be the case that you are a rare talent, but I think it's better to go with the odds. So, for example, when young people ask me, should they get an MBA or not, if you're interested in business, I say, well, it depends on how good you are, what you're doing now. You may be one of the two or three or four percent of people that don't need an MBA and that just have such a knack for what you're doing, that it's an opportunity cost going to business school that's not worth it. But for most people, and my three children, for example, they all have MBAs from good business goals. They, I think, correctly concluded that they were not so talented that without an MBA they could do anything in business.

business world that they would like to do and then an MBA really helped them and I generally think that's true for most people. Given the increase in tuition costs for a lot of these higher educational institutions, there's a lot of skepticism around the value, the ROI of that, but you serve on a number of boards for these institutions, Duke, Harvard and others. What has been sort of your inside scoop of how universities continue to add value? Are you, I guess, bullish on their impact? I don't think you can spend too much money on education. In the end, as a general rule of thumb, people who are highly educated tend to be more professionally successful and to lead more exciting lives. And that's another point that I also think that people overlook. You can't look at just how much

earning power you might have if you go to college or graduate school. You should view it that you're getting an education, which makes you a more valuable member of society and will make life more interesting for you. So you can't just look at the dollar and cents and what it would cost to go to Harvard Business School versus going to getting a plumbing degree or an electrician degree, because that's the false comparison. If you go to a great school and you're going to hang out with great people who are going to be successful in their lives and are going to expose you to new ideas, that's worth a lot of money. And you can't just measure your success by how much money you might make in your career. It's the exposure to ideas that I think makes people better humans than would

otherwise be. And that's why I encourage people to get as much education as they really can. Beyond your business success, I kind of want to talk about your media success as well, because you've had this prolific career as an author now, but also as a TV personality. Are there any heroes in media that you look up to or are you trying to emulate? Well, I'm not really a media hero. What I have is I do some interviews and they're picked up on Bloomberg and PBS and some other things that I pick them up, let's say, like YouTube. I basically stumbled into the interview business. I was elected the president of the Economic Club of Washington,

supposed to get business people to come in to speak. I found that they were kind of boring. I decided that it's on a whim. I would interview it or maybe make it a little more humorous if I could. And if people liked it, Bloomberg picked it up. And people seem to like the way I do it. And I just did one this morning of Jake Sullivan. I will probably do a few more soon of different kinds of people,

some athletes I've been talking to recently and others. So I try to do it by making it, you know, interesting and entertaining with some humor in it. But I can't say, you know, I don't make money by doing it. I just do it as a kind of a hobby. You do incorporate substantial amount of humor and also humility in the appearances and interviews. Where does your sense of humor come from? Well, if you go back and look at people who are humorous and have a sense of humor, they're often people that come from more modest backgrounds. There are people that can make fun of themselves or make fun of society. And you're going to generally come up. It's a humor is to some extent of defense

mechanism. And maybe by growing up, I didn't think I was handsome, smart, talented, a great athlete, or whatever it might be. And so I developed a defense mechanism of deflecting questions or dealing with things by developing a sense of humor. And I've been surprised as I've been an interviewer that people notice it a bit because it's always been part of my personality. But I guess now people are watching it more. But, and I also find that self-deprecating humor generally works the best. And, you know, making fun of other people, maybe it's funny in some cases. That's not my style. My style is generally to be more self-deprecating. And I have a lot of things I can be self-deprecating about because I have a lot of things that I, you know,

I haven't done that well. But generally, I think when you're self-deprecating, it takes a certain amount of security in your personal being. And I have a fair amount of that now. Maybe when I was younger, I didn't have as much. But now I can make fun of myself and don't think it's going to be the end of the earth or feel like I have to go hide away because I have some lacking of talents or so forth. It's always intimidating to interview folks like you because you're not only a titan in your field, but you're also a great interviewer.

Are there skills or is there somewhat of a craft to interviewing, much like there is to investing that you've kind of discovered along the way? I've thought about writing a book on how to interview. I have a style. It's not perfect, but it's a style I use. But I don't know how big an audience there is. When you think about it, I'd read it. There should be a bumper sticker that says,

punk if you don't have your own podcast. Because today, everybody's an interviewer. And as you may have heard me say, it's an interesting format. It probably began as a form of entertainment in the late 1950s, early 1950s in the tonight show and then began and then talk show in the afternoons with Oprah and so forth. But we don't have interviews of people 100 years ago, 200 years ago, 300 years ago. We don't have any interview transcripts of Abraham Lincoln, George Washington, Charlemagne, you know, Shakespeare. It would be wonderful. We had those interviews so we could see what they were like in that interview context. But people seem to like interviews if they're done in a lively way with some humor. They're not too tedious or not too boring in some ways. And people

seem to like it in part because you can read the interview and come back to it. You don't have to start at the beginning. You can start in the middle or you can start at the end. And so people seem to be interested in it. I'm surprised at how many people actually watch my interviews and come up around the world when I go around the world. And people come up to me and they like the interviews and many people think I do nothing else in with my life but interview people. I think I'm a full-time interviewer. I try to say, well, I do have another life. This is not my whole life. But anyway, the power of media is staggering. So like on your own podcast, no doubt, people come up to you from time and time and they ask you questions and they, you know, you're probably surprised at

how many people listen to what you're saying or interesting to people you're interviewing. And the power of media is just incredible. Well, I hope you do write that book. I'm kind of curious what prompted you to begin writing books at the age of 70. Yes, I'm kind of interested myself. I'm thinking, you know, why is it that so many people started writing books in their 20s, 30s, 40s, 50s, 60s? I guess it was.

I didn't really think I had much to say that people would be interested in. Probably wasn't secure enough to think that one of my ideas would be useful to people. I just began doing a lot of interviews. I thought I could do a backdoor way into book writing, like kind of taking my interviews, editing them down, and then, you know, and summarizing a bit. It's a different kind of style than you normally see. and I thought I could do it differently than other people would do it. So I tried it.

And the first one worked and the second one and third one. Now it's the fourth one. So I enjoy it. But I'm racing to get more done because I know at some point my brain will collapse and I won't be able to do this. And when you reach your 70s, you know that you're living on borrowed time to some extent. I'd like to shift gears and talk a little bit about your philanthropy because you've done a considerable amount of philanthropy.

You're one of the original signers of the Giving Pledge. what are some of your core principles when you're determining a philanthropic contribution? I don't have a staff because I don't really want my staff to company with ideas and I have to say no and make them feel bad and so forth. It's like 95% of what I do is an idea that I might have had. Now, most people, and I'm no different than others, like their own ideas better than like other people's ideas. So I kind of, most of the stuff is something I thought up and I convinced somebody that to maybe take my money. I have four principles. They're not brilliant, but they are one, start.

something that otherwise wouldn't get started. Two, finish something that otherwise wouldn't get finished. Three, have an intellectual interest in it such that I'll be involved with more than just writing a check. So I'll go on the board or I'll spend time on it. And four, and maybe most importantly, I'd like to see some progress in my lifetime. There are many projects that people come to me with where it's going to take 50 years or 100 years to see any progress. And that might be nice, but I just kind of prefer to see something happen a little bit sooner than that. So those are my four guiding principles. And generally, I tend to do things in subject areas I'm interested in. So we're educating people about American history, what I've called patriotic philanthropy,

buying historic documents or fixing historic buildings is one area that I'm probably known for. But most of my money probably goes to higher education and medical research, actually. On the historical document side, you spent 25 million on the copy of the Magna Carta. Why was that document in particular of importance for you? Well, there's 17 extant copies of the Magna Carta. This was the only one in private hands, and therefore the only chance any citizen could have to buy a Magna Carta. In this case, it was owned by Ross Perrault. He was selling it and using the proceeds to give to medical relief for Iraqi veterans.

I wanted to keep it in the United States. I would talk to the curator who was selling it the next day at Sotheby's, and they said that likely buyers were three people. One was from Russia, one was from Saudi Arabia, and one was from South Africa. All countries that are not ones that I would say it could be a tragedy of somebody in that country owned the Magna Carta. But the Magna Carta was the inspiration for the Declaration of Independence. And so the Magna Carta has actually had more impact on this country than it did actually in England. And in fact, when our charters were drawn up, or the charters were drawn up in England to create colonies in this country, the people drafting the charters tend to be legal scholars.

They also tended to put in there that you'll have the rights of Englishmen, which is to say the rights of the Magna Carta. And so it was an inspiration for people in this country, and therefore I thought it was important to keep at least one copy in this country. So far, what contribution has given you the most satisfaction or pride? Well, I would say I'm not sure there's scholarships generally. I mean, I give scholarships away to lots of people in universities I've been associated with, or I have a program to give scholarships to the best 50 high school students each year in the D.C. public school system. So when you can see people who could go to college or afford to go to college because of what you've done, that gives you a lot of pride. I am surprised at how many people come up to me and thank me for doing what I call patriotic philanthropy, fixing the Washington Monument or Lincoln Memorial and so forth.

And I guess it's because not that many people are doing that. A lot of people give money as I do to medical research or to cultural institutions or to education. I do all of that. But not as many people are doing things like I'm doing in the patriotic philanthropy area, and so it tends to get more attention more than it's probably to do. And so when people come up to you and say, well, you're a great American, you're doing something to help the country, you know, obviously that makes you feel good. And when my mother was alive and somebody would come up to me and say your son is doing something to help the country, obviously that makes you feel good because your mother's there. I'm kind of curious, your father was a Marine, I believe. And did that give you sort of some early patriotism in the household early on that's made this kind of impact or giving you that kind of drive around the philanthropic efforts? My father dropped out of high school to go into World War II when he joined the Marines. I asked him once why. He said, well, an next door neighbor had joined the Marines, and he loved

the uniform. But I don't think he was that familiar with what the Marines did when he joined. I wouldn't say it was any different than any other family. But I did, you know, in his honor, kind of restore the Iwo Jima Memorial, which is a Marine Memorial for Marines who died in combat, which he obviously did not do. But, you know, I guess I don't want to say I'm more patriotic in the average person, but I did probably appreciate the value of serving your country. I did not serve in the military when I was growing up. The Vietnam War was prevalent, and I was never drafted, and I never did anything to avoid the draft. I just never drafted, and so I did not go into service, but I did certainly respect what my father and his generation did.

Well, beyond the educational boards you serve on, you serve on almost nearly a dozen boards, I believe, in total, and not all of them are universities. In the book, you interview a lot of people. it seems like you've actually served on the board or committees with, one of which stood out to me, you serve on the World Economic Forum, and that might be of interest to our listeners. With an organization like the World Economic Forum, what is the mission exactly, and how do you define success? The World Economic Forum was started more than 50 years ago by Klaus Schwab, a man who's lived in Switzerland for most of that time, a German by birth, and he's an economist, and he basically came up with the idea of bringing people together in Davos once a year. It's obviously become a gigantic event now with

thousands of the people there. And what the mission is of the World Economic Forum is to bring people together to this talk about global problems, but also in the corporate context, he was a leader in developing the concept of stakeholder capitalism, which is to say companies shouldn't worry only about their shareholders, but they should worry about their employees, the countries and neighborhoods they live in, worry as well about their customers, and not just worry about the shareholders, and that's a concept that has taken off and now I think is pretty well accepted that you should worry more than just about your shareholders. But it's a very good forum for people from all walks of life and all countries to come together once a year or so I think it does

serve a valuable purpose. You know, what you described there kind of falls, I believe, into the ESG category, which is getting a lot of speculation, I guess, or Slack, mainly because you're seeing impacts of certain efforts. A lot of people are saying that Sri Lanka went into chaos because the fertilizer needed to be organic and it caused a lot of uprising and food shortages. So a lot of these ESG impacts are obviously goodhearted and hopefully we'll see more and more of them. But do you feel like there's a different timeline that we're working on or more realistic something or other that is that part of the idea of what you guys are discussing at these, how to impact, but also do it in a way that's not disruptive, I guess.

For those who may not be that familiar with the concept, ESG stands for environmental, social, and governance. And what it really means is that companies should focus on more than just making profits. They should focus on the environmental impact, the social impact, and the way that their company has governed, you know, is there diversity and inclusion and so forth in the company. There's a view now that maybe people have overdosed on ESG and maybe we're too politically correct and too worried about ESG. And a good example of that in the mind of some people is that Right now, people are so worried about ESG concerns with respect to the environment that oil drilling is down in many parts of the world.

And there's an oil and energy shortage in Europe, in part because Europe was probably caught flat-footed by what happened in Ukraine. And so there's a review now that maybe people shouldn't be so ESG focused and worry about more mundane things like getting enough energy to have ability to heat your house. I'm not sure I subscribe to that view, but there is no doubt. doubt that there is a revulsion against some ESG feelings, maybe that ESG was too politically correct. I think there's a good balance in there somewhere. And I do think the ESG is very, very important. In my own firm, Carl, I was a leader in that, and I'm very proud of that.

When you get a bunch of wealthy people together, there's bound to be skepticism. A lot of your peers and colleagues are now immensely wealthy. But I believe you touched on this in the book. You often hear that money cannot buy happiness. Can you tell me about the lessons you've learn from wealth around you and how you manage your own pursuit of happiness? Well, obviously wealth doesn't buy happiness. The richest people in the country are not the happy as some of them are tortured souls are very wealthy people. And there are many people who are not very wealthy at all that seem to leave very happy lives because they just don't have the expectations of being wealthy and they just put it out of their consciousness. In my own

case, I would say I'm a pretty happy person. I mean, I don't run around clicking my heels all the time and tap dancing to work as Warren Buffett probably does. But I, you know, I feel I've accomplished a reasonable amount in a modest period of time, and I'm reasonably happy with where I am in life. But again, happiness is something that is very elusive. It's probably the most elusive thing in life, which is personal happiness. There's no perfect formula for how do you get it. And so I can't tell people how to be personally happy any more than Thomas Jefferson could when he wrote about the pursuit of happiness. I don't know if I'd be so modest. You said reasonable accomplishments. I think if you look up accomplishments in the dictionary, your photo is probably

one of the them picture. I was blown away by the research what I was reading up about you. And I'm kind of curious as to how you manage all of that. That's the just kept sticking with me. What does your typical day look like? Do you have routines? I don't play golf, which saves a lot of time. I don't drink alcohol, which saves a lot of time. I, you know, don't go to a lot of movies, probably that saves some time. And I don't binge watch television, which probably saves some time. I may be the only person that doesn't subscribe to the Netflix that I know of. So I save time that way. But to be very serious, I have a number of people that help me with the schedule,

and I struggle very hard over events today and every day about whether I should do this event or that event. And I'm fortunate to be invited to do a number of events. And like, for example, tonight I had to choose between having a dinner with a justice of the Supreme Court, a very well-respected justice, who I do know, or doing an interview of the artist that painted the portraits of President Obama and Mrs. Obama. And I have a lot of those fortunate choices to be able to make. But I'm tightly scheduled and I don't tend to take weekends off and I don't tend to, you know, just lounge around.

So I guess that's how I do it. Now, clearly, I have scheduled conflicts and my rule is if I'm chairman of a nonprofit board, I will always attend the board meeting as the chair. You have to, I think. But I have some nonprofit boards where I have conflicts and I'm not the chairman. I may skip some of those meetings. The alcohol thing really stood out to me, as I understand it, you're a lifelong teetoler, if you will, never had a sip, which is just kind of mind-boggling, especially given where you

kind of operate in the world, right? You kind of came up in business. There's a lot of networking involved there. You're in Washington. There's a lot of suarez and all kinds of things that kind of revolve around that social lubricant of alcohol. How and why did that come about? I think when I was young, I was in a youth group in Baltimore, and the head of the youth

group was really trying to keep the young teenagers from drinking alcohol. I need to kind of talk a lot about it. And I also observed a number of people who would get drunk from time to time. And I thought it was unseemly. And I guess I liked not losing my control of what I was doing. And I thought if you drank a lot of alcohol, you get drunk inevitably. And then you can embarrass yourself or your family. So rather than do that, I just didn't do it. So, you know, there are a number of people who are teetoters, maybe some are Mormons and I'm not a Mormon, but I haven't missed anything. And, you know, whether alcohol helps you or through life or not, I don't really know. But I'm pretty happy with, you know, drinking tea or things like that. It's okay. Well, it certainly hasn't

stifled you. I mean, I just find it very impressive. It was one of those things that just sort of built on itself after a certain amount of time. You're like, well, I've made it this far. Why start now? Yeah, I don't see. Look, I mean, you know, I'm not sure that I have observed a lot of great things that have come out of people who drink a lot of alcohol. Now you can sip it, I guess, and I do realize a lot of my friends enjoy wine and so forth. And I realize some of the greatest writers in the world have written some of their best things when they were probably half drunk. But I've just sort of, you know, I can't do everything. And one of the things I can avoid doing is taking time to learn the best wines or also to spend time drinking. And so it's not a big loss

because that's nothing I really ever had. You mentioned your mom being proud of you when you were being philanthropic. you're doing an interview of an individual, of any kind of any industry, I've noticed that you often ask them if their parents were around to witness their success. In addition to asking you the same question, I'd like to get an idea of why this is such an important question for you. You know, what is life all about? But, you know, trying to have a successful, enjoyable life and one of the things that life seems to give as the greatest pleasure is seeing your children grow up to be successful, happy, and healthy.

It's not that easy to do. You've probably heard me say it's one of the hardest things in life to do is to raise children. And I think one of the greatest forces in the world is the force of pride that a parent has in seeing a child do something successful. So I like to ask people that because it also shows their humanity. And people generally open up. All of a sudden, they might be very tight-lipped in the interview. and I asked him if their parents saw their success and all of a sudden they light up and say, well, yes, my parents did. They were proud of me. And or some I'm speaking about regrets that

their parents died young and they never had the pleasure of having your parents take pride of them. So it's just something that I'm always interested in. And my parents, they never had high aspirations for me. They were very modest, blue-collar workers. So as I began to give away money and became better known, I think they did take some pride in it. And I'm glad that my parents lived to see what I did. Well, David, I want to be mindful of your time. I agree. greatly appreciate you coming on our show and sharing everything you did today. It was one of the more exciting interviews for me because there's so much to cover with you and so many different aspects. We covered a lot of them. Hopefully we'll have you back to cover some more.

Thank you. Bye. All right, everybody, that's all we had for you this week. If you're loving the show, don't forget to follow us on your favorite podcast app. And if you'd be so kind, please leave us a review. It really helps the show. If you want to reach out directly, you can find me on Twitter at Trey Lockerby. And don't forget to check out all of the amazing resources we've built for you at the investorspodcast.com. You can also simply Google TIP finance and it should pop right up. And with that, we'll see you again next time. Thank you for listening to TIP. Make sure to subscribe to millennial investing by the Investors Podcast Network and learn how to achieve financial independence. To access our show notes, transcripts or courses, go to

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