Billionaire David Rubenstein: This is the most elusive thing in life

all right let's take you to the corner of wool abroad right now volume not what it normally would be as a kickoff week here this is of course the week we expect the Federal Reserve when it wraps up its latest two-day meeting on Wednesdays and Hike rates another three quarters of a point uh some are betting it could be as high as a full percentage Point get back to sort of the Paul volcker type level where we used to see him raising rates one full percentage point at a time uh we shall see in the meantime I do want to get the read on all of this from David Rubinstein of course you know David uh we co-founder the Carlisle Group very successful multi-billionaire which could explain how he got other successful billionaire investors to talk to him he merely calls they pick up the phone say oh it's it's David it's not Cavuto so yeah sure I'll be happy to talk to him uh the book is how to invest uh Masters on the craft David Rubinstein good to see you my pleasure thank you for having me I love having you I I want to get into the nitty-gritty on some of this and some of the names that you chose and the people that you reached out to but first off on your expectations this week and what the Fed does move another three-quarter Point well you mentioned Paul Bowker Paul volcker and the FED increased interest rates discount rate 200 basis points over one weekend and they didn't really Telegraph it and they didn't quite explain it now the world's different they Telegraph exactly what they're going to do and they explained it afterwards the FED has been telegraphing 75 basis points if they were to go to 100 basis points I think it would be shocking to the market I know some percentage of people in the market 14 or so think it might be 100 basis points but I think they wouldn't want to shock the market that way so if they were going to do 100 basis points I think they would have telegraphed it by now um they had expressed alarm about what's going on and that was what so many out after you know Jerome Powell's remarks in Wyoming a few weeks ago uh but the market reaction did Paul volcker worry about how the markets would digest what he was doing what is this Obsession we have I don't think that well there weren't as many TV shows and as many uh people who knew what was going on in the market those days because we didn't have instant access to the markets for everybody today everybody follows it all over the world it's a different situation but I think right now the FED is likely to think if they were to do 100 basis points the reaction would be that they know that the inflation is much worse than people think it is and therefore I think it would probably depress the markets even more than they were to press last week when you get gathered and talked to some of the successful most successful investors on the planet the one thing without getting into the details just yet is is that there what is a common theme to a lot of most of them um this was not their first choice or education I mean and a lot of them much like yourself didn't come from money at all right most of them came from Blue Collar backgrounds or maybe lower middle class backgrounds many of them had no interest at all investing Warren Buffett is an exception he was interested in making money investing as a young child but that's the exception many of them like Stan drucken Miller were interested in other things I think he thought he was going to be a forest ranger or something like that so many people were interested Jim Simons was going to be a mathematician right I was going to be a lawyer so you know you just we drifted into it so let me ask you a little you talk about what they all have in common uh and they're some of the finest you know investment Minds in the planet but you say great investors do not accept conventional wisdom they see what others do not and they're prepared to take the risk of being proven Wrong by going against conventional wisdom so I get that part but these days a contrarian you know could could be someone who is Bucking that Trend or sees better Bluer skies ahead but what well right now for example the markets are depressed right so many people are staying back and not investing in the markets but now maybe a great time to invest you're getting things at a lower price now you're not an absolutely at the bottom perhaps but I think trying to time the top of the market and the bottom Market is a Fool's error and generally the great investors don't worry about that they do the analysis they think the company's good they're not going to worry about the markets because the markets will catch them catch up to them eventually do they care though that their views like Ray dalio comes to mind he was here not too long ago but he was talking about just not knowing how high is high in interest rates and I know he recently pinned it we get over four percent on fed funds we could be looking at a 20 hit in the markets on kind of simplifying what he said but that is not a wildly contrarian view with the markets I mean a lot of people are pessimistic so where did they differentiate well some people now think that the market has kind of bottomed out and some people think it could go down as Ray said the other day and Stan druckenmiller said something similar not too long ago but nobody really knows what they tend to do though is make predictions for a long time out and you know you can't invest for that long a time periods they have to make decisions every day or every week or every month so you know and they're not right all the time either remember great investors don't always make the right decisions they like to own up to their mistakes they get out of them quickly and and so nobody's perfect if you are perfect as an investor you've never made a mistake you're never really not an investor so in Rucker Miller's case George Soros shorting the pound was a unprecedented type of move back then to short the British pound and then make a billion dollars plus honorable those are rare events aren't they well in that case a billion dollars then was a lot of money when John Paulson did his bet he made 20 billion dollars which is a staggering sum a billion dollars so essentially the housing crash that's correct and uh they saw George Soros and Sandra Miller saw the pound going down and and and separating from the rest of the European currency so they basically um shorted that the pound in effect they made a billion dollars a staggering sum at the time and basically George soros's view was well maybe we should put even more in because his view has always been if you have a great idea double down or triple down because how many great ideas are there all right but when you talk about great ideas do they have to be altruistic in in pursuing these ideas well I think uh they don't every time you have a great idea you always pursue it because sometimes you have other priorities and so forth but generally when they have a great idea they do research they think they know what they're doing and they make a bet but if they think they're wrong they will correct it in other words great investors say I made a mistake I'm going to get out of it and go into the next thing people are not a great investor sometimes uh hold on if they do it in a woke manner isn't that the big push today to do you know make investments that only make you rich but can enrich Society well I don't want to get into the woke thing I don't think most greatest year though you actually do you say until relatively recently investors were in truth not obsessively focused on social impacts of their activities getting the highest rate of return level of profit was the invariable go but you do argue by extensions what they do does help Society it it does what they do help Society because if you make a bet like on moderna that helps society and you make a good bet you're helping the economy generally you're helping society and you're doing creating jobs on the wokeness I would say some people people are very concerned about ESG factors but let's suppose you're investing you personally well of course I'm concerned about the environment I'm concerned about those things but does that drive everything I do well it's a factor but it was not a factor 20 years ago and 20 years ago nobody paid attention to ESG or very few people did now everybody does but people that invest for their own family offices they're not subject to public shareholders knowing what they're doing I don't think they're as focused on ESG in some cases as people that have public disclosure they have to make all right so this pushback against some like you know BlackRock was getting this pressure from another number of states and Mayors are saying well wait a minute this woke investment strategy where you wanted to de-emphasize fossil fuels on that's going too far that's what some people have said and there has been some pushback agree with that I think in some cases some things may have gone too far but generally I think ESG is a good thing I think we should worry about social impact of investing but that shouldn't be the only thing you worry about so when you look at these guys in their success and all they didn't go into this with those type of goals in in mind probably not except for one person in there David David blood he did and he he basically built an organization with Al Gore that was assigned a focus only on ESG all right so do you uh I'm not that great an investor compared to those people all right but you were a multi-billionaire so you've done something right do do you now you've given back a lot to society that's an understatement do you think and do these people you profile do they give back is that something that's important to you when you when you write about them absolutely first of all except for unless you're investing for an endowment or a college endowment you're not going to get wealthy in that business but if you're investing for private investors you're investing for yourself and you're really good you're good enough to be in that book you've made a lot of money very few people who are in this book are obsessed with spending the money to make great art collections build great houses they really care about society and they do give back and most of them are great philanthropists but they also like beating the other guy right they like to keep doing that right well it's the intellectual wits I mean you want to gain you want you want to you know when you go do any game you want to win you play tennis you want to win you play golf you want to win they want to win at investing so that's not unusual but when they win they make a lot of money and when they make a lot of money they tend to give it back to society they are the greatest philanthropists we have Elizabeth Warren doesn't see them in the same way that's probably true do you well I would side more with the investor side than maybe with her all right so when she goes after guys like that and by extension you know some of the most successful people on the planet Jeff Bezos and you know we could go on and on that Elon Musk goes back at her and and says what have you done what do you say well I don't want to attack Elizabeth Warren I would say she recognized and she's a very smart person because a Harvard Law School professor she recognizes them when she says these things the laws are not going to change that much because she's really not able to get a majority of the Senate to do what she wants if she was in majority or she was President United States she may have different positions you have different responsibilities and the time being I think her views are not likely to be the dominant abuse in Washington so David when I didn't want to belabor this but when this argument is that the rich have to pay for their fair share or that's the whole argument that you know you hear from Joe Biden a lot that the rich are finally paying their Affairs share and all this how do you feel about that well I'm paying a staggering amount of money but I also think that sometimes you look at the percentage that people are paying you don't look at the quantitative amount let's suppose Bill Gates is paying two billion dollars a year in taxes but the percentage is smaller than your percentage well is that still good or bad I mean he's contributing a lot of money because he's paying a quantitative size amount you just shouldn't Focus only on the percentage that's not the only way I think it's fair to look at Warren Buffett at all because his secretary pays more in taxes than he does well I've told him he should raise his secretary's salary okay very good let me get you it said because you've given ought back and we don't mean the light of that but quite a bit back and one of the biggest applications is historical documents you just recently bought a copy of the Magna Carta it was of 23 plus million for that it did cost about that yes but that was a number of years ago and I put on the display and it's permanent display of the National Archives and I mean I buy historical point out you don't just stuff these in a drawer in your home and it's nothing to see nothing is in my home okay um everything is on display somewhere and I want people to learn more about American history because if you learn more about American history maybe we can make avoid some of the mistakes in the past and we don't know much about American history right now all right the controversy you ran into is uh in looking at history and you were very vital in refurbishing Madison's home in Vermont and I think by extension Monticello Thomas Jefferson and also bringing this other side to their past their slave ownership and all of that and that it it became a a distraction for a lot of people that you you sort of glossed over their accomplishments and focusing instead on that what you're referring to is about 10 years ago I gave money to help repair Monticello and help repair Montpelier James Madison's home and since then people have gone on tours there and the criticism was that well tours now emphasize that these individuals were slave owners and I think that's not really fair there are many different tours that go on there some are for people who want to hear about the slavery summer people don't want to hear about that they have different tours but as a general rule of thumb I think it's important people know that you're good and the bad Jefferson was a brilliant man and so was Madison they're responsible for Declaration of Independence and Constitution but they were slave owners and we should recognize that now I've not gone to these homes since you're they've been refurbished in all your hard work there but the readings you get on them is that the people who who conduct the tours that's the first thing they get into do you think that's a mistake that's not true I mean there are some tours in some places where people say I want to hear about slavery and they get a special tour but the general tour that average person gets there is not focused exclusively on slavery it just isn't true so this sort of re-packaging of history as critics have called it you don't subscribe to that well when you were a boy and I was a boy we learned history that was different than we now know where the facts are we we didn't learn everything about the founding fathers then they were terrific people but they did make some mistakes Society wasn't perfect and we and all leaders make mistakes I think it's important to learn the good and the bad that's what history is all about learning the good and bad so we can avoid the mistakes in the future but fair enough those who take down statutes of Jefferson or Madison you know even some have done this with Lincoln um or George Washington too far well I think I don't know that they've taken a lot of statues of Lincoln there's been some discussions of it but uh statues that were put up expressly to promote the idea that that slavery was a good thing is probably not a good idea to keep those statures up but if you have a statue that was put up of someone um that isn't designed to promote slavery like Thomas Jefferson there's a statue of him in Washington it's not designed to promote slavery and I think it's appropriate that there'd be a Jefferson Memorial all right um let's go back to present day and what's going on in these markets and all when you talk to the Draco Millers and some of these others and and get your lay of the land um even Sam's L with real estate did you get a sense that they were saying we're through the best of times for the time being now we're going to go in for some real adjustments no um Sir John Templeton a famous investor once famously said that the biggest mistake in the investment board is saying this time is different in other words everything has happened before so I don't think the great investor thinking this hasn't happened before yeah there's always different challenges but I don't think any of the people I talked to thought that the world was going to end tomorrow or all of a sudden capitalism was going to end all of these people are still at their desk they're still trading and they're still making money so when you look at those who've had great successes to a man or woman a good a good many of them had a knack for math you know right um and one is I think he said he could someone economics professor at University of Michigan what have you but but they did have a basic skill set there but invariably what they're doing now was not what they thought they'd be doing that's true but what they all have in common is an intellectual curiosity to be a great investor and to be successful in most things intellectual curiosity helps a lot and so they're always reading even if it's not directly relevant to what they're doing that day they want to read read because you never know what piece of information might be relevant to what they're doing in the future so all of them are really intellectually curious and that's one of the best ways to be a great investor be very curious keep asking questions and never give up learning you know what that's the one thing I do like I need to said that the Workaholics they love and their passion and they love what they do but they to me I read into that they just can't stop and smell the roses and the good life and all that but the smell of roses implies that playing golf is more pleasurable than investing for some people investing is pleasure you know I get more fun in my office sometimes and I do playing tennis because I always lose in tennis but in my office I'm not losing so much so I think what you and I do for a work is called work but for many of these people it's pleasure they love doing it more than they like doing relaxation things no I think you're right about that enjoy what you do and then it should be self-evident but a lot of people you know a lot you hear about these people who are quietly quitting and I was thinking of you in your own workout where you came from I mean not only the wrong side of the tracks nowhere near the tracks and and your great success but you enjoyed what you're doing you worked hard at it a lot of the people you talk to here worked hard at it but do you worry about the work ethic that's evidencing itself now a lot of people yeah the hell with it the hardest thing in the world to do is Achieve Personal happiness that's the most elusive thing in life and if you achieve personal happiness by working hard at something why why interrupt it and say no don't work hard and don't have a good time doing that go play golf or go play shuffleboard I don't think that's a good thing to do I think if you enjoy something without being obsessive about it to the point of hurting your health but if you enjoy it it's nothing wrong with it it's pleasurable so part of your enjoyment is history you're walking encyclopedia and you've actually put money down as we said to buy some famous documents to do that but a lot of people in this country barely know who their own congressman is let alone Senator some of them might be taxed at who the treasury secretary is that worry you it does a survey of Americans recently showed that in 49 states a majority of native born Americans couldn't pass the basic citizenship test that foreigners have to take and we're to become citizens so it's not good you know and the theory is of history is you learn from the past but if you don't know what the past is how can you learn from it very good can you stick around with us a little time honored to have him David Rubenstein here co-founded Carlisle Group a very good book that sort of steps back looks at the key to success and what it takes to be a success besides their investment strategies you get inside their heads and what makes them sort of be the odd Ducks albeit very very brilliant ducks that looks at this world entirely differently stay with us you're watching Fox Business over the years he's been one of my favorite guests of course he talks to a lot of folks here but David rudenstein put together a great book right now the co-founder uh of the Carlisle Group how to invest Masters on the craft talks to the the mightiest and the best at this business who haven't seen something of that hacked among the the people profile in quite a long time back with us you know David one thing that we look at now and just after these 12 days of mourning for Queen Elizabeth II is that well I third one commentator say uh England's best days are gone the Empire that she took over when she did 70 years ago is very different than the Britain that remains and a lot of people go back that's the USA in slow motion right now what do you say to that I think that's an exaggeration and not likely to be true remember England was a small country in the North Sea of of of you know the world it didn't really have the location to really control the Empire that it really had and it didn't have with that with the population to do it either United States has a gigantic population we're the third biggest country in the world population wise and we have wealth far beyond what actually England had so I don't really think what's happened to England is going to happen to us in our lifetime or in the foreseeable future you know nothing is permanent but you know China has 1.4 billion people so we have you know a quarter of the population more or less but for the foreseeable future next 20 30 40 50 years I think the United States is going to be a dominant economic and technological and military power I think that some said we've lost our fastball we're not like the greatest Generation but most people died on the vine yeah but most people strike out strike out on curveballs and and Sliders and not the fastball fastball you can hit other home runs so we I don't think we've lost our fastball I mean we have 50 million immigrants in this country 50 million immigrants the next highest country in the world with immigrants is Germany with 15 million why are people want to come here because it's still the greatest place in the earth it's got a lot of challenges but it's greatest country in the world so I don't really think uh it's fair to say that we've lost our fastball we're still unique and people want to come here um again your great history Bob if you put your money with your mouth is trying to sustain that history remind people about that history in the past um do you have a favorite President well to my in my way of thinking the greatest American of all time was uh was Abraham Lincoln because he kept the country together most people would have said oh South you want to go away you want to keep slaves fine I'm going to run the North and that's what almost any other person would have done so he held the union together and then his eloquence in the second inaugural address and in the Gettysburg Address is something that lives on forever so I think he was our greatest president and our greatest American followed closely by George Washington who got everything set in motion and and he did it when he was really setting all the precedents so those are two that are transcending everybody else in my view um Joe Biden seemed to hold out the possibility he might not run for re-election in the 60 Minutes interview what do you think of him and where things stand well I've known him for a long time I worked for President Carter he was the first senator who endorsed uh Jimmy Carter when he was running and so I think that's right I forgot that yeah I think Joe Biden uh you know what's he supposed to say he said in effect in the interview if I say I'm running then I have all kinds of legal constraints there's the same thing with Donald Trump if he says he's definitely running but he can be a very successful one-term President James Polk was a very successful right well I think George Herbert Walker Bush was a successful one-term president I think Jimmy Carter despite the criticisms of the time was a successful one-term president agree so you can be a very successful one-term president but I think George George Herbert Walker Bush did a lot that he didn't get credit for the time so did Jimmy Carter in in the case of Joe Biden he's got to deal with the age issue but it's it's too early for him to decide and he can't say yes I'm going to run or not run it I think it was too early to say that is this a young man or a woman's job do you think well I'm 73 so I can't run I'm too young to run so I think I need you need somebody a little bit older than me I need more experience in maturity before I can run right uh full disclosure here we both talked about Jimmy Carter I was an intern uh Virginia card of course he was a big cheese uh I don't know what he did with his life after that but apparently everything worked out okay David Rubinstein please the book how to invest Masters on the craft gives you an upbeat view of how even in the most dire times if you Zig well everyone else is zagging you could do quite well against the consensus stay with us

2022-09-21 22:54

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