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Henry Singleton

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25

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2020-02-10

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2020-02-10

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1

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1. “His shareholders' billions. I don't know if he actually made billions personally, but I just think this is like, that's just the way I look at it. And that's why I always say, like, I think it's the old Seth Goden quote. Like, a book is a bargain. It's a screaming bargain. Like for 20 bucks, you could find an idea that changes your life. Like, I believe that statement to be true. And we're seeing Henry demonstrate this here. So let me read this section to you. Henry talked to me on several occasions about the book by the former chairman of General Mortys Corporation. He told me he had learned a very important concept from that book, which he wished to use in the growth of Teledyne. He explained that in about 1921 or 1922, after World War I and during a very difficult economic time or recession, General Motors had needed additional funds to finance her growth and had a plan to sell bonds to the general public. The bond sale was a complete failure and the chairman had written his book.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

2. “Yeah, I'm going to invest. If I think there's a good idea and it's going to cost me $100 and maybe 15 hours to read the book, what happens if I read the book and I don't find any good ideas? I'm out 100 bucks in 15 hours. But I could find an idea like Henry is about to find here in one of these books that literally will make me 20,000 X return on that investment, whatever the number is like over the life of your career, a lot more. This idea made Henry billions.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

3. “One, if you're interested in it, and obviously if you like the podcast I do, it's a good indication. Oh, wow, that's interesting. There's usually more interesting things, right? Because I can't tell you everything that's in the book. It'd be impossible. These books take hours and hours to read. But I would say is like when I thought about like who could I recommend this book to? Like if you're already running a company right now no brainer if you're an investor that analyzes companies and that's how you make your money no brainer. The reason I say this is because like one, I don't look at books as costs. I look at them as investments. Okay. Now this $30 this book is not $30. You might pay $200 for it. My whole thing is like, well, okay, the people we study, they're masters at capping their downside and leaving their upside unlimited, right? Almost every single founder we've analyzed does that. And so in this case, like.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

4. “Another thing I learned from Henry that I want to apply to my own life. He said the note myself Henry knew where he could create the most value and focus on that are you doing the same? That's a question to myself, but it could easily be something you might want to ask yourself. Like, are you focused? Like, where do you spend your time? Is it where you create the most value, where you're like you have whatever your unique skill sets might be? A lot of times you'll find out what we're best at and where we create the most value is we're not actually dedicating the most time to it's a very, I would say common and bizarre occurrence. So it says, Henry, this is Henry realizing what he's going to be best at. This is where Roberts is going to start running like the operations and Henry's going to focus on capital allocation. Henry spent hours studying stock and bond markets and was anxious to have both the funds and opportunity to pursue his life interesting word, life interest. But couldn't do that at the beginning. Has to do that later on. Doesn't have the, they started the company 450 grand. Can't do that. He's got to wait till he's got actually a lot of companies, a lot of capital rolling in. So first things first.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

5. “Debating this, and I'm not debating it. I've already analyzed this. I know I believe in it. I'm going to move forward. So he says, determined to succeed, they moved cautiously at first using their limited cash carefully.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

6. “Brain time to just think and run through it. And that's the problem. Every time I'm bored. I have this instinct. Oh, let me pick something up. Let me add something else, like some noise, whether I'm reading tweets or just even listening to music sometimes. We're just like, no, no, why don't I just have nothing and just listen to my own mind? So that's really like, it's just super motivating for me. Like this person, like talks about, he didn't pay attention to Wall Street. He didn't go to conferences. He didn't do any of that. He just said, hey, I'm going to think from first principles about what I'm doing. I'm going to identify the single best way to do this. I'm going to compare the opportunity costs that I have, not only in time, but in money. And then I'm going to analyze all that and I'm going to move forward with conviction. And that is super, super rare. Hopefully that made sense. I wasn't obviously I didn't have that written down, so I don't know. Hopefully that made sense to you. All right. So we have his first acquisition back to the book. But just this whole idea is like everybody else is.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

7. “The ability to be willing to isolate yourself and focus on what you're working on, which I think is extremely hard in today because we're inundated with all these centralized information networks. And the problem is, yeah, you can learn a lot of things from them, but also everybody's getting access to the same information. And so that's why I study most of the books I do. They're old books. How many people do you know have read this book? Very, very few. way less than the people that read Twitter today or were on Facebook or Instagram or any of these other networks, you know. And so with Singleton, it's like he's giving me courage and a conviction to be willing to say, hey, you know what? I can ignore most of that because most of it's noise. And if I just focus on things that are important, you know, he's analyzing past companies. He's reading financial statements. He's doing all this other stuff. And then he's giving his time and his.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Even create this mosaic, and then you add your personality and you have something unique. I think that gives you a huge advantage in life. And so with Henry Singleton, ever since the ability to, I didn't finish, and I guess I'll never finish, but the ability to constantly learn and then teach what you learn of Charlie Munger and Warren Buffett. And then from Henry Singleton, it's that singular focus.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

9. “Billion dollars like to private company. So you have the clarity of thought of Steve Jobs, the dogged persistence of James Dyson, the ability to, the conviction to invest in yourself like George Lucas, could you study his history of him saying, hey, I know that's how you guys make movies. I'm not doing any of that. I'm going to control it and made him a billionaire. And I don't even have to be a billionaire. I'm not trying to emphasize too much the financial part. It's just like being in control of what you do for half the time that you're actually living. So you have that. You have the ability to maintain and control the cost that we learned from Andrew Carnegie and Henry Clay Flick. Henry Clay Frick. Gentlemen, watch your costs. It's one of the quotes in those books I never forgot. The resourcefulness of the Wright brothers. So what I'm doing here, I'm trying to like take all these individual ideas that I learned from these people and then you combine.”

   2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

10. “Stuff I've learned from reading these books, I'm trying to pick out individual traits that I need to improve on and that I want part of my life. I don't have a list and maybe I should write it down, but like off the top of my head, like, okay, why have I done a million in one podcast on Steve Jobs? Because I've never run across another person that had the clarity of thought that Steve Jobs had. I want that. James Dyson, my favorite book that I've read since for this podcast. I talk about over and over again. His dogged persistence. He did 5,127 prototypes of his vacuum cleaner before he got it right. I think he started working on that project when he was 35 and then didn't have a vacuum cleaner that met his standards that he owned completely to his like 44. How many, I think it's actually more than that. I think it was 12 years. I can't remember exactly. And that dogged persistence made him, you know, today James Dyson owns 100% of Dyson. He has a net worth of $13.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

11. “I'm using like when I read these books, I'm like taking different things from all the people I study and traits I admire. Let's ignore half of this is learning things I don't want to do, right? But I'm not going to focus on that right now. When I think about”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

12. “But I read that I emphasize weird the wrong words here. What it's saying is that what became his dominant fact, the faith that he had, so he knew something, right, and believed in it. And then while at the same time, the important part of that sentence was he had already arrived at this conclusion and he was willing to bet his career on that, right? Even while other people were still debating it. That is super important about Singleton. This is why I keep talking about his singular focus, how Arthur Rock. I don't know if you know who Arthur Rock is. He was one of the first venture capitalists of not only did they sit on Teledyne's board, but Apple's as well. And so when he says, he reminds me of De Gaulle, his singular, like, that's the biggest, like, I'm in some degree.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

13. “That gives me goosebumps. And I think I've never forgotten. And it said George Lucas unapologetically invested in what he believed in most himself. I think that's the only way to live life. No one cares about you as much as you care about yourself. Maybe your mom probably does if you still have a mom. You know, like, but other than that, outside of your mom, no one else is going to care about you as much as you care about yourself. And I think just investing yourself as a no-brainer. So he says, you know what? Sorry guys, you don't agree with this. This is a strong conviction. This is when he jumps to start his own company, okay? So he says They started the venture, which is with a ritual capital of $450,000. I already covered that. Their first acquisition was a small electronics company. This small electronics company gave them a plant, some manufacturing facilities, and a small cadre of employees. The company name was changed to Teledyne. This is from a Forbes magazine article in 1968 says his early faith that semiconductors would become the dominant factor in future electronic systems, even while this was still being debated by others in the industry. There's some quotes I can jump over that.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

14. “I'm learning from the life of Henry Singleton and something I've never stopped thinking about is like I need to make sure I'm doing the work so I could trust my own judgment because if I can't trust my own judgment I'm never going to be able to accomplish what I want to accomplish okay so He never lost that focus. Has groundwork for those ambitions? He started out with two years at the University of Texas and then he joins the United States Naval Academy. That's where he meets George. This is pretty crazy. Henry ranked first in mathematics at the Naval Academy in our class at 820 students.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

15. “450,000 initial investment to sales over 450 million profit of 20 million and a market cap of 1.5 billion in eight years. That is bananas. That's also that eight-year period they're talking about happened in 1960s. That's where he buys, takes advantage of his fact that conglomerates had favorable valuation to PE and bought 130 companies. So that puts us around 1968. I think 1969 or 1970s the last year he ever bought any company. And so that's why it goes back to the eulogy where he talks about he studied not only like how did Ford build his company, how did General Motors build their company, how did General Electric build their company, but also how did companies succeed through acquisition? Buffett talks about this in his shareholders a lot, that most people don't succeed through acquisition. He talks about like you're kissing.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

16. “What they bootstrap their startup investment of $450,000 into a company with annual sales of over $450 million in an annual profit of some $20 million and a stark stock market value of $1.5 billion. That is insane.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

17. “Am I maximizing and getting the best returns on those resources? Because that's why Singleton Y Buffet said Singleton has the best single record in American business. Listen to this. Within eight years of founding Teledyne, they had bootstrapped their startup investment of $450,000 into, well, first of all, they're using the word bootstrap there, I think, today that has a different, they got investment of $450,000, right? So, this is what they did with that investment. That is very, very rare today. Within eight years of founding Teledyne, they bootstrapped their startup investment of $450,000 into a company with annual sales of over $450 million. What?”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

18. “The book uses the, and William Thorndyke uses this to describe him. They say that he was a genius at capital allocation. I would take that a step further. I think he was a genius at resource allocation. And sometimes that's money. Sometimes that's people. Sometimes that's ideas. But what I would say is like, we have to take that a step further, not only in our work, but also in our personal lives. Like, I don't think that you can be financially disciplined and really good at resource allocation in your work. No, I shouldn't say you can't because I know people that do this. It's weird to me that you can have people that are very financially disciplined in their work, really good at allocating resources. And then when it comes to like their personal lives, they don't apply those lessons to their personal lives. So just think like when you hear the word capital allocation, think of one resource allocation. And then don't stop there. Think of like, look at my personal resources.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

19. “I always say that quote that more companies die. It comes from, I think David Packard that more companies die from indigestion, starvation. And so there's a lot of people. It's like an abundance of money right now, right? It's like sloshing into systems. And we see some what happens when you're not forced to maintain financial discipline. Founders can confuse themselves and they make very silly choices, silly decisions. I think this applies not only to businesses, this applies to investing, this applies to your personal life. And one thing about... Singleton is like he was, they always say, like.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

20. “As suitously, I can never pronounce that word. But we're subject to a great number of outside influences on our businesses, and most of them can't be predicted. So my plan is to stay flexible. So that's a direct quote from Henry there. And what Henry's essentially saying is, hey, the world is very complex. And I think he's 100% correct about what he's saying. He's like, listen, we're subject to a great number of outside influences that we have no control over. So I'm not just going to have this rigid plan. I'm going to be flexible and just rely on my own intuition and judgment. And so now we have Henry talking about that. He says, my only plan is to keep coming to work every day. I like to steer the boat each day rather than plan ahead way into the future.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

21. “And they have now become commonplace in the business world. He was once criticized for not having a business plan, Henry replied that he knew that a lot of people, he knew a lot of people running companies that had very definitive plans, they followed.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

22. “Especially reading stuff like this, and you'll just be constantly smacked in the face of like, wow, like the amount of opportunities you can pursue, like you can't obviously can't work on all of them, but they're essentially limitless in the opportunities we have to choose. I'm not being clear at all here. The opportunities in which we have to choose from are limitless. You just have to look for them. All right, so let's go back to the introduction, or I guess starting an introduction. I haven't even got there yet, right? So now this is just, you know, Robert's writing about Singleton. And he says, over the years, a great deal has been written about Teledyne and its founder and guiding genius, Dr. Henry Singleton. And this is, I love that he says this right up front. He says, genius is an oft misused word.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

23. “You know what it is? We forget, let me say we. I forget how large the world is in general and then how big total global economic activity is and just how much like opportunity there is in the world. It's way more complex for any single individual to understand. And so like just like when you read Buffett's shareholder letters, you're like, oh my God, there's a candy company that makes $90 million in profit every year. And they do, you know, 90% of their sales in one month. Like that's a weird thing or like there's all these like there's there's businesses in this book that I will never understand right but they'll produce like one piece of equipment for say like for the radar detection in military aircraft and they built a wonderfully profitable business around that like you just constantly reminded that that opportunity is limitless and if you feel you're in a place where you can't identify like a business you want to start or an area you want to work in like i just recommend reading”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

24. “He fired his business development team. This was the group that was finding acquisitions for him. And he says, and Singleton focused on optimizing his existing businesses, then he began a pioneering program of repurchasing his shares over the next dozen years. He purchased 90% of the shares outstanding. He showed an amazing ability to pivot as opportunities presented himself.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source

25. “That podcast yet, I need to give you an overview about Henry Singleton and why he's made a huge impact on the way I think ever, and this has only been a few weeks that I even knew of his existence. And I just cannot stop thinking about the way this person approached business and life. But this is William Thorndike giving us a basic summary, I would say, of Henry's career. He says, for the first 10 years he ran Teledyne, conglomerates with the social media companies of their day. Meaning they traded at extremely high PEs. Singleton used the inexpensive currency of his high PE stock to buy 130 companies. He did that in about a decade. At the end of that period, this is around 1969. At the end of that period, a couple larger conglomerates missed earnings and the entire sector got pounded. PE multiples came down and Singleton never bought another company.”

    2020-02-10 · Founders · #110 Henry Singleton (Teledyne) · IDENTIFIED FROM THE TRANSCRIPT · source