YouSaid · the spoken record

Stephen Schwarzman

lines on the record: 75
first: 2019-11-12
most recent: 2019-11-12
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“The firm ran into trouble because there was people in the trading department exceeded limits on certain type of security and it ended up that interest rates went the wrong way. And we lost doubly on the trade and the impact of that on a mark-to-market basis would have gotten close to wiping out the entire firm's equity and the way financial firms work is that if you have no equity and people have lent you money to support your balance sheet and they realize there's nothing underneath them, then they panic and call their loans and everyone calls them at the same time more or less than the firm collapses. And so that's what we were facing. So it's important that you either bring in additional capital very quickly before anybody knows you have that kind of severe problem or you have to end up selling the firm on”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“I think it probably makes you appreciate data less. Someone who is trained in my era, you know, every slight nuance in a number is multiplied because you had to fight to produce any number. So you felt everything viscerally. And now you can just look at it on a page and see some differences. But somehow that's different than going through the process of creating the base data because it was much easier to use your mind to search through that because you completely understood where every number came from as it was being produced. That's different than having it instantaneously produced. So, I can't tell you the full differences, but I know it's different.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“We were almost like in a guild from the Middle Ages. There were no calculators. This is my lifetime, and I think I'm young. I mean, you had slide rules. You had almost no databases. If you did a project where you needed stock price endings for the month or a week, you went to the basement and they had a stack of newspapers spread out by year for like 100 years. And you just open newspapers and you ended up being covered by newsprint. It was very excruciating work. On the other hand, it was real foundational building blocks because you had to fight for every bit of learning. It didn't just happen. Like now people who work at our firm who are infinitely brighter than me, they just hit a button and the whole thing. Comes out. So this is a whole different type of learning”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“Melange of interesting people, and it was very small. Corporate finance, we had 30 partners and 30 associates. None of these armies of people preparing work for other people to give to other people. They were just partners and non-partners. And so the ability to learn from somebody who allegedly knew what they were doing was really high. It was a very intensive kind of learning experience where you were given a lot of room because there was no one else there. And we had a huge client base. And so I really enjoyed it.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“Oh my goodness. Either earn them or had them tattooed on me. I'm not sure. But in any case, it was a very interesting group of people. There were very few investment banking firms back then that really had corporate finance and probably six or eight of them. Lehman was one and Lehman was right near the top along with Morgan Stanley was a little more grand and Goldman had a little more in the way of number of clients and Lehman was probably number three or something. But it was three out of a world. So this was like a wonderful opportunity to learn and the people at the firm were real characters. It's before the endless line of business school graduates. I mean, to get a job at a place like Lehman, you're either an ex-CIA agent or somebody who was working, you know, sort of an oil rig, who was smart. And it was like a...”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“And don't drop out. So I didn't realize it was that suggestible, and I sort of finished this letter and I said, well, I guess I shouldn't drop out. And that's how I finished Went to work at Lehman, which was fantastic.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“Uninteresting. Up in Boston, and I wasn't used to that level of cold, and it was wind that would come across the river, and it was freezing and, you know, sort of lonely. And what was I doing? So I wanted to drop out, you know, go back to New York and do something. And, you know, so I wrote a letter to Dick Generet and told him, you know, I was thinking about dropping out, would you like me to come back to the firm, which was probably hopeless anyhow since I didn't know what I was doing the first time. And he wrote me this six-page letter, one of the loveliest things anybody's ever done talking about how he wanted to drop out of Harvard Business School in the first year in December. He didn't think it was very interesting intellectually, and he was going to transfer to the economics department at Harvard and get a PhD. But he didn't, and I shouldn't leave. I should sort of gut it through. And he said this is the right thing.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“I wasn't around people who were a lot smarter than me. I always had people smarter than me. In high school at Harvard Business School, that wasn't the case because all those smart people were somewhere else. And so I thought it was odd first time in my life. And I think it was just because the smart people went somewhere else. And I found the curriculum was sort of outmoded and the teaching wasn't very good. And, you know, I sort of thought it was boring after a while. I got the joke. which was every course they were taking was teaching the same thing. They said it had different names, you know, strategy, production, human relations, marketing, but it was all the same thing, which is that every piece of any integrated system has to be coordinated or else the system itself doesn't function, right? So by the time I got to December, I mean, this was like unbelievably.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“That was different. I thought if I got in, which I did, that I'd be fine if I went back into the real world doing something. And I found it pretty boring because it was during the Vietnam War when business was unbelievably unpopular. And all the smart kids basically went to the best law schools, whether it was Harvard or Yale, they went to Harvard Medical. So I was one of the few people who went to business school and the group of people that I knew. And so for the first time in my life.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“So, this was 1969, and it's not in my book, but in 1982, Dick Generet, who was the third name, called me over and asked me to be president of DLJ. So it was one of these. Weird moments. I turned him down because I didn't think I was old enough yet or capable to handle that level of responsibility. So anyhow, after the army, I went back to Harvard Business School. I had to learn something. I just couldn't show up at places knowing nothing.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“No eye contact. And so it was really six unbelievable monset that I was called up for the infantry. So we had an exit lunch, which was sort of astonishing that the head of the firm would take the time with me. I was like a nobody. And so we went to the little cafeteria. Bill said, how did you enjoy your time here? I said, well, I said, this was pretty good, but you didn't get anything from me. And I feel really bad about that. I said, I think you wasted your money. I said, why did you hire me? I had no capability. And he said, well, I have a hunch. I said, what's your hunch? He said, I think you're going to end up as the head of my firm one day. At which point I was just sitting there completely stunned. And I said, how could you say that? I said, I don't know anything. He said, I just have a feeling. That's why I hope.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“And so I just sat at my desk, and it was one of those OMG moments where I went, what in the world have I gotten myself into? And so it was six months of these awful situations where, you know, basically it wasn't a culture where you could ask people. And so you were really like a student who was going to class unprepared and didn't want to be called on. And so whenever the teacher was looking your way, you'd sort of duck under your desk or may pretend your papers fell on the floor.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“Which was almost a completely hopeless thing. I didn't even know there was something called stock. I knew there were bonds because in my era, if you were in public school, you bought savings bonds. It's like just saving money. And those were U.S. government bonds. I didn't know there were any other securities once somebody explained what a stock was. They forgot to explain there are other things, you know, like corporate debt and subordinated debt and preferred stock and convertible preferred stock and convertible subordinated debt and all the other warrants and all these other things that I had never heard of. And so there I was. They gave me an annual report for something called a company called UNESCO. And it had all of those things. And I had never seen an annual report. I didn't know there were annual reports.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“And he said, Well, thanks for coming. I'll give you a call. And we called a few days later and offered me a job. That's how I got into the investment business, knowing nothing. I was scheduled at an unknown time in the future to go into the Army Reserve. So this wasn't meant to be a full career. It was probably going to be six months to a year before I was called up. And they gave me an office and a secretary. And unfortunately, then somebody stopped by and gave me something to do.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“I'd only had one other interview in my life in the real world, you know, outside of a university. I was waiting in the lobby and there were these, you know, sort of great-looking young people, men and women, running through the lobby. They were all excited about what they were doing. And so I went in for my interview with the head of the firm. And he said, why do you want to work here? And I said, I don't even know what you do here. But the people who are a little bit older than me seem so excited that I want to do what they're doing. And he said, that's a good enough reason. So, you know, he sent me around to meet his partners. And then at the end of the day, he asked me what I thought. And I said, what I thought is relevant. I says, what they thought? I said, they think you're crazy wasting their time with me. I have no qualifications. So he started laughing.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“And gave him the book. And I think they were just so stunned that a complete stranger who was 21 years old did that. Obviously, thanked me for the book. And he said, you know, what are you doing after you graduate? I said, I have no idea. He said, well, you graduated already. I said, that's right. So I was another desperate undergraduate. So, you know, he sort of took me under his wing and introduced me to one or two people, one of whom was Bill Donaldson at Donaldson Lufkin Generette. You know, so I went down for an interview and”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, sure. It's a journey, as they say. I got my first job pretty much by accident. It was at a firm called Donaldson Luffin Generette, which was sold years later to Credit Suisse first Boston. And I had met somebody working at a reunion who was like a grown-up. He was 37. And one of his classmates was one of the three founders of DLJ, and I didn't have a job after I graduated. And I didn't even know who this man was, but I had given him and his children a book that my father used to read to me called Babar the Elephant. And I don't know why I did that. They just look like a model family at a reunion. You know, it was like a husband and wife and two kids and nuclear family. And I looked at that and I said, geez, you know, that's like a idealized portrait of some type. And I just went out and I didn't have much money. And I bought a bar.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“I've always been like that as a kid. I loved athletics. It didn't matter what the sport was. Even when I was really young, I always ran faster than everyone. So as a kid, when you don't have skills, and all you have is like getting someplace faster, you know, whether it's capture the flag, you know, I always just loved being ahead, just like letting your body do what it could, you know, and the farther you could push it the faster you went. And I found that very pleasant, actually.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“I went to Yale, unlike high school, where everybody gets out at the same time at a university people take different courses. So of course you get to the track at different times and sometimes there are very few people there. Sometimes there were a lot of people there. But you trained as an individual, not as a group. And I found that totally uninteresting. for what I already had a bunch of medals. It wasn't doing anything because I couldn't be the best. So I said, you know, I'd rather take my energy and put it into learning at college. And that was a great choice.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“He'd obviously seen it before. And, you know, he had almost a wry sense of amusement as to how far you could be pushed and whether you could go through whatever that barrier of pain was that built not character but built endurance if you end up competing against somebody who's quite good and you have to go into that extra gear that extra dimension to just push yourself you know you you could do that as a result of the entire approach that he took with you as a person and as an athlete”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“He knew and you knew that he was pushing you to the absolute limits of your capability. And as he would say, when you'd run past him in training, he'd say you have to make deposits in training so that you can make withdrawals for game day. And so as a result of this kind of really intense training, we all look forward to actual track meets because it was so easy. We didn't have to work nearly as hard. And, you know, he had a sense of what it took to motivate adolescents. And we all love to just play our hearts out for him.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“He had Olympians and he was at different school districts, public high school districts. And so you're aware it had nothing to do with the athletes themselves. It was the coach because in high school you don't select your athletes, you're just given them by the nature of where people live. And he was a really lovely man. He would give us workouts to do not as individuals as sort of sprinters got a certain kind of workout and middle distance and sort of long distance runners got different workouts. The workouts changed every day, but they were designed to push you to the limit of your capability and endurance. And he was unflappable. He was cheerful, no matter how much pain you were inflicting on yourself, he found that almost amusing because”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“Pretty much, I don't push my children. I've told them what I want is for them to do the best they can do. It's something of their choice. And I want them to be happy. And I think they both are.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“I learned to always keep trying. I learned that you can't look to anyone else for validation. My parents never congratulated me on anything I ever accomplished. It was just assumed that that's what you were supposed to do. So I sort of got used to that and I've never done things for external validation as a result. It's just the thing itself. If it feels good to me, if it's worthwhile, if it's something that I've created or done, I have to own it myself. I can't depend on anyone else to tell me that was a good thing.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT
“And I believe the most important decision is to not lose money. Some people care about the upside. They don't worry much about the downside if they think the upside is great. I like to start in the reverse, sort of like a doctor. You know, do no harm.”
2019-11-12 · The Knowledge Project with Shane Parrish · #69 Stephen Schwarzman: What It Takes · IDENTIFIED FROM THE TRANSCRIPT