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Your Survival Guy Feels Like Jason Bourne Inside “I-Rock”

July 13, 2021 By E.J. Smith - Your Survival Guy

By Motortion Films @ Shutterstock.com

Your Survival Guy feels like Jason Bourne writing to you about a secret, underground black-ops finance story—like I’m uncovering some hidden truth. A secret. But in reality, the truth isn’t hidden at all—it’s right in front of our eyes. More like in front of our “I.” That’s the beauty with stories full of EGO and hubris—they just can’t keep their success to themselves. So here we go.

You know about my concerns with “You Invest, They Win” and how EGO plays an unfortunate role in “high” finance. We get a front-row seat to all of this in Blackstone founder Stephen A Schwarzman’s book, What It Takes.

For a little background, Blackstone is the original gangster in real estate, hedge, private equity, go anywhere, etc. funds. If you name an area in finance—or that single family for sale down the street—chances are these guys are looking under that rock or already have. And like any memoir, this story is in the eye of the storyteller, Mr. Schwarzman, filled with his favorite pronouns “I” and “me.”

If you want to learn “What It Takes” to succeed as an investor, look elsewhere. But if you want to read about someone that comes from a good family, is a high school track star and class president that goes to Yale, Harvard Business School, and becomes richer than Croesus, then this book is for you.

Skip to the end of the book, and the Acknowledgments read like a who’s who in politics and finance—the movers and shakers around the globe. He tells us, for example, he’s met the last five presidents of the United States as we learn money and power are non-partisan. Yippee. Hey, woke is not for the broke.

Turning to EGO, did you know that the largest financial services firm in the world, BlackRock—not to be confused with Mr. Schwarzman’s Blackstone—was founded by Blackstone partner Laurence Fink?

Here’s the back story. When Fink was at First Boston, he was the “man” that created mortgage-backed securities. Fink along with Lewis Ranieri over at Salomon, were the godfathers of MBS trading, controlling 90% of the market. Read Liar’s Poker by Michael Lewis for a front-row seat, then watch the movie The Big Short to see what could possibly go wrong.

Well, Mr. Fink bet on the direction of interest rates, hedged it incorrectly, which was apparently not his fault because some kid in operations messed up what he wanted the hedge to do. Anyway, First Boston lost $100 million, and Fink was looking for greener pastures. He joined Schwarzman at Blackstone to create a financial services division, and kicking around names “BlackPebble” didn’t sound “big” enough.

In what Schwarzman refers to as a transaction he’d like to have back, he and Fink got into a disagreement about ownership/dilution, and Schwarzman sold Blackstone’s shares in BlackRock worth a couple to three hundred million at the time to PNC, which it sold a few years ago for around ten billion. The agony of defeat.

Action Line: Depending on where you stand on this true story—just think these guys are up and at it every single day because, as Schwarzman notes, he only needs about five hours of sleep—What It Takes is less about Schwarzman’s Blackstone than it is about how much “I-Rock.”

Originally posted on Your Survival Guy.

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E.J. Smith - Your Survival Guy
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998.

E.J. has trained at Sig Sauer Academy in Epping, NH, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention.

E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@yoursurvivalguy.com

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