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Making It with Jon Davids
229 - Kevin O'Leary: "Here's how I really made my first million bucks"
00:44:04
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- [00:00]
A
What's up, guys? JD here. And today it's my conversation with Kevin O'. Leary. I talked to Kevin back in 2024, how he made his first million bucks, what his business looks like today, and lots more. You guys are going to love this conversation. And hey, if you're a fan of this podcast, you need to subscribe to me on YouTube. I'm @John Davids dropping new videos every week. And I promise you, if you like to listen, then you're going to love to watch. Hit the link in the description to subscribe. And now my conversation with Kevin o'. Leary. You're listening to Making it with John Davids. Kevin, welcome to the show. So my first question, how did you make your first million?
- [00:49]
B
It's a great question, but the truth is you don't actually notice making your first million when you're so myopically focused on your business. It was my first company was softkey software products, and it turned into the Learning Company. You know, it was a classic startup in a basement with a few people. And then it ended up being the largest educational software and reference publisher in the world. And we sold it for about $4.2 billion way back in 1990. And I remember the next day coming into the office and realizing, you know, I never thought about the money. And I've talked to many entrepreneurs about this. I didn't think about that. But the next day I said, shit, I'm really rich and I have a lot of cash. What am I going to do here? It was my first multiple millions, and it happened all at once. And that's pretty well how it happens to entrepreneurs that because if you actually start a business and all you're doing is pursuing money, you'll never succeed. You have to be so passionate about what you're doing that you're willing to work 25 hours a day, eight days a week, compete globally. And then one day it just happens. And it's a derivative of the pursuit of freedom. That's what it is. You're doing it to set yourself free to pursue the things you love along the way. Sometimes that becomes very lucrative financially. But it was never about the money. It was about being personally free to pursue what I wanted to.
- [02:12]
A
But do you remember the moment where you checked your checking account one day and there's, you know, 4,000 bucks, and the next day there's 3.5 million?
- [02:21]
B
It was more than that. I do remember it. It was in Boston. And, you know, I wasn't the only. There was nine of us, I think that were still there as founders. All I remember is, what am I going to do tomorrow morning? And so I did try retirement for a few years. It was really boring. I went to every beach on earth. Like, I went everywhere, and I just needed to get back in the game.
- [02:45]
A
How old were you when. When that happened, when that sale happened?
- [02:48]
B
I think I was, like, 34, something like that.
- [02:52]
A
That's a great time in life to. To realize that you can start a new chapter.
- [02:57]
B
Yeah, but you're so in the middle of your career. I mean, what do you do? I mean, did you really want. I love competing. I like being in the race. It sort of transitioned me from being an operator in a business to more of an investor. That's really what the transition was, because then I started to do many, many deals, and some of which were very successful and others had failed. But that's the nature of what, you know, venture investing is.
- [03:23]
A
This episode is brought to you by my Playbook social media selling machine, available right now@johndavids.com playbook. Let's be real. You don't want likes. You want sales. You. You want to know that customers are going to show up every day from the content you're already posting. This Playbook shows you how that's done, how to turn social posts into cash flow, and how to scale in a way that's simple, repeatable, and on brand. Grab it free right now at johndavids.com playbook. That's johndavids.combookbook. so I heard a crazy story. You tell me if this is true, but you were, like, really early to personal branding before the term personal brand exists. I heard a story that you called up the head of a television channel and said, you should give me a show or something like that. Did that happen?
- [04:15]
B
It was like that. I'll never forget how it occurred. I was working right after the sale of. Actually, what happened was one of our largest shareholders was one of the private equity firms in Boston. And they said to me, hey, listen, while you're deciding what you're going to do next, why don't you work with us to vet deals? And at the time, one of the hot deals was cable going digital, you know, going over the top, going online, and yet to buy the license. And so he said to me, look, why don't you go and buy up these licenses? And I said, okay, I'm interested in that. I'm kind of interested in media because we were doing multimedia at the Learning Company, one of the first to bring out, you know, interactive Reading, Read. A rabbit. And all that was all done with video. Because I originally started. My first business was a cameraman, soundman, editor. I mean, it was like a full circle. I was back to media. So there I was. And I remember that night, after the first auctions, I got called on to a television show and just to talk about it with Janice Mackie Frere, who's gone on to become a very, very famous reporter for NBC, I think, all around the world. I met her that night and we got into a huge argument on tv. Like just a huge argument. And I didn't even think about the cameras. I was just getting into it with her. And the phones were lighting up. And the producer came and said, wow, can you come back tomorrow?
- [05:45]
A
You were made for cable.
- [05:47]
B
Yeah, that was it. It was the beginning. Jack was his name. I'm trying to remember his second name. Great guy. And he just said, listen, that was crazy. And you got to do it again.
- [05:58]
A
Fleichman.
- [05:59]
B
Jack Fleischman. Jack Fleischman. What a great guy. He was my mentor on television from that very first Janice Mackie Frayer, whatever that was, to where I am today. And I always think about Jack. What would Jack do? And Jack basically said to me, if you're going to do this, you got to be honest. You were just so brutally honest. You didn't sugarcoat anything. And I said, I believe everything I said. And by the way, I was right. And he said, I don't know if you're right, but you certainly believed you were. And so that's how it's been for me. I don't care about what people think about me. As long as I'm telling the truth. That's what I care about.
- [06:39]
A
And I saw you. I remember seeing you on CNBC talking to Joe Kernan. And this was all back in the 90s. So you were sort of a natural television animal. Like, you sort of got the medium. Was that completely natural, or did you have media training? How did that actually start?
- [06:55]
B
No, no, I. Jack said to me, listen, Kevin, can you answer three questions in 60 seconds? That's what you have to be able to do if you're going to understand this. Medium television. This would be for social media. If you're going to go on live TV, you have to articulate the opportunity in 20, 30, 40 seconds. That's it. That's all you've got. That was the best advice he ever gave me. That sort of what worked. And I started doing that, and I started working with Chase producers on all the networks, all the Cable operators long before, you know, YouTube or anything. And I think that was a very good training ground for me because I had to get up at 4 in the morning to work on Squawkbox or whatever it was at MSNBC or FNN or, you know, cnn, FN or whatever. There was so many different outlets that were springing up, and I was hitting them all. I was everywhere. And that was sort of in New York. And I was learning. I was just learning how that worked. And then things started to change. You know, it just sort of. I will always remember this moment. Boston, Logan Airport. But it was really tied to the first season or second season of Shark Tank. I was working in London, England, and I got a call from Mark Burnett to show up in California the next morning at Shutters, which is a restaurant, Santa Monica. He said, I got a new show I'm working on called Shark Tank. It's a format that, you know, from England and Canada called Dragons Den. And we're looking for a real asshole, and you're it. I said, listen, I don't get it. He said, no, no, don't change. Tomorrow when we shoot the pilot, just be the guy I've seen on tv. I just want that guy I want. And I said, well, that is the guy. That's who I am. And we never look back. And so that thing took off, and I had never been recognized anywhere. And I was in Boston, Logan, with my daughter and my wife. And we're boarding a flight, and I went to the washroom. He was on my right, you know, standing at the urinal. He kept looking at me, kept looking at me. I'll never forget this. And he finally said, are you that guy on Shark Tank? And I said, yeah, I am that guy in Shark Tank. Like, no one had ever recognized me or ever say anything about Shark Tank to me. Because in the early years, nobody was watching it. A cat and the dog were watching it. He said, last night, you really screwed over some young entrepreneur. You took 51% of his business on his first round of financing. That's totally unfair. And I said, wait a minute. It's my money. I'll do whatever I want. And we got into this big narrative in the can. And I said, gee, a lot of deals get done in toilets, but not today. I'm going to thank you for your input, but I don't care. And then he walks outside and says to my wife, Linda, that asshole Kevin o' Leary from Shark Tank's in the can. And she says, I know. Could have no idea you know, it was just a random outcome. That was the beginning of whatever celebrity is.
- [09:53]
A
And that was years after because you were obviously up in Canada on shows. I mean, I remember seeing you on Squeeze Play back in whatever I was in high school.
- [10:02]
B
I love that show. The Mandalang. Yes. I really learned my chop. She was tough. She was tough.
- [10:07]
A
She was very tough.
- [10:08]
B
She was nasty and tough and smart as hell. There was no going in hungover onto that show, I can tell you that.
- [10:14]
A
And so at what point did it click for you? Going sort of fast forwarding to the whole personal brand as we know it today. At what point did it click? Okay, this is actually a business in itself. Kevin O' Leary as Mr. Wonderful is a business just like the Learning Company was a business.
- [10:30]
B
It started when people started calling me to ask me to come and speak all around the world saying, look, we want Mr. Wonderful in, you know, Abu Dhabi, in London, England, in New York, in San Francisco. I was just getting. Nancy and I just got together at that time, and she was starting to run brand for me. And that turned into a multi million dollar business. And I just said, wow, what is this? And it was a huge business. And then the television commercials came, and then the advisory businesses came and then the agents came and it grew from there. And we started with this small group of people and it grew into a franchise, I guess. I mean, we entertain all kinds of products and services now. But I have one basic rule. You know, you pitch me on a wine or something or a product. If I don't use it, I'm never going to endorse it. If I don't actually eat the cooking, I'm going to stay 100% tell the truth. I use this product because it solves a problem. And I'm eating this cooking because I like it. And that's really worked because I never, you know, my mother said something to me years ago when I was like 15 years old, maybe 16. If you always tell the truth, you'll never have to remember what you said. She's right. That works across the whole platform. I just tell the truth now. Does that make people unhappy? Oh, yeah. Yes, it does. Let me just. I happen to have an award here I'm so proud of. This is the most hated man on television award. Yeah, we got Emmys. But I like this one. This is the most hated guy on tv. I love this. I love this.
- [12:06]
A
Treasure it.
- [12:07]
B
Yeah, I have it. I love that a lot.
- [12:10]
A
So what is the Mr. Wonderful? I'm curious about that. So you said it started off as just speaking gigs. And it's a full on. Like, do you have a P and L? Do you have an operating team? Do you have sales targets? Like how, how rigorously do you run it? Or is it really just more opportunistic?
- [12:24]
B
No, no, no. It's a multimillion dollar business today. It's got relationships with agencies, television broadcast networks. I'm very proud of it. It employs a lot of people. It has PNLs, it makes money, and it's global. We have offices in Abu Dhabi. We do business all around the world. And we're involved in all kinds of different asset classes. We build data centers, we do real estate indexing, S&P 500. I mean, there's just a whole plethora of businesses that are basically built around this guy. Mr. Wonderful. That people, you know, here's what I say to people. What is this brand? You don't have to like me. I only ask that you respect me. I don't care if you like me or not. Do you respect me? That's it. Because I'm going to tell you the truth. You may not like it. I'm just going to tell you what everybody else is thinking. I don't care that you're having a hard time with it because it's still the truth. It'll be the truth tomorrow, it'll be the truth a week afterwards. It's still the truth. Somebody's got to tell you the truth. That's what it is. I would say that 50% of the people just don't like that and would rather. This is the argument I have with Lori and Barbara in the context of Shark Tank. Lori on my left, Barbara on my right. I've worked with those women for 15, 16 years. I have a lot of respect for both of them. But what I can't stand is when I know they're not going to do the deal, I know right away they're not going to do the other. Of course I know they're not going to do the deal. I've known them for 16 years. But they'll say, well, well, I'm not going to do this deal. But you keep going. You keep bankrupting your parents. You keep mortgaging your house. You go, you keep going. When I say your business is a piece of shit, it's going to zero and you should stop doing it right now and do something else. We fight about that all the time. And the only reason Barbara gets to Shark Tank every year is I buy her a new broom.
- [14:22]
A
You and I will Say this genuinely. You do say things like, I talk to lots of friends, watch Shark Tank, and. And they will say things like, wow, that Kevin's an asshole. But I actually have rarely seen you been wrong. I could disagree with your opinion. Maybe I like this. You don't like this, but I believe that it comes from a place of truth.
- [14:41]
B
Yeah. Why would I lie? I would feel guilty about telling somebody to go on. I say, listen, Laurie, you shouldn't be able to sleep at night after what you did to that person. Shame on you. Shame on you. You gave them hope where there's none. I mean, these are the narratives we have after, you know, these deals. Walk out of the room. I just. That's the way I operate. I want to walk. I want to go to bed at night and feel that I told the truth to everybody I dealt with.
- [15:05]
A
So let me ask you this. What separates the people who are successful versus those who are very successful? Here's what I mean. You know, you could build a business and let's just say you're a moderately talented entrepreneur. You could build a business doing a million bucks or maybe 2 million bucks. And then there are businesses that get to 10 or 20 million or even, you know, 100 million plus. Is that a difference in people? A difference in opportunity, A difference in luck? You've seen so many businesses. What. What separates them?
- [15:33]
B
One thing. The ability of that entrepreneur to distinguish the signal from the noise. And when I say that, I mean on a very simple basis. In today's world, when you start a business or you're running a business or you're managing a business or you're an investor, I don't care what you do. 90% of what's coming at you all day long and all night long is noise. 10% is the signal. It's what you have to execute on. The best analogy of this is, you know, great ideas are dime a dozen. Executional skills are impossible. So if you have the ability. And I'm. My greatest competitive advantage is the ability to look at somebody and in a few minutes determine whether they have that innate ability to separate the signal from the noise. And when they can, they can be wildly successful. And, you know, it's sort of saying, okay, you're running a business. You've got to achieve three things. Today, you're going to get phone calls and texts, and people are going to call you about stuff. But if that's not on mandate for you, if that's not one of the three things you've got to get done, it's noise. And you can't even let one ounce of energy be spent towards that until you finish dealing with the signal. Now, if you understand what I'm talking about, you get it. If you don't, I do not want to invest in you because you are going to fail and live a life of mediocrity.
- [17:00]
A
I get it loud and clear. And I've seen it also on Shark Tank where people will come in and they'll start talking about a whole lot of sizzle and it's like, what are the two or three numbers that matter? And they never get to it. And that must be so frustrating because you do you know exactly what that signal is. And they're just going on about the noise.
- [17:18]
B
They are. But you know, sometimes they can't help themselves. The thing about Shark Tank that people don't realize, we don't see those deals before they come in. They're hidden from us as they have to be by law. And they practice a hundred times in front of a mirror. But it's different than walking out on that carpet with 20 plus cameras running, you know, a billion dollars sitting in front of you. An opportunity to start your business. And there you are on that carpet alone. That's your moment. Not everybody can handle it.
- [17:49]
A
Quick break. So I can tell you about Influicity. That's the little marketing agency I started in my apartment about 10 years ago. Well, fast forward, it is not so little anymore. Influicity works with some of the biggest brands in the world, building customer communities that drive revenue. We do this through influencers, podcasts, paid media, social media, content, AI and so much more. You can learn more@influicity.com and hey, while you're there, check out our case studies. We have a lot of them. That's influicity.com. is there a deal that you passed on that you look back on and say, ah, maybe I should have done it, or an entrepreneur that you kind of gave up on too quick?
- [18:30]
B
You know, that's a. It's a great question and often asked of me and I say, I don't cry over spilt milk. I don't get every deal. I don't get it right every time. And what I've learned, and this is really, I think, important if you want to do this, if you want to support entrepreneurship. You know, this year I'm in the middle of the season. I've already done I don't know how many deals. Let's say I do 11, 12. And I think I've got four that are absolute winners. And in the next four to five years, I'm going to get 100x on them. That never happens. Never. It's always that long shot deal that I just did because I thought, okay, she's great or he's great and I'm just going to take a flyer and do 250 or half a million bucks that ends up being a thousand X. I just didn't see it coming and nobody did. Or maybe it was serendipitous or maybe that something changed in the market. But it's the ones you don't see coming that give you all of your returns and it's the ones that you think are surefire winners that end up being dogs. And that's why you need to be diversified. You need diversification in a huge way. And you've got to do multiple deals because you just don't know. And anybody that says, oh, I'm really good at picking these things, particularly in venture investing is full of shit.
- [19:44]
A
It's the power law. It's always going to be in the law of the numbers. And the one, as you said, the one that you think is going to hit it probably is not going to hit.
- [19:52]
B
In fact, that's what happens. And I would say over 16 years, almost 70% of the winners have come from companies run by women, which has been another interesting attribute. They don't even know each other and they're in almost 11, all 11 sectors of the S and P in almost every state. So I mean, you know, I love that adage. You want something done, give it to a busy mother right now. Look at Sarah Pooh at Blueland. She's just killing it. When she exits that deal, it's gonna be the highest IRR in shark tank history. And who knew she was crystallizing cleaning fluids? The most boring idea I've ever heard. The things on fire because people don't like plastics anymore.
- [20:28]
A
If you were starting a business today, obviously you're very busy, you got a lot going on. But if you were 20, 25 years old, 20 years old, you're starting a business, where would you look?
- [20:36]
B
I've really come to the conclusion that what makes a business successful over the last five years is our people. And this is a remarkable change in my thinking because the facts have changed. So it's a very good question, but here's the answer. If you had asked me five years ago, and I teach in colleges, Harvard, MIT, Waterloo, McGill, all these places, I used to say, look, here you are investing your Own money or borrowing money to be, you know, to pursue an education. You should think of three different careers. Number one, engineering. Number two, engineering. Number three, engineering. And at night you should take some engineering classes. Everything else is a waste of time. I don't believe that anymore. And I'll tell you why. If I look across my portfolio, my global portfolio, even what we're doing right now, talking together, my number one increase in costs is social media and customer acquisition. Artists, storytellers, videographers, photographers, editors, animators. I used to pay them 20 grand a year. Now I have to pay some of them half a million because they are the key to the new digital economy. So if you are a creator and you can create and storytell, you're incredibly valuable today. What a reverse of just what I used to think. So now when I look at managers, when I meet new people, and I was just talking to Nancy about this yesterday, I said, make sure the next person that comes on the team has got the ability to be a writer. I want the yin and yang, the chaos of art versus the discipline, the black and white of business. I want to see someone that dances on the weekend or plays guitar or paints or does photography. Someone that can show me they're balanced in their mind. Mind to solve business problems creatively and chaotically from the arts. This is really important. I don't want somebody working 25 hours a day that's useless. I want somebody that's able to solve problems and tell stories and create an environment where we can acquire customers on an economic basis and hold on to them. So CAC and roas customer acquisition cost and ROAS return on ad spend. I spend millions of dollars every week on advertising. I need talent there. So you asked me what the great career is, is binding in any discipline, the arts, the chaos of art, with the discipline of business, which is binary, black and white. Either you make money, you lose money. Putting those together, that's the future.
- [23:04]
A
And you said the magic words K and rock and roll. That's it. I heard that jingle from you. Stuck in my head because it's so true. I think what a lot of entrepreneurs miss, business people in general is once you have the audience, once you've figured out a way to hijack the attention, get, you know, selling them the product. Assuming you have a half decent product. That's almost the easy part, which is a big difference from as you said years ago was like, how do we create the greatest invention? The problem now is that anybody can create an invention with, with AI and all the technology that's around today. Yeah.
- [23:39]
B
And that's true. That's why customer acquisition has become even more important. The first thing I look at on a new deal is tell me who's running social media for you. Show me your. Your CAC and ROAS metrics over the last 12 months. And I'm really good at analyzing that. I got a great team. I mean, that's the whole deal. I mean, the competitive advantage I have is I have millions of followers. So when I buy into a business, I start promoting it. I start spending on unpaid social on my own platform. I say, look here. Here's a company. I bought products and service. I'm a major shareholder in it. I bought it because here's what it does. And I put that out on my own platforms. You know, it's sort of a weird transition that's occurred to me. I work with all the television networks, but I also have my network, which I have to feed every day to over 9 million people that are watching. And it's got to be well produced. It's a major business, it's a network. And I collaborate with here. We're collaborating right now. I'm going to work with you. I'm going to post some of this stuff or Nancy Will on whatever. I don't know which platforms will stick it on, but I'm going to promote you. And because I'm enjoying this conversation, I'm gonna put it out on my platform. That's what matters. Yeah.
- [24:45]
A
What do you think your superpower is obviously like today? Looking at you, you're global celebrity. You've got all these. The audience is kind of one thing. But take the audience aside. If it was just Kevin o' Leary starting from scratch, what is it that you're very good at?
- [25:01]
B
I tell the truth. There's room in the narrative, in any narrative, for the truth. And the world really needs that these days. There's so much BS and noise out there. Somebody has to call it like it is. Sometimes it's not a popular position, but I don't care. I never, ever, ever waver from that. And even in the darkest days of financial crisis and the FTX scandal and all that stuff, I just told the truth. And I said, here's what happened, here's what I know. And it was just a shitstorm. Unbelievable shitstorm.
- [25:33]
A
But that was rough.
- [25:35]
B
I told the truth and it played out to be factual.
- [25:38]
A
Yeah, I remember. I remember watching you on what looked like the longest, most painful. Maybe it wasn't painful for you, but it looked painful watching it on.
- [25:47]
B
On.
- [25:47]
A
On Squawk box felt like 15, 20 minutes of you just being hammered. How do you deal with that kind of. I mean, even, you know, you put something out on social media, you get hammered. How do you deal with all the constant negativity coming your way?
- [26:00]
B
I remember that interview. In fact, that's so legendary that it got turned into a Harvard case. Harvard published that about, you know, the whole FTX thing and brand and what happens and all of that stuff. And it was Becky Quick, Andrew Sorkin, Joe Kernan. We talk about it when we get together sometimes. I remember it. It was really long. But every question came and I just answered it with the facts. Maybe Joe didn't like it or Becky didn't like it or whatever, but it was a fact. I was at the center of that scandal. I was talking to Sam Bankman Fried frequently. And I just told him what I knew. And then I got called in front of the Senate to testify. I did the same thing. I said, here's what I know and here's what I think happened, and here's why I think it happened this way. And it was an absolute shitstorm. It was 24 hours a day, nonstop. And I thought it would go away after two days. It lasted, like for two months. It was crazy. And in the end, it was the facts that prevailed. And everybody went back. All that stuff went to the Record. They pulled that stuff up in the Senate from CNBC and at Harvard. That's out on the Internet everywhere. It's a record that in perpetuity. But it was the truth. And I think that goes back to what my mother said when I was 15. Just tell the truth. I was telling the truth. While the fire was coming at me, I was being roasted like a chicken. But I said, why would I not tell? Why would I ever change what I do at this point? I mean, I'm going to. Hopefully I'm going to get out of the other side of this oven, which is what happened. I just remember when, you know, the storm moved away and the sun started shining and people were calling me up saying, hey, listen, that was incredible. Can you come and do this or do that? We want to talk to you about Bitcoin. We want you to be involved with this company, that company. It was an extraordinary journey. Prefer not to do that again anytime soon. But it's part of who I am today.
- [27:55]
A
Ftx. Everyone has been made whole as far as I know, right? That.
- [27:59]
B
That's come back there still. It isn't settled yet. There's lots of litigation. But the last offer I saw was 120%. Wow. So, I mean, it's a remarkable situation. I don't know what, you know, how, how and when it's going to get paid out. I mean, I lost millions on that deal. I never, I never, you know, traded in that account. I said, I want to be paid in crypto. And that's what happened. And I had to pay my taxes in US dollars. It was crazy, the whole thing. It was a remarkable journey, but, you know, in a great way. And I think about now, and I testify at the Senate about stablecoins digital payment systems. The era of the crypto cowboy is over. It's completely over. And now I'm an investor in WonderFi up in Canada, M2 in Abu Dhabi. I own a piece of circle that issues usdc. I'm buying into the infrastructure of a compliant basis. I love crypto. I love digital payment systems, and I'm part of the narrative again. And it's someone who's come through the gauntlet of all of the crypto cowboy days, you know, Binance, Sky CZ and the Slammer. I mean, all those crypto cowboys, they're gone. And it's a good thing.
- [29:06]
A
Yeah. Because they sort of mess up the system. You're trying to run it and look at it like a legitimate business and asset class, and meanwhile, you got these crazy swings and all that kind of stuff. So it's probably better now.
- [29:17]
B
The Ethereum ETF just came out. We're talking about it 48 hours after it was issued. That's another step up in terms of integrating crypto into the global financial services system. I think it's a fantastic outcome and I think this will continue. I'm going to stay. I'm 18% weighted in crypto right now. I'll probably get past 20%. That's a full weighting, sectoral weighting. I'm a believer.
- [29:39]
A
Yeah. Well, just one more question on that, though. When you're going through that, I'm just curious on a personal level, is your armor, you're good with it, or are you actually having sleepless nights and what's going to happen?
- [29:50]
B
No, I don't have sleepless nights. It's another lesson from the mom. She was not a stock analyst, but she was very financially astute. And she taught me in my teen years a very basic lesson about how she invested. She said, Never more than 20% of your portfolio in any one sector like tech or energy, and never more than 5% in any one stock or position. And you will survive forever. It was the best advice I ever got. And I never got weighted down in any one thing because Georgette said she's in my head now. She's on my shoulder, always saying, that position's over 5%. Sell it down. Which I do. I mean, I. You know, I own a Tesla. My son got me into Tesla early, before it split. The thing was like a huge position. I sold it down to five. Every time it was over five, I sold it down, Sold it down, sold it down. My cost base is zero. I'm still a shareholder. I mean, the whole idea is this strategy is about diversification. I mean, that was a very wise woman. And when she died, she hidden her money from both of her husbands, and I was the older brother. And the executor called me and said, you got to come down here. Your mother died a very wealthy woman, and you're the executor of the estate. I said, no, she didn't. We're middle class. She said, you got to come down here. I looked at it, and I called my brother and said, you're not going to believe this. And we distributed that money to our family. It was just crazy.
- [31:16]
A
Wow. How much of. Like, just talking about wealth building for a second, because there's a lot of people listening who obviously motivated and ambitious. How much of wealth building do you think is skill versus timing, fortune? And what I mean by that, I just want to be clear. I'm not talking about being able to make a million bucks or 2 million bucks, but when someone gets to the echelon of, you know, running $100 million company or what have you, do you think that really is skill? Or do you think there's a certain element of you've got to be in the right place at the right time?
- [31:46]
B
It's mostly common sense, and it has to be something you're passionate about. But, you know, it's a really interesting question you're raising, because just 24 hours ago, right around 24 hours ago, my wife inherited something from her family, and she generally is not that interested in. In. She's very smart. She's done her work, took a brokerage license years ago, but she generally leaves it to managers, and she pays the management fees, and that's fine. And I don't do that. I manage our own capital corporately and my own personal and. And my trusts and all that stuff. But she said to me, you know, listen, Kevin, I want to manage this myself. I said, okay, let's. Let's take this cash and put it into a diversified portfolio of ETFs, because that's. I'm an ETF guy. I used. I still do. I index ETFs. That's one of Oshares, is a business recently sold to Alps. I'm very proud of it. Still involved in the indexing of the indices. And I said, look, you can take this and diversify it. Let's put a third into the S and P. Let's put another third into international stocks, and let's put a third into fixed income. And in an hour I showed her how to do it online. And she figured it out in two seconds. She said, this is good. I'll manage this myself. This morning she went online for five minutes and checked out what happened in the market. I mean, you know, it's not that hard. It just takes a discipline of doing it, of having that discipline of doing it. And I think financial literacy is very, very important. And I wish we would teach kids not just about debt and credit cards, but actually how to build to take 15% of your income as soon as you hit 22 years old and start indexing it into the market, which is going to give you, over your lifetime, a 7.8percent return. And if you have the average salary of 70,000 a year, you'll end up with 1 1/2 bucks in the bank for retirement. Nothing wrong with that. That's what I believe in.
- [33:35]
A
Yeah, I'm always amazed, just general financial literacy that people, they know what a bank account is, they kind of maybe know what a mortgage is. But you start talking about ETF to the average person, you know, I talk about the Qs or the, you know, everything that I'm in, the spy. And they have no clue what I'm talking about. And they, and they associate investing in the stock market with gambling and that really, that's got to change.
- [33:58]
B
I showed her how to look up the contents of an ETF by simply clicking on its symbol. She said, okay, it's weighted, you know, 40% in Asia, 60% in Europe. I get it. I want to see the top 10 holdings. Just scroll down there. It was Nestle, one of the top holdings in Europe. And she said, ah, this isn't so hard. I said, no, it isn't. You just have to do it. It's all the information's online. Being digital today is a wicked competitive advantage because I think she spent 40 minutes setting that portfolio up and now she knows how to do it. And I think she's probably going to go back and take money back from some of her managers. That's what's going to happen because she's, she's saying, wait a second, I could do this. You know, I can do this. And she's comparing performance versus managed accounts. You say, wait a second, I can do this myself. And she can.
- [34:45]
A
She went to the school of Mr. Wonderful.
- [34:47]
B
Yeah.
- [34:48]
A
This episode is brought to you by Influicity's new tool, the AI Ads Generator, available now at johndavids.com ads. Most marketers waste weeks testing headlines and burning cash on ad copy that doesn't convert. The AI Ads Generator deletes that pane in just seconds. It gives you ready to run ad copy built on 10 years of data pulled from brands like Samsung, Mindvalley and Airbnb. With the AI Ads Generator, you'll never run out of ideas. You'll beat competitors to market and you'll scale campaigns with confidence, knowing every word is optimized to sell. And it's free. Yes. Seriously, it's free. @johndavids.com ads that's johndavids.com ads. Let's go macro here. So just to kind of close out the conversation, here we are. It's July 2024. Lot of stuff happening in the political space just over the last two weeks. What do you see over the next, let's call it six to 18 months in terms of. And I'm talking everything, interest rates and kind of U.S. policy. Do you think things are generally going to get better? A lot more shaky. Where's your head at?
- [36:00]
B
This is a great way to end it and a great question. I really like this question. And so when I was in grade school, I went to Stansted College, right on the Derby Line border of Vermont. It was a cadet college. And we'd get up at 5 in the morning and we would march in the winter and take rifle training and all the things cadets do and then go to classes. I fell in love with history. I wrote my first 100% paper in grade 11. And I love the history teacher. He really got me into it. And I started studying Bismarck and Kissinger and, you know, all of the Napoleon and all the influences of politics and outcomes. It really intrigued me. And because I loved it, I was scoring hundreds on all my papers. I was just killing it in history. And I said to my stepfather, I said, I'm going to do history. That's all I'm going to do. He said, no, you're not. You're going to starve to death. You're going to do that. You got to it's great to have this hobby, but you got to figure out a career and it's not history. It was great advice, but I never gave up my love for it. Fast forward to today. That love of history and Greek mythology and studying Bismarck and Kissinger and the first and second world wars and Churchill and all of that writing. It's all about policy. Now. I don't make money in politics. My secret competitive weapon is defining policy before it's implemented. So here we have a situation. Let me give a specific example. If I thought right now that the outcome of the election was a pro energy outcome in policy, that sector has been pounded like a piece of tenderloin meat. The peas are low, the cash flows are high, the regulatory environment is just brutal. And these companies have been compressed and almost ostracized because some of them are in hydrocarbons, some of them are in gas, some of them are in wind, whatever. So I'm listening to the speeches that are occurring as we speak to every talking head on business cable on the left, the right, the center and everything else. So you got this Harris situation. She has not brought any policy forward yet. And in a way she's very fortunate because she was a VP of no consequence. She never got any airtime for three and a half years until now. So you don't know what she did. It could be nothing, but that's her advantage. She can redefine herself as not being a left winger and she can redefine herself being the center and she could win the seven states that are going to determine who the President's going to be. On the other hand, and this is the lesson of Bismarck and Kissinger, listen to talking heads right now defining her for her on the right. So if you're talking to Trump people, she's left wing, she's San Francisco. She's just the most radical, yada yada yada.
- [38:52]
A
She wants to get rid of straws.
- [38:55]
B
So can she define her future in the center that gives her a 50, 50 chance of winning? Or is she going to get slaughtered by being defined by the other side? Which is what Bismarck never let happen. He always made sure whoever was backing in the German empire was someone that got the message out the way he saw it should be. This is history repeating itself. If I see her move to the center, I triple down on energy because it won't matter if she wins or loses. Energy is going to be pro economic growth and I'm going to capture that index at some of its lowest value in history. If I Thought Trump was going to win. I should quadruple down because we already heard from Burgum. I spend all day on this stuff. I don't care who gets in the White House. I care what the policy is. Now, if I hear her over the next 48 hours, just go left, go left, go left. And define herself as a left wing radical, she's going to have a hard time. So she's going to have to figure this out. And I heard for the first time today, something else I'll add. While we're talking about politics, I talk to investors every morning before 8 o'.
- [40:00]
A
Clock.
- [40:01]
B
Big institutional investors, all kinds of investors all around the world. Democratic investors, Republican investors, independent investors. 51% of the voters in America are independents. That's why you got to win them. But for the first time this morning, the first time I heard buyer's remorse from a very big Democratic fundraiser and investor, big guy. And I said, what's going on? He said, you know, I'm starting to think we should have run a process. We should have taken advantage of all the press we would have got. She could have come out on top, but we, and we didn't coordinate her. And then we would have felt better about this risk we're having in trying to redefine her. This morning, you know, just an hour ago, I saw a lot of talking heads saying she had nothing to do with the border. I don't know if she can pull that off. She was called the border czar. Maybe she can. Social media's got all that digitally. If it was Bismarck's time, he would have just decreed she wasn't the border czar. But can't do that now. So, I mean, it's a long answer, but you see, where I'm going, history repeats itself. And if you're a student of history, it helps you make economic decisions.
- [41:08]
A
It does in a big way. But what I love about your answer, and I hope people picked up on this, is that it's not about Trump or Harris for Kevin o', Leary, you're gonna win either way. You're not gonna hang your hat on one of the teams and put all your chips in there. You're gonna be fine either way. Do you have, I mean, I know you're. You don't speak about this necessarily, but do you have a preference or do you actually think either one could win and we could all do well regardless?
- [41:34]
B
I'm a very lucky guy. Here's why I care about companies that have between 5 and 500 employees in America. They create 62% of the jobs. I support entrepreneurship. I have unlimited access to the Hill on both sides. I can walk into the Elizabeth Warren's office or I can walk into someone on the red on the right. It doesn't matter because all of them support entrepreneurship. Even AOC supports entrepreneurship. Who doesn't want the American dream to succeed? I'm an ambassador of the American dream. I'm agnostic to politics and it gives me a wonderful place because I can have these narratives with you and any senator, any governor. I've never met one that said to me, I don't want to create jobs in my state. So that's what I do. You know, for example, I'm very critical of the Chips and Science Act. I read it. I told the secretary, I don't see a single line in here for small business. And we create 62% of the jobs in America. You gave a trillion dollars away to the s and P500 and there are only 40% of the jobs and half of those are overseas. Then I look at the Inflation Reduction Act. Not as. Not a paragraph in there for small business. I'm an advocate for small business. If you're going to give away that much money, $2 trillion, you got to give at least 6 cents on the dollar. The small business. That's a bipartisan narrative. Now why would I ever step away from that?
- [43:01]
A
Kevin, you are very good at what you do. It's been a pleasure. Thank you. Thank you so much for joining today.
- [43:07]
B
Take care. I really enjoyed it. You're a great interview. Can't wait to see this thing.
- [43:11]
A
Thanks for listening. If you enjoyed this episode, make sure to leave a rating or review wherever you listen to podcasts, Apple or Spotify. Lets other folks know that you love the show. And it lets us know that we're doing something right. This episode is brought to you by my Playbook website selling machine. Available right now@johndavids.com Playbook Most companies want websites that look nice. But a lot of nice looking websites don't sell. What you really want is a website that grabs attention, builds trust and turns visitors into buyers while you sleep. That's what this Playbook gives you. Based on 10 years of work we've done at Influicity, optimizing websites for 7, 8 and 9 figure brands. Download the Playbook now at johndavids.com playbook that's johndavids.com Playbook.