#338 Monty Moncrief Texas Oil Billionaire
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In one thousand nine and seventy eight money money clip f was eighty four years old. He was still very much the patriarch, his clan, the man who made the decisions in his family and in his family's business. Family and business were in fact the same thing with him, the desire to found the one being in separate, tied to the desire to found the other.

When speaking of his business, he never mentioned himself specifically. He would always say, we sign this deal. We figured out what was best. This is a we kind of business, he explained. We don't tolerate any of that eye stuff around here in texas.

In the oil business, one sees as nowhere else that the idea of capitalism is the ideal of founding a family and conferred the right of inherent ance upon IT, passing a legacy on where oil men moncure ef with answer. When asked about watching, or about real state, or about anything else war, oil men meant that anything which extended beyond the realm of oil was not a proper moncrief concern, where hundred percent family owned, unincorporated and independent. And we intend to stay that way in the world of oil promoters.

One sometimes meets with independents who have bought and sold their way to six or seven businesses, who indeed start those businesses with the aim of going public and selling out as soon as possible to money moncrief. Such a strategy is an imaginable moncrief oil is synonymous with himself. His dynasty continuity is what his blood demands.

He was at the age of eighty four, as big and as strong as a bull. He possessed the directness and the other simplicity of the old and truly great. He walk without a stop, and he Carried his large frame without a trace of fat.

He seemed impervious to age or to changing times. His unquestioning confidence in the worthiness of his enterprise made him seem impervious as well to the doubts and the questions about motives and meanings that inevitable be set the later generations of his family. He kept his faith in the absolute value of building, of progress, of getting things done.

When he spoke of his belief in the enterprise of producing oil in america, one could almost forget that he has made hundreds of millions of dollars doing so. Such benefits sounded almost incidental to the task of settling the land and mining its resources. Perhaps this confidence is what set free the huge energies of this first generation of giants.

The stories told about money moncrief over veal. Him as tough, canny, given to, under statement, a man of action who waste few words but can, when he wishes, move mountains. That is an extra from the book and we talked about today, which is wild cutters, a story of texan's oil and money, and is an all way back in one thousand nine and eighty one by Sally hegan.

There's a bunch of characters in this book. They talk about other oil families. But once I got to that part, that's when I realized, oh no, no, what I want to talk you about is money, my grief.

And so I think that expert gives you and I A good idea on why we should focus on money, my craeke, and the shadow that because at the time the book is publish, he still alive, his son is still alive, and his grandson is still alive. And so I was always, always curous like, well, what are they up to now? So after over the book, so the researching, see what I can find out about them.

And there's a line in the book that I think is very fascine, because it's like, why is this guy so interesting to me? He reminds me money, my grief, he reminds me a lot of other people we study and there's just a random sentence. And he was talking about the fact that his grandsons was sana like measuring his life in his success based on his grandfather, which I think is honest a bad idea um but he says the shadow by which dick moncrief measured himself was cat by his grandfather monty.

And I think that word shadow is really important. In fact, I went back and searched a founders notes for the word shadow because like this sounds very familiar to me. There's two things that are fascine here that I think a unit spends the time talking about, and it's one that an institution is the length and shadow of one man.

And so that that that's from Edwin lands, one of Edwin land's by graphs. So right? So only the founders, the shadow of the company that they found. But you also know, uh, that's true for monty, for the the company found, but his shadow also loops over his entire family and money shadow loomed over his entire family where he's alive.

And it's to has an effect in present day, I went up looking up to characters in the book to see what like if they were still alive. Money son minds up, living to one hundred and one. He passed away relatively recently.

Now the whole families is essentially fighting over this fortune, multiple billion or fortune, that really stems from the work that the grandfather did sixty, seventy years ago. And the usually ends one of two ways, as most of time that the future generations can not obviously live up, uh, to the shadow or the example that the founder of the family usually set. So I was thinking of, as was going through searching founder notes, shadow came across an idea when you say J.

P. Morgan, you realize I said this on the multiple gp Morgan podcasts that i've made. He's very know, obviously impressive figure, but I found his dad to be even more impressive.

And so there's a line from the house of Morgan rid by ron cherney that talks about this. He says the Morgans always believe in an absolute monarchy. While junior s.

Morgan live, that shape is dead. He ruled the family and the business. Until junior died, his massive shadow dominated his son's life. And so I think the importance of the family business aspect of this is really important.

So I want to read the section to you because this is what part of what makes this story unique is, the setting in which IT takes place and the belief that family is destiny. So says, what makes text is different is not so much as money as its blood. And it's a awareness of that blood, blood lines, human blood lines. In texas, there's always an awareness of exactly whose blood runs through a man, men or women's veins and what that blood demands and are going to pause right before I continue his grandson, which will talk a little bit of that, but there's a lot more detail the book and that highly recommend getting the book.

He was a really fun book to read um but I feel his this pressure that he has where it's like all your mony's grandson causes dict maybe do things that like take risks that were unnecessary because he was trying to not only match what his grandfather did, which is nearly impossible but also try to go one step further, basically super seed his achievement, which he obviously failed to do. So to go back to this um you understand the blood that runs through a man or woman's veins, and what that blood demands people in texas are raised to be what others and their families have been. Family is destiny here.

Success is measured by what one achieves beyond what those who went before achieved. Future generations of the family feel the need to surpass them in order mean the founders of family surpass them, them in order to prove themselves of worthy of their blood. okay.

So with that background, I wanted jump into money's life. And really what's facility is because he's born in the eighteen hundred years, right? He serves in world war one, then comes back and gets into the oil business. And that's really important decision because he essentially picked uh uh um an industry field where the opportunity before him was really without limit and that's not what his the same opportunity was not open to his son and his grandson.

And so when I read the stories like this, what I am obviously not trying to build new york company, but I am very interested in finding these areas like where today, like what I wanted know, like today, where is opportunity without limits available today. And I think reading history like this gives you insight to like what these opportunities look like and what to look for. And so this little about about that, the old bulls in this story, so people like my chief, said Richardson, is a bunch of oil one, one of becoming oil billionaires in the story.

But the old balls in the story, the giants, the men of monty moncreiff generation, came into the oil business in the wild old days of the open frontier. Everywhere they looked, they saw opportunity without limits. The land itself was empty.

And so these men built cities upon IT, and they found a dynasty. They left behind them, a world made in their own image. They gave shape to a business and to a way of life.

And their deeds made them legends, the major oil companies, which one day would almost destroy the independence. Think about that is like they are going to talk about axon. Uh, axon was once an independent.

So these giant, uh, major oil companies, right? And then the independence, like the students, are the family on businesses. Obviously, among trees at this time are independence. The major oil companies, which wonder, destroy the independence, had not yet consult, dated their power. Those companies were still independence themselves.

Instead, they mention at this time in the story where money monkey for setting out what what is going to one day turning to axon, was just as company called humble, humble oil. And the way people describe at the time, like a humbles, just a fly by night, little rinky dean company. And so one of the first takeaway there is okay if you want to look for opportunities where there's uh essentially uh, our industry that where the opportunity that limits you can already be.

Second thing, as front tears men, the old wild cutters had neither the time or the inclination to question their own purposes or to agonize about what the future consequences of their efforts might be. They just went out and did whatever there was to be done. Teddy rose vote has this famous quote that he took from his dad as his life model.

It's called gate action. There's people in the book there like life model is make action. There are the very beginning of an industry, so they're going to have to learn by doing.

That's another teletype sign that you might be in an industry where has as such unlimited opportunity. The second is the opportunity has to be open to our the third of guess, the opportunity has to be open to small teams without a lot of money. And so when they're thrilling right now, in fact, you know, let me pull this up a crack.

This is one of my favorite lines ever. I think I did another podcast and read another book around a similar time period. In fact, some of the characters in that uh in this book, in that book.

It's called the big rich to one of my favorite books i've ever read, but was fascinating, is just a line in the book that I never forgot. And I used IT as a metaphor of the time. And he said, the trouble with this business is that everybody expects to find oil on the surface.

If IT was near the top, IT wouldn't be any trick to IT. You've got a draw deep for oil. And my interpretation of that are how I lied to my own life is like there's an essentially an example supply of people that want to get the most for doing the least and is one more competition for things that are easy.

And so in my own life, I want to get the most by doing the most. And so it's fascinating that that quote was about the oil business maybe twenty or thirty years in the future when we were in this book. But at this time, I was very possible for a Young wild cattle.

And that's why the book is called wildcatter. Essentially, just like this little start up oil companies to go out, raise some money and then try to drill some wells over time. That ability comes cost prohibitive. And the only people that will drill wells are these giant oil companies like we see today.

So at the point at this time, you could buy, at this time, you could try to drilled a well, the oil or the gas a you're looking for might be five thousand feet underground, right? So IT would cost you, IT would cost a wild cattle about twenty thousand dollars to drill. And in local homine, texas at the time, there is a ton of oil at five, only five thousand feet underneath the ground.

And so that was the advantage that money had, right? But this is twenty years later, everything near the top right is gone. So now used to go thirty thousand feet underground to get the same amount of oil or gas out of there.

And that's going to cause you the cost go from twenty thousand dollars to seven hundred and fifty thousand dollars. If I did the math correct, that is thirty seven times more costs, thirty seven times more investment required to do similar work. So if you're looking for fields with limitless opportunity, how they look in the very early days is that the opportunity has to be opto small teams without a lot of money. And eventually, as that opportunities exploited, IT will usually just be open to people with a lot more resources. And you will see the cost doing the same things classically skyrocket.

So something has been on my mind for the last few months since I reread the new version in of the strike press um just republished uh the episode three, twenty and nine if you want to listen to IT was charlie has this thing that he talks about lot which is this model of surfing um and he uses IT to when he tried example like okay well why was some walking so successful? Why was lesh ob so successful? There's a bunch of factors in one of them he says, like, they had to serve some kind of wave. And so I was reading this book.

So, okay, what wave? I was looking for the weight. And like, okay, well, what wave did money? serf. And I want to read this. This is facing like why this was available to basically at this this time in history and at this specific place, the fact that he was luckenough to be born in amErica because amErica is the only country in the world in which the mineral rights underneath the ground right, which your these wild cutter's need to buy or police are privately aren't everywhere else, uh, a state or a crown will hold the title and so he says in america, mineral rights must be purchased from thousands of individual landowners.

The big companies very naturally preferred to make their deals with a single sheet or tired or whatever, the country for the wealth of entire nation, instead of clicking around with countless farmers in order to be to put together a field. And this is the punch lime here. The wild cutters competitive, individual way of working was compatible with the private ownership of the land.

Okay, for the fact that amErica is only country in the world where such rights are primarily owned is the main wave. And then the second thing is the fact that let's say he buys you know one hundred a thousand acres, there might be fifty, sixty, two hundred different farmers or uh, land owners that he has to go and negotiate with and so a larger oil companies like i'm not going to do that. I'll just go and see if, like, let me go, let me go to the golf or let me go to russia because if I can sell that one person or if I convince one person, I get to essentially sovereign level assets.

And then there's a second thing that charlie monger said about surfing um that I think what one is useful you and I but also as you heard, money in the opening and have a bunch of of other highlights of, uh most likely where he was anti diversification member. They like you ask him about cattle or real stays like we're oil man, his future generations are you know diversifying and all kind of assets and he was very against that, although he was good for him not to diversify. But you could argue that he was beneficial for his descendants too, because the old business vasey changes in his lifetime book.

This is what monger said about IT. Let me pull that up again. It's for a portrays women act.

In fact, I found my note too that i'm going to reach so he says there's huge advantages for the early bird. So this is charly monger talking about surfing. Obviously applicable to wait more um people and industries than money and oil.

There are huge managers for the the early bird. When you're an early bird, there's a model that I call surfing. When a surfer gets up and catches the wave and just stays there, he can go for a long, long time. But if he gets off the wave, he becomes mired in the shallows. But people get long runs when they're right on the edge of the wave with its microsoft or intel or all kinds of people serving is very powerful.

I'm looking at the note that I left myself when I read that, when I read that portrays, and he says charly surfing out of one thing I learned from having dinner actually, was the importance of getting into a great business and staying in IT. There's a tendency in human nature to massive, a good thing, because of an inability to sits still. So money understood that and was only interested in the oil business for entire life.

Let's go back to this idea of what is a limitless opportunity. Look like limits. Opportunity usually found environments with little to no regulation. At the time, the money starts almost not existent. Uh, regulation by the third generation is coming increasingly difficult.

So this is the difference of gene, what money had, which essentially little to know regulation on what the third generation is having to do with. There is an increasing number of bureau tic considerations governing everything from the distance of well can be from an old indian burial ground to the number of portable toilets that must surround a rigg site. These regulations continue to increase as government agencies proferred.

I want to continue with eighty four year old money and creep before you go to his early life, which is actually absolutely incredible. It's really, again, main part of the book is the fact that this guy shadow is over his entire family. All these oil dynamics are controlled by you one new year.

What do they call them? Prickly individual. I get there in one second. But one of the reasons that they are shadow loom so large because they never exit. He's doing oil deals until he dies, way past his decades, past the need a to work for money. And so his, his not only did are his entire family working the business and he started, but his physical presence is still there.

And so he says, these grandfathers, so there are these patric, to these family dynasties in texas, rarely abandon the towns where they raise their families and they don't venture forth. And a senior citizen, a senior citizen communities. And florida, arizona, a they live where they've always lived, and their daily presence keeps their legends alive.

The mistake of grandfather heroes exist partly because the grandfather's play a special in between role in this land of men that are impossibly hard all over texas. The story is the same. My daddy was a tough old ball, but when he told me he was time to quit law school and counter workforce, I did IT even though was the hardest thing in the world for me, and even though he told me and have to run him out of business before I could get my share.

That's funny because that's happening in texas. Also, I don't think it's is excuse to texas when I got to this the number of myself so oh, this this could be this code could be from ted Turner, as you and I learned in episode twenty seven on ted Turners automobile phy. You know, he he tried to rebel.

His dad had started. That company is very successful when in the largest, I think was the most successful billboard company in in the southeast. And you know, he took off running, but eventually exactly what they said. No, he called them is like you just now, the time you have to come and even though the ted wasn't sure is like, you know, i'm going to go do this back to this book.

This is also something that have noticed that the entrepreneurs that you and I study are way more similar to each other then, uh, you and I are maybe like the the general population, the population not entrepreneur uh, traveling through oil country, one becomes aware of a similarity among the tales told of grandfathers who first have do the land and claim, ed, it's Richard's like mythic heroes. The men of the first generation should begin to seem interchangeable after a while, like figures cut from the same rough, magnificent fabric. They call them prick.

They said, they said they possess prickly individuality. That's a great line. They were. They possess prickly individuality. All the story seem to be about the same prickly individual.

I I is over, over, like the same personality type, then reappears over ever again throughout history, different industries, different part of the world, different times, basically the same shape, same shape, more description. These are their giants. They are successful predators, acute and a cute tamers of the untameable and defenders of vast treasure.

That is a description of mont, mont crae's. Another thing where the second and third generation they are to love luxury. They're spending, they're making a rain.

They're bowling out of control. They're spending a ton of the family money. Money was not interested that he lives in the same house that he lived in his entire life.

Old wild cutter's attitudes seem to be much like those of the original cattleman who preferred their familiar ranch homestead. To the partial quarters that their areas built in town. The allegiance is not to pleasure or lucky y, but to comfort one by sweat and handed down with an understanding of the duties that entailed upon them.

What drove money was achievement, not money. Knowing that if I chase achievement, the money comes with IT. But it's also about being able to live up to your own ideals. And so at this point, the story monkeys are obviously very, very wealthy. Y so he wants up knowing a bunch of president.

And this was a very fascinating, uh, insight into a money and chief is quick to tell the visitor got pictures in his office, but like Richard nixon and linden Johnson and only other people, right? This is very fascinating. Money on chief is quick to televisor that nickson was a weak man destroyed by zone avers.

He speaks of lindon Johnson as a compassionate man, but greedy like nixon and much prouder than he. Such judgments are not political but personal. They are moral sentences passed upon men who were not large enough to live up to their offices.

But at the same time, we still respect them because for this reason, put to whom and measure over is nonetheless old, simply because they won and held those offices. They exhibit personal pantheons across which fall the shadows of men who shaped american destiny. I so I need to explain that a little further.

So it's talking about the the first generation of front tier sadlers, which is what what a monty monkey for us, right? They have a sense of honor, even for those who have decrease themselves, because even when a great man falls from Grace, they are actions did before that help shape america's destiny. Okay, so then the book goes into his early life.

I think this is the way I think I can essentially tell the entire story in just two sentences. And so this is not a direct quote from mounting on Cliffe, but this is my interpretation. If we are able to talk to him, this is what he would say.

My dad got a texas and a covered wagon. I made hundreds of millions of dollars in my lifetime. And so when monty is a Young man he serves in, he goes to your to fight in war, war one.

While he's doing that, he actually becomes friends with the sun of an OK hole oil family. And so after the war, a montee gets back to america. He decides to head for khmers.

And he starts working for his friends, families, oil company. And so his first job in the oil industry, he has a job called a land man. So he says he worked first as a landman, as many future independence often did. Land man, land men do not buy land.

Rather they least the right to produce minerals upon IT from the land's owner says, is what I mentioned early, have a lot of larger companies, oil companies like, i'm not doing that, I think go, you know, in, negotiate, individual, fifty people, twenty five people, two hundred people, I just rather go straight, the rule of the country. So this is how IT works. Rather, they least the right to produce minerals upon IT from the lds owner who takes a share, a lease, which is what he's negotiating, gives the Operator access to that tractive land for five or ten years.

If oil is found before the least expires, the Operator may continue to produce IT for as long as that well last. If not, the mineral right rights revert back to the landholder, who then may sell them to the next bitter. But if the land proves productive the least, the person's doing leasing pay a royalty to the land on the rate, uh, which is a share of his profits before costs.

So share is revenue before cause. Rather, the share is usually one eighth, and this is, this is faster. The share is usually one eighth.

And IT is called a royalty because I was once paid to the crown. So after few years, money decides to strike out his zone. He wants to work for himself, and he's going to go from oklahoma to west texas.

Now a huge part of this early industry is like, where are they are getting the money from? And so there's two interesting sources for funding here. One is the oil industry.

This point is completely dependent on the railway industry. Remember this latter because there's a huge dispute between two separate oil companies and wait to hear the name of the let of the actual governing body. It's not named after oil.

We just put IT. Let me just say that. So the earliest some of the earliest american oil years were actually easterners, right? These are very for away from the frontier and okhotsk.

Is there actually easter's who controlled LED, the rural lines? And then the second source, which was uniquely taxi, is before oil came to texas, they were their massive industry with, uh, a lot of the the richest families were actually cattle ranchers. So this is getting puppy wagoner, for example.

He was texas first billionaire, obviously made his money in cattle ranching, and then he takes that money and then actually founded a bank, and then he would fund a button china like Angel investing. Think about talking on here is a billionaire. He's like, okay, i'm willing to go head and issue and invest these in the speculative like oil startups is a way to think about this.

And he does IT through fort worth national bank, which he he found IT. And so one of the main things that jumps out is like, okay, well, why would you do they have a good job? Like, why would you quit?

You move states and this is this idea works like he had unbelievable self confidence. I don't even know if that's the right word. This a lot of these early woodcutters, they they were default optimistic by far, but they also believe they were born lucky.

This is not a joke, so he is money my. He believed that he had a gift, a special talent for finding oil. He believed that he'd been born lucky.

When asked why he said himself up as an independent oil man, he said, that always had IT my mind to Better myself and took Better himself has always been his quest in life. And so these wildcatters raise money. They are start drilling holes.

Mony's first twenty nine, his first twenty nine wells all come up empty. So at the beginning of his career member, he still thinks his born lucky. He was decent to IT, I have a gift is the way you talk.

I have a gift for finding oil magine believing that, right? Quitting your job, moving states, raising money first, twenty nine times they're all duds. They start calling him dry hole monty. That was the situation right before he hits one of the largest oil discoveries ever. There is actually, let me read this too.

There's a great line, I think, about all the time in the book, officiate the well, which about sams murray and I talked about this such he goes in and accumulates assets when he does not have the money to do so, because he believed if he did not get those assets, his business in the future would not work out anyways. There is some, some degree of for some reason when when I got to the section of book, I was thinking about this line. This paragraph is in the fish ate the whale.

So let me read that paragraph you first. And they will get into this incredible discovery that money is a Young money. moncure. Ef, his son is, I think, eleven years old when this is about to happen. But this is the line from the fish at the will.

There are times when certain cards sit unclaimed in the common pile, when certain properties become available, that will never be available again. A good businessman feels these moments like a fall in the biometric pressure. A great businessman is dominated gh to act on them, even when he cannot afford to.

And so when a real estate trader by the name of B. A. Skipper comes and asks money if he wants to buy these leases, this is what happened.

So ba skipper, we're trying to unload the leases that he held on four thousand acres. These four thousand acres just happen to be near. Dad joined as well.

So dad joiner is this guy that sold out to this other, I name H L hunt hl hunters in that book I reference earlier, which is the big, rich dad joiner sight is the foundation of the H L. Hunt family dynasty. Should went to dad or anybody sold out? I think that's a huge important thing to remember.

So B, A skip comes and is like about four thousand acres he's in under financial pressure. Their kind of near jonas. Well, do you want them? No geological survey had been made in the land, but the accurate was cheap because skipper had paid off his leases, he had taken them on an open draft from the the bank instead, hoping to get rid of them fast and turn a profit by doing so.

So as a bunches, people where they'll get a least and associated, they just want to sell paper there. You have no issue. They're not wild cats like we got these let's I paid, you know, making number.

I paid a thousand for them. I will give you my rights for, you know, five banks. They're like short term, short term traders, I guess, is the way to think about the very different than what a money was interested in doing them.

money. Clive ve thought I was possible that this site may be sitting on top of the northeast running trend and on impulse, meaning that is close to the dad joiner discovery. And an impulse bought the leases.

Any thought? The laces, even though he can have the money. So what did he do? They do this over over again. And they take on partners, uh, to save some money, he went partners with the man, man named jt feral, who worked down the hall from him.

Moncure ef and faial didn't have enough money to permit them to expand their holdings and undertake the expense of drilling at the same time so they do with independence, have always done and then sold off pieces of their enterprise. They gave up some other interest to getting a that, getting oil. So think about what just happened there.

B, A skipper comes to monty with with an opportunity monies like, okay, i'm going to take another flyer have trailed twenty nine dus I don't have money for this. What I can do, I going to walk down the hall, not on some doors. See, wants to going on this deal with me.

So now we're fifty, fifty partners or like we got the leases, we we got no money to to drill what we going to do here. We'll go to a bigger world company, say, hey, give you some money drill and if that works out well, obviously give you some move the interest in a good well. And then I love his relentless optimism here because of the first well that he draws gush force, eighteen thousand barrels of oil a day.

And then his response was hilarious, right? Because it's like, it's like to be delusion. Ally optimistic. You just go for one setback to another settings without any loss of enthusiasm.

Which I love and IT says, like, so you know, all these struggle years doesn't have the money once figure out how to do IT the first well, they drill on the other things. So this we in thirty is attempt, uh, the first one is eighteen thousand beards a day. And then he says this further convinced him that the good lord must be looking out for her, in other words, that he was born lucky.

Now it's fascinating is how fast his fortune change. So his money and his partner held onto their releases until the end of one hundred thirty one. If i'm not mistaken, they actually hit IT.

I can't find the exact year and pretty sure they hit that same year. I think they held onto IT for a year, maybe too. IT was not the point whether to year to year something.

It's not a very long time, but the value obviously increases dramatically. And so he says they watched their worth increase many times over. Finally, they sold out to a larger oil company for two unit, five million dollars that be the equivalent of something like fifty million today.

A few years later, the company that bought up for two and a half million sold IT for thirty seven million to standard oil. And so a bunch of other people like we're like, oh, you know, you sold too earlier of the cases. But again, this can be the foundation of which present a multibillion of our family fortune.

So a lot of other wildcatters, like all you sold too early, but I loved what monument increase said here. He says, uh, in the oil business, there's no what if there's only what happened? And another interesting thing is, one, he's sold and I just not work by any money he's going to keep.

He's going to be in the same business for the verse his life and he's going to keep having a lot of success in that business. But also what was facing is because, uh, his wealth was very soft, like this tangible resource, he was able to survive and thrive in the great depression. So says, unlike the oligarch in new york, rich texans were not necessarily forced into the mini circumstances by the depression.

Texas fortunes had been built upon the barney of the earth. This is their words. And the memory of this advantage during a time of crisis has made many texans mistrustful of paper fortunes ever since, mistrustful of paper fortune ever since. Remember that sentence later on, when his grandson is, you know, essentially like peacock in, like, look what I did when this deal he's drilling oil for israel, a unlike dispute and in in israel and the egerton the one thousand and seventy and we'll get to that later but his a grandfather wasn't buying IT is like until the money is in the bank know reminding me something that seems else I think was an autobiography where, you know, somebody had set him during the dthe original dot com boom in the late nineties.

Like sam, you know you took you forty years or something like that to be a billionaire ah what do you think of this guy that, you know so this company eighteen months ago and is a billionaire, know this like ninety seven and ninety eight, tell me when he is the money in the bank and i'm pretty sure if I remember the the story correctly, that the that was always just a paper. Fortunate went up booming and then busting and then I think going bank crowd. So before I move on, I wanted go over some of the characteristics of these early wildcatters ers because i'm choosing to focus on money on creeps.

Was a lot of all the characters in their hl hunt, sid, Richard son clip merchants. In fact, we brought this book to my attention is i've been doing research I want to do uh a podcast on and Richard rainwater H A very influential uh investor and company builder. And yet there's surprisingly influential this person was there's no bike phy on him.

And so I found this podcast, and it's called rainmakers podcast, or leveling down below. Turns out a rain who runs the rainwater podcasts has been listening founders for a while. And I sent him a message and he gave me all of his research.

He's that i'd recommend listen that podcast, because the level of research that I went into its incredible. I've been trying to find some richa real. The time and rain just came up with, like his sources were just way Better in the mind.

And I one of his sources was this book and so immediately were all the books on that list and I started reading this like this is incredible um and so my interesting in this was I was like, okay, I want to learn more about because Richard rainwater, how he got to start was that there's a oil man. One's is becoming, I think, the richest person, a united states for certain times more like a gAmber seems sir Richard, her son. He passes away.

His fortune goes to, he didn't have any children. His fortune goes to his nephew. This is the best family. And then the best family hires Richard rainwater.

And so the pog gem tell you about talks about how Richard, I think, turned fifty million of the basis money into five billion. But said Richard son, just like monday, monday, they were a big belief in luck. In fact, h.

Siz crato says that, uh, hey, he'd always been, uh, his credo had always been that he'd rather be lucky than smart, because a lot of smart guys go hungry. Another treat that they had was they were not afraid of jet. This is not advice, by the way, because there was a lot of people who did the exact same thing they did, but did not survive.

And so sir Richard son's, his partner is going into merchant, who's also fascinating in the big rich. Highly recommend. I am going to leave links for this book, but I D also go back and listen episode one and it's not one fifty is IT I don't know why.

I'm guessing I can just look at up, uh, IT is episode one forty nine, one fifty seven one so one forty nine I listen to episode. I also read the book the big richest excEllences. I'm going to want rereading IT in doing another podcast on in the future because I thought the book was a fantastic, but so clear merchants s in there as well.

They were one time partners with sid Richardson, and you might find this interesting clint merchants, sun IT was actually the founder of the dallas cowboys. But so what they have a in common, they believe in, look, they have an absence of fear of disGrace. We just saw like they're fAiling over over again.

They just keep getting back up and going at IT uh, as we just saw with monty, he was all in two thousand nine and he was still going out and and thirty was, you know changes his life and really now he change his life to change rejectors of many generations of his family. They're also not scared of of having tones of debt. And there's a great ah there's a great exchange between city richton in this and clint merchant in the book and sid tells clint I must be the richest one between us because I owe more money than you do.

They've got paper of mine floating all the way to london. Sid believe that this is crazy, said I had an attitude that there was no innate shamefulness in going broke or in borrowing as because there was a reason for IT. They all were delusional optimists.

They believe that optimism was the personal quality that nurtures luck. They hated timidity. They said you cannot use simply an oil man simply could not afford to be timid and then they did not feel the need to apologize.

Uh, for the occasional big losses. They believe that if you were not having big losses, I mean, weren't trying enough. And in many cases, they Operated in legal like grass.

They build concrete bunkers around wells and hired armed guards to defend their turf from government inspectors. They smuggled oil across state borders. They Operated unregistered refineries in backwards.

They processed crude and excessive what each Operator was allowed. This is later in. The oil industry says chaos, and they believe in chaos and defiance, and they refused to be controlled.

They were not afraid of risk. They said, the risk is always there. And in clean merchants in has a great saying, he says, so the risk is always there.

And as calling merchants was fun of saying, after the first hundred million, what the hell? And so when he found out there is like, after one hundred million dollars, you get one hundred. This one you get up one hundred million or a billion, the difference in your lifestyle negligible.

So you should be going like you should be building businesses going for risk. In clin case he he would spread money all around. He would oil companies, railroads, coal running ing.

Obviously his son a eventually um started the del's cowboys. But really this is that I guess, the punchline for this entire section they were motivated to found dynasty to which their sons and their sons suns could succeed. This is more about their mindset.

Uh, west texas, where all these these guys are Operating, were settled by optimism, by peer booster spirit, by the willingness to go on faith and instinct to believe that hard work in the taking of high risk as inevitable, bring reward only something, a stubbing and unreasoning member. This is not like an intellectual thing. In many cases, there are being irrational.

People around them are telling them they are only something is stuck in and and unreasoning, as faith could have inspired men and women to settle and remain upon this harsh on yielding inland. These texas wildcatters were optimists without equal. They had to be.

This was very fast sting. So keep mind, clint, uh, are not clint. Uh, monti gets in the business right after we were once.

So we're talking in late one thousand nine teens, right in the years before and after the first war war, the U. S. Bureau minds had begun issuing a series of pessimistic surface.

They estimated. These are the coron code experts saying, you're wasting your time here. why? Because we estimate that forty person of america's patrolling reserves had already been exhausted.

That is insane. As an insane statement, this is over a hundred years ago, right? So one hundred years later than this report by these experts was issued, right over one hundred years later, there is more petroleum produced in america.

There's hundreds of thousands of barrels a dead in the thousand nine twenties. So at that time, let me let me be clear. I'm same here in the one thousand nine hundred and one thousand nine teens when this this reported issue is like, hey, we've already we're as making that you've guise of already top forty percent american illum serves.

We're already producing hundreds of thousands of barrels a day, right? They can like we're going to run out a hundred years later, we're producing tens of millions of barons a day. This is why keep bring up the a rational optimism and the belief in luck that they have because like.

The industry reports like no where forty percent of the way through, uh and the report concluded, right, that the domestic oil business was not far from dead. West texas oil men refused to take these reports at their word. And IT was a good thing they did because when they start drilling, all of these findings is going to happen over the next ten, twenty years, right? IT was the greatest frontier gold rush of all time.

And they they make a great point. The book that these discoveries in texas in chinese thirties, forties, uh, were ten times the size of the gold strike that brought the forty nine years to northern california and eighteen hundreds. And I think there's some needed context around this, right? Like why could you have this defauts optimism and IT goes back to this this theme that I was thinking about.

I was reading this book because I, okay, let let's study this, not to like try to start an oil company. But i'm really curious like where is their opportunity without limits today? And can we dive insights into like what those opportunities look like and what to look for? And part of this was that these are is a actually dull theme here.

Like these are poor men. Moni man cooee, when he was doing this, was not a rich man. When his grandson or his son tried to do that. They are rich men.

And so I think the benefit that like a clint merchants or c Richard son or monem creve head is the fact that they they really, they could speak as growth as an inevitability because there's nowhere to go but up. They had to begun their lives. And a lot of these wild cutters, they become their lives and hovel and had nowhere to go.

And so they were willing to sleep intense. They would, in some cases, they would teach. They would pitch a tent rain next to A, A, A Derek, right? And there are open.

They describe this environment as ungoverned backwards, with the climate that was predictable only in its violence. So you got here the freezing, their storms, there's mud, then there's heat. And the only thing pushing them through is one there broke.

And to their very optimistic, such harshest put to the test the willingness of people to put aside all thoughts of present comfort and pleasure and live exclusively upon hopes for the future, this same stern ability to ignore their present circumstances and live upon their hopes. As one descendant of a wild cutters said, my granddaddy, I was born in a hole in the ground. You can't start life much lower than that.

And so I mentioned a surprising role that railroads played in the known, the growth of the oil business, but also the regulation of IT. So says h growth meant railroads, some west texas field had to be shut down after they were discovered because so means they struck well, because there is no means for hauling barrels of crude out of there to the refineries. And if the discovery was big enough, they would actually be able to influence railway rhoads to lay tracks.

So says they became a bananas er for railway schemers as much as for wildcatter. So that that at the stage and was very interesting that you know there's a kind of like synthetic tic relationship between independent oil wildcatters like monty and these larger companies like they're kind of doing deals with each other. Their fields are next to each other.

They they become partners for a little bit and they break up as an independent uses is going to eventually stall out. He's going to sell out to a major. So this was fast, was really surprising in IT. I think spc influence said that railways tes are roads had on the a early american oil industry. So independence, like monument grief, they usually are rarely willing to jeopardize their relationship with major companies by taking them before regulatory boards.

Minimum grief had to do this because he feels that he thought that humble was decreasing the value of his oil fields because they were draining essentially like, let's say, he was on the outskirts, they on the middle. They were dreaming things that were not in the middle. And so if an independent wanted to file suit against a major, he would go through the regulatory board of the oil sheet, the time which was called the railroad commission.

That was surprising. Again, it's not the oil board, oil regulations, the railroad commission, and in this case, this one of making him over hundred million dollars. The railway w commission ordered humble to compensate him for his fields. They were forced to pay hundred million dollars, along with percentage es and residuals on on those percentages. And so I said I was a Victory for his dynasty and that means for its perpetuation.

And there's just a great line in the book about this because you think give nuts for you and she's suing a potential partner in the future, you're nuts for doing all you know, all the behavior of the wildcatters are doing seem nuts at the time. And he says being crazy is something that majors just don't understand. And being crazy and having imagination is actually a huge asset for the independence s this.

This step blew my mind. Independent wildcatters find eighty percent of the oil and gas in america, despite the fact that most of the mineral leases they acquire have been rejected by the big companies. And so when the book ends, monti's in his eighties, and he still added, and I think this is a good description of why money on chief grew up amid the harshness of a developing frontier land and made hundreds of millions of dollars over the course of his eight, eight years, he had realize his ambitions in the town that he helped to settle and shape and may grow.

He had been able to trace his shadow, leave his mark upon an empty land and set a standard for those who were to follow. He created a dynasty for money on craeke and for men of this pioneer generation achievement, not refinement, is the measure of all things. And that is where I leave IT for the full story highly.

You recommend reading the book if you buy the book using link in your show notes or a available funding stroke that com you will be supporting the podcast at the same time is only a few limited copies of this. So in case you can get this, I will also leave a link below uh to read the big rich, which tells a lot of uh similar stories and is an excEllent book that is three hundred and thirty eight books down one thousand ago. And I talked again soon.

Okay, this is a few quick things. In fact, a few quick new things, uh, before you go. First one was ask for and requested for many, many months. Founders now officially has merch. If you go to shop dot, founders by cast dot com can go to 点 com and click on merch。

A few months ago, I did in a live show in new york city with my friend Patrick SONY from the investigative best Price cast, and we sold for the first member. Like founders merch, like swetchine cats, people seem to love IT. I've been wearing that.

I have actually took like four of them for myself, and i've been wearing them for the three months. They are super, super comfortable. I would definitely order the sweatshirt, the hat that we have on there right now.

I'm actually going to replace soon with a hat that because the founders logo on the hat is big, some people like IT, I personally like IT if a little smaller, but if you happen to like the bigger logo, get the hat soon, because eventually that we replaced with the hat with a smaller, uh, logo. So if you want to buy some founders merch, go to shop dot founders broadcast 点 com， or go to founder park to come and click on. Merchant can do that.

The second new thing, and this one is incredibly important, me and Patrick are looking for partners if you are building products, if your company is building a product that makes somebody else's business Better. So B2Be, and you will be interested in becoming partners with me in Patrick ony from vice, like the best email partnership PS at founders podcast a com, that is partnerships with and s partnerships at founder podcast a com. Tell us about the company, your building, obviously, any important links that we need to know and why you think we would.

Good partners. So we're able to obviously help with distribution where we're looking for partners that we can actually partner with them and help advertise across both of our part cast. We can also bring capital and then access to talent as well.

And one of the reasons this came uh this this idea came to mind is because I keep having this experience where whether i'm touring a company because have been invited to or giving a speech, I meet somebody uh through like a friend of a friend that listens to the podcast. I keep coming across these unbelievably talented and formidable founders that listen to founders and in some cases, have been listening like I just met one last week is incredible and is again listened to two hundred episodes. And so it's very apparent to me that i'm doing something wrong with because these supremely talented people, there's no mechanism for which for them to like, reveal themselves to me.

And that's important to the pocket because supremely towns of people usually build supremely impressive products, products that can make your business Better. And I would like to use the P, I, D cast to essentially highlight founder LED companies from founders that listen to founders that would benefit other listeners of founders. And so Patrick, I don't know what shape this is going to take IT.

All we knows. We have access to a lot of resources. We have very unique assets and no one else the planet has.

And if you you think you're right fit, just email partnerships at founders podcast 点 com。 There will be more details in the future. I just want to put out put out, out there for now.

So if you're building something and you would want a partner with Patrick and I email partnerships at founders podcast dot com, and I think you'd be surprised about all the kind of unexpected benefits that could happen. So this judge, you just happened because I told you about this company vest to VS and Victor E S T O, its veto dot com. And I partner with them for a while.

I knew the founder, two of my close founder friends were both using veto to get higher returns on their businesses, idle cash. And so as I go, this is a new band and spend a much time with them. We have to deal with them much times.

And then I had two people I trust, and they were both in very opposite situations. One was had raised a bunch of venture capital, and so hit a long runway. He was using vesa to length in his own way.

And the other one had this giant bootstrap with a bunch of companies and he was using IT to get uh higher rate of return than his bank was offering them. And so there's a bunch of people that heard about veto. From the adda was doing on the podcast.

But what was fascine? And this is an unexpected benefit. They actually pull the product out of vester that didn't exist and now exist because of that. And this is also the benefit of founder LED calls, sales calls. If you can do that, your company because bend, bend, we're taking all the calls right, explaining, getting to know who the prospects were, explaining the business, explain why the business exists. He built IT from the ground up, so he's the person in the best position to explain to explain its value to potential customers.

But he having bunch of these conversations and was fast, people know that didn't even know each other, were asking for the same thing because I guess I have excess cash and I would like a higher return, obviously, now the interest strates or higher. But there's this other problem um that I really want to find a solution for. And a lot of people have in many cases, multiple bank accounts spread across multiple banks, in some cases, multiple countries and in some cases, multiple currencies and multiple entities.

And the only solution they could find, and this is what they're asking bend to build for them, was, hey, I have to hire somebody, right? They are paying somebody every morning or everyday to log into all their accounts. In some cases, there was like ten to thirty different counts reconcile all the baLances and in some cases, convert the currencies just to figure out how much cash, as all my businesses have, write this exact moment.

And so as a result of founders in the founder community, in the founder markest community, this product now exist. If you have this problem, you can go to vestoia com. V E, stu, everybody says, I slam my words. I know I don't pronounce things correctly, so it's V S. And Victor, I obviously will leave the links in the showed tes.

And the links for everything I talk to talk about is that from the pocket a com, if you want to see all of your company's financial counts, in one view, this, this, this versions of veto will connecting control all of your global business accounts from one dashboard. And then if you choose to, they can automatic, also hope you earn higher rates on your businesses, idle cash. And then when you go to vessel and schedule demo, you actually talk to bend.

So just make sure that you tell the David from founder sent to you. So two more quick things I want to talk to about founders notes. Founders notes is the best way, the single best way. First, I think it's it's the world's greatest the worlds greatest notebook for founders, but also the best way to support the podcast. I think last week um the new pony episode really homed in on the value proposition from just reading and rereading all all of my notes and highlight ts.

So what founders note is is for what is this now six years in s two thousand and eighteen i've been catalog ging all of the notes and all the highlights i've been putting in this APP called to read wise, which allows me to search by book, search by keyword, coning review my highlights. There's a thing called the highlights feed, which I think is incredible, which is essentially a random generated like a smart twitter feed. But instead of reading the psychotic delusions of these crazy people, they had to hang on a social media all day.

You're reading notes and highlights from histories, greatest founders. And so I went to the team and read wise. This is like, hey, people have been asking for a long time to have access to my notes and highlights.

Is there any way we can build a product together where we can essentially mire what I see? So when you subscribe, when you go to founders notes that founders of the nest founders no that com and you subscribe to this, when you invest in the subscription, you see exactly, you see a direct mira. You see exactly what I see.

This is something that I use every day. This is a product that I could not make the podcast without. IT is literally embedded in my workflow.

So if you'd already had access to founder notes, you would have already seen the highlights for the for the wild cutters, the book that we just want over because i'm updating IT nearly every single day. And the reason I thought that there was a lot of there was a couple things that people emailed me that really resonate from last week. One, I would talk about the fact that it's only for people are running already a successful companies, right?

If you're not already running accessory company, the people running successful company, uh, are going to get the most value of founder notes because they already have a mechanism which to turn that knowledges in the new book into profit, right? And if you're not, listen to the podcast I said, like founders of notes does not have a free trial because the podcast is the free trial. So if you're not ready, running a successful company does not make any sense for you to to invest in, subscribe.

Just go and listen to the three hundred thirty seven episodes whenever you want as much as you want, and then use those ideas to build a successful company. Then this is this is in addition to, but for people are already running a suc company, then it's no brain. You can invest in a year subscription right at the end of the year.

first. All there's already does not know something. Twenty thousand highlights in there. I think the team read right just sent me my stats page. Um I think this there's twenty four thousand highlights um but i'd had to go back and double check check up.

But anyway my point being is like the use if you sign up today in the next year i'm going to add another you know fifty something books and you know by four, five thousand highlights. So the product literally gets Better every day. And then you could decide at the idea, did you get value out of or not? Well, I think I think it's a no brainer to try for at least a year.

And the reason I say that I heard from a lot of people that uh the open a episode resonate with them and they realized to help them realize the value of, you know, not just listen to the pockets, but really going deep on this and reading and rereading over over again because that's that's the polling own words he said, read over and over again and say, read once, listen to one episode and then keep a movie and know he said, read over over again the the campaigns of Alexander handle seizure, a fragile c grape. Make them your models this is the only way to become a great general to master secrets of the art of war with your own genius. Enlightened by this study, I truly believe that if you subscribe to founders notes and you read IT every day, keep IT open your browser.

What I would do is pick a new book every morning, right? And just read the highlights you to see my notes to search where ever comes to mind. Uh, use the highlights feed, which is that is a really cool thing if you can build a habit of just scrolling the highlights feed, take ten this will take ten minutes out of your social media going right just take ten minutes at whatever how much I am using and use that to read the highlights ET for ten years.

It's impossible that you're not going to get valuable information that make your business Better. If you do that, time's a day for the year is just impossible. That is not even including the crazy thing that i've been testing.

And I might just released IT soon. It's the essentially a founders GPT that I can't call that there's got to be a different name. So I got to go go up what's like ChatGPT as that have been trained on the entire internet.

It's trained on all my notes and highlights and then now all my transcripts um and it's just if you've ever heard you heard on the pot gas, but if you ever heard we speaking in in person to it's this thing or are being interviewed the pocket I don't know what that other person is going to ask me but everything that I hear is filled through through all the reading and research in the consent rereading my highlights. So oh, that reminds me of this that reminds me of that you hear you do this over over again. The founder GPT version does that.

And I like IT email is making connections that I didn't even think about. And i'm like, oh, this is interesting. Now here's problem. You're just like with any kind of these like you know chat models, eighty percent of its amazing and then some of its like that's not you just made that up. So we ve got to figure out what to do with that, but that's superseding.

So this idea where it's like polling said multiple times and his maxims to the importance of this know he says it's it's profitable ables to study the campaigns of the great masters. I don't know about you if you're reading notes and highlights from bargrave hies of history, cage entrepreneurs, what is that? That is, you're studying the campaigns of the great masters only saying that's profitable to do so.

Uh, he says that all great captains have been diligent students of history. You and I talk about this every week. That's one of the main reoccurring themes in this this in the history entrepreneurship that comes up in these bike pes over over again.

And then the pony's says experience must be supplemented by study. No man's personal experience can be so inclusive as to warn his, disregarding the experience of others. Experience must be supplemented by suddy during the day you're busy working in your company, you're building your empire.

When you're not doing that, I think listening to found readings by graphs, investing in suffusion to founders and it's that professional research you are supplement and you're you are supplementing your own experience by study. So if you have not yet signed up for IT, highly recommend you do you go to founders notes dot com after you sign up your receiving email. In that email, IT goes into detail that welcome to email, make sure you you read IT IT goes into exact detail how I use this on a daily basis.

And even this morning I was going in rereading highlights because one of my hair box that i've ever read was this is called hard drive. It's it's episode two ninety. It's a, it's a biographical bill gates. But what I love about is like it's the first like thirty five years of his life because IT ends at the microsoft IPO.

And what I was rereading highlights because he Young go gates had there is this line is has like this monoclonal quality and such what i'm just brainwashing myself to make sure that I don't lose my focus. And so was reading to the highlights and also thinking about this idea, uh, that i'm thinking about my own business, the importance of like uncapped, limitless opportunity. And his decision to insist on a royalty agreement between him and IBM.

So all these weird things that you know maybe had forgotten had taught on a while and rereading. And then he gets to this poor. I was like, oh, he consumed biggies. Uh to understand how the great figures of history thought and like up there IT is again, I said he was doing that you know, thirty years ago by longer that forty years ago. But this idea, it's like all this constant rereading and rereading and studying of the great people that came before us.

And I really do because I can tell you, with my whole heart, like I made the product, I use the product every day IT would be impossible for me endorse, uh, uh, another product in the world to agree to degree other than know listening to the podcast. So I truly believe it's valuable. If you want to try IT over a year, go to founders, founders, notes dotcom. As always, thank you very much for listening, and i'll talk you again soon.