SkyBridge Anthony Scaramucci: Masters in Business (Audio)

Dell and as well here in the conversation. He's very self effacing and he's all about we the team. When he was at Goman Sacks, it was the team. And when he was at UM other places like new Berger and Berman or Lehman Brothers, it was all about the team. But I'm gonna share a little bit of info that he was too monest to talk about. You know, when when Dell ran into some trull in the early nineteen nineties, he was a young kid. He was a hotshot CEO, one of the youngest CEOs of an SMP company ever,

and they ran into a bunch of trouble. You know, HP kind of retooled and went after them. Ibm UM became a better competitor, and at the same time their CFO began dabbling in the currency markets something as it turned out that he was wholly unqualified to two and del The company lost hundreds of millions, if not billions of dollars that they simply didn't have to lose, and

they really needed a cash infusion. And my understanding, and this is second and third hand and based on some old research and some old conversations, was nobody was especially enthusiastic about getting this deal done. Um Anthony said. If he wasn't there, it would have happened. Somebody else would have picked up the ball. I'm less convinced of it. I think that he was a guy who was sort of an odd fit at Harvard Law to Goldman Sachs

investment banking, not exactly the usual candidate. And I think that he was looking around for something that he understood and he could pick up and run with that nobody

else really did. And he had was impressed with Michael Dell as a person, and he understood the situation as to the trouble the CFO had created by engaging in these currency hedges that all went bad, and so he decided to pick up the ball, and with a great Rolodex and a great network and a very personable way about him, essentially rescued Dell as a company, managed to get a lead, managed to raise money, managed to get

the deal done. But what's fascinating about the discussion with Scaramucci is that he for a guy who is as wildly successful as he is on pretty much every level. The company, he's running, the conference, he's running, the resurrection of Lewis ruck Kaiser's Wall Street Week. By just about any measure, he's a tremendously successful guy. The conversation we have is all about failure. He discusses how he was

fired by it from Goldman Sachs. He discusses how when he first launched Skybridge, it was pretty much a disaster. It wasn't happening the way they had hoped, and then

the financial crisis had come along. But the the thing that we hear over and over again in all the stories that he tells is that each subsequent failure is greeted, if that's the right word, as an opportunity, as a learning expense, as a learning situation, as as as a chance to pivot and try and do something new and different, to rise from the ashes, so to speak, and Skybridge

is a perfect example. He tells the story of how originally they started out as a hedge fund seating company and that really wasn't going especially well when the financial crisis hit, and in the attempt to raise some seed capital from City Group, ended up essentially recognizing that they

had to get rid of their hedge fund practice. It was a liability and they were really retooling dramatically, and so Mooch as he's known, ended up picking up a couple of billion dollars in assets, really very inexpensively, and parlayed that into their nearly uh ten billion dollar fund

of funds now and runs a very straightforward approach. Hey, if you're looking for us to beat the market, if you want to generate alpha, if you're looking for all those sort of things, that's not what we're gonna do. That's not what we're capable of doing. He's pretty straightforward in not over promising, and therefore he doesn't under deliver. So I babbled on long enough. I think you'll find this to be a really really interesting conversation. My interview

with guy Bridge Capitals Anthony Scaramucci. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My guest today is Anthony Scaramucci. You may know him as the Mooch. He is the founder of Skybridge Capital and the Impress Sario behind the Big Salt Conference, which takes place every year in Las Vegas. Anthony, Welcome to Bloomberg Barry. It's a pleasure to be here. Thank you for having me. So you're at Goldman Sachs in the nineties, coming out

of Harvard Law. You are summarily dismissed from Goldman What do you do with your career then? So, now it's a Friday afternoon. I go home very rejected, and I wake up on Monday dust myself off. I have a roll of quarters because we didn't have cell phones back then. I took a train back into the city. I started pumping quarters into stay phones and I was calling my buddies asking for help, and finally I reached the fellow

was a great friend of mine. He said, hey, listen, there's a job offer and an opening at Goldman Sacks. I said, are you kidding me? He said, in the sales area. I said, okay, that's probably better suited for my skill set. So I called my old boss who had just fired me. His name is Michael Facetel. He built the building that we're in. He was the CEO of Vernado Realty, went on to become CEO Vernado Realty Trust. I said, Michael, you gotta help me get this job in sales at Goldman. Uh and so he put a

call in for me. I got interviewed. There were many interviews later, they offered me a job on March. So I was out of Goldman from February one to March. But I got rehired two months about two months. So so there's an ironic thing. I got to keep the eleven thousand dollars seven check, thank god, grand months and I got and I got myself a new job at Goldman,

which is better suited for me. So so the lesson for younger viewers out there is, try to go for the jobs that you think you're well suited for, not the ones that you think are the sexy job. Don't breed in security in your own personality. Go for the stuff you think so you stay at Goldman for a couple more years. But eventually, and I think it's ninety six, you end up leaving to launch Oscar Capital. That's correct.

What was Oscar Capital like? So it was Andrew Bozart, So his name was bo s. My first name, I make last name is S. C. A. R. We dropped the be called it Oscar Capital, worst name in financial services history. Every time we had a meeting people for our year affiliated with Oscar Meyer the hot dog company. You know, Oscar the grouch. But we built a one billion dollar registered investment advisor that had a small hedge fund. We had a very good relationship with Fidelity. We were

part of the advisor referral program. I think New Burger wanted to be in that business with Fidelity, so that's why they They contacted Greg Fleming, who was the M and a banker at Mary Lynch. He's now the president of Morgan Stanley. Greg was our merger banker and we did the d all six weeks after the nine eleven terrorist attack, really in two thousand one. So you have

gone for five years. Now you get bought by New Burger and I think it's too and I'm assuming for a billion dollars in a U M there's a number of ways of calculating that um multiple of sales or how how did they figure out I'm perfectly understand if you want to blurt out the number, but what was the formula that we're playing with? It was at times sales. Yeah, you know, I'm a I'm an open guy, but I

did sign a confidentiality. It was a reasonable multiple. I mean, I think of earnings of of revenue, how do they

they do? Yeah, it was multiple of revenues. But I think I think the interesting thing about it is, I mean, none of us were crying when we when we did the deal, But I think the interesting thing about it is you have to make sure if you're ever going to do a deal like that on your own company and you're gonna sell it, you gotta make sure you sell it to people that are similarly situated personality wise. Thank god that was the case for us. I sold the business to a guy named Bob nats Up and

Jeffrey Lane. They were the two senior guys at New Burger, and they lived up to their promises. They were great people. New Burger then went on to sell New Burger Berman to Lehman Brothers and so That was an interesting point in my career because I had worked at Goldman Sachs and now we were all migrating over to Lehman Brothers. And I became a managing director of Lehman Brothers in October of two thousand and three. You know, we we

had Jack Rivkin on the show some months ago. He was at Lehman, left more or less, got fired, joined New Burger, joined New Burger, and ends up coming back to UH Actually his time at Lehman the first time became a Harvard Business School. He took them from last to first place the research similar situation ends up at

New Burger along with your friends. Gary Kaminsky was a New Burger for and his dad, Gary and his dad and his brother Michael and Gary Kamitsky, and I go back to two where one of his best friends from the town Ulit that he grew up in was one of my roommates in college at Tufts. So I've known Gary forever um and it was really a lot of fun to work with Gary at Newburger. So in the last thirty seconds we have how can you compare the culture at Lehman with the culture of Goldman Sachs very

very different places. Uh these things he evolved differently over time. So I'll just talk about the culture. I remember at Goldman inclusive, team oriented. The pronoun use was we, the pronoun use was our, uh, and you had to pass the ball. You did way better Lehman. They had one eye on the outside world and they had one They had one gun trained to the outside world, and they had one gun trained on each other. You see that. That's a little bit more divisive. You kill to play

sort of. And the other problem they had, and I do respect them, and I'm sorry that they're gone, but the other problem that they had they had Goldman Sachs envy. Well so did everybody else. They'd sit at the conference table and say, well, we're just as good as Goldman as this, We're just as good as Goldman at dad, And I remember thinking, hey, who cares what you're just as good at. Focus on yourselves and let's not have this relative comparison. I think it's a good message for

younger people about their own lives. Right If if you're at a conference table when someone is saying that over and over again, the potential client is thinking themselves, maybe I should check out Goldman. My days were numbered. When I raised my hand at an m D meeting, I said, guys, why are we so focused on Goldman? I can guarantee that they're not that focused on you. And that was that was not a politically astute thing to say at

that moment, but it was honest that it was true. Yeah, but you know, that was another reason why I had to look on and see if I could start another company. I'm Barry Ridhult. You're listening to Masters in Business on Bloomberg Radio. My guest today is Anthony Scaramucci of Skybridge Capital. Let's talk a little bit about your early days at Goldman,

and I recall way back. You're telling a story that I found absolutely fascinating about when you were rotating through of the different departments and you found a sort of, if I memory serves correctly, a kind of orphaned deal that people really kind of were neglecting with some startup company called Dell Computer. Well, Dell at that time wasn't a startup, you know. Michael started the business and eight four uh he in college, he went public and eighty

eight through Goldman Sachs. In the summer of three, Michael had gotten into a little bit of trouble with his laptops the introduction of his laptops. The batteries weren't working well. Uh, they were actually catching fire, and he had to stop the production and he had a little bit of a cash bleed and a little bit of a spin out. There.

One thing Michael Dell said to me, in order to become Michael Dell and Dell Computer Corporation, there were about eight thousand decisions that he had to make and he had to get about seven thousand, nine hundred of them right. And it's an interesting thing. And so he was in a tailspin. And one of his best skills, he's incredibly commercial guy, was that he needed a little bit of help.

He need a little bit of financing and so and this isn't so long after they had the currency issue that the currency hedge, and basically that was a commodation to dead bet and it wasn't what Michael did. But what can we call it? I can't call him Michael, but you you know, listen, I I call him Michael, but you know he is Mr Dell. I mean, the guy is a masterful guy. He should be on your show way more than me. But but to tell you this story, it's twenty two years ago, but I remember

it very well. It was mid August, most of Wall Street was on vacation. Michael came into the conference room. I got called into a meeting by one of the capital markets people. I was on the institutional sales desk at the time, looking over the deal UH. And then they asked me, look, we're gonna put a convertible bond together. Do you think some of your clients would have an interest in this convertible bond? And I went out and

call several white guys who were on vacation. I said, listen, this thing has a very low premium meanings will convert into a lot of equity. It has a high coupon UH, and I really think this is a good deal. And people looked at the financials and said, well, you know, the financials a little shaky. I said, they are a little shaky, but this guy is not shaky. This is a betting. Michael is a steward of this business. All businesses go through some hiccups. This is an opportune time.

When he gets this cash onto his balance sheet, He's gonna retool the product cycle. He's gonna freshen up and strengthen his balance sheet, and I think you guys gotta make this investment. And so long story short, and listen, this is a team approach. I'm out here running the flag up for myself, but Goldman Sachs went out and raised him. Uh. I don't know. It had to be about two and fifty million dollars a lot of money at that time. UH, and Dell went off to the races.

If you look at that short, one of the great stocks of the ninete andies from the apple of its death, no, no question. And one of my institutional investors who I'm still very very close to, just retired from the Alfred P. Sloan Foundation. His name is Bill Peterson. UH remembers that deal fondly because he said it was the top performing name for him over a five year period of time

that he held the stock. And so a combination, like I said earlier in our conversation, a little bit of providential luck, good timing, But that helped me build a relationship with Michael, and I just have an enormous respect for him. Was speaking with Anthony Scaramucci of Skybridge Capital, talking about the time Goldman Sachs essentially rescued Dell Computers. So let's talk a little bit about Michael Dell. He's been fairly active. Um, not so much him, but MSK Ventures is MST ms D m s K is the

whole something else. MSD Michael S. Dell UM is a fairly substantial venture cap role operation. Are you still in touch with him much? Do you? How often do you bump into it? I'm actually in touch with him less. Uh. I see him once in a while at the World Economic Forum in Davos, Switzerland. He's obviously super busy raising his family as m I, and he's got deaf and he's also taken del He's got a private company that he's dealing with now, which I predicted some point we'll

probably go public again. But MSD Capital is I think a very diversified UH portfolio. In addition to venture private equity, they've got long portfolio, fixed income portfolio, and him and his team there have done a masterful job of managing his money. And I'm pretty sure they've taken into outside money at this point. Are we gonna see Michael Dell at a SAULT conference anytime? So you know, we haven't gone in the CEO direction, but you know he's a

terrific guy to have it an event like that. So let's talk a little bit about Skybridge Capital because we really haven't touched on that. UM. That was post Lehman when you decided, all right, I've had enough of this, I've offended all the right people. It's time to make head for the exit. You launched Skybridge Capital in what year was that? It was March March of two thousand and five five, and so I had worked at Lehman from October of two thousand three to March of two

thousand five. UM, a lot of guys were departing from the Lehman senior management team. I went to the guy that I was working for. I said, listen, I didn't grow up here in this organization. Guys that are in I was forty one at the time, and I said, you guys that have grown up here twenty years that are now in your forties are super tight with each other. I'm not in yourr an outsider within. I'm an outsider.

These guys had a strong culture and it was a good culture, different from Goldman and but you have a little bit of an immune system because I'm transplanted in from new Berger Berman so and I'm doing renunal rejection. Rejected tissue. Is that I was rejected tissue and no problem. It could have been personality issues too. But but but but in fairness of them, well, but you know, I know you long enough that I know you're kinda you

get along with pretty much everybody. You know, you're really rubbed that many people when you're when you're opinionated in a politically correct or politically neutral organization. Uh that's uh, well, you know what your your elbows for somebody like you or me or elbows may not be that sharp given

the neighborhoods that we both grew up here. But when you're in that sort of corporate environment where everybody's wearing a white shirt, Uh, you know, and you have an opinion, it may not be something that people super like about you. And so I think the more successful guys, and God blessed them, they have a way of talking and a way of navigating those situations that you know, I wasn't

super successful at. Having said that, Uh, Richard s Fold Dick Fold do have an enormous amount of respect for Uh. He gave me ten million dollars a balance sheet capital put it into our fund. A gentleman by the name of Jared Way he helped me get that done. He was on the senior relationship management team there at Lehman, so they see you very much. Day Goldman's seeds outgoing traders as well. They did. They put ten million dollars of their balance sheet into our fund, which helped me

get the catalyzation. If you will have that fund started. And I'm Barry Ridhults. You're listening to Masters in Business on Bloomberg Radio. My special guest today is Anthony Scaramucci of Skybridge Capital. Anthony is the gentleman behind the resurrection of an iconic television show, Lewis Rukaiser. Wall Street Week with Louis Rukaiser was on for twentysomething years, thirty years. It's how a lot of people today of our generation, or maybe a few years younger, first discovered investing Wall

Street stocks back in the day. What made you think of bringing the show back. It's an amazing show and I've seen almost all of the film library a half hour show over thirty five years. Lewis Rukaiser, classic guy. I think He was a master at explaining complex things in a way that regular people outside of our industry

battery can understand. And I don't want to say simplify them, because these are very complex things, and sometimes when you try to simplify something complex, you really don't get it at all. He never dumbed it down. He just gave He gave it rust in the viewer to but Button made it understandable. Liz Ane Sanders was on our show this past week. Had a great story where she was very nervous the first time she met lu She was sitting in the chair. He said, are your parents in

our business? And she said no. He says, I'll tell you what we're gonna go on the air in a few minutes, but I want you to talk to your parents. I want you to explain the concepts that we're discussing to your mom and dad. If you do that, we're gonna have a terrific show. And that's the spirit of what we're trying to capture with the return of Wall Street. So Wall Street Week, that's so, that's funny you mentioned that because my wife's an our teacher. My mother was

a real estate agent, and that was always the goal. Hey, if you can make a real estate agent and an art teacher, if you can remove the jargon and speak in ways that they can understand it well, then anybody can understand it. And and and this is a good segue because I do think that some of the punditry on business television is intimidating, and some of the punditry on business telligence is for the impression of other pundits. They want to impress each other while they're talking to

each other. And so what Louis Rukeyser did was he waxed away all of that stuff barr and he really just tried to deliver high, thoughtful content. And so that show laid dormant for about ten years. UH. Gentleman by name of Jeff Salkin had actually bought the rights to the show. He had a website up called Wall Street Week um, and but he had not really figured out how to bring the show back on the year and to transform the brand. UH. And so he came to

see eight. I had a conversation with him, UH and Maryland Public Television, and I acquired the brand from him and Matt Brand and the library. That's correct. So it's the access to the archives and the library. It's the likeness of Mr Ruth Kaiser, it's the great computer fond digital digitization of the logo. UH. And it's also the website, the Twitter page, the Facebook page. UM. This stuff I think will be usually valuable if we handle it right.

From an auditorial perspective, I want to try to explain to people what's going on. I think since your Bailout Nation best seller, I think the average American is super intimidated by the markets, super intimidated by the volatility. Uh, they're uncertain. Uh, they're uh stashed in cash if you will. And I think that it just came out more than half of Americans have zero dollars exposed. So you're you're supporting my thesis, and yet we both know that the

nation is undersaved. We're probably underslept, and we're probably overfed. We've got all the dials on our dashboard wrong. And so what we want to try to do is deliver a message to the average American that there's a simple and easy way to boost your savings, take more financial control of your life. UH, put yourself on the arc of the aspirational society that we all want to live in and that requires you to take a little bit of risk in the stock market in a balanced way.

It requires you to have the right fixed income exposure and portfolio um and to be patient. And you know you could you could spare yourself a latte a week. That's five dollars a week. That's two underd and sixty dollars a year and lo and beholds you're building a little nestag so you can work at Bloomberg in this free Well, that's another great show about Bloomberg. Let me ask you a question about that archive. Are you gonna

any plans to put that online? What are you gonna do with all these So so if you go to Wall Street week dot com, you will see archival uh stuff on the on the on on there. We also have it up on YouTube. We're we're finding new nuggets, new treasure every single day as we mind that archive. So you just had Jeff Gunlock and Liz and Saunders were two names I recognized last week. John, Well you

have coming up in the coming weeks. Well, uh where if you look at the SALT conference list, it will give you a really good cross section of what we're trying to do. We want uh, policymakers, hedge fund managers, we want possibly actors, music composers. You say, jeez, why do you want that? Well, you know what, everybody in

that group has a financial plan. And what the am mortal lou Ro Kaiser would say to you is that the show has to be about the way the world works, because your money world and the way the world works are completely intersected. And we know that from federal reserve policy, we know that from governmental policy. And so I'm gonna try to bring a very broad cross section of guests to the program. I'm Barry Ridholtz. You're listening to Masters in Business on Bloombug Radio. My guest today is Anthony

Scaramucci of Skybridge Capital and Wall Street Week. Let's let's talk a little bit about Skybridge Capital. It's become quite successful. It originally began as a hedge fund seating shop. Is that right? You were looking to identify emerging managers. Yeah, my my original concept and for the entrepreneurs out there, what happens is you start with a plan and then you have contact with the enemy and you have to switch your plan. And so I had and that's the

great Mohammad was it um. Mike Tyson said, everybody has planned to the punch in the face, and so most generals know once they have contact with the enemy, the plan goes out the wayside. But but for me, I had a seating idea. I was gonna back early stage managers, take GP steaks in them, and then uh literally have our LPs participate in the growth of the earning streams of these managers. Great looking on paper, but it's a little bit like a venture capital situation, and seed hundreds

of them. To find that we didn't have enough money to seed hundreds of them, we seeded ten. We seeded them in the years two thousand and six and seven, the early part of two thousand eight, so we were in a barrel going over Niagara Falls and so uh. Which interesting is that one of those funds is doing quite well today, which you still we stole own a small interest in. But that seating business itself, we had to make a decision to dismantle it. And so I was By the way, the tech folks h call that

a pivot. So you pivoted from seed in. Yeah, that's an elegant way to say that you're failing and got to come up with some other idea. And so so that's what we had to do. And I'll tell you that our seating business, I would describe it as the old movie Apole thirteen. It was a successful failure in the sense that the seating business was the lunar module that we lived in as we tried to figure out what we're gonna do to crawl back into the command

module and get back to Earth. And so, uh, we had a bleeding asset, tons of redemptions, and there was a period barrier looking straight in the face and tell you that I thought we were going out of business. And I remember in March of two thousand nine, with the dow at about six d the SMP had approximately six sixty. I thought, this is it, and uh it was. That was a good time we made. We made two decisions there. At number one, we started the Salt Conference.

President Obama said now is not the time to go to Las Vegas, and all the TARP recipients canceled their conferences on Las Vegas. Uh. That upset the mayor of the city. I called him Oscar Goodman, and I said, listen, I want to bring a hedge fund conference to your great city. And so he put me in touch with Michael Milken. He put me in touch with the former governor.

I got to meet Steve Winn and we put the first Salt conference is it may have two thousand nine in the Encore Hotel, which is part of the Wind Complex. I tell the story that way because we were really on our knees and I thought, okay, maybe we all go into the conference business. There's a huge void in these things. Uh. And people said to me, well, how is the conference business tie into your seating business. I didn't have a great answer, but I knew that there

was an opportunity. I said, well, maybe we'll have a lot of hedge funds there and we could populate our seating business. But what it really turned out to be, Uh, it turned out to be a great networking opportunity. And in the network I discovered that City Bank needed to sell many of its non core assets. So let's let's put this into the right context, because I really love this story. So it's in the midst of the financial crisis. We're bottoming. But you know, three or four people, me

and two other guys know, but nobody else. Nobody else got They've got a plastic mouth brace that I've just had molded from my teeth. Because I'm in the middle, and I've been told by many of my former colleagues at Goldman and Lehman that you know you're you're going out of business life demon you're done. But they were probably right, But courage stand there. But that's a fantastic opportunity that you capitalize. In hindsight, it was a fantastic opportunity.

At the time, many people had passed on the deal. Yeah, because they they had put the fund of Funds unit into what's called City Holdings, which was their place for dissolution or disposition, and so it was very hard for that terrific asset management team to more eight billion dollar how much money was in that well, No, at that time there was one billion dollars of discretionary money in that portfolio. I went to Michael Corbett, who has become

a personal friend. He's a terrific guy. He was running City Holdings at the time. I wanted to buy his seating business. Another big lesson to our listeners, think way bigger than that. He looked at me and said, Hey, I can't sell you that seating business. I can sell you the entire fund of funds business. And I blinked and gulped and probably blanched white, and said, oh my god, how am I gonna pay for that? But I looked at him with a poker face and said, you're on.

I'd like to buy that business. And so it was at a desperation. It was a hail Mary pass late in the fourth quarter. But all of that money that I earned from the sale of our first business to new Burger Berman, I liquidated those assets and I brought them to Bear to buy the thing from City Bank. I told my oldest son, whatever in errorge, you thought you were getting from your dad, Well you're now long skybirds through your eyeballs. You better hope I don't blow

up the bridge. And so we got that deal done on the thirty of June two thousand and ten. Brought twenty four people over. Uh. It's five years later, twenty three of those twenty four people are still with us. We've add more personnel. Our discretionary assets went from a billion dollars under management to nine point three billion in the five year period of time. And because there was a void in the conference space. Our conference also has

done reasonably well over that period. Okay, so now I have to throw a yellow card on you because your conference hasn't done reasonably well quote unquote. So you mentioned my book. It came out in two thousand and nine, and you had me out to Vegas to be on a panel with Austin Goulsby, who was the former former Council of Economic Advisor chairman. I forget the Congressman's and a few other people on that panel, and I have to tell you that was one of the hottest conferences

I had ever gone to. You had Bill Clinton as I'm getting the yellow car because I'm understanding, totally understanding, and I wasn't. By the way, Bill Clinton listeners the halfway like me. Remember I'm a hedge fund guy, so I'm obviously a social pariah out the viewers the listeners are sort of like me. Well, but you're you're as an individual, you're fairly charming a character. As a character, I think people who you call yourself the mooch, not a lot of people. That was a that was a

high school football name. My last name, Scaramuci, not you people call me the mooch, But some of the guests you've had at Sault. So this year is Ben bernanke. Yes. The year I was on a panel, it was Bill Clinton. The year after it was George Bush. I remember Bill Clinton, not that far removed from quadruple bypass, walking into a

very hostile room of about hedge fund managers. And basically by the time he was done, if he would have said and that's why I'm running for president and I wanted you to write a fifty check, he would have would have walked out of that room with twenty millions up. Super popular guy, not only here in the United States but globally. But I will tell you this, President Clinton made our conference unbelieved because because in in two thousand nine we had a smaller conference, uh, four people. We

then said, okay, let's go big. And that's the magic of life. You gotta think really big home go big. And so I told the guys, we're gonna we're gonna go after President Clinton. See if we can get him. Uh. He had a guy working firm by the name of Doug Band and very nice guy. Uh, And we signed him up pursuing to dates that work for the president.

And I will tell you very upfront. He made our conference because he credentialized the type of speakers that we wanted to get, and so it was easier to get President Bush, it was easier to get Governor Romney, it was easier to get Chairman Ben BERNANKI, Uh, Secretary Rice, We've got most of the secretaries of Defense. We've had General Petrays, We're bringing General Keith Alexander this year, Yankees.

So we're really trying to bring people who we think other people in our industry want to hear from and to learn from. And so we've also cross section this thing. So we've had people like al Pacino, We've had all of our stone. We did the movie with you had the guy that Catch Me If You Can was based on That was one of the most fascinating conversations, great great guys. How fascinating was that? Uh Frank Abig Nelly, I'm sorry that's announced his name, but that was a

fascinating speech. That was a great story about redemption. It was a great story about the mistakes that he made in his life and how he tried to set his life right um and failure in redemption. I think it's a classic American thing. I think one of the things, one of the big advantages our country has over these other countries, that we accept people who are willing to take enormous amounts of risk. Uh, they can fail, dust

themselves off and restored. This is the reason we Ford in his fifties, it was like a sixth or eighth coup. Look at look at Sam Walton forty six years old. Two failed stores started Walt what became Walmart when he was forty six, and so the greatest many of the to stupendous things about our country, but one of the greatest things is the culture to accept risk takers, to accept failure. It's the reason why Facebook is invented here,

Google is invented here. Apple started here talking about failure and redemption. Jobs gets fired, comes back well. We showed a great scene from him in being interviewed by the late Louis ru Keiser talking to Steve should he dismantle the company or should he try to grow it? And Steve was gung ho. He said, I'm coming back to create a new spirit of innovation. We were ten years

ahead of our competitors back in the day. My goal is to get us ten years ahead of our competitors Again, it's a brilliant commentary about what you need to do in life. Thank big or go home. We've been speaking with Anthony Scaramucci of Skybridge Capital about the Salt Conference. If you enjoy these conversations, be sure and check out the rest of our chat. You can find that on Bloomberg dot com or on Apple iTunes. Be shouldn't check out my daily column on Bloomberg View dot com or

follow me on Twitter at Ridholts Anthony. Where can people find you? If they want to, they can find me at a Scaramucci at Skybridge Capital dot com. Uh. They can also go to Wall Street week dot com and they can toggle the prosper at Wall Street week dot com. That's all the viewer emails or commentary about the website. I read every one of those and so and I try to respond to them as well. And your Twitter handle is my Twitter handles at Scaramucci. Easy enough. I'm

Barry Ridhults. You've been listening to Masters in Business on Bloomberg Radio. Welcome back to the podcast on Barry Ridholts, and my guest today is Anthony Scaramucci. Anthony and I know each other over the years from the street. It's not exactly a big place. Let me fantastic book, Bailout Nation, thank you. Let me give you a little little background on on who Anthony is and how he got to

be where he is today. Undergraduate of Toughs, graduate degree in economics onto Harvard Law, which is uh interesting that you took the Harvard Law degree straight to Goldman Sachs and from Goldman Sacks you eventually left to set up your own funds, which long story short brought by new Berg and Berman, which eventually was brought by Lehman. So you've really been pretty well versed all over the street.

Well less has been a blessed career, and you know, as a fellow entrepreneur that a lot of your success is providential. You certainly have to work hard, you have to relate to people well, but at the end of the day you get a couple of lucky breaks too that helps your career slow. I'm still I'm still working on that relating to people well part. But the lucky you have the radio show, I'm just the gags. You must be doing a good job relating to people. Well,

I'm just curious. So that and you're a perfect person to ask a question a bunch of questions to to save that curiosity. So let me start right off the bat. Harvard Law is a very storied institution, a very specific culture. As his Goldman Sacks, a very different institution and a very different culture. What was that transition like going to law school say I'm gonna be a lawyer and ending up Well, I had a you know, an interesting background. My parents ever went to college. You're real come from

a middle class come from a middle class family. Yeah. I would never disrespect my parents by telling you I grew up poor, because I did not grow up poor. We were resoundingly in the middle class. We had plenty of food, clothing, air conditioning, heat. My dad was a very Yeah we did. Actually that's why my hair is so straight. But we we we had a narrow casted view of the world. I didn't take the s a t prep at Stanley Kaplan. I didn't really have a

good idea of what was going on for college placement. Uh. My dad was working at a place called Gotham Sand and Stone on Long Island. Uh. He built a relationship with a gentleman that had gone to Toughs University and the gentleman's name is Billy Tamasah. He's he's passed on now. He's a terrific guy. My father came home one night and said, you and your brother you're going to Toughs University. Uh, we thought it was spelled t O U g H. We had no idea what it was. My brother my

brothers a couple of years older than me. He looked in the baron's book and he said, Dad, this thing is most selective. I don't know how we're gonna get in there. He said, well, you both have good grades. My friend Billy said he went there and he loved it. That's where you're going to school. I said, well, I don't know is it that easy? We both applied. My

brother is a couple of years older than me. He applied, got into U University, liked it, and I said, okay, So I applied to a couple of schools, got into US University, And now what do you want to do with your career? Well, you know, I had no idea. I read in a magazine article that lawyers A Crevass, Swain and more in we're making sixty five thousand U S dollars a year. I said, oh my god. Uh, you know, it's about what my dad is now making.

And I said, I can get out of law school and make almost as much money as my dad and have this incredible life. I guess I thought sixty five dollars a year it was more money than I could ever want or need. So, very simplicitally, Barry, I applied to seven law schools, uh, and I got into Harvard. Harvard's down the block from Toss. I went down there and made it a deposit. Right once you get into Harvard, that's pretty much. Uh. The other options really fade unless

you're looking to specialize in something unusual. That's the story is. So now I'm at Harvard and it's dawning on me that I'm not well suited to be a lawyer, and so always always an interesting time to discover that in your second was it How soon did you realize that? Because it took me. It's about my second year law school. Pretty cool, I said, yeah, I don't want to be a lawyer. Well, this is another classic mid eighties story. You can't do this now because of the post nine

eleven security. But I decided that I was going to be a Wall Street lawyer, and so once I put the deposit down at Harvard, I went to their placement area. I asked for their placement book. Uh. Not knowing a lot about how the world works, I thought Wall Street lawyers lived on Wall Street, and so I opened up the book. I looked at number one Wall Street, which is the old Irving Trust building is now National Landmark.

It's a law firm there by the name of use Hubbard and read and I said, okay, I'm gonna put my resume. I typed it up on a Panasonic typewriter. I took the number four trained down to uh Wall Street. I rode the elevator up to the floor. No security walked in there. And I had a list of Harvard a lumps that were there, and so I was like, hey, is you know Worthington, Babscomb, the thirty second here and then? And the woman said yes. I said, well, I'm Antony Scaramuch,

I'm here to see you. Is he expecting you? I said, well, yes, sort of, And she was like, okay, he comes out lovely man. I said, sir, I desperately need a job. I've got, you know, financially to help me with school, not financially more like loans. I said, can you can you can you give me a job this summer as apparently I'll do anything. So coming to my office, son, we sat down, we had a conversation. He says, okay, I'll pay you eight dollars an hour. I said, sir,

could you make it ten? He looked to me, are you kidding me? I said, I really need the money. Could you make it ten? So I gotta paid ten dollars an hour. I worked seventy hours a week. Uh. This was back in the day where Continental Airlines was buying People's Express, which was a new work based discount airliner.

And I worked on that merger all summer and I remember thinking to myself, oh my god, this I'm not well suited for this um And so I went to Harvard Law School thinking I was not going to be a lawyer. Thanksgiving Day, I told my parents that I wanted to leave law school. Now. When I was going to Harvard, my mother thought it was Hartford Law School. So when we were packing the car, she said, uh, we're going to Hartford. I said, no, mo bus, she said,

We're gonna We're gonna Cambridge. She says, no, no, No, he's in't Harvard Law School and Hartford. I said, no, no, it's Harvard and Harvard are very different. And so anyways, my parents didn't care whether it was Harvard Law School or Harvard Law School. They wanted their son to be a lawyer. And so when I told my mom I wanted to quit law school like a Jewish mother, by yeah, the Italian, I forget about it. It was a very historionic event. I said, no problem, I'll finish law school.

And then I was something else, desperately seeking a job, and so I read it several articles about Goldman. Uh. But I made a classic career mistake that young people make is that I went for what I thought was the coolest and the hottest job. Maybe that's a job at Google today, maybe that's a job at Facebook. But back in our day, the hottest, coolest job was investment banking or McKenzie consulting. And uh, even better than that, because the real estate market was super hot to be

a real estate investment banker. And so you know, I wanted to be the kid at the Harvard graduation, at the cocktail party to tell people I got the hottest and the coolest job, and so I went and sought that job, got that job. I went to that party and bragged about it with my amazing insecurity at that time. I went to work at Goldman Sacks, and eighteen months later I was summarily fired. I got fired from Goldman Sacks. I'm February one. I started there in August fourte uh.

And the purpose of the reason I got fired was three reasons. Super uh terrible at the job. Number one. Number two, we were going into a real estate recession and the firm was making extreme cutback and the combination of me not being even though he was working very hard, I didn't have the skill set and the recession. Uh. They gave me a pink slip to give me an eleven thousand dollar severance check, and they told me I

had to leave, and I was devastated. I can imagine by the way, I'm gonna say this now, there's all sorts of stuff you said. First, I'm gonna flip he's got like nine phones and they're all lighting up with emails. First, I think you're very very self effacing and understating some

of the things that you've done. So the story I heard with you and Dell was that it was the middle of the summer, and nobody at Goldman was really paying attention that in the scheme of things, that hundred fifty or two was a relatively small deal and there were bigger fish to fry. There were multibillion dollar mergers. There was all sorts of stuff going on, and that was I don't want to say orphan, because Goldman Sex doesn't orphan a deal, but there was a lot of other, hotter,

bigger things going on. But it's not really me being self effacing, because you have to understand the machinery and the capability of Goldman Sacks today in if if I was not at the firm, that deal would have happened with with or without me. And I'm not saying that in itself effacing way. I'm just talking about the wonderful organization and the uh, the people, the depth of the bench at Goldman's ax. But I will say this, I took a big liking to Michael Dell, and I admired

Michael Dell, and I remember teasing him. I said, jeez, you know, you did everything wrong. I did everything right. And I remember him looking at me, what do you mean by that? Anthony. I said, well, I listened to my mom and went to college. I listened to my mom. I went to law school. You dropped out, You got into a fight with your parents over dropping out. You were building computers in your dorm room. I was selling T shirts. Okay, you went on to be worth a

go jillion dollars wealthiest. God bless him, and I hope he gets the number one. But the point is, you know, he was a guy that I really looked up to, and I said, you know what, He's gonna turn this thing around. And I believed it, and so I definitely went out there to try to convince my clients of that. So I heard this story third hands from other people,

and I've asked you about this over the years. So the way this story came to me was sort of, I don't want to use the word orphan, but not the most you know, not the one that was flashing red on Goldman's investment banking desk. You kind of found it and said, oh, this is a really interesting deal. You're the guy that lots of people gave sort of

a lukewarm Yeah. Well, if you get a lead, which is sort of a cowardly thing we all hear when you're raising money for something, well, who's the lead, who's the who's good, the who's the which means who's the guy that's going to do the heavy lifting, the due diligence. So I don't look like if it goes south, at least I could say, well, look who the lead was. They got it wrong also, and that you're the one who reached out to people that I believe it was

t I A Kraft. Well, you know, it's so funny you say that because the guy is working at t I A Kreft. Now his name is Bill Regal and but he's he was they were. The leader was JP Morgan, investment manager. Bill's working at Kreft. Now he's a tremendous guy. And uh, but that was the lead. That was enough to get convinced everybody else. You really, you really did do your research, because that's twenty that's twenty two years ago.

But Bill, Bill looked at the deal, he said, well, the financials are pretty crummy, but the story is good. I said, well, forget about the story. This guy can execute okay. And this business, like most technology businesses, are gonna have fits and starts. But he's got a great forward game plan, and so you know, and the credit goes about at the end of the day. It's one thing to serve something up, but this guy had to pull the trigger and make the investment. And so but

you now you're in the sales department. The other guy who basically said, hey, there's nothing on Wall Street that's guaranteed. This is a home run. This is you have to participate in this. What they put in fifty or a hundred something like that, and it was ten They did ten percent of the deal. And now you're really getting me to remember the whole thing. And so once they got ten percent of the deal, like you're saying about Wall Street, they were a big name anchoring the deal.

And then people started saying, wait a minute, there might be something here, and then orders started flowing. And then you've worked in these places and so have I. And so what happened was they were anchoring the deal and the capital markets people wanted to cut them back on the allocation. And so that was a little bit of a pushing and shoving match. And somewhat when we've got all this somewhat politically incorrect because I got I got in there and and roughed it up a little bit.

Can't you can't do that? Can I do that? And so you know, and that was probably not the most politically astute thing for me to do, but I really felt I needed to be a strong advocate for those guys that got in early, and it was the right thing. And but but they and they got the full load of the allocation, which ended up being a great thing

for them in their investment portfolio. So so it's an interesting story, um, but it goes back to something you and I know, and it's a universal truth about business. Business is about relationships, and business is about as Buffett says, it takes twenty years to build your reputation. But start with the principles of fairness, start with the principles of doing the right thing for the other guy in the room, uh,

and not trying to take the last nickel out of something. Uh. And you'll see that your career will grow and people will make bets on you. So speaking relationship, what was your at that point? Like, By the way, the reason I know as much as I do about that deal is I've described you to people. When people say to me, who's this guy Scaramucci. Mooch is the guy who saved Dell back in the early nineties. Yeah, I know there's a there's a bit of hyperbolea but but that's how

I describe it. But since you mentioned relationships, what's your relationship like subsequent with Michael Dell. Is he involved in any of your other deals? He was? He was an original investor in Skybridge. Uh. But great anchor. Yeah, great Michael rate anchor investment. Uh and uh, very very grateful for him for being an original anchor alongside of Merrill Lynch and alongside of Lehman brothers. But the the Meryl was an investor the first the first couple of investors

were Michael Dell, uh, Merrill Lynch, uh Lehman. There are a few others like that, the the Quate Investment organization. Uh. So we had a really good stable list of investors. Um. And but Michael is no longer investor because we're out of that seating business. And he did a masterful job with a group of partners building his own family office, which is arguably one of the best family offices in the world. And so so he doesn't really need sky

Bridge to run his money. But we've remained friends. He's a very very good guy, incredibly charitable him and his wife. Uh and uh. I have a prediction which I think when del Re emerges from its private equity position private company position, I think it will flourish again as a public company. So and I think Michael Stolen in the halftime here at at Michael's probably fifty, I think he's got a good thirty four year run to go here.

MSD Ventures is capital Capital is someone in the neighble to twenty or thirty billion dollars the size of the Yale endowment. That's pretty substantial. I'm not sure they've done a masterful job that that place got started in and uh where I could be wrong. And so it's almost twenty years old, and they've done a masterful job of helping Michael with and his family with their investments, to say the least. So, so we talked a little bit

about how you got into the financial services industry. Really you're just knocking on doors. I don't know if you could do that today. But you also talked about some early mentors. Who are the people that were early and influential in your career that that you remember fondly. Well. I mean, there's many of them are still very close friends of mine. Bob cash Rignano, who ran the Goldman Zax training program. UH. Bill Groover, who ran the training

program before Bob, who's now a professor at Bucknell University. UH. I would tell you that Bob, Matsa and Jeff Lane are very close to me. Those are the guys that were from new Berger Berman that bought my company. Andrew KA Bosar Jr. Who was the co founder of Oscar Capital, but really the senior partner there. I was his junior partner. I would say without Andrew K. Bosar Jr. I don't think I would have had the courage Barry to leave

Goldman Sachs when I did. I always dreamt about having my own business, but I think Andy provided me with the security and the financial stability. And I sort of knew that going into partnership with him, because he's such a naturally good person UH would lead to good things for me. UM and so I have to pay a huge tribute to him. UH. John Weinberg, the legendary John Weinberg, who I had the opportunity to be his private banker for a few years. He was the CEO of Goldman.

He retired in I had some great aphorisms I'll remember the rest of my life. One was some people grow berry and other people swell, and you better figure out who you are, okay. And I think that was a very interesting thing about life and not getting too full of yourself. Uh. The other thing you to say is that trees do not grow to the sky. I've never seen a tree hit the moon. So be careful because markets are cyclical. Uh, markets get exuberant. He was a very,

very wise, earthy guy. Uh. That really shaped the culture. Him and John Whitehead really shaped the culture of Goldman Sacks and really explained to people that you're gonna do a lot better if you can work on the team, figure out what your strengths and weaknesses are. Don't be insecure, don't try to go after the credit if you will, but pass the ball. And so I look at those people as great mentors of mine. I've probably left out ten. I don't want to make this like an Academy Awards speech.

I probably left out ten other people. But what we know about life, you can't do it on your own. You gotta ask people for help. Ben Franklin once said several hundred years ago, if you want a friend, you gotta ask the person for a favor. And what typically happens is once you ignite that person's willingness to help you. And I'm in the camp that most people are good natured and they can go out of the way to

help you, they will. Michael Milken, who I don't talk to every day, but I sort of feel like I can pick up the phone, God forbid, if there was a health issue in my family, Michael would be there. One of my partners at a prostate cancer scare, I picked up the phone and called Michael. He spent an hour on the phone with my my colleague. Uh. He's a great man. I've tried to be a charitable donator to his healthcare charities. He's a guy that if I had to make a big decision, I would call him

and I would ask him for his advice. And so my message to our listeners is, if you want to make a friend, ask for the favor. Push the envelope a little bit. Let's talk about um, not just mentors. What investors influenced how you your career went on? Who who did you look at everybody says, well, Warren Buffett was really influential, But anybody that perhaps people may not

know quite as well. Um, what investors did you find really influential and seminars, you know, the classic investors like Buffett, or Monger or Phil Fisher. I think everyone's gonna talk about those guys, Phil Fisher. Um. Phil, Phil Fisher is ken Fisher's dad, Ken Fisher's Fisher investments. But Phil was the real champion. And this is Charlie Munger's persuasion of Mr Buffett, who was buying cigar butts that were half smoked, and he was buying them at a discount, picking them

up off the streets, so to speak. He convinced Mr Buffett to start buying growth orientated companies at fairer prices. And don't be super concerned about that huge value orientation. Make sure you're in a great business that as a moat around it that can excel. Uh and and and Warren Buffett and Phil Fischer and these guys were more focused on how companies perform and not necessarily how stocks trade. They're more focused on investing as opposed to day trading.

And so those guys are a huge influenced to me. Um, but I'll tell you something that may or may not surprise you. Uh. For my career, I'm more interested in the Steve jobs is. I'm more interested in the guys that the Richard Branson's or that the people I call the holy Trinity of disruption, which would be Ted Turner, Howard Schultz, and Richard Branson. Why am I so interested in those guys? This year? I do have Richard this year. Uh, they are breaking new ground. Uh. I'll tell you something.

I'm in a commodity business fund of funds management years. Uh, several hundred of those sorts of things. Who else is in a commodity business. Well, there's a company that makes five products. They make a smartphone, a tablet. They used to make an MP three player, They have a hardtop and a laptop. Now they're gonna have a watch, Okay, And they still make the MP three players, just just no longer a hard drive. It well well, well yeah, well they've and they've also built it into the iPhone.

But but Apple Computer, with those five commodity products, Barry and everybody in the world is making those products, particularly everybody in Asia. Apple Computer has turned itself into the largest market capitalized company because they understood how to take a commodity and turn it into an experience. You walk into their stores, you're on their their app store, you're in their eyebook store, you're on their iTunes store. All of a sudden, you're in their ecosystem. You feel hipper,

you feel cooler. You're fifteen to eighteen year old daughter wants that phone versus the others. And they turned a commodity into an experience. Howard Schultz, he turned a commodity coffee that you and I went to the Landmark Diner room Manhasset and bought for twenty five cents in a Greek diner coffee cup. He turned that into an experience. I walk in there. Now it's got earth tones on

the floor, there's a green apron. I'm speaking in their language about ordering something that I used to pay five cents for that I'm spending four dollars for. Uh. There's some good folk music in there, and I'm super happy about the whole thing. And so so what I look for these guys too. I'm gonna, by the way, I'm gonna combine the two. I take the Starbucks app. Yeah, and go exactly, and you got and I don't even reach into my pocket. You go to pay for this yourn.

That's the funny thing is your phone is always out your while it's buried somewhere. Well, that's the other and that's Apple pay and and and so so from me, he was, no, exactly, that's Starbucks is card on there. But my my, my point is Richard Branson big commodity. Last fifty years air travel. Look at what he did to air travel, the colors to change. He turned those planes into an experience for the customer. We turned a coffee shop. Howard Schults turn a coffee shop into experience

with the customer. Sky Bridge, we are trying to turn our investment thesis and our performance into an experience for the customer. We wanted to come to the Salt Conference and learn from some of the smartest people in the world what's going on in the world. We wanted to tune into our television show Wall Street week and get a thirty minute Salt conference every week. We want them to be investors of ours, and we want to help

make them long term investors. You know you've heard this before, but maybe your your listeners haven't if you take the following two choices. Would you like ten thousand dollars a day or would you like a penny that I hand to you that doubles every day. So I'll give you ten thousand dollars a day for thirty days, or I'll hand you a penny and it will double every day for thirty days. What do you want that? I got the math background, so I know I want that doubling penny. Yep.

And so that doubling penny yields about five point four million dollars. If you're in your car, don't google it. But if you're at home, go to Google and look up a penny doubling every day for thirty days, and you'll see the spreadsheet come up. And what you'll find

about life. If you can get people to think about their money going to work for them and compounding gradually in the marketplace, uh, it'll mean a more financially stable society, a more financially a stable and secure future for the individual. And this is something that I'm very passionate about. A skybridge. We're gonna try to make that broader and more open for the average person. So let's talk a little bit about your buddy Gary Kaminski, yea who I'm I know.

He lives the next town over from me. You actually don't live that far from me either. I just moved a little east. So there must be there must be something in the water from Long Island and all its big males living in the same area Togain. It's it's not that far. We have a mutual friend, Jim McCann who was on the show that's great far from where you live as well. I'm a partner of his in the New York Mets, by the way. So he's a

great human being. And Jim's son, Matthew, has worked at Skybridge for the last decade, one of the first employees that so we had him on the show. By the way, I talk about his new charity that he's he's wonderful, and he's like, you know, we're really not ready to talk about that yet. Jim, I wanted you to. Let's raise you a little money. It's like later, okay, it's it's uh And it's actually a wonderful local charity. Wonderful guy. I'm looking forward to seeing what that goes. But let's

talk about Kaminsky. He would go in that mentor role model camp too. By the way that no, I mean Jim Gary. Gary's a contemporary. He's a very close personal friend. Before I left to launch my firm. Yeah, I had dinner with Jim and and said, here's what I'm thinking about. There's a few people like that in my life. Another guy is Ed Mandel David Sure and basically said here's what I'm thinking about. And each of them, from a very different philosophical approach, gave me very good advice, very

complimentary advice, but from a different angle. And and McCann is one of the how do you describe him? He's just very easy going and very insightful, and he's got, like you and I do, a pretty thick New York Long Island accent, and he sort of surprises you because what comes out of out from that accent is a little different than I think a lot of people expect. He's a he's a wonderful human being. And he took something, uh, and this is what I love about life, and great

American entrepreneurs can take nothing and turned it into something. Literally, he took a queen's flower shop and turned it into an internationally recognized iconic brand. And so when I sat down with him uh m and acid had dinner with him when I was starting Skybridge. Uh he gave me a lot of good advice and he said, hey, my son will come in an intern for you. And this is a great story. The kid worked for me for three months, fell in love with him, and I offered

him a permanent job. The thing is, I couldn't offer him the permanent job until I was confident that we were raising the capital. But once we got the capital in place, I turned him out and said, hey, we got to offer your permanent job. He's there for ten years. And so I not only oh Jim some of the benefit of his great advice, but he also put his first second born son in my office. So I'm very grateful for that too. So let's talk about Kaminski. So, so,

Gary is a dear friend. We've known each other forever. Gary has a wonderful way on television. He's very quick on his feet about particulate, very fast. Uh He's got

a real expertise behind. Like I don't know if you look at the same way when I watch other people on TV and look, you and I have been doing CNBC and Fox and Bloomberg for for decades, I watched somebody on TV and ten seconds it's like this guy doesn't know what he's talking about, or this guy is trying to be outrageous to make a call, or like you and I, I assume are kind of critical. And when you see somebody like Kaminsky on TV right away you say, oh, this is a real depth and knowledge.

Back here to remember. So he's a money man. I mean he was running billions and billions of dollars at New Berger Berman. Uh, he's one of the best money managers of our generations. That it was a Darmoul brad m d brilliant guy. Still working at New Burger with his other brother Michael. They have a great team there. Full disclosure. They manage some of my retirement money and my family trust. I have an enormous respect for the Kaminski family as investors. But here's something that Gary has

been absolutely brilliant about. And you and I a decade, but Gary has been on Tellers for twenty five years. Amazing. His first time on TV, I think he was well, yeah, well yeah, let's let's let's put him back. I call him Grandpa Gary. Now, just to tease him. But but but he's Uh, he's been a great friend. But he's an insightful guy. Here's the thing I find that we have to be careful of as pundits. We don't want

to just provide information to people. We want to provide them insight and what context with them exactly context, what to do with the information. There's nobody better on television than Gary Kaimisky and doing that. And I'll tell you another thing about Gary Kaminski. Uh, the guests want to be on the show, Uh, in large part because of him. Well, let me put it to you this way. I think he knows these guys a lot better than me. A

lot of these people you know. And I have some close friends in the hedge fund community and some close friends as a result of Salt but being on television twenty five years and interviewing different money managers over that span of time. He had his own television show about five years ago. Uh. He has a whole code array, a whole broad deep rolodex of people that I think are fascinating that I'm looking forward to having the opportunity

to interview on our show. At the time of Gary Show, which was the name of it was Strategy Session, right. I thought it was the best show on the CNBC lineup, but they had put it at the wrong time. It wasn't a lunch hour show. It was either a seven am show or a four pm After the Bell show. But in the middle of the day it didn't find its audience. And it was very smart and very well done.

Well listen. I mean, there's a lot of different things that go on in these places in terms of how you make decisions about leaving a show on the air or not. And so one of the things that Gary and I Skybridge what we thought we would do is we would make the show ourselves. This way, we could show the show whenever we wanted. You can go to Wall Street week dot com and watch it. We are televising it on Fox affiliates because I am a contributor

to Fox Business and Fox News. But now that's something new, because you weren't always a contributor. No, no, I had. I had a prior relationship with CNBC, and that was for a couple of a good couple of years, a couple of years, but they were a spot. Now I know. Bloomberg is a sponsor of the conference wasn't CNBC at one time CNBC. Well, you know, I think there's a couple of guys coming from the internet side, but I think the the television side this year will be Fox

Business in Bloomberg and listen. You know, the truth of the matter is, um, I have fallen in love with Roger Ales and Bill Shine. Roger has done and we wanna talk about an entrepreneur, I gotta put him up there with the other ones we were referencing. Fox is a giant. But you just think about what Roger Ayles did. He started something from absolutely nothing, um. And he'll tell you himself that people were throwing eggs and tomatoes at him and Rupert Murdoch scoffing at the idea that they

were going to take on CNN. Can I tell you look at look at what he's done. He's one of my intellectual heroes. I don't agree with the politics of of some of the crazy that we run into on some of the more radical shows on Box, but when you look at it strictly from a business perspective, they may be the most successful cable television channel ever. Well, listen, I I think that there are crazies on the left. There are crazies on the right, and I know, but

MSNBC has no influence. Foxes enormously. People scoff at the tagline fair and balance, but I always tell people who aren't watching it, go watch it because it is fair and balance. They are bringing a ton of Democrats on the show. They are bringing a ton of left leaning people. I would argue with the fair and balance but from but there's no But there's no argument from a business perspective. They are the most one of the if not the most successful. Watch Bill O'Reilly's show for one week and

you tell me where he's not fair and balance? So what's pretty fair? Independent guys? So let me tell you this is an interesting digression. But Bill O'Reilly when he first started, was kind of described as the wild man of Fox. And now how Bill O'Reilly is essentially the adult supervision. He is the closest thing to fair and

balanced on Fox. When you compare him, he's practically statesmanlike against some of the other I'm not going to mention people by name, but some of the more extreme shows, and you know, every now and then there's some really listen, I'm I'm a I'm a declared Republican and so I but that's a transition for you as well. Well. No, I've always been a Republican, but my law school classmate was a couple of years behind me. Barack Obama when he ran for the presidency two years behind you, was

that right, two years behind me? I did support him in two thousand and eight, and so, as a good Roman Catholic, I'm paying penance now to the to the Republican Party for doing that. But but so you know, listen, I don't want to spend the whole time talking about Fox. I'm in love with the network. Uh. I think they do a massiful job. I think that Brett Bear Special Report is among the best news uh that can be delivered out there. Show me a better news program. I

do think that they are fair and balanced. Not to say that they don't have right leaning shows, but they have a lot of left leaning individuals on there. And I think that the reason why people are watching them and Quinnipiac backs is up they were entertaining. Well. No, they voted in the most trusted news organization in the United States when they had a pole So we don't we we don't have to you and I disagree possibly about some of this stuff, so that I like them.

So let's tall. I have an enormous amount of respect for Roger rails Well and Bill Shine for that man. So let's talk a little bit about your involvement with Barack Obama, because there's a wonderful arc when people talk about who is Anthony Scaramucci? So you support your former Harvard Look classmate he gets elected. In two thousand and eight, we're in the midst of a financial crisis. Lo and behold,

there's a lot of chess beating about Wall Street. Um. I try to be as objective as possible in bail Out Nation because I didn't want to write the book that there's a story to that. Bill Fleckenstein's Greenspan's Bubble had come out and it was wildly successful for a business book, and uh mcgroy hill had gone to him and said, okay, now let's do something on bear Sterns. And he goes, hey, man, I just finished one book and I need a few years to you know what

it's You've written super hard. You know, it takes a year or two to recover. So they asked him, who who else is writing on this? Oh? That's easy. Ridholtz has been running about Baron Lehman for a year or two. You should go talk to him, And I said, no, no exaggeration, half half a dozen times. I don't want this. So anyway, I tried to be objective, which is a real challenge. But the reason I bring that up within the context is there was a lot of beating on

Wall Street. And look, you and I have both been in this industry for twenty plus year. You know that there's a handful of people in every firm that blows up that a response. My favorite example is a I G was seventy employees, two people in the financial products division, and of those two people, a dozen were responsible for all of the damage. So when people are beating on Wall Street, they're beating on the headlines, or they're beating on a guy like Dick Fold, but the people at

Lehman Brothers didn't cause it to blow up. One of which leads me to the line, Hey, Barack, you're beating us like a pinata. That's that's where I wanted to go with That was a that was a tough line for me. So I was at the museum at a town hall meeting, Susan Krakaur, who is now my producer for formerly producer at CNBC and a big demand money and Fast money, long television background. Uh, she's our producer

for Wall Street Week and a partner of mine. She basically called on me to ask a question of the president. He recognized me immediately from law school. We got a little of a bantam while I also supported him, and I said, well, Mr President, when are we going to stop whacking Wall Street with a pinata stick? Well, one thing you learned is as an Italian American, you shouldn't use the word whack on live television. That's one thing

you learned. And you know the president as a bully pulpit, and so he bullied me with the pulpit, and so that was fine, But that wasn't the reason why I switched back to the Republican. But let's talk about one second and then we'll come back to the Republicans and I will have a discussion because I'm an ex Republican. But you um that when viral that line blew up, It was on The Daily Show, was on Fox, it was on CNN, that basically was everywhere. What was that like? Well,

you know, let me tell you something. I was lit up by the left wing blogs and YouTube. That clip was on YouTube YouTube a few million views. You know. Jon Stewart had some funny lines about me that my teenage children still give back to me over the last four or five years. But what I would say to you about that experience is uh, something that you should never read with people write about you. That's probably a

good idea, but don't. But I did read a comment where somebody said to me that I was an elitist because I was. I didn't realize that Wall Street was this great sinning society and Barack Obama was the popular savior, and I was an elitist because I was a member of the Wall Street community, like it's a monolithic exactly. And I remember thinking to myself, my god, this person thinks I'm gonna leaders. I grew up in a middle class family on Long Island in Port Washington. My parents

didn't go to college. How am I an elitist? And then it dawned on me, Barry, that the person that wrote that was right, that I had actually become an elitist because I was insulating myself with super wealthy people managing the money of super wealthy people going to fancy pants country clubs and fancy pants restaurants, and I was losing touch with some of the things that the middle class of the United States and the lower middle class

are suffering with. And so that whole experience for me was hugely valuable because when I worked for Governor Romney on the two thousand twelve election, I asked for the opportunity to travel and got an opportunity to see some of the small towns in the United States that are frankly suffering. We've got a wage depression or stagnation. We have a disposable income decline over the least six or seven years. And you know it goes back decades, but the last six or seven years I had an eight

percent drop. That's fairly steep. And so the point of me bringing all this up is that we have to come up. But this is not a left or right discussion. This is a right or wrong discussion. Or as Scott Walker said in a dinner on Sunday night, it's not a red or blue thing. It's a red, white and blue thing. And the point being is that we have to come up with the right policy directives. The right initiatives, corporations, small businesses. We have to figure out a way to

close that income gap. We have to figure out a way to grow the po. I I'm not a big believer in the redistribution theory. I don't think that's ever worked in history. We have a lot of laboratory documentation about that not working. Uh, And so we have to figure out a way to empower people. And this is another reason not to threat it back to our show Wall Street Week, but one of the themes and the mission statements of the Wall Street Week is, hey, rely

on yourself. You can't rely on Social Security, you can't be a dependent of the government. We gotta figure out ways to help you save and build an est eg for yourselves. So that's really a fascinating tell. I love that arc. And you, basically, I don't know if you're aware of what you just said, but one of your early mentors who had said to you, are you gonna grow or you're gonna swell? You're basically saying that pre Pinata, you were engaging in a little swelling. Is that what

I'm hearing from? Well, I, you know, I certainly didn't think I was engaging in swelling. But I possibly was not only just engaging in swelling, is I was overly insulating myself in a way where you're losing touch with the some of the things that you need to really focus on in your life. And so and in politics that's huge, and in politics, but also in business. UM, I've really tried to set up Skybridge in a way where who's ever working at Skybridge they feel like they're

getting a good experience. We pay a percent of the health care at Skybridge. We give the most allowable or the maximum profit contribution to the i RA S or matching. Uh, you know, I'm Italian. We serve a free meal every day at lunch. If you're there for dinner, we're gonna

serve your dinner. My My whole feeling is is that I feel that we can create a profitable enough firm to help people with their retirement and help people with their current healthcare and so so I really have tried to think about these things in the most human way possible, because at the end of the day, UM, I think that's all we really have is the relationships that we

have with the other people around us. And so so sometimes if you are in a tunnel, or sometimes you're overly focused on certain things, you can lose focus on important things. I if I gave you all my flaws, we'd be here for six days. And there's a ton and there's a big phone book of them. But but one thing that the pinata experience did for me, it was very eye opening about not overly insulating yourself. So so let me ask you a couple of related questions.

And I only have you for another fifteen minutes or so before your um colleague is gonna start bouncing off the glass walls in the UH in the engineers booth um. Is Wall Street still being treated like a pinata? Or have we begun to move past that? Well, I think there's a number of things that have happened, and and not to music cliche, at one or two bad Apple spoils a whole bunch. But what has basically happened is

the media focuses on Wall Street. It's a lot like what Willie Sutton said about banks, because that's amount of money is and so when the media is focusing, the focus has been on sort of three things. The person that's made a billion, the person that lost a billion, and the person that stole a billion, and so it's made a billion, lost a billion, stole a billion, and the and the stole a billion one is the most riveting because that's the car crash where all the rubber

necking takes place. And so what that does is it infuses the spirit of distrust, malfeasance, malpractice. Uh. And to your earlier point, there were probably pick the number. Most of the people in our community are really trying to do a good job, and most of the people really care about their customers and are not in the rip off business. And so uh that and are offended by the concept of, Hey, if you have a product to go sell, go sell it. But if you're gonna steal

from people, what is that job? You know? That seems to be the two. If you worked inside the sky bridge, you'd have to hear this lecture all time. You know, my my parents and my grandparents, Uh, they love me very much much. Uh. Many of them work with their hands. Many many of these people were never educated. And I always tell the people that work inside a skybridge, but one thing they did for me is give me my

last name clean. There's not enough art, there's not enough, not a big enough house there isn't a large enough private plane that I need to do anything to hurt my family or my mom and dad. And so I really try to drive that home because I think, uh, in leadership, the fish things from the head down. I try to let my staff know we don't ever need to go anywhere near any line. Our job is to serve our customers. And I also tell the staff. Let me tell you some there are six d people relying

on the firm. Immediately, those are the sixty people inside the firm. And then there's all the dependence that would be my four children, my mom and dad who I subsidize. Uh, you know, my my employees and staff are partners. All have children. They need to make mortgage payments, they need to make tuition payments. We got a ton of people relying on us, and so don't just think about your self when you're making decisions. Think about that broad community of people. Uh that or want you to look out

for them? All right, So in the last couple of minutes we have, let me get to my last few questions or a couple of questions I always ask, and I don't want to skip um. But first a quick hedge fund question so the rules have recently been changed on on advertising, on marketing. How is that changing the

hedge fund world. Well, I think for right now it's not changing the hedge fund world because most people have elected to stay away from it because they're getting advice from their outside councils and their internal council that the rules are very uncertain and you don't want to hit a trip wire somewhere where you get the the SEC or some other regulatory agency upset with you. Um and

so I think it's hard. One thing that Skybridge did which I don't view as necessarily advertising, is we went into a public private partnership with the City of West Palm Beach uh and we are the sponsors for their bicycles share a Ride program, so like like city Bikes Nike here and so we've got a hundred and fifty bikes bicycles at fourteen kiosks throughout the city of West Palm Beach. We just opened an office in Palm Beach. Guard pretty clean. That's this, this environmentally safe. All it

is is our logo. I can't believe any compliance lawyer would give anybody no no, no. The outside compliance people, the inside compliance people, all thought that that was okay. Some people call that advertising. I'm calling it branding, calling a brand awareness. I want people to say, hey, this

seems like a pretty cool group of people. Let me look at their website or let me check out where they're doing uh, and then they can make draw their own conclusions about our performance UH and the quality of the stuff that we're doing inside the So let's let's talk about hedge funds briefly. There's been a lot of criticism by some people in this room um that the performance for the whole community of edge funds has been

soft and the fees have been hard high. Obviously that doesn't apply to everybody, but by and large, the hedge fund and by the way, hedge funds continue to attract lots and lots of capital. What what is the story of of hedge fund investing today? It really depends on what you're looking for. If you're looking for a panacea or the perfect investment story, it's not out there, and someone that's trying to tell you that it is, well,

chances so they'll be in jail before long. And So I look at the hedge fund community as a group of people are super sophisticated that have a great diversity of skills. They can go along something in short, something which means by and bet for something, or sell and bet against something. They have an ambidexteriative talent. UH. And the goal, at least the Skybridge goal is to try to get a high single digit return with one third

of the volatility of the SMP. I'm not allowed to talk about my performance on a radio show, but people can go to our website and figure it out. Uhclosure and that sort of stuff. But we but we I will simply tell you that I believe in the industry. I'll say tell you that we went from one billion to nine point three billion dollars in discretionary assets in five years because we are doing a service to people

who want a stable return with less volatility. If they're looking for us to outperform the market, it is not our product. I would not recommend it. If they're looking for us to do something that we cannot do, I certainly try to tell them that I would not recommend it. But there's been softness in the broader industry because of

the macroeconomic policy driven by the Federal Reserve. The low interest rates have crushed the long short manager, and so for your listeners, that's the manager that's taking bets on the long side and taking bets against companies. What's happened is because of the liquidity, those markets are rising, and so the shorts are going up on those managers, and they have mediocre performance. They make up of the industry barry, and so so when the monetary policy starts to normalize,

I predicted that group of people will do better. But those are really the people that the stories are being written about. We we we are a different group, You're a different target. We have very low exposure along short managers right now because of the Federal Reserve monetary policy. We're more exposed to structure credit, more exposed to event driven activism and things like that, both of which I think are well situated for the current economic climate that

we're in. But I'll tell you right now, macro managers and long short managers. If you add the fort which is long short plus the fifteen which is macro, roughly two thirds or six of our industry is woefully underperforming due to current Federal Reserve monetary policy. So I expect more negative articles to be written about the industry, but it's not telling the whole story. So before I get to my last two questions, I'm gonna give you this will be the speed round. A few quick questions. Who's um,

it's pretty clear the Democrats in the nominate Hillary. Who's gonna come out of the Republican primary process? Well, I'm I'm working super hard for Scott Walker and full disclosure. And so I'm so you're raising money. We've had several events from this week in New York. We did an event from in Naples, Florida. We've done many events in

my office already. Uh. Scott has become a dear friend. Uh. And I tell you that I think he would be an incredible president and he would be the guy that I would hire to do the job of fixing many of our problems. What what about the heat coming off of Rubio right after the big GOP. Don't dislike him. I think he's very talented. He's a very articulate, very charismatic, great public speaker. I think he's woll versed on a

lot of the farm I don't have I I've adapted. Uh. The eleventh commandment of Ronald Reagan is that shall not say a negative thing about a fellow Republican and so so for me, I like Senator Rubio. Uh. And I'll make a prediction here on your show. Hopefully you'll invite me back. If Governor Walker gets the nomination, I expect Marco Rubio to be as vice president. Really, that's that's fascinating.

So last two questions I asked these of all my guests, and they always engender a really interesting uh set of answers. You know you've been in this business quarter century, coming on starting your second quarter century. You know, what do you see as the next major shift in the financial services industry. I think that the there will be a there'll be a further electronic shift. I think advice is going to be coming over the smartphone. Advice is going

to be coming over the LinkedIn like in Facebook, like apps. Um. I think the generation that you and I made, which is our sons and daughters, are more comfortable with the computer interface, less comfortable with the written word in the magazine or a newspaper. And so I think that there will be more efficiencies created in the advice giving side of financial services, no question about that. And and here's my favorite question. I get to ask, and you're really

a perfect got to ask this. What do you know today about investing, about the market, about this industry that you wish you knew when you started? Well, you know, I was investing in biotechnology call options when I started, because you see, Barry, I was a guru in biotechnology, even though I didn't have any scientific background, and so I was absolutely certain that certain drugs we're gonna get

through their Phase three trials and so forth. And I lost about fifty or sixty thousand dollars of money that I didn't need to lose at that time or want to. And so I really wish I could have told my younger self, uh to stick with that simple computational table known as compound interest. Shoot for a seven eight nine percent return. The turtle wins the race to five years. Unfortunately, when you're our age, you know, they go by very quickly.

When you're young, they think you're they're forever away. But if you just stick to a very steady, healthy, low leveraged investment discipline, you will get yourself and your family to the promised land. I wish I had known that

back then. My first ten years on Wall Street, I spent trying to be the smartest person in the crowd, doing the stupendous thing, finding the long shot that was gonna make me a hero on a golf course where I get bragged to somebody that I always tend to want on something when I was Oh, for a hundred, if you will, And so I would tell people and my younger self be patient. The turtle wins the race.

The truisms of a Warren Buffett or Charlie Munger, Uh, they exist today, they existed fifty years ago, they'll exist fifty years from now. Uh. And you're not smarter than your grandparents. You're not smarter than your parents. You may be more technologically adept, but follow those well steeped principles. We've been speaking with Anthony Scaramucci of Skybridge Capital, host of the Salt Conference and Wall Street Week. My name

is Barry Rihults. If you enjoy this conversation, be sure and look up an Inch ro Down an Inch on Apple iTunes. You can see the other forty such conversations we've had over the past year. Check out my daily column on Bloomberg View dot com or my Twitter feed at Ridhults. You can find Anthony Scaramucci on Twitter at Scaramucci, or at Wall Street week dot com or Skybridge Capital a Scaramucci, Skybridge Capitol dot com or prosper at Wall

Street dot com. I'm Barry Rihults. You've been listening to Masters in Business on Bloomberg Radio