Preston Pysh 7:00
We talk about enterprise value a lot in the public markets. When we talk with Toby Carlisle, Stig and I use that one of our main metrics for filtering results and trying to find the best undervalued picks is using the enterprise value to the EBIT.

I’m curious, is that how you typically look at things from the private equity side? Are you looking at enterprise value a lot versus just like the value of the common stock?

Douglas McCormick 7:24
Absolutely. We look at enterprise value relative to metrics of cash flow. Depending on the business, there may be slightly different metrics to look at. But to your point, enterprise value to EBIT is probably one of the most important. Essentially values allows you to think about the value of the concern, absent capital structure.

Stig Brodersen 7:45
Could you please elaborate on that because it goes into the debt structure of the company and why it’s such an important starting point to have?

Douglas McCormick 7:53
As we talked about the big landscape of private equity and we talked about leveraged buyout is one of those. Those are more mature businesses, more stable businesses.

One of the ways that that part of the asset class drives returns is they finance the transaction with a significant amount of debt. I would argue it’s often appropriate because those businesses are slower growth businesses, but more mature, less earnings volatility.

The analogy I would make is the same analogy as buying a house. If you bought a house with no financing, and the house appreciates 10%, your equity went up by 10%. If you bought a house with 90%, purchase price finance with that house goes up by 10%, you’ve doubled your equity money.

Same concept in financing leveraged buyouts. There are numerous benefits to that. The first we talked about is how you leverage your equity investment. The second is you’re providing a cheaper, lower source cost of capital. Then the third is there are tax deductibility, issues with interest.

When you add all those things together, it can really help drive attractive returns for that part of the asset class.

Preston Pysh 9:04
This is my impression of private equities that has grown a lot in the last couple of decades, and that might be true or false. I’m kind of curious to hear your thoughts on that. But if it is true, why has that occurred and why has this become such an attractive asset class for investors?

Douglas McCormick 9:19
No doubt about it. This asset class has experienced tremendous growth. So if we define asset class by assets under management or AUM, in the 2000 timeframe, the entire market was about $600 billion of assets under management. Today, that’s approaching $2.5 trillion, kind of a 4x growth here. As I mentioned, there are now approximately 4000 firms in this market space.

Very simplistically, I think the number one reason the asset class has grown is it’s been an attractive returner. There are a lot of firms out there that estimate what the kind of market return looks like for the asset class.

Most reports would say that the private equity asset class has returned 300 to 400 basis points in excess of a broad equity indices. So if Russell is doing 10% on a long term basis, private equity is kind of done 13% or 14%. I think that’s the number one reason things have grown.

As you kind of think about why private equity is interesting or why it’s performed well, a couple comments. First of all, it should, right? This is a very illiquid asset class. There are risks associated with being in the asset class, so it’s not returning better than the public equity markets where you can turn around and sell tomorrow. If you don’t like the way things are going, then it’s not going to be a smart investment.

However, I think at a very high level, there are some things that make this asset class sustainably attractive. One is the overall supply and demand equation. There are a lot of capital out there. There is certainly a lot of capital that has come into this market, but it’s also a very big fragmented market in terms of where this money can go reside in terms of the deals. I then think the supply demand equation has been favorable to private equity.

I talked about the inefficiency of this market in terms of there’s no information out there. That makes it very challenging to get good deals done, but it also creates real opportunity, where we think you can find real value, because of just the inefficient nature of information.

Another aspect of why this is such an interesting asset class is it actually solves real problems. What I mean by that is when you’re trading stock in the market, its buyer and seller, directly as a secondary share. The company is really not a participant in that transaction.

When you think about private equity, you are solving a problem: corporate finance needs capital, or a company needs capital to grow and they’re raising capital from you, or a founder or an owner needs capital to execute a succession plan or a consolidation strategy.

In all cases, I think those are win-win scenarios, not just buyer and seller where one wins and one loses. And so, I think that’s a big contributor as well.

Stig Brodersen 12:05
If we have this one scenario where you as a private equity company would go in, and just outright buy the other company, and you will just get all that net income back to you. Basically, everything would be business as usual. You won’t really interact with that company.

Then the other scenario where you would be completely opposite is that the private equity company would go in, send all the experts, and perhaps even change the management. Basically, not only look at the strategy, but also all the nitty-gritty operations.

What are we closest to those two scenarios, if you had to say what a typical case would be like?

Douglas McCormick 12:44
If you think about it, we just described how these markets experienced tremendous growth. As it’s experienced tremendous growth, it’s matured a lot as well.

I generally break it down into three stages, when people first started doing this in the 70s and the 80s, the real value of drivers was price discrepancies, real discounts to the public markets. Then in the 80s and 90s, a lot of the value was driven by leverage. You were able to get much higher leverage REIT at that point so you could finance a much greater percentage of the deal with cheap capital.

In today’s market, I think both of those two previous sources of value have been kind of commoditized, if you will. To be successful, you’ve got to be a really good underwriter, which means you need to specialize in certain industries where you have a competitive edge. Then you’ve got to figure out how to drive value or do something different with that asset over time.

Lots of firms have developed different strategies for that, but common strategies are brain operational expertise to the party or bringing unique industry expertise to the party, so you can really help grow the business. I think to a certain extent, organizations are evolving to be strategic buyers. They come at it from a financial perspective, but they’ve got to bring more than capital to be successful.

Preston Pysh 14:00
Interesting. I would imagine that you’d see a lot of private equity firms really specialize in certain niches. Is that true?

Douglas McCormick 14:07
Yeah, I think it’s specializing in niches or specializing in a business model so you can define your core competency. As we know everything about aerospace and defense, you could define your core competency… As we know certain types of business models, distribution, transportation, let’s say. You could define your core competency, as you know, we have operational capabilities to drive enhancements and operations.

Preston Pysh 14:32
Talk to us a little bit about the negatives, because I think a lot of people that would hear this would be like, ‘Wow, you’re getting 3% more than the public markets. This sounds like a lot of fun and really interesting stuff.” But, what are some of the negative sides of private equity that I think a lot of people maybe don’t think about or miss?

Douglas McCormick 14:50
Lack of liquidity, right? These are generally 10-year limited partnerships. The duration between the time you invest your capital and you get it back is going to be a very long period of time. You kind of got to be comfortable with parking this money for a long time and not expecting to get at it. If you do need to get at it, in many cases, you’re taking a significant discount to avoid that illiquidity.

The second thing is we talked about this inefficiency in the market and lack of transparency that also exists in terms of trying to find investments as a retail or an individual investor. That’s good news and bad news.

However, it’s very hard to identify good deals. Candidly, it’s very hard to identify good teams. If you then think it’s challenging to underwrite a business, where you can see the business, you can see the financial performance. You can evaluate the business’s performance today.

Imagine trying to underwrite a team that’s going to invest in those kinds of businesses. You’re trying to evaluate consistency of strategy, quality of team, teamwork, and the team’s ability to source deals and add value. That’s a challenging process as well.

The last thing I would tell you about the market is I think averages are deceiving. What you see in the market, I think, is one of those markets where persistence of performance is very high.

What I mean by that is if you look at the public markets, and you look at top quartile performers in a period, let’s say a year or five years, and you compare that to top quartile than the next period, the pull through between high performers in both periods is often relatively low.

However,in the private equity space, you see persistence, where if you are top performer of this period, you are likely a top performer in the next period. I think that’s indicative of an inefficient market, but what I also think that means is it’s very hard to identify good managers and it takes a long time and unique skill set to do that.

Stig Brodersen 16:45
Is that because they just get a better deal flow?

Douglas McCormick 16:47
I think they get better deal flow. Success perpetuates success. I also think they continue to develop their skill sets and their capabilities. This is an area where you’re not just competing on capital, you’re competing on human capital, right?

I think a lot of times, at least in the market that I’m in, which is the lower end of the middle market, entrepreneurs are not only picking capital solutions. They’re also picking a partner. As they evaluate a partnership, they want to work with people they like, people that they’re aligned with, and also people that they believe can help them build a better business.

Preston Pysh 17:24
I know if I was young, and I was listening to this, and let’s say I had $50,000 in my pocket. I’d be wondering how I can invest in something like this? How is that possible and is it possible? I’m kind of curious how you see that.

Douglas McCormick 17:38
Yeah, it’s absolutely possible. I think it’s a mixed bag, candidly, but there are a number of very large private equity firms that over the course of the last decade have gone public. So KKR, Carlyle, Blackstone, Apollo, I think all those four are public now. You can participate by buying an equity interest in a business that’s investing in private equity.

There are also ETFs out there that are investing in those kinds of businesses. That’s an option.

We started off the conversation by talking about what a great time we had at the Berkshire Hathaway annual meeting. I would argue, in many ways, Berkshire is a private equity holding company.

You think about some of the big assets that they own. I bought Burlington, Northern, Heinz, and Geico. I mean, those are essentially our private equity plays. And so, that’s an interesting way to play private equity.

I think there are some ways that individuals can play directly, not through a private equity investment professional, but lots of angel investing networks out there. I think investing in real estate, in some ways, is a private equity play. Then many of us are involved in families that have family businesses. To some degree, that family business is private equity interest.

Stig Brodersen 18:52
So you’ve been in this business for a long time, Doug, and you both have seen the successes and also the less successful ventures. What would you say if you can come up with the common denominator of what separates the good deals from the bad ones?

Douglas McCormick 19:08
Yeah, I guess the first thing I’d say is, if anybody has been in the business a long time, and they’re not talking about both their good and bad deals, they’re not being genuine with you, because everybody sees both sides of that equation.

I think the first thing is, it starts with good underwriting. It’s often in this business, when you’re a long term investor, it’s hard to win on the buy, because you buy so well that you’ve immediately created value, but you sure can lose.

Warren Buffett has one of my favorite sayings, which says, “When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”

So very simply put, good managers work hard to overcome a bad industry, even if you have a good management team. A good industry and a good business model starts with good underwriting.

I will say the second thing though is because you’re a long term investor, you have to have a good team to execute and take advantage of the opportunities. In every deal that I’ve been involved with, even if they’re good deals, they’re always periods of struggle. And so, you have to acknowledge that and put the team in place that can execute against those struggles.

I think competitive advantage is ephemeral. If you’re not continually moving and continually improving your competitive advantage is often kind of quickly eroded.

The other thing that I see is when we underwrite something, there are a number of unknowns, bt I take a lot of comfort when I see situations where there are multiple levers for improvement. I essentially look at that as if I’m buying a decent business with embedded options.

What I mean by that is there are options to grow through acquisition. There are options to grow geographically, through opening new entities. There are options through pricing, or through supply chain management.

When I’m underwriting that, I don’t know for sure which of those options will present themselves to me, but I take a lot of comfort in there are numerous ways to kind of drive value in this business. We’ll figure out of the five, we’ve identified two, three or four that can really help get us home. Then listen, in every good deal, there’s some element of luck.

Preston Pysh 21:12
Talk to us more about how you brought up competitive advantage. This is another big buzzword that Buffett and Munger always talk about as an enduring competitive advantage.

I know from my own personal investing experience that this is something that I think has matured, where I didn’t realize how important this was when I first started investing.

Now when I look back, I think that that’s one of the most important things that I can look at next to price and all the others. This competitive advantage piece is so important. Can you explain why you also think that that’s so important?

Douglas McCormick 21:47
I’m a work in progress. My experiences caused me to think about things differently. I have a lot more confidence in my ability to underwrite the quality of a business model, than my ability to underwrite growth in a market.

For example, you think about trying to project GDP growth or the growth of an end market like oil and gas or commercial aerospace. I think that’s really challenging. In many ways, it’s a little bit like a coin toss.

However, if you ask me to underwrite what makes a good business model, and you think about the attributes of that, once you’ve identified that, I think those attributes are likely to be persistent.

For example, we look at things that have very low customer concentration. We look at businesses that have barriers to entry. We look at businesses that have relatively high variable costs, because that allows you to navigate changes in the marketplace.

We talk about value in terms of multiples of cash flow, but we talked about quality of businesses, as a product of return on tangible capital. How much cash flowed to the tangible assets of this business? I then think that’s a much more durable way to underwrite and get comfortable with the investments that you’re making.

Preston Pysh 23:00
You’re obviously looking at the trends of those and how they’re progressing over time, I’m assuming as well.

Douglas McCormick 23:05
Absolutely. Also, it’s kind of interesting, all the analytics are quantitative. They focus on the metrics but it’s easy to forget that those metrics are driven by people. [Therefore,] it really is a combination of financial capital and human capital that creates a successful situation.

Preston Pysh 23:26
I’m curious, when you think about a discount rate for the business that you’d be looking at, one of these frustrations with a lot of people that are Warren Buffett style investors who are doing these calculations for intrinsic value and things like that, they go to a business school. Then they’re doing these CAPM models, and they’re using the prices of other businesses and the volatility of other businesses. They determine what they think the risk or the discount rate should be.

My personal opinion is that this approach is so backwards. I’m kind of curious how, because in private equity, I would think you’re not doing the CAPM model. You’re doing what you think your risk is and then you’re assigning that as your discount rate.

Douglas McCormick 24:07
Let’s talk about DCF, discount rates and CAPM, in general. It’s tremendously theoretical. And so, it’s interesting, but I think it’s interesting not because of the answer it gives you, but because of the process that forces you to explicitly make assumptions, right?

So when you’re doing that analysis, you’ve got to make assumptions about growth rates and around exit. Those are all valuable processes to kind of work through. However, I think the answer doesn’t really drive how we think about what we’re going to pay.

First of all, the great thing in the private equity market is you pay a combination of what you think it’s worth, but also what you think you have to pay, right? Because again, it’s a negotiated transaction. We think about the analysis we do as what we can afford to pay? What’s the top end? Then if we can, we obviously try to do better than that.

However, as we think about the actual modeling, we think about it in the context of a five year hold period: what can we pay assuming a certain capital structure? We’ve been out in the market. We’ve talked to lenders. We know how much leverage they would provide at roughly what rates. Then we do a forecast over a five year period. We generally assume we’re going to exit at the same multiple that we bought in at.

The combination of those things drives a certain return profile. We would expect on deals that are in our kind of wheelhouse, that those pencil out somewhere in the 20-30% IRR over a five year period time frame. That is a a planning process, not necessarily, the gospel, but that’s how we think about the process,

Stig Brodersen 25:45
Do you have an internal rate of return model for this? In other words, the threshold of how much return you’re expected to get if you invest in this opportunity.

Douglas McCormick 25:55
Absolutely. For us, it’s not so much in theory, what is the cost of capital? It’s what’s the IRR to the investor.

Stig Brodersen 26:04
Doug, none of you heard about some of the good deals that you made. I don’t want to put you on the spot. Yet, I’m doing it anyway.

Could you tell us about some of the mistakes that you made, some of those deals, and perhaps even some of the things you completely neglected? When did you do your due diligence of the company?

Douglas McCormick 26:22
First of all, let me go back to one thing I said. When we’re talking about good deals, all these deals have challenges. You got to expect them. We kind of joke that there’s no such thing as a 20% T-bill. We’re pricing these assets with an expected high return.

Implicitly, that means I’ve got significant risk here. I then think a lot of the game in my mind is setting yourself up to avoid long term impairment.

What I mean by that is these things will go through cycles and there’ll be tough times, but if you can avoid long term impairment, you generally can find a way to work your way home to a decent outcome or at least an outcome where you haven’t lost significant capital.

Where I find you run into real impairment risk that’s hard to navigate through, I think businesses with real customer concentration can lead to real drivers of impairment.

We talked about capital structure and that drives a better return because I’m using leverage. The reverse of that is if you’re too aggressive with capital structure, and you hit a bump in the road, it’s very difficult to kind of course correct.

We think about leverage as a double edged sword. We want to use it to leverage returns, but we try not to take the last dollar to give ourselves kind of a zone of error, or a margin of error and a way that we can navigate kind of Murphy’s Law, if you will.

Listen, we talked about teams on the positive side teams. Bad teams can be an opportunity, or a liability, if you find a situation where you have a bad team, if you’re willing to make changes, that actually can be an opportunity.

I think though you’ve got to go into the deal, knowing that you think you’re going to change out the management team and be committed to doing that, but I find generally, on the deals we’ve struggled with, we thought we had a management problem and we probably didn’t act soon enough.

Preston Pysh 28:12
Talk to the audience about the term “impairment” so they understand the terminology there.

Douglas McCormick 28:17
Essentially, think about the stock market. The stock market goes up, the stock market goes down, and I still have value. The good news is the concern has not been impaired. Over time, I can still kind of grow my money back, if you will.

An impairment essentially means you’ve permanently diminished value in the asset. A good example is bankruptcy, right? At that point in the cycle, you were forced to turn over the keys to another owner, essentially. And so, there’s no way you can kind of overcome that impairment.

Preston Pysh 28:49
Okay, Doug, you have written a book. Stig and I have both gone through your book, “Family,Inc.” is the name of the book.

Writing a book is really time consuming. I mean, it takes a lot of effort to put a book out there. When you look at the revenues that a book generates, it’s often not worth the effort to write a book. And so, the reason I asked this is because you’ve dedicated so much of your time and energy to writing a book. I’m curious what motivated you to do this and why did you put this out there for people?

Douglas McCormick 29:24
First of all, let me just reaffirm something you said. I’m pretty sure that I’m violating minimum wage laws, if you look at how much I’ve made on the book, versus hours invested.I I can promise you it is not a money making adventure.

Listen, I did it because I’m passionate about the topic and I think there’s a big opportunity to have an impact on people and really change the way people are thinking about financial literacy.

I argue it’s one of the biggest challenges that we face in America today. There are so many trends out there that are making it harder for people to navigate their life in a way that’s financially secure. It’s job mobility, wage stagnation, and increasing cost of education. It’s diminishing social safety nets and it’s increased life expectancy.

You throw all those things together and the skills required to create a life where you’re financially secure are dramatically different than they were 20 years ago. The problem is we’re still teaching this topic the same way we did 20 years ago.

My book is really an attempt to give people an actionable framework where they can make good decisions for themselves and help identify the big decisions that really impact your financial security over our lifetime.

Stig Brodersen 30:39
You really have these awesome tools on the website and we’ll definitely link to them in the show notes, where it’s very clear that you look at yourself and even your family as a business. It’s all lined up with financial statements that you can directly apply.

I don’t know if it’s because I know you and I know your background, but I couldn’t help but think this is not just seeing yourself as running your own company, perhaps even a private equity company. Is that the right interpretation of that?

Douglas McCormick 31:13
That’s absolutely correct. A little bit of history on how some of the key concepts of the book evolved.

My inspiration for the book was a product of my experiences as a young private equity investor. And so, I’m working on a number of portfolio companies looking at making investments. What I realized is many of the tools and analytics that we were using to assist the portfolio company could actually be applied to my personal finance situation.

Essentially, we’re all in the business of selling our labor into the market. You are in the business of you. I’m in the business. You can make that leap, then the same kind of tools and logic apply that.

We teach folks in business school, we should be thinking about that in our own personal financial decisions.

Now, I’m not saying that means you need to make every choice that is the financially optimal choice, but I think at least it forces you to understand the financial implications of the choices you make.

Preston Pysh 32:10
Personally, when I started my own business and I had to do my own income statement, my own balance sheet and cash flow statement, I was literally doing the double entry accounting on my company. That’s when I personally felt like my understanding of how to assess the value of another business just kind of went exponential.

It was very helpful for me to be doing those calculations and figuring it out because when I looked at another company’s books, I was like, “Oh, well, that right there is not good.” Because in my own personal accounting, when I would do that, that would be a red flag.

What I love about these tools that you’ve developed is that you’ve basically allowed any person off the street, who doesn’t own their own business, to basically be doing these financial statements on their own on themselves.

This is my personal opinion, for people listening to this, if you go in there, and you play with some of these sheets that Doug’s developed, you’re really going to improve your understanding of how financial statements work. It’s going to help you the next time you look at a public stock, or maybe you get interested in private equity someday.

All this stuff is going to really help you understand the value of a business and to understand the plumbing of how the money moves through a business, how it moves through your personal finances. I love it. If I could give it a plug for people, I highly recommend that you check out these tools that Doug developed.

Douglas McCormick 33:38
Well, thanks, Preston. For what it’s worth, I agree with you. If I can encourage folks in school to take one course, I think it’d be an accounting course. Not because you want to be an accountant, but it is the tool. It’s communication, the language of business. I think it just gives you so many perspectives as you apply it in other fields.

Forcing yourself to sit down and kind of think through what a person’s balance sheet looks like, and include non-traditional assets, like lifetime value of labor, lifetime value of social security, and think through what the implications of those things are on your investment choices, I think that’s a really valuable exercise.

I encourage people to do it periodically so you can see progress in the balance sheet or essentially accumulation of net worth. Having said that, if that’s not your thing, if you do at once and force yourself to kind of look at it, I think that’s still very eye opening.

Stig Brodersen 34:33
Going back to the background, I’m very curious to hear how you would equate that to a buzzword like entrepreneurship, which is something that you always share these days. So you have entrepreneurship on one hand, then private equity on another, how are they similar and do you see them married up in the end?

Douglas McCormick 34:52
They’re very similar activities on different ends of the spectrum. First of all, I consider myself a private equity investor. I consider myself a financial entrepreneur.

Essentially, what that means is my skill set is not technology or software. My skill set is capital and I’m trying to apply that in an entrepreneurial environment.

I would argue, if you’re an entrepreneur and you’re trying to create a business, you still are taking your intellectual property and your human capital. You’re combining it with financial capital to create a business.

In that case, your primary tool is your intellectual property and your human capital. I’m kind of coming at it from the other side of the equation saying I’m trying to find businesses that have a capital need.

My primary tool is the capital, but I’m also using my intellectual capital and human capital. And so, I think it’s almost a matter of mixing.

An entrepreneur is kind of nine parts human capital, one part capital. A private equity investor is probably nine parts capital, one part human capital, but they are both very similar activities when you think about taking an idea, a strategy, and operationalizing it through labor, and a combination of capital.

Preston Pysh 36:11
Alright, I’m really curious to hear your response to this one here. If you could go back and meet your 22 year old self, you just graduated from West Point, you just throw your hat.. If you could give yourself just one or two pieces of advice about investing, what would you have told yourself knowing what you knew back then?

Douglas McCormick 36:41
Oh, man, so advice about investing? This is my advice to young investors?

Preston Pysh 36:47
Yeah. Well, and so after you’re done with the investing advice, what would have been your life advice? So I want to get that next.

Douglas McCormick 36:53
Okay. I think young investors make a couple common mistakes. The first is to return over dollars. That concept is that everybody focuses on IRR. People want to talk about my return on an investment. In percentage terms, I think dollars gained is a much more relevant metric. And so, I don’t want a 20% return for six months, that’s 10%. Big deal.

I want to invest in businesses where I can compound for long periods of time, which result in multiples of capital returned so 20%, for five years, returning multiples of capital. That’s the name of the game.

Early on, I think I thought about returning and be damned what the duration was. I think duration is another concept that is hard for young people to deal with, but the name of the game here, Warren Buffett talks about time is patience and conviction.

When you believe you are well founded in your conclusions, you’ve got to have patience to let the market do its thing. For a young person, that’s often difficult.

Preston Pysh 38:02
Alright, and then if you need a moment to think about this one, feel free. But what is life advice? I want to hear this one.

Douglas McCormick 38:11
Yeah, it’s a little bit of the same applied to your personal situation, not your investing situation, but it has to do with duration. AI think being able to think long term, being able to make choices that have long term payouts is a real competitive advantage, strategic advantage.

I wish when I was 20, I had thought more about what these decisions would be and what the ramifications of these decisions would be when I was 50. I think when we’re 20, we think about what it’s going to be like when we’re 20 and a half. And so, forcing people to think longer term.

Preston Pysh 38:47
Bill Gates has a really interesting quote, I don’t know if you’ve ever heard this. He said, “People way overestimate what they can do in one year, and way underestimate what they can do in 10.”

Douglas McCormick 38:57
I think it’s right. That’s a real competitive advantage. It’s a real competitive advantage as an investor, if you’re able to look past the noise of a year and think about 10 year time horizons. It’s a real competitive advantage as an entrepreneur, just a life choice as well.

Stig Brodersen 39:15
Thank you for your response, Doug. I can definitely say for me, I’d wish that I had applied both of those two pieces of advice when I was 22.

My last question is a question that we are always very excited to ask of authors. What is your favorite book and why?

Douglas McCormick 39:34
I don’t know if I’d say favorite, but the one that I’m most interested in right now and have really enjoyed it’s called “Lead Yourself First: Inspiring leadership through solitude.” This is written by a guy named Michael S. Erwin, who happens to be a buddy of mine.

Essentially, Mike studies leaders throughout history that have used solitude as an important tool for creative thought using your moral compass emotion. It’ll balance and confront tough problems. And so, he studies people like Eisenhower or Martin Luther King.

So I love the historical aspect of it, but I also love the timeliness of it. I think technology has a lot of unintended consequences.

In today’s environment, if you don’t purposely carve out an environment where you’re going to not be disturbed, and you can have good quality solitude, I think it’s very hard to have any kind of deep creative thought these days. It’s a book that I enjoyed, but it’s been impactful in the way I’m trying to spend my time today.

Preston Pysh 40:34
Doug, we can’t thank you enough brilliant answers here. If people want to learn more about you or they want to check out some of these tools, where can they find that?

Douglas McCormick 40:43
So the name of the book is “Family Inc: Using business principles to maximize your family’s wealth.” I have a website so that’s familyinc.com. As you were so nice to describe, there’s a bunch of tools there that help an individual create financial statements as if they were a business. That’s a balance sheet and an income statement. I think just going through that exercise will force you to think a little bit differently about things like your labor assets.

Preston Pysh 41:16
Thank you so much, Doug. We really, really enjoyed the interview.

Stig Brodersen 41:19
Alright, guys, that was all that Preston and I had for this week’s episode of The Investor’s Podcast. We will see each other again next week.

Outro 41:26
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