Be the bad guy
Escape the prison of safety
The World For Sale by Javier Blas and Jack Farchy is, at first blush, an exposé of the billionaire commodity traders who buy and sell the earth’s natural resources. But dig beneath the surface and you’ll find it’s something more:
It’s a challenge to men and women of ambition. A call to action to stop playing it safe and go out and stake your claim in the world.
As The Financial Times puts it, The World For Sale is “a story of how a handful of swashbuckling businessmen became indispensable cogs in global markets: enabling an enormous expansion in international trade, and connecting resource-rich countries — no matter how corrupt or war-torn — with the world’s financial centers.”
These pioneers bought, moved, and sold oil and other commodities across the world. Doing the dirty work that helped usher in an era of globalization that would have otherwise been impossible.
As you read the book, you get the general sense that you’re not supposed to think very highly of these men. They regularly flouted international law and more than one ended up in prison or exiled.
But a commonality among them is that they acted with a boldness that seems alien in our current safety-and-inclusion obsessed milieu.
And throughout the story, you come across descriptions of its main figures — like infamous Dutch commodity trader John Deuss.
Descriptions that read like this:
Deuss looked like a character straight out of Wall Street. His lifestyle was more like that of a Bond villain, however. From his base in Bermuda, he entertained business contacts and friends on his 187 foot-long three-mast yacht. His typical entourage included two English sheepdogs, and a troupe of bodyguards, and striking female assistants…‘He had this big villa where girls in bikinis were lounging around. A girl would bring him a telex about some deal and he would say “yes” or “no” and she would go away to carry out his orders.’
And this:
…The epitome of the freewheeling trader…He mixed freely with Iranian ayatollahs, Arab sheikhs and Soviet bureaucrats, even becoming an adviser to the Sultan of Oman. He gambled on the price of oil with abandon, making and losing hundreds of millions of dollars at a time. ‘John Deuss is a mythical character.’
Blas and Farchy are right. I don’t like this guy, I want to be him.
His first company, JOC Oil, brokered deals to buy its namesake commodity from countries as diametrically opposed as Malta and Mexico, or Denmark and Iran. When JOC hit a snag, he formed a new company, Transworld Oil, and got right back to it.
He did business with unseemly characters without a second thought. Transworld broke international sanctions by selling Soviet and Iranian oil to South Africa’s apartheid regime throughout the early-to-mid ‘80s.
In 1987, Deuss tried to corner the global oil market and took a bath to the tune of $600 million. Somehow I don’t think he lost any sleep!
John Deuss was completely and totally amoral. A man of action to the extreme, doing whatever he wanted and making a fortune along the way. It’s easy to look back in judgment, anyone can play Monday Morning Quarterback. But how many can say they live with even 1% of the boldness of this man?
The history of commodities trading is filled with similar figures who would go to any length to build their businesses. Often at risk of their lives, let alone their fortunes.
It’s impossible to read about these men without marveling at the contrast of what so much of business has become today. Amorality has turned to virtue signaling. Boldness has become timidity. Intelligent and ambitious people — myself included — neuter themselves. Writing emails about how they “hope this finds you well.” Sick!
I understand that the history of commodities trading was akin to the wild west, but must modern business be so…pedestrian? I don’t think so. At least not for much longer…
Over the last 15 years, a tidal wave of talent flooded into private equity. It became a safe and predictable field for intelligent and ambitious people to build their careers. In an era of historically low interest rates, asset prices just kept rising and people made money hand-over-fist.
But this era is at an end. And rising interest rates means a higher cost of capital. This, coupled with an inflationary environment that has no real end in sight, means it’s going to be much more difficult to generate meaningful investment returns going forward.
Further compounding the challenges is the hyper-competitive nature of the private equity market. It’s estimated that the number of PE firms doubled(!) since 2008, with around 2,000 PE firms in America alone as of late 2021.
What was once a safe place for ambitious people to build wealth now faces significant headwinds. And while it may be painful, I think it’ll be freeing in the long run.
When I read The World For Sale in 2022, I found myself thinking of the many young private equity professionals who spend countless hours on Zoom meetings in pursuit of investments that never come to fruition. Endlessly spinning their wheels on opportunities, knowing that the best days of private equity are almost certainly in the past.
Sure, it’s still a field where you’ll earn a comfortable living. Maybe even a great one relative to the average person in America. But is it enough to live as Sisyphus? For the truly ambitious this is a prison.
We’re entering an era in which generating significant wealth in private equity will not be straightforward. Leverage will no longer do the heavy lifting for you. There’s no playbook. It will require bold action.
I’m not saying folks in private equity should turn to a life of crime, but there is much to learn from the John Deusses of the world.
On some level, I’m probably writing this to myself. It’s so easy to get comfortable. To be overly cautious. To play it safe.
It’s a mindset that’s become engrained in so many. After all, how often has a smiling face reflexively told you to “stay safe” in the last few years?
But the more I “stay safe,” the less satisfied I become. I know I’m not alone in this. Countless surveys tell us that people are less happy than ever in their working lives.
The chains of safety must be broken. Increasingly, I am convinced that the world will break them for us. This is not doomsaying, but an acknowledgement that the era of easy money has come to an end.
I hope that young men and women of ambition come to see this sooner rather than later. And as they sit through Zoom meeting after Zoom meeting they think to themselves, is this what I wanted out of life?
Perhaps the next time they write an email that opens with “I hope this finds you well,” they’ll find themselves longing to venture into the unknown. I hope they discover their inner John Deuss. I hope they find the courage to take the leap.
Justin, I think your point about John Deuss and commodity traders can be applied more generally. Many of our past geniuses (in and beyond businesses) were "bad guys". And not only with today's moral compass. In many cases they were reprehensible in their own times also. At the time, they could easily shrug off their critics. Today, with social networks, public market scrutiny and other ways of moral policing, these type of behaviors and lifestyles are much more difficult to maintain. The modern geniuses are probably being nipped in the bud before we even notice them.