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Marc Wainer the Property Tycoon
This week saw the passing of a man who had a huge impact on my business career. His name was Marc Wainer and he died aged 70. I had a brief opportunity to speak to him a few months ago under trying circumstances as he had just lost his wife. Marc always lived on the edge so while his passing was unexpected it was not a shock. I recommend you watch this short video tribute as I think there are some great lessons and I will follow it with a couple of personal anecdotes and insights.
You really need to watch the video to get a sense of the man. He was truly unique, cheeky as hell, unconventional, charismatic, loyal, a brilliant deal maker who could always find an angle, tough. However, despite the tough exterior was such a generous family man. With 5 kids it really didn’t matter whether he was in a board meeting or he was firing someone, if his kids called he took the call and he was never in a rush you just had to sit it out.
When I met Marc in 1999 he was just starting a new career at age 50. He had already tasted major success that had turned sour and was on his come back. We met at a wedding and he offered me a job that night. I was in my 20’s in charge of a multi billion dollar commercial real estate portfolio and for some inexplicable reason I accepted. I was staff number 3 and got to work on this project of listing a REIT called Redefine, which today has 500 staff and close to $10 billion (R100bn) of property.
Lesson 1, you are never too old to start again. For all the traders out there remember this lesson. It doesn’t matter how many times you have tried and failed you can always start again and start a new journey of success.
Marc believed in me from day one, he never spoon fed me he just expected me to make money and come to him for help if I needed it. He actually never even told me what my job was or my title, he simply stated the companies objectives and he said go do what you can to contribute to these objectives. With Marc’s backing we were able to pioneer many firsts as he loved to be innovative and if you said Marc, I need $10 million or $20 million he asked you a few questions and pretty much steam rolled it through the investment committee and board. If he liked it, you got what you wanted.
Lesson 2, if you hire someone believe in them and give them the space and the tools to succeed.
There are so many lessons and stories I can share so I will end with one that will hopefully provide some more colour into what shapes an entrepreneur.
It was 2002 and we were starting to enjoy great success as a listed property company in South Africa. I started to make some inquiries about international property portfolio’s that might be up for sale. I recall becoming buddies with a broker in London from an international property agency. He told me about an off market property portfolio that was valued at 300 million Pounds at the time. This was way too big for our first international acquisition but I decided to take it to Marc.
One week later, Marc Wainer the CEO, the Chairman of the Board, the CEO of our main banking partner and me where on a flight from Johannesburg to London. We flew 1st class (of course) and stayed at some shwanky London hotel, they left all the organizing to me. I will never forget that experience as long as I live. I was 31 yrs old and some seriously powerful businessman had just entrusted me to schlep them on what might be considered a wild goose chase half way across the world. You will need to email me for more details if you want to know if we bought the portfolio ?.
Lesson 3, think the impossible.
Think the Impossible
Coming back to reality here is a completely different lesson. If I presented to you 10 yrs ago the following 3 scenarios you would have said to me impossible:
1) That you would pay people who you lend money to.
2) That you would pay people who you sold oil to.
3) That you would pay people who you sold beer to.
There are some new problems brewing, today I learned that draft beer has a 2 – 4 month shelf life before going stale. Stadiums, theater’s, pubs and other entertainment venues have rivers of beer that are about to go off.
I am not suggesting that people are in fact paying people to get rid of the beer as they could pour the beer down the drain I guess. What I am trying to highlight is the severe shocks we are experiencing within the economy right now and therefore we need to consider and prepare for the impossible.
Point 2 & 3 highlight how severe the demand shock has been to the global economy. I am sure there are many examples of products that have spoiled or are worthless due to the corona virus shock around the world.
Finally I wanted to share a chart that provides a deeper insight into the real growth of the S&P 500. With the red line I show the S&P 500 in a traditional way. You can see that from 2006 – Feb 2020 the markets grew 160% in US Dollar terms, now sitting at +114%. With the blue line I made some adjustments.
Gold has been a monetary store of wealth for thousands of years and while we no longer have money backed by the gold standard, the classic view remains that gold is one of the best ways to hedge inflation and fiat currency devaluation.
With that background I simply adjusted the price behaviour of the S&P 500 by the price of gold and what you see is a completely different story. Except for a few months in 2018 the S&P 500 adjusted for Gold has lost money since 2006 and is currently returning – 31%.
While I am not making an argument for inflation right this moment, what I am saying is that in life and economics there are always trade-offs. Just because you made a 10,000% return equal to a few billion dollars (Zimbabwe Dollars) does not make you rich in real money.
The US Dollar is still the worlds reserve currency so it is not going to devalue like highly indebted nations who have borrowed heavily in foreign currencies but you cannot print trillions and trillions of dollars out of fresh air and expect there to be no consequences. With central banks printing money over the last decade like no other, expect to see the impossible.