#427 How Raymond Plank Built a $50 Billion Oil Company

00:00:00The capacity of the human mind for learning and personal growth greatly exceeds that which I would have deemed plausible in my early years. The purpose of this memoir is to open the window of my life in the hope that readers may find parts useful in achieving a fuller measure of their own capacities, to attain worthy goals on behalf of self and others, in the certain belief that happiness and understanding uplift the human spirit, contributing to the base for a full and happy life. I look back through the years of my life from the vantage point of now being in my 90th year. I look back in order to see forward. Hindsight informed me of several primary individual lifetime learnings which might be useful to others, especially those who desire to expand the remarkable individual capacities granted us

00:00:46when we seek beyond self the greater common good. My values have been influenced by a few cornerstones. First, at perhaps the age of 10, when I was on a walk, with my dad. He dropped my hand, put his arm around my shoulder, and noted, son, over my life, I've found it very useful to try to make a very small difference on behalf of others. He concluded with, mother will be calling us to dinner, time to get back. We never again discussed the topic, still fresh and off recurring in my mind now nearly 80 years later. The second cornerstone was that of this postcard that my mother had written just prior to her death at age 47 when I was just 15 years old.

00:01:33She wrote, My son, the 15 years of my life, which you have shared, have been such glorious once. How I have loved them. You are so fine and unselfish. You have given me such love and consideration. I have known no joy which could equal that of your companionship. My pride in you will go on through the years if you keep your head up and your courage and faith high. Mother died of a blood clot to the brain following a routine appendectomy only hours before I was to drive my father to the hospital and bring her home.

00:02:10She wrote that postcard a few days before she died. With the clarity of hindsight, I see that these cornerstones had much to do with the career path that I pursued. I chose to be self-employed rather than working for a large company. I wanted a smaller, riskier initiative. Apache Corporation had a very modest beginning, founded with just $250,000 in 1954. By mid-2008, that $250,000 had become $50 billion. Teddy Roosevelt once opined, it is better to have lived one hour of glorious strife than never to have lived one hour of glorious strife

00:02:50than never to have lived at all. You be the judge. Let the tale begin. So that was from the introduction from the book I want talked about today, which is a small difference and it was written by Raymond Plank. So this is a very unusual book.

00:03:04First of all, it reads like a diary, and I'll get to that in one second. The fact that this guy kept a daily diary for 60 years, what I want to do, what's so fascinating about this, is originally I was going to tell the story of Apache Corporation,

00:03:17but when I was going through all my notes and highlights the past few days. I was like, you know what's actually interesting is the fact that he's 90 years old. He has seven decades of entrepreneur experience in this book. And what I found most interesting is not the company history of the company he founded. But essentially he has like all these ideas and maxims and basically sayings and beliefs that he's accumulated and essentially just extols his philosophy, almost like you're reading a diary in this book. And so he goes into this natural entrepreneurial bent that he had when he was child. He's growing up on a farm.

00:03:49He says, farm life and responsibilities were the outcropping of a strong work ethic. Life was structured and privileges were earned rather than assumed. And so one of the first businesses he had was selling eggs. Selling eggs gave me some early marketing and sales experience. How fortunate I was to grow up in the country and comprehend self-sufficiency and innovation as building blocks towards independence. So I think he's like 10 or 12 when he starts that egg selling business. He says by high school, I was sawing down trees and with a physical

00:04:19salt. There's no power saws back then. Stacking, selling, and storing firewood. And then as he's sawing down trees, he sees another adjacent opportunity where he's like, oh, some of these trees produce sap. We should actually extract the sap from the trees, boil them down, and then make gallons of syrup and then sell that as well. And so by the time he's in high school, he's got this thriving syrup business, and he's raising chickens and selling eggs. And so he's selling this to the local grocery stores and to the meat markets around Minneapolis where he lives. Then he talks a lot about the relationship with his father, which he talked about in the introduction. He says, I was grounded in dad's values of integrity, a strong work ethic,

00:04:58and the desire to be successful. My father praised and was very enthusiastic over my entrepreneurial endeavors. There's also a financial conservatism that runs throughout this entire book, and part of that has to do with the fact that he saw his dad lose most of his net worth in the Great Depression. family did not escape the Great Depression. I recall dad coming home from the office one night and announcing that his net worth had been wiped out. Yet we had food, much of that we raised ourselves, clothing, and a mortgage-free home. He was fortunate to have credit and credibility as an honest and able businessman, and he was scrupulous about paying his bills. And so it is during the

00:05:34Great Depression that his mother dies. One never forgets the death of a parent. Mother had gone to the hospital for a routine procedure. I was to drive dad to the hospital the Saturday morning when we could pick her up and return home. At 3 a.m. I was awakened by the phone. May I speak to Mr. Plank. This is Northwestern Hospital calling. I called Dad, who was asleep in the master bedroom above me. As he hastened to the phone, I heard him scream. Oh, no, mother was dead at 47 from a blood clot. For six months, I was unable to write in my diary. I questioned why God would let this happen. There's actually an interesting historical parallel here. So Teddy Roosevelt's wife and mother died on the same day, and he also had this habit, this daily habit of writing in a diary.

00:06:16And the night that his mother and wife die in his diary, Teddy Roosevelt draws a big X, and he writes, The Light Has Gone Out of My Life. Before we get back into this, I want to tell you about the presenting sponsor of this podcast, Ramp. I have been reading a lot about SpaceX lately. SpaceX is one of the most valuable businesses in the world, and one of the main themes in the history of SpaceX is constantly attacking and questioning your cost. Ramp helps many of the most innovative businesses in the world do exactly that. And they do this by using first principles thinking.

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00:07:45There's one paragraph I want to read you though because I think there's something this guy is like an overactive almost like zest for life and part of it I think has to do with the fact that in his early 20s he saw a lot of his friends die and not return from combat and so he says at age 22

00:08:00I'd be flying a four engine bomber responsible for the well-being of a crew of 10 and helping kill the Japanese who sought to kill us there's a lot of my notes in the book where I'm comparing Raymond to Rockefeller and there's when you read biographies of Rockefeller

00:08:16something that appears over and ever again is the fact that Rockefeller was low key but he was relentless so he might not tell you what he's thinking you very rarely show any emotion but when he was when he wanted something to happen

00:08:31he would just constantly attack that problem or seize that opportunity until it actually happened and the one example I would have here is where there's this great line in Rockefeller's autobiography where he talked about the difficulty of raising money in Cleveland in the early days of his oil company and he just constantly get turned down by all the bank presidents and he says what if the bank refused to make me alone that was

00:08:53nothing that made no difference to me it simply meant that I must look elsewhere until I got what I wanted Raymond has that same set of attributes he see you see it in his professional life he is this guy is definitely hardcore and I would say, you know, relentless. But what was funny is you also see it in his dating life. And so he meets this woman named Elizabeth McCabe. And he didn't, they didn't exchange information, but he's like, I need to date this woman. And so he looks up every single McCabe that lived in the Minneapolis, goes to the phone directory and winds up having to call two dozen different McCabe's before finding the one that the house that was the girl that he wanted to date. And he says, we dated a few

00:09:36times and any interest I had in other girls promptly vanished. And so unfortunately that relationship doesn't last very long because he is shipped off to fight in the war. Of the 40 missions I flew, our squadron was shot up on 19 of them. And so he writes a lot about the importance of courage. And obviously the courage is not in the absence of fear, but it only counts if you're actually afraid. And I think the trials and the tribulations that he went through when he was a young in his early 20s made the business and the risk taking that he was doing later on in life seem inconsequential um like by comparison they in fact they wrote uh they wrote a series of company histories for the apache corporation and the very first one which covers the very first

00:10:21few years of the company they decided to title that book journey into risk country so if you go back to what he was saying at the beginning of the book where he's like well you know working for a big company or working for any company really but definitely a big company is not for me i wanted a riskier like I wanted to be in business for myself I wanted to be on a truer and I wanted to take risk and I think a lot of this is tied to what he was experiencing seeing all his friends die getting shot up you know fighting the Japanese

00:10:45and so there's just a couple quotes that he has from that he chose to write down in his diary all through like the early 1940s so he says for example without courage all virtue is fragile and then he quotes Winston Churchill says courage is what Winston Churchill called the first of human qualities because it guarantees all of the others.

00:11:06And so when he survives to the end of the war, he gets discharged from the army, and now he's thinking, he's like, okay, I'm a young man, what do I actually want to do with my life? And the way he described this is very fascinating to me. He says, it was for the first time in my life, I was in charge of my personal destiny. And this is when he says,

00:11:23I want to build a business. I sought a career in which I would be part of starting a business. I was confident that working in a large company was not my cup of tea. And he knew he had to act fast. This is another Rockefeller quote where Rockefeller is describing the opportunity he seized an oil to his partners in the other days of the oil industry. And it's really about the importance of seizing opportunity now.

00:11:43Rockefeller wrote, we have an opportunity now to expand which may not last long. Raymond thought the same thing. He thought that America was primed for this massive economic boom, which in hindsight, we obviously know who's correct. But at the time, other people thought the opposite. So he says, I believe immense job creation would be driven from the expanding roots of technological innovations and deferred availability of goods and services. I argued that both the Depression and the war had contributed to vast market potential.

00:12:13And the precursor to the Apache Corporation is actually going to come from a very simple idea. Well, I believe that there's going to be a massive expansion of jobs. There's going to be a massive expansion of new businesses created. Every single new business is going to need tax and accounting services. So they start something, a very simple tax and accounting service, to serve small businesses called the Northwest Business Service. And one way they got initial distribution is by joining these leagues of professional, these professional organizations.

00:12:39So one of them is called this one-two club. And this one-two club had a very interesting set of rules. So it says for the one-two club meetings, the rules were that the club had to limit one member from each type of business. So you could have one bank, one accounting firm, which was him, one employment agency, one securities broker, one building contractor, one insurance agency, one life insurance, one mortgage company, manufacturing, so on and so forth. Each was pledged to and delivered business prospects.

00:13:06And so as he's being exposed to all these different types of businesses, he's doing all these tax and bookkeeping services for these different businesses. This is where he gets this idea that, hey, there might be this opportunity in oil wells. And so he does a great job of describing how unexpected this opportunity was. He says, little did I know that what had started with accounting and tax work associated with Minneapolis oil investors would lead to the formation of Apache Corporation. And then he talks about the conditions that were present at this time in history, which led to this insight he's going to have. There had been little drilling in the United States during each of the wars, World War I and World War II, and our American resources were being rapidly depleted. Post-war, our government was quick to incentivize the domestic search due tax incentives, so the government wants more domestic oil drilling after World War II. Washington had also committed to paying down our then immense war debts, which meant substantial increases in graduated income taxes.

00:13:59The top tax rate would exceed 90% of gross income following World War II. This combination of tax rates on one hand and drilling and production tax incentives on the other encouraged highly taxed individuals to invest in the search for oil and gas. That is the most important part of this entire section. It did not take much time or brainpower to expand our accounting and tax service business through our contacts in oil and gas. We provided oil and gas investor groups, accounting and tax services. We saw it as our responsibility to understand the basis for change

00:14:34and growth of our served market. To this end, I did a lot of inquiring and learning, and when we recognize charges out of line with costs of drilling, completing wells, or acquiring and holding acreage for investors, I checked directly with oil field service providers. And so what he's going to notice here is that the investors are getting ripped off. I personally uncovered kickback checks that were fattening the purses of unscrupulous promoters. I reported these findings to a group of investors, and their response was instant and unanimous. You must take over and manage our assets, and these were substantial assets. The problem was, we knew nothing about either finding oil or completing and producing wells. We did not feel qualified. And I love his response here.

00:15:20We did not feel qualified. We proceeded nonetheless. So in 1954, this is when he found the Apache Corporation with $250,000, which we talked about the very beginning. Very humble beginnings. They start with just a handful employees. They hire a geologist. They hire an executive assistant.

00:15:36And they hire a landman. And so there's two tenets of his business that are present at the very beginning that stay with him throughout his entire career. One is this idea that we can do more with less than the other guys can. And so there's this frequently plagiarized phrase and repeat. repeated phrase at Apache, it says, how good is our latest discovery? It's better than it is. It gives you an insight to how they think about this. And then the second tenant is that they were extremely cost conscious. They watched and controlled their costs. He says we were very sensitive

00:16:07to redundancy of cost. And so he's talking about making sure that every single expenditure was the lowest it could be and it was actually a good like investment for the company. This goes on for several pages. But what I would say is like the way I would summarize what he's saying at this point in his career. It's like, you know, we're very sensitive costs. We keep an eye on every single dollar. Sam Zemuri, the fish that ate the whale. From the biography of his,

00:16:29is called the fish ate the whale. He has a line in there that talked about the opening that he saw in the creation of his business where he is, you know, going to get into the fruit business, which at the time were some of the biggest businesses in the world. And I'm, you know, this Russian immigrant kid and I'm going to compete with some of the biggest industries in the world. And he says, I can be fast where others have been

00:16:50slow. I can hustle where others have been satisfied with the easy pickings of the trade. He, Raymond Plank, saw a lot of waste in his industry, just like Rockefeller did, you know, a hundred years previously. And so this idea, I can hustle where others have been satisfied with easy pickings of the trade. And so the first and most important product of the Apache Corporation is actually a tax-efficient investment vehicle for very rich people. So it occurred to me that Apache had at hand an exceptional investment vehicle for clients with substantial income, in the highest income bracket. So this is going to go on for multiple pages.

00:17:24It is very detailed in case you want to buy the book and read it. I'm going to give you a quick overview. And so this is going to describe an actual example used in the book with the numbers. So Apache is not just selling oil prospects. Okay, this is a tax-efficient investment. That is what their main product is. So wealthy investors are looking for legal ways to reduce their taxes. Oil and gas investments had unusually generous tax benefits

00:17:46because the government wanted to encourage domestic energy production. all of the loopholes that he finds, they will eventually close. That's why he has to constantly, essentially reinvent the company over and over again. But I want to describe what he was doing at the very beginning. So Apache package is drilling opportunities, so investors receive both the chance to make money if oil was found and very large tax deductions immediately. So the example that he gives in the book,

00:18:10he says, okay, suppose an investor buys into one of Apache's drilling programs and they invest $200,000. That rich investor would get an immediate tax deduction of 80% of the investment. So they invest 200 grand, they deduct 160,000. All of their investors are in very high tax brackets at the time, which are above 90%. So 90% of the 160 is 144,000. So although he wrote a $200,000 check, the IRS effectively paid much of the cost through reduced taxes. After accounting for taxes, Plank then would calculate that investment really cost them only about $56,000 out of pocket. Now it continues to get even more interesting. Now, as

00:18:49that Apache discovers enough oil that investment doubles. That investor receives another 200 grand. Normally, that would be all taxable. But oil royalties had another benefit. They had a depletion's allowance. Congress allowed owners of oil producing properties to treat part of their income as a return of the oil being depleted underground. So instead of taxing all of the royalty income, at the time, you could deduct 27.5% could be excluded through the percentage depletions allowance. I know this is getting really confusing, but it'll get simple here. So you receive $200,000. The tax-free portion of that is $55,000. So only the remaining $145,000 is taxed. So investors not only received huge deductions up front, they also paid less tax on future production.

00:19:36That is interesting for investors, but I would argue more interesting for Plank and his partners. It solved a financing problem. Apache was a young company without much capital. Instead of barring huge sums from banks, Plank attracted wealthy investors. by saying, in effect, even if the wells are only moderately successful, the tax benefits alone dramatically reduce your downside. And if we discover oil, you also share in the upside. That it made it much easier for him to raise millions of dollars to then acquire leases and drill wells. Now, that leads us to one of the most important ideas in the book. What are you the best in the world at? So he says, when we founded Apache, my knowledge of the technical aspects

00:20:09of the oil and gas business was virtually non-existent. While my financial and tax-related knowledge may have had few competitive peers. He saw this opportunity because he was the only one in the oil and gas industry with his finance and tax-related knowledge. And then you realize, hey, I can learn oil and gas. And he does that by hiring people with the domain knowledge they need

00:20:29and then just hanging out with them. He says, these men were my companions on field visits while geology and engineering filled our conversations. I was learning more by osmosis and interest. So at this point in his career, he has an earned secret in an edge. The problem is he picked the wrong co-finding So there is some insane stories about the co-founder conflict.

00:20:48And really, he has fights with all kinds of people that he's going to be doing business with over the multiple decades. I think, you know, it's very, very common. But this one is very fascinating. And it talks about this, this, what he calls a schism, began to widen between Truman Anderson and myself. The arguments between us became louder and our staff would cower as we threw a wastebasket or smashed an ashtray. The differences between Truman and me ran deep. ran deep. And he has a great way to describe this.

00:21:16He says, values are not created equal. Truman and I differed on a fundamental basis. My time horizons for Apache were long term. Truman was impatient in his personal drive to become a high roller. Values are not created equal. I wanted to build the business. Truman wanted to build his personal fortune and fame. And so they're actually in a war to see who's going to wrestle control of the company.

00:21:38And this is nuts. His co-founder actually spies on him. this is going to cause his co-founder getting kicked out of the company. While seeking to rid Apache of me, Truman made a Watergate-type blunder. He bugged our offices and our board and conference rooms. And so he attributes these mistakes to Truman's out-of-control ego. He'll talk about the detriment to out-of-control ego multiple times with the book. He talks about it in the early days, the middle of the book where we are now and at the very end.

00:22:05He said the lesson from all this dealing with his co-founder. He says, what was the lesson? Ego can quickly outstrip one's competence and fat heads get flattened. So he is taking control of the company. Truman is kicked out. It's a very rough time. There's all these ups and downs. And the Apache Corporation, as you can imagine, any company that's going to last for 50 years is.

00:22:23But he does something really smart here. This is a really great idea that he started during tough times and then kept doing it even when times were great. He would just write these daily reports of what he was up to. So the board was never surprised. He essentially just over communicated. For a period of several months, I wrote a daily report on my activities that contributed to the basis for confidence and support from the board and was a practice well worth maintaining between board meetings. And then at the end of the chapter, he has two examples of, I consider him a very hardcore entrepreneur. He says, as for Truman Anderson, he started a car wash business that quickly fell from grace.

00:22:57He went broke and disappeared from the area, selling his fortress-like estate and moving with his new wife to Denver. Then he moved to California. He put together oil deals, bringing a son into the business, and that's a business. business sank. Truman had a heart attack and died and I missed his funeral. So Plank definitely holds a grudge and then there's a great picture in the book that also speaks to how hardcore he is and and the sentence under the picture is I kept competitors annual reports on the wall behind my desk the better to study them and he literally has them pinned to the wall behind his desk. And before we get back into

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00:25:23Vanta will help you win trust, close deals, and stay secure faster and with less effort. Go to Vanta.com, 4 slash founders, and you'll get $1,000 off. That is Vanta.com forward slash founders. And so then he has a piece of advice for us, get the plane. So he winds up buying a small plane. He obviously can pilot himself. But he has this, there's so many examples in the book where the fact that he could just fly himself anywhere, they would be working on a deal or going to a meeting and like, hey, can you be here in two hours?

00:25:48He says, yep, you would just drive to the airport, hop in his plane, get there. He says, getting the plane was a life-changing event. And then it goes back to just being very protective of company assets and watching the cost. He says, my arrangement with Apache was that I would charge the company the equivalent of commercial airfare. And so one thing he's constantly fighting against throughout the entire book is the cyclical nature of the oil and gas industry. So in the late 1950s to early 1960s, he essentially changes Apache into this like diversified conglomerate. And he talks about why. He says in the late 1950s, when Oklahoma and Texas oil allowables were cut by up to 90%, so were our revenues.

00:26:23Our offensive strategy was to acquire in exchange for shares of our stock, because they were already a public company this time, successful entrepreneurial driven businesses which we could grow. This would allow us to find revenues that would bridge the gap and fix the cyclical downturn in the oil and gas business. So they wind up over the next 10 years or so. They wind up eventually acquiring 58 different businesses. And it's wild. It wasn't like they were acquiring in like one specific area.

00:26:52They went up owning businesses in agriculture, plastics, telephones, steel, auto parts, ranching, utilities, lumber, It just goes on and on. They were definitely individual opportunity driven. And then he talks about how he would manage all of these separate businesses in this conglomerate that he's going to wind up and then unwind and wind up selling these businesses and then going full-fledged into just a normal oil and gas company later on. In Apache's subsequent diversification, we did more things right than wrong. In the businesses we acquired, we avoided the major error of the eras conglomerates. Very common to build conglomerates in 1960s, by the way.

00:27:25many of those upon acquiring smaller businesses, two frequently superimposed large company practices and corporate overheads on frustrated former owners accustomed to successfully running their own operations. So they would buy the company. They would centralize, they would give them direction, centralized capital allocation decisions over a certain amount, and then basically leave them to run their own companies. And so then there's just some crazy stories in the book. So at the time, they're building up. They're buying a bunch of these telephone companies.

00:27:54So it says the consolidation of the telephone franchise has continued, and by 1966, Apache Telephone Holdings had grown to 12 telephone companies. His idea is buy all these small telephone companies, put them into one group, and then sell them to a larger telephone company. And so he is pitching this company's CEO. The company's called Continental Telephone. And he has a deal on the table with the CEO, this guy named Phil Lucier. And so he says, Phil and I agree on price and terms. And this is one of the craziest things that ever happens in the book. There's like a mafia-style hit on Continental Telephone.

00:28:24phone's CO. So Phil and I agree on pricing terms. Unfortunately, Phil was blown up in a St. Louis restaurant parking lot when he turned his ignition key after lunch. The cause and perpetrators were never determined and the car bomb appears to have targeted the wrong man. So one of the most interesting things about this book and his life story is the fact that he would just reverse course as soon as the conditions changed. So he says in this is happening in 1970s, he says that we wanted to then transition from a mini conglomerate towards our long-range target of becoming an independent oil and gas company. So many COs would have stayed diversified forever. Plank didn't. When opportunities and oil improved, he actually sold virtually everything and then returned Apache to being a

00:29:12focused energy company. And so something that you see to the six decades of his career is the fact that he just wasn't emotionally attached to prior decisions. When the conditions change, he would change with them. And it's really incredible. that he made that decision when he did because almost four decades later he was still reaping the benefits of that. So in 2011, he gets this report. And it's on all these oil wells and this land that he bought for Apache from between the years of 1970 to 1977. And they thought they had, you know, reaped everything that they could out of this. But other people, this is something you see over and over again in the history of entrepreneurship. Other people, someone else will invent technology. If you just stay in the

00:29:51game long enough to get lucky and you take a long-term view. Somebody else will come along and invent technology that makes your assets more valuable. So other people were inventing drilling techniques, right, outside of Apache that made Apache's wells that they had for 40 years, then start drilling and yielding great results. My two favorite examples of this is if you read Rockefeller's autobiography, which I already mentioned earlier, is the fact that, you know, in his autobiography, I think he's like 70 or eight years old. He talks about it's like, yeah, I had a great chat today with this young man who I really admire. And it's like Henry Ford came down to Florida, if I remember correctly, and is hanging out with Rockefeller for the day.

00:30:32And it's like, yeah, I wonder why Rockefeller admires him so much. Remember, when Henry Ford, when Rockefeller retired from Standard Oil, he retained his interest, his equity interest in the company, right? That was before the mass production of the automobile. Before Ford came along 15 years later and was the first person in history to figure out how to mass produce the automobile, which greatly increases the demand for oil, which obviously Rockefeller still owned the interest in. He's like, oh yeah, I love this guy.

00:30:58Yeah, no shit that you love this guy. And then another example of this is Steve Jobs was studying the animation industry when he was trying to build Pixar. And what he realized was the vast value of Disney's film library and the fact that, you know, decades after Disney had died,

00:31:17decades after these movies had been made when somebody invented the VIII VHS tape and then again with the DVD and then again with the streaming services after that. He says something like, I think in the biography of Steve Jobs is something like, you know, Snow White came out 40 years ago and it just dropped 250 million to Disney's bottom line. They'd taken Snow White from the vault, put it on VHS or put it on DVD, then released it. And that 250 million revenue was basically all profit. again, if you stay in the game long enough to get lucky, someone else will then come along

00:31:52and invent technology that make your assets more valuable. I love that idea. Then he's just got a bunch of great maxims, which I think, again, is probably my favorite part of the book. I think I've already maybe said that a few times to you. But just, I felt like you could almost do an entire episode or maybe just read the book and just pull out, you know, 15 or 20 sentences where you just have this like wise 90-year-old man just trying to talk to you about stuff. And he says, learning moves up the fulfillment scale in direct proportion. to its transference by achieving. Something that was also surprising in the book

00:32:22was he talked about that he felt he was learning more and learning faster in his, you know, ninth decade than he did ever in his life. Here's another great little maxim that he talks about. I remain fond of the observation that those who lack self-respect are unlikely to enjoy the respect of others. Here's a piece of advice on how to persuade people

00:32:43inside and outside of your company. I found that sprinkling my delivery with analogies carried my positions a long way. That approach, together with delivering a talk without the benefit of a script, has served me increasingly well over the decades on subjects too numerous to note. Another great observation. Most markets, in my experience, rarely pause and stabilize where rationality might suggest that they should. He's also very honest and open. I think he was married three times, had a bunch of kids, and essentially he talks about the fact that he did choose work over family. He says one trade-off in my pursuits was my family who needed and

00:33:18warranted more of my time, love, attention, and support. I had time enough to say no while sort-changing a fine, wonderful wife and mother with our own discords washing over the lives of our children who have, in aggregate, done very well given their dad's shortcomings. At the same time, I'm not the type of person ruefully to reminisce and think, if only I had done this and had done that. For life is to live learn and grow, a recipe that for me is a full, splendid meal and at the core of personal happiness. He has more maxims a few pages later, one who thinks solely of self is soon forgotten. Those who care about others live on. And there's another thing that he has in common to Rockefeller.

00:34:00He says, during the early formative years of a new program at my initiative, I would carry the startup cost personally until the program had taken roots. There's an example in one of Rockefeller's biographies where he wants to invest like $3 million in something. and they're at a partner meeting and no one can agree and so Rockefeller says, hey, you know what? I'm going to put this $3 million out personally. If it works out, Standard Oil can pay me back

00:34:22and we can keep the assets in the company and if not, I'll just take the loss. And at his offering of doing that when his partners heard that, I'm like, well, if you can go in and you can take the risk, then we're going to come in with you. And so you see a very similar idea

00:34:35that Plank is using here. Talked about a little bit about this counter position strategy that he had. It's like, hey, we're going to buy these small smaller wells from major oil companies. We like them. The infrastructure's already there. They haven't been invested in because the incentives for the major oil companies are to

00:34:51go after these, you know, power law level discoveries. And so we actually think, like, we can do just a better job than they care than they can about these little wells. One of my favorite ideas from Ray Kroc, the founder McDonald, in his autobiography, he was talking about why was he so successful compared to the other fast food restaurants that are selling hamburgers too? He says, well, we take the hamburger more seriously than they do. And you see a little bit of that here.

00:35:15So he says, our new incarnation required that we achieve a substantially greater level of critical mass to operate as an oil company dependent on internally generated cash flow from wells we owned and operated from our own account. That decision shifted our primary focus from drilling to the acquisition of assets with upside potential via acquire and exploit tactics. So you might be asking, well, why would the majors just do it themselves? Why would they actually sell to Apache? And he talks about that here.

00:35:42We were to purchase from larger oil companies as the major integrated oil companies would be willing to sell as they sought cost reduction and cash redeployment in their quest for larger reserves. Once large international companies to develop their fields,

00:35:56some focus increasing attention on new virgin opportunities in a worldwide portfolio. Concurrently to reduce their cost as fields deplete, they limit exploration expenditures. So they, there's like, we're going to invest,

00:36:08we're going to take that. oil, that small oil, that you're not reinvesting, we're going to take it more seriously. And then he was asked by a reporter, because he does a bunch of deals with Shell and mobile and Texaco and all these other companies. And he was asked, well, why were we expected to make good money on older Texaco properties that had been producing for years? And he replied, well, we're a bit like pigs following cows to a cornfield. The scraps are pretty good for a company with our particular strategy. And so I think that desire to want to be counterpositioned, to want to look at what everybody else is doing, say, hey, I have to do.

00:36:38things differently. I want to do things my own way. I think it was there present probably since he was born. It's something you see throughout his entire career. In fact, he has a maxim. He says later in the book that beaten paths are for beaten men. And so he says, in looking back on the decades, remember he's 90 years old when he's writing these words. And looking back on the decades, I'm surprised to realize that what I did not know has been a tremendous advantage versus a liability. I had not fallen victim to how others learned, new, and practiced. We were able to develop the Apache way. after all beaten paths are for beaten men and then at the very end of the book there's a short letter from one of his sons that talks about what he learned from his father he says passion for all

00:37:20endeavors passion for high moral standards and integrity passion for life compassion for the individual be it prince or pauper to treat with respect and equality to challenge and encourage each individual to become more fulfilled and often providing a means to do so compassion for humanity to create opportunity for those not yet born, to offer a better life in a better world to make a small difference. And that is where I'll leave it. That is 427 books down, 1,000 to go. And I'll talk to you again soon.