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-Would you agree that you have to have at least enough of a risk tolerance to maybe sacrifice--
-There is always a risk tolerance. There is always, no matter how much money you have. When some of these high flying hedge fund people take maximum risk-- put a billion dollars into an unknown proposition--
-That takes-- that takes guts. I mean, there's a particular case of a company that's being examined. They say the company is structured like a giant Ponzi scheme.
-And they say, no, we're perfectly legitimate. So a guy like Ackman comes in and sells that stock a billion dollars short. And then another guy comes in on the other side like Carl Icahn.
And he puts a billion dollars into buying this stock. He thinks the company's going to last. Both taking a risk.
-And they're both sure of themselves.
But at one point, he prided himself on owing more money to banks than anyone else in Arkansas. You know, he had every bank in town owing him money. Donald Trump is very similar, too, where he'll borrow so much, he's so leveraged that Trump's ideas will-- the bank doesn't want to take back the running of a hotel, so I'm going to keep borrowing. And it's this kind of that-- I'd say on that scale, do people need to be that big of a risk taker to be successful in business?
-Usually, it would be proportionate the amount of gain they're going to get out of it. The risk and the gain or the loss, I think, are proportionate to each other. I have a saying that says, for example, think global but start local.
-Oh, wow. That's a good nugget right there.
-So I say, don't take those-- you don't have to take those big risks. Find out if it works. Find out if it works.
-Think global, but start local. I might get a tattoo of that. I don't have any tattoos yet, but I might just get that. Now, the third group I see is people that are-- kind of the whole time risk. As you know, a lot of times it's sweat equity, you know?
So it's the teacher who's watching right now. Maybe she's a schoolteacher. And maybe she goes, you know, I want to open up a snow cone stand on the weekends.
And you know-- and then the husband and her talk. And they kind of go, yeah, but if I waste all that time. Do you have to be willing to risk time to be a successful entrepreneur?
-Absolutely. You're risking everything. You're risking your money. You're risking your time. You're risking your reputation. How many people come away from a failed endeavor and say, boy, what a nut that was. Who would ever think of doing something like that's a sure loser. If it's something that sure loses--
I've learned to ridicule nothing. I remember-- god, so many years ago. A guy came to me with a new idea. He was going to package a pet rock.
-A pet rock?
-A pet rock. He says, well, because it you don't have to take it out. You don't have to clean it.
-You don't have to feed it. You don't have to do anything. But I'm told whatever you have on it is fine. Perfect pet. Never makes any noise. Never mess up. Never--
-We should convince my wife to buy pet rocks.
-I laughed so hard. And he went out and made a million dollars.
-On my face. In my face. Boosh.
-Without a question. So who knows. I mean, who knows what's going to--
-Another guy comes out with an ant farm, where you put together the two pieces of Lucite in between sand. We have a bunch of ants. They're going to be doing-- and people are going to watch them-- watch the ants work. These are almost laughable.
-Huge, huge, huge.
-Now, let me ask you this here. What about the person who's watching this, who says, I just can't handle any rejection. I totally can't do risk. Are you basically the world of entrepreneurship is not for you?
-OK. Just go get a jobski.
-I can't change-- the one thing I found out-- and I really think this is a truism-- I cannot change anybody. I cannot change you. I cannot change anybody. The only thing I can change, and the only thing I really have the power, is to change my attitude.
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-In other words, if what you do irritates me I can stop paying attention. I don't have to watch what you're doing.
-It's just that you can't change people and so many people frustrate themselves. I knew people that were partners for years and they hated each other.
-That's a weird deal.
-I once took over a company in Portland, Oregon. So we got-- two guys sat on adjoining desks.
-They hadn't spoken to each other for 30 years. True story.
-That is awesome.
-That needs to be made into a movie.
-I don't even want to know what the problem was. I haven't got time for that.
-Somebody stole someone's lunch out of the refrigerator and it all went bad. Now, let me ask you. There's a quote here, the CEO of Starbucks, Howard Schultz, he has said, risk more than others think is safe. Dream more than others think is practical. Now, Jack, in the case of both you and your brother Saul-- is that right, Saul is your brother. OK, Saul is your brother. You guys were both passionate businesspeople. And you guys were both survivors of World War II, right.
-We were both survivors of World War II. But it's a perfect example of what one must do. We started out together. But we're entirely different personalities in many, many ways. Particularly as far as-- he was more of a gambler. And he would take-- he would bet you on anything. He would take a risk on-- and he was good at it. He was good at it. Man made and loss four fortunes before he died young. But my point was, that after a couple years together, in the last argument I sat down with him. I said, this can't go on. And life's too short. You're my brother, I love you. And I want you to be my brother. But I can't be partners with you.
-In what ways did you guys take risks when you first start out in business that we're bigger risks than let's say, most people would take. What's one example of a risk that you guys [AUDIO OUT]
-Well when he-- when we first-- we came home from the war at the same time. And we went to our parents' home and we decided we wanted to go into business together. And we decided, well how are we going to do it. And we also didn't think New York-- where we live-- was a place for us. And neither of us wanted to live in New York. So he went as the advance
-He went first.
-There's no point to both of us going and I made a few bucks staying at home. But my point was that the risk was with time-- with your time which is irrecoverable. And also, to get into business where you have not been before. So we took that risk. And fortunately the first deal we found was a winner-- was my story of the [INAUDIBLE] material.
-You guys moved to LA, though, from New York.
-You just said, OK we'll go there.
-Never-- you didn't know anybody.
-You didn't have email. You weren't emailing with people. There was no Facebook.
-There was no email. There was no Facebook.
-So you just-- there we go.
-Two different reasons. He was stationed at one time-- it was interesting with us that-- my brother was a Marine at Pearl Harbor during the attack. And I was an airman-- a navigator-- on the road home, just as the war ended. So we kind of bracketed the war. And he was a tough, gutsy guy. And brilliant, totally brilliant. But he-- I said, we could build a business. And then you can go off on a toot when you want to do something. And we have to start all over again and I"m not ready to do that. And then we just don't have that much for it. So to be able to realize I couldn't change him, and by the same token, he couldn't change me. So we came to a friendly parting of the ways in business.
-What were some of the biggest adversities? If you look back-- going back now, you're 22, 23, going back to LA, you're sort of in LA. You just finished World War II. You guys finished basically liberating the world. It was the biggest theater ever for war. You guys had risked your lives daily. You're in LA. You're 22, 23. What were some of the biggest adversities that you ran into early on when you were first starting your business?
-I think my biggest-- my personal biggest adversity was getting over the war. I did have-- I didn't escape totally. I had no wounds or anything that could be seen, but I had-- I was waking up with nightmares and going through all that bad stuff. So I'd say that was the biggest adversity. I had no other adversity. I was not disappointed in anything.
I didn't expect something that didn't happen that I didn't-- he came out and started plowing a whole new field. And he sided with the export business and we named the company Trans Pacific Traders. And a couple months later, I bought a used car and drove out to LA and this was my home, too. So there were the two of us now. Neither of us had any money.
-Well, you didn't-- back then, you guys didn't call it "post-traumatic." For anybody watching this who is a veteran, who can relate to this, they didn't give it a formal diagnosis what you were dealing with, right? What did they call it, what you were dealing with? What was that?
-I think the closest they had come is "battle fatigue."
-"Battle fatigue," which is an understatement, the biggest understatement of all time.
-Yeah, "battle fatigue."
-So for somebody watching this who's served in the military and they are may be struggling with some of the issues that you were struggling with, what advice would you have for them?
-Oh, that's really a tough one because so much depends on you as an individual and your psyche and what you believe in and what you've done. And people have found different roads to come back. Some have found it through religion. Some have found it through the business that they went into. Some have found it through the mates that they've met and married or had children together. This is all different.
I was a bachelor. I had no-- I felt I was old enough to have gone through a war but I was too young to be married. And my style base is I enjoyed-- I can't say "I love." Sounds like I was addicted, which I wasn't-- I enjoyed drinking very much and I loved women. And they could provide all the play that I needed in there. And if it got mixed together, it was no big deal.
-Well, you know what? I don't know if I'm going to put that on a T-shirt or not-- I don't know if I'm going to take that quote and put it on a T-shirt or not, but that's real talk.
No. I want to ask you this here. Jay Z, the hip hop legend, the entrepreneur, the business guy, he says, "I'm not afraid of dying. I am afraid of not trying." Jack, is that the sort of mentality that you and your brother had at this point, because you guys were no longer--
JACK NADEL: Totally. Totally. I've never-- after my first mission, I've never been afraid of dying. I'm afraid of having a poor quality of life. I'm afraid of not being able to do the things that I can do. But your lifestyle is built on everything not being certain. I'm not going to get that same paycheck at the end of every week.
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