'There ain't any return on your money until there is a return of your money.'
A principle to live by when doing business in the independent oil and gas patch during the 60's, 70's, 80's and 90's. Still true.
In the 60's I was a very successful stock broker, living my mantra that diversification breeds mediocrity. My specialties were smaller oil and gas companies. Who was it that said, 'Put all your eggs in one basket and really watch that basket'? At one point all of my clients had big time stock positions in a dinky little company called Pubco Petroleum.
Pubco was a spinoff of Public Service Company Of New Mexico based in Albuquerque. The airport in Albuquerque had a great Mexican food restaurant. In those days the only thing that I knew about cholesterol was that I couldn't spell it. So I generally made a pig of myself when passing through the Albuquerque airport. Day or night.
Pubco was run by a guy by the name of Frank Gorham who had great problems with the truth and no problems with spewing pseudo inside information which I swallowed hook, line and sinker. Gorham shoved me quickly, on to the paranoia road with his, as it turned out, pure, unadulterated, bullshit. Peripheral awareness, aka 'paranoia', was what I needed.
At the same time I was heavily involved with Bert Ladd of Ladd Petroleum. Ladd was public through a maneuver of mine and my clients were big shareholders of Ladd. Bert Ladd told one of my kids that I was very responsible for Bert's success.
Bert's word was his bond until he fucking changed his mind. He would make a commitment, then think about it, then renege. A great example was when he committed to do a deal with an investment banker friend of mine, Tony Robinson, and then backed out by not following through on his promises.
He had a meeting set up to conclude a purchase of some Canadian natural gas properties that he had been negotiating for months. Bert never showed up for the signing. The sellers went wild and then detested Bert for going back on his handshake. For Bert, today's handshake deal, was tomorrow's renege.
Bert promised me a $25,000 fee if I could bring the deal back to life with more favorable, to Bert, terms. Being a slow learner and Bert's mullet (a fish that's easy to catch), I charged ahead. I resurrected the deal in spite of the sellers protesting that they no longer trusted Bert. They protested all the way to the bank. After the deal closed I pounded on Bert to keep his $25,000 promise. We settled for $10k in stock and a bunch of warrants which, almost promptly, went worthless. But the sellers became my friends.
Bert conned me into raising exploratory drilling money. It turned out that Bert couldn't find his ass with either hand. Bert was a petroleum engineer not a geologist but insisted in making geological decisions. All disasters. Dry holes all. I lost a few friends with that endeavor. Being around Bert was always an education in looking over your shoulder. Bert would fuck you for practice, even if it didn't do him any good. And his partner and good friend, Ken Whiting, was surely of the same mind including chasing pussy. Ken would slam the hell out of Bert in private but kiss Bert's ass in public.
Sadly, I was a slow learner and went to Bert with the notion of Ladd acquiring Pubco. We talked about it at length and we both decided that T.Boone Pickens in a partnership with Ladd would make a natural acquisition team.
I loaded Bert up with Pubco information and made a date with Pickens and Bert for the three of us to meet at the Brown Palace in Denver. (I loved the bar at the Brown Palace and getting drunk in that altitude was a slam dunk.) We met in a suite I took and then the fun began.
Bert had, unbeknownst to me, changed his mind about doing a deal for Pubco, with or without Pickens and started the 'festivities' off by saying that he didn't know why he was at the meeting and knew zip about Pubco. I went berserk. Pickens was surprised and naturally thought that I was a crude, loudmouth Jew. And who could blame him? Pubco, later, turned out to be an early acquisition of Mesa, Pickens' company at the time.
Some years later Pickens was up to his ass in financial alligators and controlled a thing called the San Juan Royalty Trust, a public natural gas entity. I was asked by Marty Whitman (with my prompting) to find some natural gas royalties for investment purposes. I phoned Pickens who told me that he would love to sell some royalties. The price? 30 times the then current price of natural gas.
30 years just to get your money back, forget return on investment. Especially grim, knowing that you're dealing in a depleting asset and there ain't any return on your money until there's a return of your money. Pickens is the great purveyor of 'If you can't dazzle them with your footwork then blind them with your bullshit'.
Yeah, Pickens recently managed a energy hedge fund that lost over 90% of its value. I hear that he is now raising money for an energy mutual fund. Geez, I put my Mother in an energy mutual fund 50 years ago which needed, a few years later, to be merged out of existence. But between dazzling and blinding, he'll raise a billion or two dollars from his mullet investors.
Ladd Petroleum was sold to Utah International which in turn sold out to General Electric who bounced Bert and brought in a great guy and manager, John Moore. John put Ladd Petroleum on the straight and narrow with good profitability.
The last time I saw Bert he was whining because GE took his airplane away from him, which he, rightfully concluded was a signal for him to go away. He left, being a big shareholder of GE and laughing all the way to the bank. Bert will always be a hero, of sorts, to me. I learned a lot from him.
But then, if you quit learning you're dead even while breathing.
A principle to live by when doing business in the independent oil and gas patch during the 60's, 70's, 80's and 90's. Still true.
In the 60's I was a very successful stock broker, living my mantra that diversification breeds mediocrity. My specialties were smaller oil and gas companies. Who was it that said, 'Put all your eggs in one basket and really watch that basket'? At one point all of my clients had big time stock positions in a dinky little company called Pubco Petroleum.
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| Albuquerque International Airport |
Pubco was run by a guy by the name of Frank Gorham who had great problems with the truth and no problems with spewing pseudo inside information which I swallowed hook, line and sinker. Gorham shoved me quickly, on to the paranoia road with his, as it turned out, pure, unadulterated, bullshit. Peripheral awareness, aka 'paranoia', was what I needed.
At the same time I was heavily involved with Bert Ladd of Ladd Petroleum. Ladd was public through a maneuver of mine and my clients were big shareholders of Ladd. Bert Ladd told one of my kids that I was very responsible for Bert's success.
Bert's word was his bond until he fucking changed his mind. He would make a commitment, then think about it, then renege. A great example was when he committed to do a deal with an investment banker friend of mine, Tony Robinson, and then backed out by not following through on his promises.
He had a meeting set up to conclude a purchase of some Canadian natural gas properties that he had been negotiating for months. Bert never showed up for the signing. The sellers went wild and then detested Bert for going back on his handshake. For Bert, today's handshake deal, was tomorrow's renege.
Bert promised me a $25,000 fee if I could bring the deal back to life with more favorable, to Bert, terms. Being a slow learner and Bert's mullet (a fish that's easy to catch), I charged ahead. I resurrected the deal in spite of the sellers protesting that they no longer trusted Bert. They protested all the way to the bank. After the deal closed I pounded on Bert to keep his $25,000 promise. We settled for $10k in stock and a bunch of warrants which, almost promptly, went worthless. But the sellers became my friends.
Bert conned me into raising exploratory drilling money. It turned out that Bert couldn't find his ass with either hand. Bert was a petroleum engineer not a geologist but insisted in making geological decisions. All disasters. Dry holes all. I lost a few friends with that endeavor. Being around Bert was always an education in looking over your shoulder. Bert would fuck you for practice, even if it didn't do him any good. And his partner and good friend, Ken Whiting, was surely of the same mind including chasing pussy. Ken would slam the hell out of Bert in private but kiss Bert's ass in public.
Sadly, I was a slow learner and went to Bert with the notion of Ladd acquiring Pubco. We talked about it at length and we both decided that T.Boone Pickens in a partnership with Ladd would make a natural acquisition team.
I loaded Bert up with Pubco information and made a date with Pickens and Bert for the three of us to meet at the Brown Palace in Denver. (I loved the bar at the Brown Palace and getting drunk in that altitude was a slam dunk.) We met in a suite I took and then the fun began.
Bert had, unbeknownst to me, changed his mind about doing a deal for Pubco, with or without Pickens and started the 'festivities' off by saying that he didn't know why he was at the meeting and knew zip about Pubco. I went berserk. Pickens was surprised and naturally thought that I was a crude, loudmouth Jew. And who could blame him? Pubco, later, turned out to be an early acquisition of Mesa, Pickens' company at the time.
Some years later Pickens was up to his ass in financial alligators and controlled a thing called the San Juan Royalty Trust, a public natural gas entity. I was asked by Marty Whitman (with my prompting) to find some natural gas royalties for investment purposes. I phoned Pickens who told me that he would love to sell some royalties. The price? 30 times the then current price of natural gas.
30 years just to get your money back, forget return on investment. Especially grim, knowing that you're dealing in a depleting asset and there ain't any return on your money until there's a return of your money. Pickens is the great purveyor of 'If you can't dazzle them with your footwork then blind them with your bullshit'.
Yeah, Pickens recently managed a energy hedge fund that lost over 90% of its value. I hear that he is now raising money for an energy mutual fund. Geez, I put my Mother in an energy mutual fund 50 years ago which needed, a few years later, to be merged out of existence. But between dazzling and blinding, he'll raise a billion or two dollars from his mullet investors.
Ladd Petroleum was sold to Utah International which in turn sold out to General Electric who bounced Bert and brought in a great guy and manager, John Moore. John put Ladd Petroleum on the straight and narrow with good profitability.
The last time I saw Bert he was whining because GE took his airplane away from him, which he, rightfully concluded was a signal for him to go away. He left, being a big shareholder of GE and laughing all the way to the bank. Bert will always be a hero, of sorts, to me. I learned a lot from him.
But then, if you quit learning you're dead even while breathing.
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