Playing Risk the Bob Mayer Way
I finally have an entire week off between trips. And I’m enjoying it.
After this, I will have to spend all of April (save four days) some place other
First up, we will be off to Frankfurt, Germany next week.
I will be there for meetings to address Polish shale gas production and Europe’s financial problems. Marina will come along to dote on the grandchildren (and I’ll help).
My son and his family live just outside Frankfurt, and spending time with them is always a pleasant respite from meetings. After all, you always get even with your own children by spoiling theirs.
Today, however, I want to talk about the trip I just got back from.
A few days ago, I was in Huntington Beach, Calif., to address the CoBank Association Forum on “The Future of U.S. Energy Policy.” The meeting took place in the beautiful new Hyatt Regency Resort on the ocean, and I had a chance to speak with a number of interesting people.
But no one was more interesting than Bob Mayer.
It’s kind of difficult to miss him. Now in his 80s, Bob is a real estate legend.
He also just happens to own the Hyatt Resort in Huntington Beach, the Hilton complex next to it, and the even larger new palace being constructed nearby.
And Bob is a dynamo in more ways than one.
A pioneer of multiple family housing and hotel constructions in Southern California over the past 50 years, Bob is best known in Las Vegas for selling the Mirage to Steve Wynn.
So when we sat down to talk about investing and risk taking one morning, I knew this would be one fascinating conversation.
You just don’t get to compare notes with somebody like Bob that often.
A few years ago, he wrote a book titled “Without Risk There’s No Reward.”
So I already knew something about his life and his approach, as well as his lifelong love of flying. But when he told me he is a subscriber to my energy investment services, well that just made the morning for me.
What I most wanted to hear from him was how he calculates risk in any investment.
For Bob, that risk involves tangibles (costs, land acquisition, permits, the competition, housing patterns, and the like) and intangibles (moving at the right time, seeing the broader picture just before others do, correctly determining what defines actual market performance).
Now, such risk is similar to what you find in other segments of the market, especially in energy.
Bob does not avoid the risk.
You really can’t.
Because risk itself, if correctly understood and managed, is the actual
source of profit.
As it turns out, Bob’s essential approach is one that I have always admired in successful investors, entrepreneurs, and decision makers: Do your homework, size up the actual potential and challenges, determine the downside and upside of the risk, design a way to reach the goal, take a deep breath, and then do it.
His book is actually a compilation of personal stories and experiences. With the exception of the first chapter (providing his personal background), the book can be read in any order. Much like life.
As in any such volume, the stories tell you a great deal about the writer. And so does actually talking to the man.
We sat and exchanged views of events and prospects, but much of that time was actually spent in coming to understand the fellow on the other side of our conversation.
Bob Mayer still has that sparkle in his eyes, and the love of the next challenge. He is the best example I have every met of a calculated risk taker, one who keeps his attention directed to the goal and finds a way to reach it.
Yet perhaps the most remarkable thing I learned about this famous fellow was what drives people who really thrive – what they share in common whether they are investors, inventors, or real estate developers.
Bob is always discovering something new, always searching for the best way to apply a new idea or approach. He’s not afraid to take that extra step and learns as well from the moves that were less than profitable.
Most importantly, regardless of how thing are going today, he sees tomorrow as an opportunity.
I found we shared many things in agreement, including a passage from the poet Robert Browning. Bob used it in his book and it has long remained one of my favorites. It may just summarize why both of us do what we do.