Transcript of Interview with Ziad Abdelnour
Dan: Welcome to another episode of Shoulders of Titans. This is Dan Lok and today I have the privilege of bringing you a true titan; an exceptional individual who is an international, best-selling author, a Wall Street financier, a global deal-maker, President and CEO of Blackhawk Partners, a NY-based private-equity family office. Ziad, welcome to the show.
Ziad: My pleasure, Dan.
Dan: Now, Ziad what I want to do for this interview is actually to talk about money and how big money is actually made, how to create wealth and also, how to protect the wealth once we have made it and also maybe get your point of view on the global economy. But before we get into that, maybe take us back and tell us a little bit about your background and how you got into what you do today.
Ziad: Well, number one I come from a family of financiers and politicians and stuff like that, from my uncle to my father to a number of people in my family so I grew naturally in this environment, you know? So for them, and for everybody, for me it was expected that I was going to be in finance but I didn’t do it because it was expected, I did it because I loved finance. Because at the end of the day I realized that everything you want to do in life takes money to do. Even if you’re fighting for the best causes, you need money for that. If you do politics, you need money for that. It’s the cement, it’s the glue that glues everything together. And, so I didn’t do it really for the love of money but I did it for the love of making things happen. If you want to make things happen, you need to either have, or raise, lots of money to make things happen. If not, you’re an observer. You can look from the outside world, observe, write, discuss, but you really cannot do it.
And you know what, and there are two types of people in this world. You have the players and you have the observers. The players are actively involved in the trenches, at war, they make things happen and usually they either have a lot of money or they have access to a lot of money backing them for them to do, for them to accomplish their dreams. So this is what made me do that and you know what? I had a lot of things in my mind. I’m a pretty ambitious guy I can say and then I realized the glue for all is money so I need to acquire that first to build what I need to build to be able to do the things that I want to do. But also at the same time I don’t want to elaborate too much on that but I think it’s important to know, money for me is not about how many cars, planes, houses you gonna have. No, no, no. Money is about freedom. It’s about freedom. When you have enough money, you’re free. You’re not gonna take crap from anyone, anymore. You know? Because you are insulated. You have enough money to do what you want to do to organize the armies you want, to go and fight for the causes you want and to execute, flawlessly, if you have a first-class group of people ready, willing and able to work with you.
Dan: Now Ziad, I also know that our listeners may be thinking well, that’s easy for you to say Ziad, you came from a family with money. But I know it’s not like that and at a young age, I know your story, you fell in love and you kind of had to build the whole thing on your own.
Ziad: Yes, absolutely. Yes, I came from money but I never saw a dollar from my family because I came to the United States under undo circumstances and I had to fight for everything. Yeah, the story is known in my book. You know, I fell in love and we had some disagreement with the family about the marriage because I was too young, I came to the states, we eloped and then they didn’t help me in any way, shape or form, you know? And I decided to start from scratch. In the United States. Without any support. And that’s what I did.
So listen, I have been poor, I’ve been rich. I’ve seen it all. I know how the 99% people think and I know how the 1 percent of the people think and behave. You know, like they say, and I learned something at the end of the day, you know, is that eat with the classes and feed the masses.
HOW TO ATTRACT “MIGHTY & POWERFUL”
Dan: OK, expand on that a little bit.
Ziad: I mean look at the end of the day I realized, I mean, in order to get the attraction, in order to attract the mighty and the powerful very few people know how to do it because they have not been there. And also, in order to attract the poor and the middle class also people come across very arrogant or very condescending or very ruthless, etc. At the end of the day, I learned something. Be very arrogant with the mighty and the powerful and be very nice and very down to Earth with everybody else. The problem in this world is that it’s the reverse. People suck up to the mighty and the powerful and are very arrogant with everybody else. It doesn’t work this way. The mighty and the powerful, they work very hard to get there. So you have to earn their respect; you don’t usually earn their respect by being a “yes” man, but by showing them pretty much you are not gonna take their crap. And once they respect you, you get their business.
Dan: That’s profound, that’s profound. So with the poor and the middle class, would you say like with any entrepreneur – in your business of course you work with a lot of ultra-affluent individuals; for entrepreneurs, what do you recommend an entrepreneur to expand, like how would they establish those relationships and like, expand their network?
Ziad: Well, number one you know I’m amazed by how many smart entrepreneurs are very awkward in approaching people with money. Very awkward. Look, my philosophy is very simple. I never use a push strategy. I always use a pull strategy. I never go asking for deals, asking for money, asking for anything. I just do apply what I do very well and I pull people like a magnet in my direction. And I know how to do it through social media, through events, through word of mouth – that’s how you really build your brand, by pulling people towards you, by writing books, by writing blogs, by speaking to events. For example, when people invite me to come and attend some event, I tell them, you know what? I’m not attending any event as an observer. Either I’m the keynote speaker or forget about it.
Dan: I get it. I share the same philosophy because if you go to the event, you’re just one of the attendees.
Ziad: Just remember I said before, observer versus player.
OBSERVERS VS PLAYERS
Ziad: You should always be in the shoes of the player. You know and I mean that’s one example. A lot of entrepreneurs still don’t know this. You know they think by pushing, pushing, being super aggressive on a business that has no revenues, that has no revenue model, that has nothing, they’re gonna get it done. They think that by sending $500 to people they’re chances of getting funded is higher. I tell them, listen you’re not the post office here.
Dan: Good for the post office though, that’s a good business right there.
Ziad: Great for the post office, you know. But it’s not by sending more books that you’re gonna get your deal funded. So look, I can talk for hours about this but to make a long story short it’s really a pull strategy. You have to know what your strengths are; people will tell you in general you have to know your weaknesses so that you can improve your weaknesses. No, no. You have to know what your strengths really are. A lot of people really don’t really know their strength. They either overestimate or underestimate their strength. Once you know your strength, forget about your weaknesses. Once you know your three top, key strengths are, you really have to go full-blast after that. And at the end of the day, there are some things in your DNA and some things you acquire strength-wise. So, it’s not like you’re born with all the qualities or — you are born with some, you acquire others, depending on your environment, depending on how you grew up and stuff like that.
Dan: I have a saying I think you would enjoy this – I say that if you spend your life working on your weaknesses, at the end of your life you have a lot of strong weaknesses.
Ziad: Yeah. Exactly. Absolutely, right. So I mean, look there are a lot of things we can talk about here, depending on the length of this interview but I think that you get the message.
“RICH” VERSUS “WEALTHY”
Dan: Yes. Well, maybe share with us a little bit if you could, some of the maybe most successful deals that you’ve done. I know you’ve been involved with over 120 plus transactions and what have you learned from those deals?
Ziad: Well, I learned from those deals that number one what kills deals is the ego. People’s ego. Whether you’re a buyer or a seller. Whether you are an entrepreneur or a financier. People’s ego. Ego comes in the way a lot of times. And this is what kills a transaction. And the smartest people are the people who can swallow their ego without, you know, losing respect and get things done. I also learned one of my frankly, one of my weaknesses is that I trusted people too much. You cannot trust people too much – you have to be very careful and you have to test the people. I mean like they say, love all, trust a few, do wrong to none. You can break trust for a good reason, but it still remains broken. And the other things really I learned in business is never lower your standards. You know, I mean, sometimes you will work with people who don’t care as much about their work as you do. This is not an excuse to start doing a worse job; if anything really, it’s a good reason to double your efforts.
So, I mean I think those three things are very important and I learned this the hard way. It cost me money, it cost me deals, but you know what? I don’t do these mistakes anymore.
Dan: And, it’s also, I can imagine in NY you probably trust nobody so–
Ziad: You know, I mean it’s exactly what Reagan used to say: “trust, but verify.”
Dan: Yes, trust but verify. Also, Ziad, you have a very interesting definition between like rich and wealthy. What’s the difference between the two?
Ziad: I’m gonna make it very simple for you. I’m gonna give you an example. Being rich is: Dan, let’s go and spend a week in the Bahamas. Being wealthy is: let’s go and spend a week in the Bahamas right now. In half an hour.
Dan: Oh, yes. So it has to do with choices and freedom.
Ziad: It’s time. The most important commodity. The most important thing is time. The wealthy people are totally in control of their time. Rich people, you know, they have the money but they’re still not in control of their time. Time is the most precious commodity you have because once it’s lost, it’s gone, you cannot get it back. Money, you can lose 100 million dollars and make it again. So, it’s really, what I advice people is to use their time very wisely to build their brand and learn how to leverage their activities. I mean, you know, I mean I’ll tell you the difference between an entrepreneur and a business. I mean a lot of people still confuse this. Your business should be able to run with or without you. If you cannot build a scalable business with a great support network around you, you will never be wealthy.
Always remember Dan, the richest people in the world look for and build networks. Everyone else looks for work.
Dan: Yes, yes. And in this case we’re talking relationships, we’re talking platform, we’re talking personal brand. So, with wealthy – let’s talk about wealth. Let’s talk about philosophy when it comes to creating wealth.
Ziad: Well, the philosophy I’ll tell you I mean the major driving force for me to create wealth- to acquire wealth- is freedom. I’m an extremely independent guy. I’m free-spirited; I’m like, you know, I cannot be controlled. Honestly. In a good way, you know. I cannot be controlled. I’m free-spirited, I’m very opinionated and to be able to do all these things and afford to do all these things and say what I want, like I said in the book, I’ll tell you, any guy on Wall Street who writes what I wrote in Economic Warfare would be fired from his job the next day.
Dan: Yes. So it’s a very – I’ll just tell our listeners, first of all, definitely go get the book and read the book; it’s very, very blunt.
Ziad: Very blunt. I mean, because you know this is not PC – it’s not politically correct at all. In order to not be politically correct Dan, you have to have a cushion. You have to have money to be able to say these things because most probably no one is going to hire you.
Dan: Yes, but it’s the truth! What you say in the book is truth.
Ziad: Of course it’s the truth and that’s the most important thing. I’m absolutely a seeker of the truth, because the truth basically you can make the best decisions you can take. Look, as I said a number of times in my book and you know during interviews, business for me is war. It’s not a hobby. Whether I do this from 9-5, no no. I don’t have a job. I have a career. This is not a hobby, this is war. War. The art of war, Sun Tzu. Economic Warfare is the 21st century of Sun Tzu. A version. Basically business is war. Now, to be able to win wars the most important element you need is not brains nor brawns. You can be the smartest guy in the world, doesn’t mean that you’re gonna be the wealthiest guy, doesn’t mean that you’re gonna win in business because in most instances if you’re really smart, your ego is too big. Now, remember the issue we had before what I told you before is ego.
So it’s not brains and it’s not brawns. Not necessarily the people with the most money win. Because sometimes they make very quick decisions and generally their ego is too big also. So, this is what a lot of people don’t realize and you don’t see this stuff written anywhere. What’s really the most important out there is to gather intelligence second to none. To give you an example: the Iraq War. If we had the proper intel, we would have saved $3 trillion dollars in the United States and saved 5,000 lives. We went to war after Iraq and other countries based on the wrong intel. And the same thing applies in business. If you have the wrong intel, you’re gonna make the wrong decision. And sometimes your ego may cloud your judgement because you or your advisors, not having the right intel, are making a decision that’s absolutely crazy and you think, you guys think, that you’re right.
So, always try to gather real intel. And the problem with entrepreneurs, when they come back, they haven’t really gathered any intel on their companies, on their competition. When you ask about the competition, the typical answer: there’s no competition.
Dan: It’s like the worst answer.
Ziad: Exactly. It’s like this is the ego playing here when they say that. Well, you know what, basically they cut and paste and then they give you a nice, slick plan as to this is it. I want $5 million to build this and do this and that. I tell them, listen. All the information you have for this plan, you know, there’s nothing new. There’s nothing Earth shattering and nothing I’ve learned here. I have access to a lot of intelligence. And you have to show me something that I don’t know. And I don’t care how much you need, whether you need $5 million or $500 million, but you have to show me what is going to be so critical to really build and scale the business to literally crush the competition. Yes, crush it. I like these terms. I like the killer entrepreneurs. I don’t like entrepreneurs who mince their word and who cannot even say the word “crush.” John D. Rockefeller, my biggest idol, used to say: I don’t meet competition, I crush it. I wish we had more people today, there are a few, who would say that today but it’s not politically correct to that, it’s not politically correct that you’re a capitalist, that you’re a wealth creator, that you would crush the competition because this is like the old saying, like the old Robert Barron’s, who actually build this country.
This country was built on these principles. And this is what I talk of also in my book, as you know this. Capitalism was the creation of this country so you know what, you have to be in the right mindset. You have to go back to history. See how this country was built, see how the fortunes were built, see how empires were made. Today, it’s like oh you know technology’s the hottest thing so I’m gonna write a small business plan, go to some stupid VC who is going to fund me like that. You know, I’ll tell you the thing is that most of the entrepreneurs for me Dan are lifestyle entrepreneurs and I’ll explain. Lifestyle entrepreneurs are entrepreneurs who need a certain dollar amount a year to survive, like let’s say $500,000 for them and their family- especially depending on where they live. If they live in NYC or Silicon Valley or in Utah, so they are looking for somebody who is going to basically- and usually they invest very little of their own money in the company so they have no skin in the game because they don’t have any money. And they haven’t made anything, so it’s just an idea.
Dan: Which they think is very unique and when it’s not unique–
Ziad: They think it’s the best idea ever and regarding ideas by the way, when they approach me with an idea I say listen, if your idea is not dangerous, it’s not worth being called an idea. They’ll say, what do you mean? I say, if you don’t know what this means, you should not be an entrepreneur.
Dan: I love it.
FIVE CRITERIA TO BACK A COMPANY
Ziad: Simply, you’re not an entrepreneur. If you don’t know what a dangerous idea is, what are you doing? Go and find yourself a job. Honestly. This is the reality. So anyways, to come back to the point, lifestyle entrepreneurs. They are looking for somebody to fund them for five years, half a million dollars a year, that’s $2.5 million start-up seed round, you know, and they don’t have no skin in the game and they have no track record, they have nothing but an attitude and then if they get funded- if it doesn’t work they come and tell you, oops, sorry. But it doesn’t work like this.
There are five criteria I follow when I back a company. I want to share this with you. And this is what I look for, you know, you see these reams of pages on business plans- I don’t- I only focus on these five things. So it takes me like five minutes to determine if this is a deal worth pursuing or not. Number one, I only back people who are operators with a track record. They’ve either bought a business, sold a business, operated a business, etc. All these promoters, lawyers, bankers turned no, no, no. Frankly, if I have to back somebody who went to Harvard business school and was a top grad versus somebody who went bankrupt three times – I will always back the one who went bankrupt three times. Why? Because this guy is very hungry, very humbled, he learned from his mistakes and he wants to prove to the world for the last time that he can make it big time, while the other is an egotistical, arrogant prima donna who thinks he’s entitled to this and that. He is entitled to that many options and that much equity. This is not my kind of guy. So number one, they have to be operators.
Two, as I said before, business is war. The most important thing is intel. Somebody who can show me his plan and when fleshing his valuable position that he has gathered intel that very few people have as to how he is going to literally crush the competition. If you cannot prove this to me, you have no real compelling value proposition, you’re like any other guy out there. There is nothing special about your business.
Three – laser-eye focus. You know when you acquire the intel, remember how we used to, in the Iraq war have the self-bomb aim for a target and shoot? When you acquire the intel, you know exactly where the achilles heel is. You can have all the firepower, which is all the money you want, to go and execute on that. Most entrepreneurs will tell you the what, why, when, where – but they don’t tell you how they’re gonna execute. And that’s the most critical part and I mean they’ll tell you how – oh, you know what I’m gonna go and buy ads and do this and that – that’s not how you execute. When you execute in a business, you know I use a military approach, you know? And as you can see, Blackhawk, business is war, I’m very much like this and I have tremendous respect for the military and the way they operate. You know, so when you are in business, I go and tell these guys, look, consider yourself General Schwarzkopf, going to war with your ammunitions, your army, your infantry, your planes, your this- how are you gonna do that to win the war? What kind of intelligence you’ve gathered to win the war, which is your company? They look at me with round eyes, what is this guy talking about? Well, I look at them and say, you know what? You have no clue. You have no clue where you’re going. This is a very cruel world out there; if you don’t have this attitude of a killer who has done his homework and who has mobilized the right armies and people around him to execute ruthlessly and flawlessly, you’re gonna be toast. And you’re gonna come back to me: oops, sorry. You lost all your money.
Four – it’s how fast you can scale your business. When people tell me and show me business plans, stupid business plans, when I see the projection and the company is still gonna lose money for like two or three years- you know? And in some instances worse than that! They’ve already lost let’s say 5, 10, $15 million and they gonna still lose millions the next few years and they still need $15-20 million. So I tell them, look – in order to cover this, oh and there’s a prominent firm who invested before – what does this mean if this idiot invested before and let’s assume his name is Goldman Sachs- let’s assume I’m gonna invest because Goldman Sachs invested and lost their shirt – I mean people are so influenced by these brands, which is crap. Anyways, to go back to that – so I tell them, this is the question I ask them then: listen, assuming you have access to all the money in the world, I can write you a check for whatever you want, what would it take you to be profitable six months after I fund you? Only six months. 99 percent of them, Dan, will tell me it’s impossible. I cannot be profitable. So my answer to them is, so you’re not a businessman. You may be very smart, you’re a technologist, you’re a scientist, after all the money in the world you still cannot be profitable six months after I fund you? We have a problem here.
Dan: So then it’s not money problems, it’s a business problem.
Ziad: Exactly. Exactly! And that’s what most entrepreneurs, because they don’t have a background, you know most entrepreneurs look at the idea, it’s the sexy idea. No, we are- when they go to people with money, to the capitalist for money, they have to think like them. We look at the bottom line. We look at the profitability. How fast can you scale this? This is why I never invest, honestly, into life sciences because the path to profitability is way too long. Seven years, ten years. I don’t invest in that. I have no patience for that. And also, you know, sometimes you don’t need to grow only organically. You can grow through acquisitions, as long as you can really show profitability. Profitability is the name of the game. We’re here to back businesses that can become very profitable, very scalable. You know what, I’ll tell you what, and this is the problem we have today. 80 percent of the companies that are doing the IPO today are not profitable. And you have, I don’t know how many companies, in Silicon Valley, all these unicorns, like 70 of them that are valued at a billion dollars each and that have no revenues. That’s insanity. And when they show me things like this, like no you don’t understand- no, you don’t understand. You have lost all concept about value creation. This is all crap. This is all gonna come to tumble. Mark my words. I tell them listen buddy, I survived the ‘87 crash, the 1990 bankruptcy, the real estate crash, the real estate adjustment, the 2008 crisis – every crisis and I’m still thriving. Now, you gonna teach me how to survive or how to make money?
Dan: I see. So, Ziad what you’re saying is that would you say you’re more – some tech company, some entrepreneur, they come and say to you – here’s are burn rate, we don’t know when we’re going to make a profit but hopefully when we get to the market we’re gonna do an IPO and then we’re going to make a whole bunch of money – so you don’t like that type of business?
Ziad: No, no. And then I’ll ask you this question but there’s a fifth point also. Is your skin in the game? Anybody who doesn’t have skin in the game, cash – not equity crap – cash, of his own, in the deal I will never back him. So they’ll tell you, oh but I don’t have the money right – if you don’t have the money, you need to do something to make money so that you can do that. Look, at the end of the day, you can lose $100 million. If you lose $100 million- if you make and lose $100 million, you can make them again. If you never made this kind of money, or even close to that, you’re not gonna make it on my watch. Very unlikely. So this is where I don’t mind people who made it big time and lost it and went bankrupt, because they learned. Skin in the game is very important.
So, if I want to recap, no matter what the industry, no matter what the geography, I look for five criteria. Operators with skin in the game who can turn a business into profits very quickly who are laser-like focused and have access to intel that very few people have. It doesn’t matter if you focus on that, the industry, the technology, the geography. And you know what? A lot of entrepreneurs like this, not necessarily in the United States – Silicon Valley is not the center of the world. This arrogance that the Silicon Valley guys have that they are “it,” they are not “it.” There are lots of centers around the world – in China, in India, all over the place, in the Middle East, in Dubai – lots of very smart entrepreneurs who went also to Ivy League colleges, who also are very entrepreneurial, who have skin in the game, who have skin in business, etc. This is not 1999. Some of the guys show me plans, they think they’re gonna get away with it like they got away with it in 1999 before the internet — there is no more dom money. Why? Because dom money is all lost. They lost it. Today people who are still in business are people who have learned from their mistakes and they’re not gonna fall for this crap. And you have these arrogant guys who go out of business school today, they think because they went to Harvard Business School or Stanford, they think they know it all. They’re 25 years old. They know crap. They have a huge attitude and just because they have an idea, that’s not even dangerous, not even skin in the game, not even track record, not even nothing, and they think they’re gonna get funding and become Mark Zuckerberg. Mark Zuckerberg and Bill Gates are exceptions. They are not the norm.
Dan: Yes. There are only a few of them in the world.
Ziad: Exactly, exactly. Look, I’m a very pragmatic guy and I stick to – I stuck to this philosophy since I’ve been in the business for 25 years. I don’t change. You know, this is how you build real businesses. Value added business. At the end of the day, this is the value creation process. You can’t fool people and tell them you have great things – no, no. You have to be able to execute. You have to show a track record. You have to have money at risk because I’ll tell you what, at the end of the day I tell these entrepreneurs Dan, it’s not me who is not gonna sleep at night. It’s you who is going to lose sleep at night. You know: oh, oops we lost all the money, sorry – I don’t need the “sorry.” You know what, I don’t need the sorry, I need you to be accountable to what you do. Now, if you can execute this and you have the wherewithal and you have the skin in the game, you know what, when people have skin in the game, to come back to that point you know, they’re gonna make damn sure to make it work, if not they’re gonna lose most of their net worth and most of the net worth that’s tied up in the transaction. If you do well, you’re gonna become a billionaire. If you don’t do well, you’re finished. Next.
BUSINESS IS LIKE WAR
Dan: It’s a little bit like in the military, the war philosophy you know if you wanna take the island, you’ve got to burn the freakin’ boat. Like the Chinese philosophy that you burn a ship; you either win or you die.
Ziad: Exactly, you know what? Exactly right. You totally get it. And you know what, I follow like this – it’s a very military way, it’s very analytical, it’s very disciplined, it’s very focused, but it works. And now, also, you have to value these words, you know: commitment, integrity, honor. You know, today it’s like people talk and bullshit and do all this stuff. It’s not serious anymore and they think they’re gonna go through with it because some idiot is gonna believe them, their pizzazz, they’re gonna dazzle them with how smart they are. They come and dazzle me with how the technology is. So people tell me, Ziad, what kind of companies you invest in, what kind of industries? I don’t invest in companies or industries or things or anything. I invest in people. It’s all about people. And I ask them the very tough questions to know who they really are. A lot of people wear masks and tell you, oh I’m like this, I’m like that. Unless you ask them the right question, you will see he will divulge sometimes by knowing it and not knowing it who he really is – I need to know what’s in his belly. How much fire is there in his belly? For example, there’s a guy – he came and told me – I was asking him a question, I don’t remember what – he told me, I know it all. So that’s exactly the problem is that you know it all. Even if you know it all, you never say these things. You are an idiot.
Dan: That’s awesome. It’s so funny, I love it.
Ziad: And you know what? Look, I mean when you win war, I don’t win it graciously. When a guy says like this, I like to make him feel very bad so that he learns and people don’t do that. Oh if I do that, it’s not nice, it’s rude. No, it’s not true – that’s how he’s gonna learn. It’s like today, you know, in grammar school, it’s the age of Obama, the age of equality. We’re all born equal, we have to feel each other – no, number one we’re not born equal. Some people are born smarter, some people are not and there’s nothing wrong with it. And we’re never gonna be equal and we’re not gonna die equal. And people aren’t equal. And income equality isn’t going to happen. And smarts equality is not going to happen – just get used to it. Not everybody can drive a Rolls Royce, live on Fifth Avenue or drive a Ferrari and go to Harvard. That’s the reality, that’s a fact, that’s life.
Dan: Yeah, that’s correct.
Ziad: You know what, and in school today – they do a project or contest you know like some students win, so the others as a consolation they give them gifts also so that they feel good. No! They should not feel good. They should feel stupid! Because I’ll tell you what, once they feel stupid you’re gonna have this thing in their- they’re gonna start to think, next time I have to do much better. You learn from your mistakes- you don’t learn from your successes. You learn from your failures so let them feel crappy – there’s nothing wrong with that – they may emerge there much stronger. You’re gonna see the monster growing in them that’s gonna be pissed off because they were treated like this and they’re gonna succeed even more. You have to arouse this, there’s nothing wrong in this. Everybody today has to feel: don’t offend me; they’re offended by the most minute things. Like the other guy, you know I’m a Christian/Catholic – you know I was saying to somebody else, a friend, “Merry Christmas,” he looked at me like I committed a crime – I said, listen I celebrate Christmas, it is Christmas, you don’t like it? Sue me! Sue me for wishing him Merry Christmas.
Dan: But also, wouldn’t you say now that people are talking about what’s very hot, it’s like social entrepreneurship – talking about you know they want to make an impact in the world, but sometimes there’s a lot of so-called social entrepreneurs – they, like you said, the lifestyle entrepreneurs – sometimes I call them the “tree huggers” – they hug trees and they focus on oh yeah it’s the people, it’s the planet. But we also need to profit in order to do that.
Ziad: You know, forget about people with a plan. Number one, if they want to change the world, they have to change themselves. Number two, if they want to change the world, they’re gonna have to be able to have the means to do that as well. When I started the interview, I told you, money is the glue. Most of them have no education, no means, no discipline, no vision – just some nice idea. And they think by this nice idea they’re gonna create a couple of ideas and they’re gonna have a huge impact on the world. Who gives a damn about them? For other people, these guys don’t even exist. They are not even a pimple.
Dan: It’s true, it’s true. I almost see them- a lot of social entrepreneurs they use this almost as an excuse to be in their own little world – they don’t have to face the cruel world of business.
Ziad: Yeah. Absolutely right. And you know, they don’t have really anything to offer. And this is why they always look for equality. Oh we’re all equal, we all think we have to be – I don’t have to be nothing. I am who I am. You either accept me or not. If you don’t accept me, fine. Live and let live. There are seven billion people in this world, go and talk to them. You know, I don’t try to change people. I learned this a long time ago. I do what I do, I do it very, very well. Either I become a role model and I pull people in my direction and we all form an army of thinkers, of doers, of players, or we don’t. And if the guys don’t fit, they don’t fit. Next. There’s 7 billion people in the world.
Dan: It makes sense. It makes sense. Ziad, who are some of your role models or do you have any mentors that you look up to in your career?
Ziad: Yeah, I have a few I would say heroes and role models. You know, basically, spanning the business world, humanitarian, all over – I would say in the humanitarian, let’s start with that. Guys like Nelson Mandela and Ghandi. In the political world, JFK and Ronald Reagan. In the business world, Michael was my former boss at [?] and Trump, Donald Trump.
Dan: Well, let’s talk a little bit about Trump since he’s now kind of the hot topic running for president. What’s your view on Trump?
Ziad: Well, Trump is a doer. He gets things done. He’s not politically correct. Frankly, I relate to a lot of things with him. He also went to the Wharton School. He’s a New Yorker. He’s a patriot to the core. He loves his country. He’s not the most eloquent guy out there, who cares, you know? But he gets things done, that’s for sure.
Dan: That’s true.
Ziad: And that’s what we need. We need somebody who loves his country. He does. Who gets things done. He does. Look, you really look at somebody by the way he raised his family. Look at his kids. Very accomplished. This is a solid guy. He’s a maverick, yes. He’s controversial, yes. But this is what makes him different. I don’t want a normal guy. In abnormal times, you cannot have a normal guy running this country. And what is the alternative? Who? Jeb Bush? Please, I’m sick and tired of the Bush, Clinton, Bush, Clinton, Clinton, Bush for the last thirty years. It’s becoming a dynasty; this country is turning into like a Banana Republic.
Dan: It’s true, it is true.
Ziad: Clinton and Bush – who do you want, a Bush or a Clinton? You know? Enough of this crap. So I mean- and you know what? It’s good because once you have an outside establishment guy like Trump who comes to power, this is going to open up a lot of roads and inspire a lot of people who are very successful in finance and business to one day – and these are really smart people – to one day use the political arena. We need people in politics who are really accomplished, really smart, business and others to really use that. And they’re never used before. Because the smart people are not usually in the political arena, they’re in business. We want them more in politics and less lawyers and bullshit artists in politics.
VIEWS ON ECONOMY
Dan: What’s your deal on the US economy or the global economy?
Ziad: We are headed towards a disaster. Meltdown. I’m not Mr. Doom and Gloom, but look at the numbers. You know, they speak by themselves. First, we haven’t learned anything from the crisis of 2008. Nothing. Second, a lot of the people who created the crisis are not in jail. Most of them are still in power. They moved from one job to another. Third, the size, the balance sheet of the fed went from $2.1 trillion in ‘95 to $21 trillion today. Fourth, the derivatives market, which is a huge risk, systemic risk, went from $187 billion to today around $300 billion more risk than ever. Fifth, we have $20 trillion in debt. I mean our performance today is not really 5 percent or this crap, it’s around 25-30 percent. These are facts. These are numbers. So the only thing that’s working is the stock market. But not for long. So people say, oh look at the stock market it’s doing great, everything’s great. The stock market is not a reflection on the economy. The stock market is high because of a lot of stock buybacks and stuff like that. People borrowing to buy back their stocks. It’s all artificial, it’s all rigged. And the Fed at the head of the stake is the biggest evil of all because they are totally out of control, QE1, QE2, QE3, QE4, printing money nonstop like there’s no tomorrow and every Fed share is doing that to keep the President in power.
You know? So I mean, these are – this is the reality and I talk about it very much at length in my book, which you read Dan.
Dan: Yes, almost half the book. It’s a lot of numbers and facts.
Ziad: Yeah, I mean look you know me by now, I’m very disciplined. I back everything with numbers and facts and everything – I’m not just saying this you know shooting by the hip here. So the economy is very, very bad. It doesn’t mean, however, that you cannot make money in an economy like this. Of course you can.
Dan: So what should we do as an entrepreneur?
Ziad: Hold on, as a matter of fact, usually you make really obscene money when there’s a bloodbath on the streets. You make obscene money when there’s a huge dislocation of the markets. You don’t make a lot of money when everything is hanky panky and the stock market is 5 percent, 12 percent, that’s not money. Money is when you make 2x, 5x and 10x. You know, there’s a lot of things you can do, not only buying gold and precious metals – it’s not much here but really we do a lot in the distressed area. We do a lot event-driven investment. We make money when the market goes up or down, it doesn’t matter. We don’t really follow the market here; we basically look at the pressure points in some asset classes that went a bit out of whack and we make big bets on that. I see also there’s gonna be a couple of black swans shaping up in the near future, given the geopolitical situation. Once we start having the geopolitics coming into the economy, then you should expect lots of trouble because now we have reached a point where geopolitics, ISIS terrorism is affecting the global economy. Just the events in France Dan, in Paris last week, they lost around 1 billion Euros, just because of the destruction. I mean, think about it. God forbid if this wave of terrorism hits our shores in the United States, God forbid in NYC or other places, Washington DC – well, you know what? You’re gonna have a tremendous hit to the real estate market that has remained in NY, especially in the high-priced areas not very solid. So I mean, you know, when geopolitics hits the road, so you’re gonna have to really factor this and this is going to be ugly.
It’s going to be very ugly for a couple reasons. Number one, the fed is getting very cornered. Number two, the geopolitics. Number three, the real estate of the economy – so you know what? All the stars are unfortunately lining up for a black swan or a disaster scenario. So, how long? The fed has all the power, they’ve been pretty much under control so far but you know what? How far can you do it? And there’s always an end. To everything – there’s a beginning and an end. Nothing is limitless. Nothing can keep going forever. Especially when things aren’t working. I am flabbergasted by how people can be so naive sometimes to think that this circus is gonna go forever. It’s a circus. What we have is a casino here. It’s a big casino and you know what? On the US dollar we have the sign that says, “In God We Trust.” I think it should change to, “In Debt We Trust.”
Dan: Would you say this time a disaster comes it will even be bigger?
Ziad: It will be much bigger because of the size of the derivatives market I told you about, because of the debt we have- every time we postpone it and nothing happens it becomes bigger. It will be much bigger than the crisis of 2008. 2008 is going to look like a walk in the park. And believe me, believe me, this is not wishful thinking at all – I’m a capitalist, I want the best for this country, I’m not Mr. Doom and Gloom, I don’t talk about this stuff but you know what? I read facts and these are the facts. They are very well hidden by the government, they don’t want people to know these things – everything is fudged, is rigged, is hidden, is manipulated – and most of the people don’t even realize this because most Americans want one thing only – they want to be entertained. Keep me entertained, I don’t need to know shit. Just keep me entertained with The Voice and the dance shows.
Dan: Yes. What’s going on with Kim Kardashian?
Ziad: Right, and the baseball games. Keep me entertained, I don’t care what happens, there’s only 1 percent, the ruling elite, in Washington, NY, who know what the hell is happening and who made all the arrangements in case this happens. But this is the reality, this is the reality. So, unfortunately we are in a state of denial. We’re denying it. Well, it’s gonna have to happen. And you know what, the poor and the middle class should be even more concerned than the rich and they are less concerned because the rich, if they lose some they have a buffer, they can afford to pay some more taxes. The rest, they cannot.
ACTION STEPS TO TAKE
Dan: So, what are three or four maybe action steps that we can take? Like you kind of mentioned, should we put our money in precious metals? Should we take our money offshore? Like, what are some of the steps you would recommend?
Ziad: Well, you know there are a lot of things we can do but number one, you’re gonna have to start doing your own due diligence on anything you buy, you sell, you invest into. A lot of people don’t do their due diligence, they just follow the crowd. You know, Warren Buffett said this, this is the Oracle of Omaha, this guy is God – he should be right. Or Goldman Sachs issued this report, they should be right. It’s all crap. Everybody has an agenda. So number one, you have to know what you’re doing. Not ever invest in something you don’t know, something you’re not aware of, something you have no due diligence on. And not because there’s this or that guy or group who invested it means it’s good.
Number two, you have to be willing to develop – other than reading the press or the TV – this is all manipulated, this is for the masses. You have to develop your own reliable places where you get information. You know, what you do – I mean I think gold and precious metals is a good place to be but it’s going to take some time to recover. We are actually in a deflationary period right now – all the commodities are down, everything is down. Except for the stock market I told you about but it’s not gonna last. When 80 percent of the company’s doing IPO and are profitable, it shows you this is not earnings – it’s buybacks! Stock buybacks. It’s not earnings. So it’s not like oh if the economy is doing so good, I mean how can you have a 2 percent growth and have the stock market zooming like that? It doesn’t make any sense! It doesn’t add up. So, I mean you know some basic things people are overlooking. Basic things.
So, I mean, you know I put some in precious metals. I will, you know, put some in rural, agricultural land outside the big cities. You never know the scenario what would happen here or there, I’m telling to you – if the big cities are hit, a lot of the other places outside, far outside – a lot of people are going to migrate, you’re going to see a lot of people leaving the big cities. In five, ten years. It’s not because the price is going up as usual, it’s too expensive, but it’s because the price is going down. It lost value. It’s the reverse. It’s amazing, but it’s true. Look, anything is possible. Don’t discount anything. Don’t discount anything. I mean, look at what’s happening in Israel. Every two days you have a bus exploding somewhere. Can you imagine God forbid if this happens in NY? Washington, DC? I mean, this is where all the wealth is, where everything is – can you imagine? You know, what? You can never discount this. No matter what. We have the best police, best intelligence in the world but you know what? Who expected 9/11 to hit two buildings? So, you never know.
So, number one: expect everything. Number two: do your homework. Number three: surround yourself with people who you can really trust and share information. You see, the thing that amazes me is that people, you know, take so much – I mean you know when you’re doing any investment, it’s not buying a car or buying furniture. You go there, it’s impulsive buying, you go and it’s a nice looking car, you check the price and the price is good so you buy it. When you do an investment, that’s not the same story at all. There are a lot of dynamics behind it. And number one, also look, always at the management – who is really running these companies? Look at the guys who were running Enron, you know? Nobody really did his homework, who are these people? It’s the management, management, management. People, people, people. In everything you do. In every transaction you get involved in, it’s people. Also, to come back to the point I said earlier, it’s intelligence – gathering the intel. You have to consider yourself as a CIA analyst who does your homework on those very important career decisions, investment decisions and life decisions because at the end of the day nobody gives a rat’s ass about you. Not government, not anyone. Barely your family.
Dan: I love it, “barely your family.” It’s true.
Ziad: You never know! Some guys are blessed with a great family, but a lot of people you know today have family, what family? There’s broken divorces, fights, feuds, you name it. That’s why I said barely your family – nobody cares. So you have to really take care of yourself. You have to care for your brand, you have to care for your loved ones and you have to stay healthy. Live long. The longer you live, the more you’re gonna make money.
Dan: Yes. You actually have a section, a chapter in your book talking about health in which I was surprised. It’s a money book but oh it’s talking about drinking water and taking care of yourself.
Ziad: You have to care for your health! Listen, basically, what will drain you is health issues, divorce issues, debt issues. This is what drains you. If you stay away from these things, I mean you’ll be really fine.
Dan: It makes a lot of sense. It’s almost – it sounds so simple.
Ziad: It is simple! But people — it is simple, seriously. People complicate it with their lives like it’s hard; it’s not. My father used to tell me look, there’s two things sometimes I get upset of this and that when I was much younger but you know what, listen. There are two things that matter really – three things, really. Number one, your health. You’re very health. Number two, your money – you’re making good money so you shouldn’t really worry about. And number three, your loved ones, they love you, they support you – that’s what matters! What? If it’s raining, if it’s snowing, or if you missed a plane – who cares at the end about that? People get frustrated on the smallest, little thing and then they wonder why they have all these diseases, diabetes, cancer, all this stuff because of stress – they cannot manage their stress, everything stresses them. On TV you know they say the wrong word, people offended – you know it’s becoming, hey – you have to be able to insulate yourself from all the shit out there.
Dan: I think, you know I was gonna ask you one last question but I think you already answered perfectly right there. It’s truly money, health and your family and relationships – that’s all that matters.
ALL ABOUT ATTITUDE
Ziad: Yeah, yeah and I mean look, it’s an attitude. You have to have the right attitude. I mean, look, whatever your problem is – there are people who have bigger problems. That’s how I look at it. So if you look at it this way you know, it’s an attitude, I think people live longer because they have the right attitude – it’s not just because of the genes, etc. Yes, it has to play a part but it’s the attitude. With the right attitude, you can win every time, you can live longer, you can enjoy life much more and but also, you have to be very aware. A lot of people live life, walk through life like zombies. Honestly, they don’t know where they’re going, why they’re doing this, they’re so lost and confused and they think let’s say by having some joint or marijuana or drinking more, they gonna forget about this. In fact, they don’t. They are digging themselves further in the hole. You don’t get out of it and you know what, at the end of the day it’s all habits also. You know, like they say, old habits die hard. You have an old habit, you’re gonna keep doing it and digging your hole even more. Start doing the right habit, you’re gonna be on the right path. It’s tough at the beginning, frustrating, just do it. Crush it. And then it will become a good habit.
Life is very simple. But people today make it so complicated. Everything is so complicated, so regulated, so politically correct – you know what? We are not robots. We are human beings with feelings, we all make mistakes, we should learn from our mistakes. We all should pretty much empower each other, help each other to the right path, you know? None of us is perfect. That’s life. At the end of the day, you know, what impact have you left? On society? And everything. This is really what matters.
Dan: Fantastic. For our listeners, if they want to get in touch with you, they’ve got a deal and they meet all those five criterias – if they don’t, don’t even waste your time but if they do meet those five criterias, what’s the best way to maybe get in touch with your company?
Ziad: The best way is to go to www.blackhawkpartners.com
Dan: And for your book they could just go to Amazon – that’s where I got my book from.
Ziad: The book they can go to Amazon.com and type “economic warfare” or my name, Ziad Abdelnour and they see the book, they can order the book on Amazon I think, it’s very much available.
Dan: Yes, it’s awesome. It’s a great read – it’s a book that you would need to read multiple times.
Ziad: Thank you so much.
Dan: Ziad, thank you so much for inspiring us today with your just amazing story, your ideas and your bluntness. I appreciate that. Thank you so much.
Ziad: Thank you so much, Dan.