LETTERS FROM THE GLOBAL PROVINCE

GP 30 January 2008: Losers and Winners: Pirates of America

“Great and good are seldom the same man.” - Winston Churchill

TurnaroundLetter.  George Putnam’s TurnaroundLetter reminds us once a month that the way to make money is to dig for gold where nobody else is looking.  For investors that means you take a peek at companies whose fortunes and stock prices have sunk so low that you know that all the gas has gone out of their balloons.  Nobody likes them.  In other words, they have no place to go but up.  Then you may hit it big.  Prices on some of his picks have gone up 100%, 1000%, and, in some rare instances, over 5000%.

Turnaround People.  Should you talk to Putnam, you will find that he gives a harder look at troubled companies that have brought in new chieftains.  Legacy management simply is not very good at doing resurrections. It takes a new broom.  But it takes more than that.

As the great Buckminster Fuller would have it, in his short and very sweet volume Operating Manual for Spaceship Earth, we are looking for Great Pirates. Supposedly the splendid rogues he describes are extinct now, but in some odd way, one or two crop up now and again:

The Great Pirates became extinct.  But because the G. P.’s had always operated secretly, and because they hoped they were not through, they of course did not announce or allow it to be announced that they were extinct.  And because the public had never known of them and had been fooled into thinking of their kingly stooges and local politicians as being in reality the head men, society was and is as yet unaware either that the Great Pirates once ran the world or that they are now utterly extinct.

Though the pirates are extinct, all of our international trade balancing and money ratings, as well as all economic accounting, in both the capitalistic and communistic countries, hold strictly to the rules, value systems, terminology, and concepts established by those Great Pirates.  Powerful though many successors to the Great Pirates’ fragmented dominions may be, no one government, religion, or enterprise now holds the world’s physical or metaphysical initiative.

It is a more confusing world, says Fuller, since Great Pirates, the great giants of the earth, have disappeared.  But they are the sorts of guys we need to actually get anything done.  Change does not get done by the suits (front men) and the conventional sorts of politicians and businessmen who ostensibly are leading us.  To get through crises, we require people cut from a different bolt of cloth.  For instance, to overturn and revamp our very wounded healthcare system that is sapping us dry we will require an earthshaking figure who understands that band aids won’t work.

What Are They Like.  The pirates we need are often on the outs, shunned as deeply as the longtime worshippers mentioned in “Banned from Church” who have been cast aside because they did not fall in line with the rigid commands of their insecure pastors.  The pirates are usually not saints, but sinners, yet they are equipped with great conviction.  They can handle crisis, because they have been through personal deep crises of their own and have bounced back.  We are reminded of one uncanny executive named Pat who was born with the use of just one arm.  He became a baseball pitcher in college and went on the head a Fortune 500 company.  We were always eager to bring in him when a company was in tatters.  He was a pirate who got things done—fast.  He was a throwback to the past.

Conventional people often think of pirates as losers.  That attitude creates exactly the climate in which they can and do flourish.  Out of the limelight they can do what they have to do, free of the distraction and interference that celebrity brings, to take the hill ahead of them.  We remember that the somewhat eccentric Isaac Newton got all his exciting work done before he went to London.  After that it’s fair to say he was sort of a dandy without much to show for it.

Teddy Roosevelt.  Sickly as a youth, he became the very symbol of the robust life as he matured.  When a man has dueled with death and feels his mortality, he often is less inclined to fritter away his remaining time on earth. Everyday counts.  As Roosevelt said, “Get action.  Seize the moment.  Man was never intended to become an oyster.”

He became president against the wishes of all the Republican party bosses.  Mark Hanna knew TR was trouble for the Old Guard.  It’s not uncommon for pirates to achieve power by accident in unlikely ways, McKinley’s assassination putting Roosevelt into the Oval Office.  For many he was the 20th century’s greatest president, bringing the trusts to heel, putting conservation on the national map, and using his big stick to create a pacific globe.   Oddly enough, he was much less warlike in practice than the professorial Woodrow Wilson, who was his real successor, the next president after the unfortunate William Howard Taft whom Teddy had to topple in 1912.

He had immense highs and terrible lows, right up to the end of his life.  One need only read The River of Doubt, about his last great journey in Amazonia where he came near to losing his life.  It’s endearing to learn that he took poetry along on this trip, the reading of which consoled him during its worst moments.  We would hazard a guess that he was the only president to swim buck naked outdoors in Washington, with the French Ambassador no less. 

Winston Churchill.  When Hitler arrived, Churchill was ready.  For a while only he stood between the traditions of Europe and Nazi disintegration.  He had to take over from a line of paltry politicians that had culminated in the shameful appeasement of Chamberlain.  For a considerable period of his career, he was on the benches, exiled from power by politicians on all sides who took him to be nothing but trouble.  But he was just the kind of trouble his nation needed.

A man of huge achievement, he regarded his life a failure, right up to the end.  He battled depression, some say low-grade manic-depression, and it colored most everything.  He called it his Black Dog.  For a closer look at his greatness and his moods, one should take a look at the Churchill Centre.  Pirates, we find, are much harder on themselves than any of their detractors.

Maria Sharpova.  Having fallen to number 5 in world tennis just a short while ago, Maria Sharpova has staged an astounding comeback.  She has just swept the Australian Open.  It is rather remarkable that this young Russian has already done a turnaround—at age 20.  These days, however, that is the sort of roller coaster ride both athletes and teams commonly experience in today’s competitions where nobody remains on top for long.  Successful training plus some treatment for an afflicted shoulder permitted her to turn in what was maybe her best match ever in Australia. 

She has come a terribly long ways, her family having literally emerged from Siberia.  Her father Yuri Sharapov is a wild card, prone to erratic fits and slightly unsportsmanlike behavior that is the despair both of his daughter and tennis officialdom.  He just made a throat slashing gesture that has raised some hackles:

Sharapov, who rarely gives interviews, addressed the issue briefly after the tournament and said he had meant no harm.  “Do you really think I would be stupid enough to make a sign like that about some other player?” he said.  “If I were so bad as people think I am bad, then God would not let her win the big things she is winning.”

In other words, she has a bit of the pirate blood in her.  The best-paid player in women’s tennis, she only has to win the French Open to have conquered all.  Baying at her heels are upstart young players from the former Yugoslavia, which is also producing some fabulous male contenders, according to our sports analyst Dr. Lundquist.

Charlie Wilson’s War.  There’s a film out just now, Charlie Wilson’s War, that will give you a lot of laughs.  It’s so unreal that it has to be true.  In fact, the History Channel has done a documentary called The True Story of Charlie Wilson, which, if anything, demonstrates that the whole tale is even more extraordinary than the movie conveys.  A reprobate and onetime Congressman from Texas, Charlie Wilson could be said to be no damn good.  But darned if he didn’t get the arms and support for the Afghans in their fight against the Soviets that turned around that conflict and sent the Russians home with their tails between their legs.  At the end of the day, he got surface to air missiles to the Afghans to bring down Soviet helicopter gunships and turn the tide of war.  In this he had to trick the Congress and oppose both the CIA and the State Department.  Congressmen who do something just don’t come in neat packages.

In Search of Pirates.  Several years ago one of our friends from the investment banking community hornswoggled his fatcat firm into sending him up to Harvard Business School for one of those overpriced quickie executive education courses that promise to make you into something you ain’t.  His big takeaway—the thing he most remembers—is that the way to make a fortune and change the world is to swim upstream when all others are paddling their boats down river along with the current.  That is a pirate kind of thing.  It is ironic, of course, that Harvard itself, in most ways, pretty much goes with the flow, tossing anybody with an untoward passion out of the boat.  We have mainly seen this in the area of medical research, but we notice this well endowed university has also not produced many presidents other than Teddy who go out for a swim in Washington to brush off the political fumes and capital gridlock.

Today we’re in need of the gifted few who will swim upstream.  It’s clear that crises abound which only the unusual can surmount.  And it is clear that the nation can rebound from the river bottom if and when a few brave souls will grasp that our future is to be entirely different from what has come before.  We are at a time when only Olympians can make a difference.  After a rather long period of mediocre leadership in the country, the moment has arrived when they can seize power.

P.S.  We were much surprised to learn that Charlie Wilson’s War was directed by Mike Nichols.  We should not have been.  A prolific director, he has often sketched out Americans who have not gone along with what has been ordained for them in The Graduate, Silkwood, Working Girl, and others.  “Born Michael Igor Peschkowsky in Berlin, Germany, he and his German-Russian Jewish family moved to the United States to flee the Nazis in 1939.”  He has some feeling for the unique contribution outsiders with an edge can make to a society.  It is not clear that any of our presidential candidates has a creative view on how to make immigration work for us rather than against us, in this a nation built on its immigrants.

P.P.S. Alcoholics Anonymous has really been the only organization in America that has been successful at efficiently reclaiming large numbers of alcoholics from the depths of drink.  When one meets with many of its stalwarts, they never tire of saying in private conversation that there’s not much hope of recovery until the alcoholic really hits bottom.  Pirates, too, are like that.  In some way they have to scrape the bottom in order to soar.  That personal experience ever informs their lives thereafter.  

P.P.P.S.  Turning companies around has gotten harder as markets shrink and corrupt practices creep into our financial markets.  Many of the so-called turnaround artists these days are not turning around much but their handsome paychecks.  Finding somebody who has what it takes in tough times requires quite a bit of insight.

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