RV Blog Anthony Scaramucci on Failure, Authenticity, and the Future of Crypto

Anthony Scaramucci on Failure, Authenticity, and the Future of Crypto

My Life in 4 Trades Podcast

From investment banking at Goldman Sachs to serving as the White House communications director for President Trump, Anthony Scaramucci’s career has seen all sorts of successes and failures. In this episode of My Life in 4 Trades, the founder and co-managing partner of SkyBridge Capital and chairman of the SALT Conference joins Maggie Lake to share how his humble upbringing helped shape his career and teach him the value of authenticity.

TOP TAKEAWAYS

#1 Takeaway — You’re Not an “All-Knowing Genius”

  • Anything you think cannot happen, will happen.
  • You can bubble up into overconfidence, but you have to manage it or you’ll fail.

#2 Takeaway — Stay Inside Your Core Competence

  • Understand the risk so you can size your investments accordingly.
  • Understand how the balance sheet and the income statements of your potential investments work and then leverage these factors.

#3 Takeaway — Stay True to Yourself

  • Don’t let your pride and ego get in the way of your decision making.
  • Have enough self-awareness to know where you belong.

#4 Takeaway — Learn to Pick Yourself Back Up

  • You cannot get through life without making regrettable decisions. Learn to accept that and don’t get bogged down by regret.
  • “Seize today, focus on how we’re going to grow for tomorrow, and make ourselves a better person. That’s all we can do. And if you put that in your brain, you’re going to be a happier, better-disposed person. You’re going to have a better disposition.”

PODCAST TRANSCRIPT EXCERPT

ANTHONY SCARAMUCCI 

So I’m talking to you from two miles from where I grew up. I live two miles from my mom and dad who still live in the same house that I grew up in. So I’m going to tell you mama’s boy, I grew up on Long Island in a town called Port Washington. I now live in Manhasset. My dad was the crane operator locally at the sand pit, which is actually a sand mine. His dad – my grandfather – emigrated from Italy and went to Northeastern Pennsylvania, was a coal miner. And then he ran a store, he was actually a butcher for a period of time. He died young, unfortunately, due to black lung disease. My dad, you know, lost his parents very, he was very young. He moved to Long Island responding to a classified ad, not to mine coal in the ground in northeastern Pennsylvania, but to go out for Long Island and mine sand. And so he started as a laborer, worked his way up to being the crane operator. When he got a little older, they allowed him to be the truck dispatcher. And so he’s been 42 years at the same company. He was in the union, he’s a hard worker. My mom was a housewife. There was a time in America where a blue collar person like my dad could actually, off of his salary, he could raise a family of three kids. And we lived in the blue collar Italian neighborhood. My uncle had a motorcycle shop at the top of the hill. He ran that motorcycle shop successfully for 50 years. He was a world war two veteran. He died last year. He was in his mid 90s when he passed, but he fought in the Battle of the Bulge. These were old school, tough Italians. I did every job imaginable as a kid because the family needed money. I was in a newspaper route, I worked stocking shelves, I worked for my uncle selling mopeds in the 1970s at his motorcycle shop. And, but you know, my parents, even though they had no college degrees, or college education, they wanted us to get educated. So I got educated. I went to Tufts University, then Harvard Law School. And my first job on Wall Street was at Goldman Sachs, where I spent seven years at Goldman mostly in the private banking area.

Maggie Lake 

So when you were sort of heading off to college, did you know about investing in business? Did you have an idea about what you wanted to do? Or did that come later?

ANTHONY SCARAMUCCI 

No, I had high anxiety about money. You’re cheaper than my therapist, so I may as well just let  it all out on your podcast. My dad was up against it. So if his wages got cut due to a slowdown in the economy, that was bad for the family. So remember, if somebody like my dad, if you’re working on the weekends, that’s good for you, because you’re getting time and a half or double time. If you’re only working to 40 hours, that’s bad for you because you don’t have the extra income. And so we all went to work to help supplement my dad’s salary, if you will. My mother worked in a nail salon and she became a makeup artist. This is sort of funny to say this, but if I didn’t see my parents on the weekend during the day, that was a good thing. That meant my mother was making up a bridal party somewhere on Long Island. She was a makeup artist. And my father was down on the dock working as a crane operator. Those two things on a Saturday, or even possibly a Sunday, are good things for the family. So, I had no clue. But I had a lot of anxiety about money. But I was also incredibly superficial with my decision making at that time. So I went to Tufts because I got recruited for football, even though I’m short, I was pretty fast as a kid. I then hurt my knee, which gave me the opportunity to study as opposed to really do anything sports related, which was good for me because it helped me get into Harvard Law School. But I was a junior at Tufts and had no idea what I wanted to do. I opened up the Time magazine that we’re paying, starting salaries at these New York City law firms – $65,000 a year. I said, “Oh my God, my dad’s making like 33 grand. So I can go work as a lawyer and make double what my dad makes. Okay, I’m gonna go to law school.” And that was how superficial my decision making was at the age of 20/21. And so I got into Harvard Law School. My mother thought it was Hartford law school. I mean, these people were clueless. And I said, “No Ma, Harvard.” She said, “Why the hell would they name it Hartford Law School if it’s not in Hartford down the block, it’s in Boston.”

Maggie Lake 

But Harvard’s real bragging rights. I would have thought that they would have quickly figured that out.

ANTHONY SCARAMUCCI 

So anyway, yeah, she had no clue. And she got a clue later in life. And we always tease her better. She’s 85 years old. And I always tell her, “I went to Hartford law school, Ma.” But you know, I’m there at law school hating every minute of it. I wanted to drop out. Of course, I’m in an Italian family. My mother’s go to is “I’m going to kill myself. I’m going to kill myself if you drop out.” And then this is the best part of the story because you asked about my origin. Okay. I wanted to drop out Thanksgiving weekend, 1986. My mother says she’s going to kill herself. Okay, no problem. So I stay in law school. I finished law school, I get a job at Goldman Sachs. When my mother found out that Goldman Sachs wasn’t a law firm, she started to cry. Okay. And for about five years, she told her friends in the neighborhood that I was at a law firm called Goldman Sachs. Because I remember like, Mrs. Panetti,  I think it was at the Rosanna Italian Downey and Mrs. Panetta said, “So that law firm you’re working at, Goldman Sachs, how’s it working out for you” I’m like, “the law firm that I’m working at?” And then it dawned on me, my mother was embarrassed that I wasn’t a lawyer so she was telling her friends in the neighborhood that Goldman Sachs was a law firm. I mean, you can’t make this shit up. Right. So I mean, this is exactly how I grew up.

Maggie Lake

What was your experience like when you got to Goldman? Did that background help you or ground you in any way? Or did you think it was sort of an obstacle to overcome?

ANTHONY SCARAMUCCI

Oh, that’s a really good question. Let me think about that. I would say a little bit of both actually. Right. I mean, you know, this is like, sort of so honest, that will probably make people uncomfortable for me saying this to you. But, you know, I wasn’t set up for Goldman. You know, I grew up in a blue collar neighborhood. I never saw the inside of a commercial office building. My first job interview, I had my best suit on but it was 100% polyester. Okay, I had bought it from Size Sims. I had a polyester shirt on. It was shiny. Okay, that’s what my parents were buying me, right. So I was fully flammable for my first job interview. And so those two partners are looking at me like, “Okay, this kid.” And they took me outside to the Charles hotel and the partner looked at me and said, “Hey, you’re very, very smart. But you are the worst dressed person that we’ve ever met. You gotta go buy some real clothes. I can’t take you down to Goldman Sachs looking like this.” I was looking like a young Italian funeral director or like, I was an undertaker. So I’m like, okay, and I know what to do. So I got a student credit card, it was like 20% interest rates. And I went to Brooks Brothers, and they got me a, you know, a discount student discount. I bought two suits, three shirts and a couple of ties like these rep ties, you know, because you like these boarding school rep ties, absolutely knew nothing about. And I went to Goldman Sachs, and I had to buy a new pair of shoes too. And I got the job. So I was prepared for it though, because I had a lot of street smarts. You know, I had worked for my uncle’s motorcycle shop. I had a lot of commercial instincts as a result of that, but I was ill prepared for it because I had no idea culturally, how to frankly, fit in.

Maggie Lake

Yeah. Was Was your initial and then we’ll get to your trades because I think this was sort of interesting. Did it take you long to acclimate? I mean, one, you know, to sort of figure out how to navigate in that environment? Not the job specification, but kind of culturally.

ANTHONY SCARAMUCCI 

No question. And, you know, what, I’m still acclimating. Okay, so I’ll let you know when I’m fully acclimated, I’ll give you the heads up, okay. Because I am actually still acclimating. And I often see these guys at big banks at these conferences, or some of them, frankly, even come to my own conferences. And they’re like, looking at me, like, I got three heads, you know, because I don’t fit into the corporate box. I’m not going to act like them, or talk like them. And then somebody said to me, “Well, you’re not really that woke.” I’m like, “I’m not that woke, I’m in a coma, forget about being woke, okay?” I’m just gonna be me. Okay, treat everybody fairly, treat everybody equally. If you don’t like what’s coming out of my mouth, that’s too bad. I’m running my own company, you know, let’s go. Okay. Treat people nicely and fairly and treat them equally.

Maggie Lake 

So you’re in Goldman, and I put this trade first, I think we have two trades from the 90s. But I put this trade first and that’s a big bet on a biotech company called CentorCore. There were long 50k calls. And this is one of your worst trades. So set the scene for us what’s happening at this time in your life.

ANTHONY SCARAMUCCI

So what’s happening in my life, I’m swinging from massive insecurity to overconfidence, borderline arrogance. Okay, so I am at Goldman, I’m on the trading desk. We have a bio technology research analyst that put a buy recommendation on this company, CentorCore. I go to meet with him and CentorCore at that time was a biotech company in the early 90s. It was developing a cure for sepsis, which is a very difficult thing. 30 years later, we still haven’t cured it. And they have this cure for sepsis. It’s going to reduce mortalities in the hospital, it’s going to be a blockbuster drug. And so I meet with him, and I decide that I am a genius, okay, and even though I have no experience as a scientist, I have no experience in biotechnology. I am a biotech guru. I’m a genius, all knowing genius. So I buy call options leading into the FDA phase one approval for this sepsis drug. And then the worst possible thing happens to me, they approve it. And so these call options go from like $6,000 to like $80,000. And I am now a guru and I’m a genius. Rather than paying off my school debt with that money, which I should have done, I rolled it into the forward call sequence for the phase two trials and get this – I went to the FDA. Okay, I flew down to the FDA with the biotech guy for the phase two hearing. They disapproved it. They disapproved it. Okay, and the call options imploded. And I went from plus $80,000 to minus $50,000 in my account, it had to do with the way the leverage and the margin call worked on the account. And so now, the Goldman Sachs clearing group is calling me and they’re saying “you have to meet a margin call by Friday of $50,000 US dollars.” Man, I didn’t have the money. Okay, so now I’m going to panic, I’m going to lose my job. I called my boss. And I tell him what happened. And he says, “You know, you are an imbecile.” And I said, “Yes, I am an imbecile.” And he says, “Okay, I’m going to take this out of your pay, and I’ll dock your pay. I’m gonna pay it.” So he had the firm pay the $50,000, clear the margin for me, and they docked my pay until it was paid off. And it was the most humbling and most embarrassing thing that ever happened to me. But it woke me up to risk and it woke me up to overconfidence in investing. And it woke me up to being so far outside of my circle of competence. What am I doing in biotechnology call options at the age of 27 when I absolutely have no clue as to what this is, or what is actually happening? And so yes, I think I’ve marked that one down as my worst trade, but in a weird way, that was like my best trade because it set me up psychologically, to be humbled by markets. You know, listen, I’ve been humbled by life, and markets. It’s been a lot of life experiences for me that have gone up and down. But that was a big one at 27. And I needed that money. So I went from probably, when I left college and law school, $120,000 of school debt. And so I ridiculously added $50 more thousand dollars as I was trying to pay down the school debt. But it happens. But I mean, the good news about this story – I love telling this story to young people, because they should be excited about life, enthusiastic, and yes, you can bubble over, you can bubble up into overconfidence, and I did, you know, but you have to manage it. And that’s all. It was a great learning lesson. And by the way, it was a great $50,000 tuition. Okay, what happened to me you’re not learning in a textbook or and you’re not learning in college.

Maggie Lake

So it’s interesting, because your second trade is one of your best. And that is making a huge bet in financial services, resolution trust, traveler stock and warrants that that really paid off for you. But it’s another big bet. So, explain this – you’re still taking big bets, but are you smarter about it?

ANTHONY SCARAMUCCI 

So, a different bet because of that experience it’s sized with a much smaller amount of my net worth. It’s sized, recognizing that I could get it wrong. I’ve gone into every trade since the CentorCore, “Okay, I have this 100% Wrong. Now, why?” Okay, as opposed to “Oh, I’m so overconfident, this is just going to work out masterfully.” And so that would be everything. My cryptocurrency trades, any trade that I’ve made in the stock market, any real estate trade, I’m always like, “Okay, I’m going to do this. I’m 100% Wrong. Now why?” But in the thing that you’re referencing, the RTC, the resolution trusts to remind your young viewers and listeners, what that was, we had a banking crisis in the late 80s into the early 90s. And so we had a lot of over-levered real estate assets and a lot of banks, savings and loan banks went belly up. And the government stepped in with this thing called the RTC, the Resolution Trust Corporation or whatever it was, and these banks moved all of their bad assets over to the RTC and then the government began the process of unwinding these assets and private equity participants like Blackstone and others bought these portfolios from the government. As that was happening, the economy was healing and the financial services sector, in my opinion and the opinion of my partner at that time in the private wealth management area at Goldman, was improving. Okay, so now I’m inside my core competence. I’m working in financial services. I understand how the balance sheet and the income statement works and the leverage factors in these financial services companies. So I’m not in biotech now, I’m in something that I actually understand. And I said, “Okay, this is going to be very big for the financial services industry.” And Sandy Weill, that time was running travelers, he merged travelers and the city Corp very famously brought Jamie Dimon over there with him. But prior to that, so from like, 1995 to 1997, I owned that stock and I owned the warrants on that stock – so that was a little bit of a levered kick to the stock – and it made me a lot of money and it helped me pay off my school debt, purchase a house, which was a modest house in Manhasset, and gave me enough additional money like enough additional savings, or a nest egg, so that I could go start my own business. And so that’s that that’s what I did. And that was a great trade for a number of different reasons. We got it right, it obviously worked. It was sized, right. It wasn’t sized over confidently or ridiculously. And you could always say, with hindsight being 2020, “oh, I should have put more money in that trade.” But the answer to that is no, because you don’t know what’s actually going to happen. But those factors, that was probably one of the best trades in my career, both from the sizing of it, understanding of the risk and then after it was successful, what I did with the assets. You know, I ended up doing really smart things, paid off debt, purchased a home, and then prepared myself with a nice nest egg to help me go start my first business.

Maggie Lake

So it’s interesting you did you know when you were a Goldman that you wanted to start your own business? Did you feel that entrepreneurial streak? Because you could have just kept climbing the ranks at Goldman, had a very nice career, been very successful. What was it at that time that you were already thinking about starting your own?

ANTHONY SCARAMUCCI

So essentially, one of my partner’s stayed at Goldman. He’s been there now, 30 years. He’s had an unbelievable career, made tremendous amounts of money, and he’s got a great family, great lifestyle. But it wasn’t for me. And you just have to know yourself. And I would tell people “know yourself and follow your bliss and follow your dream.” I went to see Mario Gabelli, he was a very famous money manager, some people probably don’t know him outside the industry. He’s 82. Now, this is probably 28 years ago, so he’s, you know, in his 50s. And Mario said to me, “you’re not right for Goldman.” And I said, “What do you mean?” He goes, “Well, look at your personality. You tell people what you think, you’re not corporate. You know, the only way you’re going to be super successful at Goldman is if you shave all of the sharp points off of your personality. So you’re right now you’re a star, shave it all off and become a pentagon, and then go work at Goldman. Okay, take all the sharpness out of your elbows, etc.” He says, “or you could do what I did, you could leave Goldman and build your own business. Let me tell you something else, you’re going to be 50 in 10 minutes – I was like 30 at the time – because you think it’s a long time from now. But boom, you’re going to be 50 and you’re going to want to work and have energy. You’re going to be still active, but you’re going to be out to pasture at Goldman. You’re either going to be in top management or you’re going to be blown out the door or you’re going to be irrelevant at the firm. So go leave and start your own business.” And I was 30 at the time and I remember leaving his office, and I looked up to him – he was an Italian American, very successful in our business – I looked up to him and I remember coming home and saying “you know what, he’s right. I got to have enough self awareness to know that I am not a Goldman Sachs, corporate apparatchik.” One of my buddies who stayed there 30 years, totally that. But not me. It’s just not my personality. And moreover, you know, I like doing things that are outside the box. You know, I have spoken at the World Economic Forum. I obviously failed as the White House Communications Director, got my ass fired after 11 days. I’ve been on reality shows I did. I did the Celebrity Big Brother. I just filmed the reality show in the Wadi Rum, Jordanian desert, with Mike Piazza and Danny Amendola and Dwight Howard, we were jumping out of helicopters, it was a Navy Seal, Special Forces survival training. I mean, I might be able to do that at Goldman Sachs. They’ll have me in some kind of box stuffed in the closet. So that wasn’t going to be enough for me. I’m not saying it’s not a great career, and they’re not great people. And I loved my time at Goldman Sachs and I learned a lot from my experiences there but I wanted to be able to be me and do what I wanted to do with my life. And so, look, I’m an entrepreneur, people say, “Oh, you’re working for yourself, you’re your own boss.” That’s never true. Anybody who says that doesn’t understand you always have a boss and your clients or your boss. Okay, believe it or not the regulators are your boss, you know, I have to make sure that we’re in regulatory compliance. I always tell my staff “performance is a close second to regulatory compliance.” Because if we’re not in regulatory compliance, it’s over. You know, we’re not Goldman Sachs where we can pay a fine, and we can stay in business. You know, I think JP Morgan paid $4 billion of fines during the financial crisis and they can stay in business. A small company like mine can’t. We can’t afford that. We can’t afford to pay the fine and we can’t afford to get it wrong, it’ll hurt our reputation.

Maggie Lake

You’re right, you always have someone to answer for. When you were thinking about and you went on and started your first firm, did that feel super risky to you? I mean, were you married at the time? Did you have your family?

ANTHONY SCARAMUCCI

I was married at the time, I had two kids. I was 32 years old and I had just paid off my school debt and I still had a small mortgage. But I had some savings. And I was scared out of my mind to the point where I made myself sick. I actually, I think I stressed my body out of it. I had the flu, I think I had 100 degree plus fever, my first day on my job at my quote unquote, new company, which was me and my partner sitting in a room smaller than the one I’m in right now. And I remember thinking, “I gotta be crazy to do this.” I’m leaving. I mean, it’s probably sounds like bragging, but I’m not bragging. I’m just being observant. I was making over a million dollars a year at the age of 32. And I went from making a million dollars a year and that’s 1996, that was big money at the time, and I was making a million dollars a year to making no dollars a year to start my own company. And I remember thinking “I am absolutely stupid to be doing this. Why am I doing this?” But I was driven to do it, and you know what, it turned out. When you make decisions like that you are forced into the box of survivorship and eventual success – you’re gonna figure it out you know?

Maggie Lake 

Well, not everyone does, Anthony.

ANTHONY SCARAMUCCI 

Well I have and I haven’t. I failed at things and I get up and I get restarted you know? That’s what you have to do. I mean, you know, I have a picture on my phone – we haven’t gotten to Bitcoin. I don’t know if bitcoin is a success or not. We don’t know yet, right. So here’s a picture on my phone. Can you see that? That’s me sinking in the SS Mooch. Okay, now, I wish I owned that many Bitcoin, right? If you invite me back on, this could either be a great trade or a horrific one, I’m not sure which. But that’s a composite, and I look like Tyrion Lannister, like a dwarf in the picture, okay, it’s totally fine. And I’m sinking in the bitcoin boat. And that was on the front page of The New York Post business section about six or eight weeks ago. And my Bitcoin exposure, I’m getting rocked right now. Now, truth be told, I bought those coins in the 16/17 thousands. And they’re still trading in the 19 thousands. But they’re down from 60 plus thousands. So I’m getting rocked. And it could be a bad trade, but it may not be. I put it on for five years, let’s see what happens. My point is, why am I bringing that up – that could be another failure of mine at which point, you know, I’m gonna have to rebuild and rethink and restructure, and regrow – that’s what you do in life. You move and you adapt, and you pivot. And you, you you have neuroplasticity in your brain where you’re, you’re expanding the flexibility of your intelligence.

Maggie Lake 

Yeah. It’s interesting that you chose that. I understand that it’s sort of being true to who you are, but financial instability was such a major part of your childhood, that it’s interesting that you left the security of a place like Goldman and took a gamble and kind of went back to that – having financial instability, at least at the start.

ANTHONY SCARAMUCCI

I’m going to explain why because I think there’s elementary to everybody’s career as they think about their career and idealizing their adulthood. There were moments of great financial anxiety and pain in my family, from ages 11 to 18. So over that seven year period of time, there’s great financial uncertainty. And I remember thinking, “okay, my dad has a boss, and he has no control over what’s happening to him. Okay, so therefore, I am going to do everything in my power not to have a boss.” Yeah. Okay. Jack Welch used to say “control your own destiny or somebody else will.” Okay. And so I admired my dad’s work ethic. I admired who he is, this person is a very honest guy. So I tell my staff, “we will never dishonor my dad or his work ethic. Okay, or his honesty by doing anything wrong to skybridge. I don’t care if we go bankrupt, it doesn’t matter. You call me an imbecile but you can’t call me dishonest or unethical.” But he had tremendous anxiety, and volatility of earnings associated with the economy, which he couldn’t control, and his boss, and what his boss was doing. And so I said, “I don’t want to have a boss.” And so at age 32, I didn’t want to have someone knocking on my door, say, “Hey, you’re out of work. Now go find a job.” If my clients want to fire me, that’s fine. But I’ll go out and find more clients, trust me. Okay, I know how to do that. So I will do that. But my point is no one singular person, a boss, he or she, is going to knock me off my game. And so that was my singular focus from age 13 to 32 when I started that business, to 58 where I am right now. Does that make sense?

Maggie Lake

It completely makes sense. I feel like so many people can feel the same way, especially right now, related to that. Because, you know, at the drop of a hat, no matter how your performance is, you can be canned. And that’s so unsettling. I think that constant job insecurity just follows a lot of people around and gives them sleepless nights. I think a lot of people relate to that.

So let’s talk about your third trade because we’re talking about Skybridge now, and this is, I think, really the thing that sort of launched that. And that’s buying Citigroup’s alternative investments in 2009. So, talk to us about that, because I think it’s hard to overstate the misery around that time in the financial sector. I mean, it was, you know, the global financial crisis, things were blowing up, the unthinkable was happening. So, it is an interesting time to make a big purchase. So you know what’s going on with you?

ANTHONY SCARAMUCCI

So, what’s going on with me… Let me just give you the backstory. So my first is pretty successful. It was also in a bull market. So we started in ‘96. We sold the business about six weeks after the terrorist attack in 2001 and we had a billion dollars under management, so it was a very healthy sale. It was a nine figure sale. I mean, it was over $100 million. We had four or five partners, and we split the money. But you know, that’s 20 years ago. That was big money for a guy like me. I paid my taxes. I think I put a lot of that money into municipal bonds and there it was. And so I had sold the business to Neuberger Berman, I went to work at Neuberger Berman – Neuberger got bought by Lehman Brothers – that was also very good for me because I own stock in Neuberger and I got the bump. And so now I’m at Lehman Brothers, when my contract ended, I went to default and said, I wanted to start Skybridge. And so he was great. He gave me $10 million of balance sheet money to start Skybridge. And so we started Skybridge and we got off to a successful start, and then wham, we got hit with the financial crisis. And so now the business was doing poorly, I was quite nervous about the business and we decided to do two things at that time. Number one, we got a room block, it wasn’t really purchasing it. We got a room block from the Encore Hotel, which is part of the Wynn complex in Las Vegas and we started what ultimately became the SALT conference. We did that because all of the major banks were leaving Las Vegas at the time and I thought that this was a contrarians move to start a conference when everyone else was leaving the conference business, maybe we could create something out of the ashes of what was going on. And then the secondary thing was I had lunch with Jane Fraser, who’s now the CEO of Citibank. And Jane was a friend of a friend. We got together, she was running with my core bat, who was the her predecessor CEO, she was running something called Citi private holdings, or something like that. They were dispensing and getting off their balance sheet all of their non core assets. So they took $25 billion in from the federal government and the government said, “that’s great. But we want you to be in commercial banking, get rid of all of your non-core assets.” And Jane said to me, I wanted to buy her hedge funds seeding business, because I was in the hedge fund seeding business. And she said to me, “Well, I don’t want to sell that to you. But I have a fund to funds. You know, I could sell you, not just the seeding business, but I could sell you the whole fund to funds complex.” And I gulped. And I said to myself, “Okay, I will buy that from you.” And so this is what entrepreneurs have to do – I liquidated my entire municipal bond portfolio, my life savings, and I used it, plus I borrowed money to buy that business from them. And that was a risky thing to do, frankly. But I thought it was an important thing for me to do, because I thought that that business would grow and I thought if the financial crisis ended, and, again, I have this belief that we’re in a cyclical environment, you know, we think things are really bad, and we think they’re going to continue to go even worse. You know, Jamie Dimon’s out talking about another 20% drop in the market, he could be right, because markets usually go down 40% in a bear market, 50%. But I don’t think it’s going down 100%. I don’t think JP Morgan or Disney’s going to trade to zero, they have assets, and they have cash flow and things like that. So I’m always of the more optimistic side. and I just made the bet that this would recover. And when it did, the Citibank assets combined with the Skybridge assets would be a good story. And that was the best trade of my career. And it was a very risky trade to an outsider. But again, unlike CentorCore, I’m in the financial services industry and I knew that this was a thing I needed to do to allow for my businesses to arrive. And so that’s how it worked out.

Maggie Lake 

So when you’re making a massive decision like that and really putting everything on the line, how do you know it’s right? Is it a gut feeling? Do you consult with others? Do you have a group of mentors or people that you turn to? How do you make a decision like that?

ANTHONY SCARAMUCCI 

These are great questions. So the answer is yes, you have mentors, you turn to people that are on your personal board of advisors and you’re looking for advice, you’re looking for help and counsel. But you’re making this decision in a vacuum of your own loneliness, because ultimately, it’s your decision and you’re going to live or die by that decision. But  this is the thing that I think people need to understand, you either believe you’re going to make it or not. Okay, so you either believe you’re a Swiss army knife and you’re gonna pull out the right tool at the right time and deploy it, or not. Entrepreneurs believe they can jump off the cliff and they can build the airplane while they’re descending to Earth. That’s what they believe. Now some of them go splat. And some of them pick themselves up. There’s a gentleman by the name of Elon Musk. He was virtually bankrupt in 2008, virtually bankrupt, by his own admission, by his biographers admission. You can listen to YouTube videos of Mr. Musk talking about his near impending doom of bankruptcy. He was over levered in his rocket company, and he was over levered in his Electric Vehicle Company, and two or three things had to happen and break his way to prevent his annihilation, and they broke it. He went on to become the richest person, probably ever, in the history of US economic history. But what Elon Musk knew, which I so admire about him, is that let’s say broke the other way, he got wiped out, he was going to rebuild. He was going to dust off and he was going to rebuild. You see, I grew up in a blue collar neighborhood in a blue collar family. If I’ve got to go back to a white T-shirt, and a six pack of slits and a rabbit eared television to watch my beloved Mets, I’m doing that. That’s where I came from so I’m going to do that.  Okay, I don’t need to be in the country club, telling people what cars I have, or that my house is bigger than theirs or my yacht’s longer than yours, I don’t need it. What I need is the artistic creation of business. Entrepreneurs are not capitalists, they’re capital artists. Okay, they’re painting on a canvas. The canvas happens to be their business and if it gets smudged or becomes worthless, they’ll start on another canvas. And that’s the mindset that you have to have if you want to own your own business. You don’t fear failure, you don’t have the self consciousness of status in your mind. If I walk into a room and someone says, “Well, he’s a loser, he lost XYZ.” Ok, no problem. I’m a loser. But you know what, I’m having a great life because I’m experiencing the ups and downs of entrepreneurship. And the journey for me has been incredibly rewarding. It’s rewarded me intellectually. It’s humbled me. It’s made me sharper as a human being. It’s made me more reflective. It’s given me more empathy for other people and their personal struggles. And by the way, I stupidly went into politics, and boy, what an eye opener that was to. And I’ve done all of that because I have an entrepreneurial mindset. So that’s my message to people “relax.” Okay, we all know how the thing ends anyway, right? I mean, what does Mel Brooks say? “Relax, none of us are getting out of here alive.” Okay. Enjoy your life. We all know what’s going to end, but just relax.

Maggie Lake 

That’s beautifully said. You mentioned that you mentioned the politics thing, too, but even with SALT. So, you’re challenging yourself in all these ways. Did you understand at some point that being a public figure was part of that? And do you like that? Does that stress you out? Is that a part of the business that you’ve built that you enjoy?

ANTHONY SCARAMUCCI 

Another really good question. So, I would say to you that I had no interest in being a public figure and I can give you evidence of that. I joined Goldman Sachs in 1989. I did not make a television appearance until 2009. So you know, that’s 20 years: never went on TV, never had an interview. I had my own business started in 1996. I could have gone and done those things. I had no interest in it. So what happened to me is we were failing. Okay. Skybridge was becoming Lowbridge, the bridge to nowhere, blown up bridge – I mean it had all kinds of nicknames for it. And I was like, “Okay, well, how am I going to make this as successful?” When we started the SALT conference one of my friends said to me, “Well, you’re not going to get anybody there if you don’t promote it.” Okay, so I went on, I think Neil Cavuto invited me on. I went on to talk about the SALT conference. And then he invited me back and he asked me about the economy and you know, okay, he invited me back and then all of a sudden CNBC saw me and said, “Okay, forget about them, come over here.” You follow what I’m saying? And then all of a  started growing this persona in the media, related to the economy, related to business. And then because I was in politics, how did I get in politics?

Maggie Lake 

How did you get it in?

ANTHONY SCARAMUCCI 

I got in only because there was no network. So I’m at Goldman trying to meet rich and successful people and I’m in a labor crane operator’s family. I was never inside a country club, never hit a golf ball, never swung a tennis racket. How am I gonna meet these people? And so I wrote my first check – Republicans, Young Republicans for Rudolph Giuliani – okay. I was 25 years old. I wrote him a Twitter and $50 check to be part of his campaign. He loses to David Dinkins, that’s very good for me. I ended up becoming a friend of his and working with him. ‘93 he wins. I’m 29 years old and I’m now part of Rudy’s network. And I’m meeting all these successful and influential people. I met a ton of people through politics. So I worked for Rudy. I were for Pataki. I worked for D’Amato. I worked for all different types of people. Then a relatively unknown guy who went to law school with me, was running for president. His name is Barack Obama. I was like, “Okay, I don’t really remember him.” One of my buddies said, “You’re a good fundraiser, even though he’s a Democrat, will you help the guy out? He went to law school with us.” So I remember running into Obama in July of 2007. I said, “Senator, I’m about to write you a big check. But I want to lie to all my friends and tell him that you and I were good friends in law school. Is that okay? I mean, I’m about to give you a big check.” And he looked at me, he has the best smile in American politics since Jack Kennedy. He just lit up. He looked at me say, “Hey, Mooch. If you double the amount of the check, we can take it all the way back to Hawaii. Okay, you know, like we were in high school together.” Okay. I thought it was really funny. I ripped up the check. I had another check in my pocket, I doubled it and I handed it to him. Okay, so I worked for Obama in 2008. So it wasn’t like a Mr. Strident Republican or Mr. Strident Democrat.

Maggie Lake 

What made you what made you go to be press secretary though? It’s such a brutal job.

ANTHONY SCARAMUCCI 

Well, that’s a whole different story. That’s a whole different story. That’s a story of ego and that’s a story of misplaced ego. And it’s a cautionary tale for people: don’t let your pride and ego get in the way of your decision making. So I could have easily stayed in my lane of Republican Party fundraiser well connected into the party. And I was hosting Wall Street week for the Fox Business Channel at the time, I could have easily stayed in that lane. And my wife, who thank God, we’re still married I mean, because that was also a strain on our marriage, probably hated Donald Trump, almost as much as Melania hates him. I mean, that’s like really up there, you know, I mean, she really couldn’t stand them. And so she begged me not to do it. But here I am. A blue collar kid, grew up on Long Island, went to Tufts and Harvard, built two successful businesses. Now the American President is asking me to go work for him in the White House. Yeah. And I said, “Oh, I gotta go do that.” Well the American president is batshit crazy. And I said, “Well, he is batshit crazy, but you know, I’ll be able to work with him. I worked with him successfully in the campaign and that was a mistake of pride, and that was a mistake of ego. And I made that mistake. And you know, so that’s why I took the job. But when I left the press box, when I was in the Brady Press Room giving the press conference – when I was done, I was walking upstairs from the lower press back up to the Oval Office and my cell phone was ringing. And I can’t tell you who it was, but it’s a very well known guy. He said, “What the hell’s wrong with you?” I said “what?” He said, “You can’t talk like that to the American people from the White House. You can’t tell the truth like that. You’re about to get annihilated.” I said “what are you talking to me?” He said, “Let me tell you something. This town is allergic to the truth. I’ve got Republican aids in the house, and we’re looking for opposition research on you to knock you the hell out here.” And then I helped them because I said some ridiculously, very funny thing about Steve Bannon, which is probably one of the more legendary things that I can’t repeat on your podcast. It’s not appropriate,  you know, parental discretion is advised. But he was one of the biggest assholes that I’ve ever met in my life. He was a malevolent guy. And, you know, anyway, to make a long story short, I was talking to who I thought was a friend, the guy, the journalist’s father, worked with my dad in construction on Long Island. The families knew each other for 50 years, and I said, a very flippant, Long Island Italian comment about Steve Bannon. And he recorded it and he ran to CNN. And I said, “Okay, well, now I’m getting fired.” And that Monday, General Kelly fired me and I left and that was it. You know, I just interviewed General Kelly at Mitt Romney’s conference this past weekend. General Kelly and I have become very close personal friends and we travel around the country together. We do public speaking together, I always lead off with “Hey General I’m asking the questions. You’re not allowed to fire me again. Stay calm, I’m gonna ask you the question.” But my point is, he fired me, he had the right to fire me, I deserve to have been fired. When you make mistakes like that, be accountable for them. Don’t blame anybody else but yourself. I made the mistake. I was still loyal to Trump after that, I was like, “no problem. I want to be loyal to the President and help the President, I’m a patriot.” But when you start acting completely nuts, and you’re starting to disavow the system and the checks and balances of the system, and you act literally like a sociopathic buffoon, then you have a responsibility to speak out against that. And as I tell my Republican friends, “he is the wrong messenger for your movement.” Okay. So find a different messenger. Calm down. Okay. And let’s, let’s run the country appropriately. Enough that is left and right nonsense. How about right or wrong.

Maggie Lake

Yeah, and we certainly need some progress.

ANTHONY SCARAMUCCI 

I have no problem speaking out against that. It cost me relationships, it cost me my business. You know, meaning that didn’t cost me this, but it cost me revenues in my business. But that’s fine. I’m a big boy.

Maggie Lake 

So I want to squeeze in your fourth trade, although I’m fascinated by this part of the conversation. But your fourth trade is interesting, because it’s a concentrated bet on structured credit assets. And I’m going to put it at 2019. And this happens so often on this podcast, because it was a good trade, before it became a bad trade. So it’s a trade that had worked for you until it didn’t. So talk to me a little bit about how that happens. And why did it work once and  not work again?

ANTHONY SCARAMUCCI

Well, so I mean, we put that trade on in the aftermath of the financial crisis. So a lot like what was going on with the Resolution Trust back in the 90s, the financial markets were healing and this is sort of the 2009-10 timeframe. So structured credit, housing loans, credit card loans, auto loans, things that are packaged and structured by Wall Street and syndicated if you will, they were getting blown to pieces in the 2008 crisis. It was like 40/50.60%. So we were buying things for 30 cents on the dollar, expecting him to go to 70, you know, never expecting them to get back to 100. And so we made that bet. It was very successful. We then shedded those assets, and we started buying into activism and things like that and then in 2017/18 when I returned to Skybridge after my failed political career, we went back into structure credit. Why did we do that? Well, we thought that the volatility was low and we thought that the beta – that’s your measurement of risk to the overall market, if it’s below one, that means you have taken on less risk than the market – the beta on that stuff was 0.3, so we were taking 70% less risk than the overall market. And we thought the market was a little top heavy. So we thought it was a defensive place to be and we got it wrong. In March of 2020, that beta, which is just garbage in garbage out data, those trades got annihilated in the COVID 19 crisis, and no one had expected the economy to go from A 2ish percent growing economy to a standstill. Yeah, this is my message to your podcasters okay. Anything that you think cannot happen, will happen. Okay, let me repeat that, okay. Anything you think that cannot happen, will happen, okay. And you have to live your life like that, okay? So, you know, we didn’t. We got caught on and we had too much on, we had too much exposure. And I think I said it to one of your producers. It was like we were picking up pennies. We were earning yield but we were picking up pennies in front of a steamroller. So the steamroller hit us and knocked our principal down. Now we have recovered from that. But structure credit is down again, we recovered and we rotated out of it. I’m more into cryptocurrency now, and just some more growth here places. But again, I’m doing this 34 years and you make mistakes. You get things wrong. Berkshire Hathaway, the legendary investor Warren Buffett, go look at what his stock has done year to date. Okay, you do get things wrong. So you have to stay humble and you have to stay open minded to what’s going on in the markets.

Maggie Lake 

Is it what keeps you in the game? Because now as you mentioned, you’re into crypto. FTX took a stake in Skybridge. And that’s a whole new area, a whole growth area. It seems like that’s a hard choice, a risky choice to put yourself in there. And yet you do. What keeps you sort of on that front foot?

ANTHONY SCARAMUCCI

Again, I could be wrong. And you know, you’ll invite me back on and we’ll either like I said, I’m sinking in that boat, according to The New York Post. I’m either going to be sinking or building my own yacht, it’s gonna go one way or the other. I looked at the technology, I have a pretty decent understanding of financial services after three decades and I just think the blockchain technology is better technology than what’s out there right now and in the world, as we’re decentralizing, which is a very empowering thing for the individual. I mean, the reason I’m hesitating is, everything I’m about to say I could be 100% wrong on so I don’t, I don’t want to say it with any level of definitiveness, but I just think that this technology is a wonderful delayering mechanism for an economy and it’s going to shorten up the – we right now, go through third parties to do all of our transactions. We go through a bank, we have mortgage companies. All over the blockchain, we’re going to have peer to peer transactions. So you’re sitting in that restaurant, you’re not going to take out your American Express card, you’re gonna take out your phone that has had a smart wallet embedded on it. And you’re going to have maybe a US stable coin, you’re gonna have something on the phone that is recognized as valuable. And you’re going to send it to the restaurant in exchange for your meal. And you’re going to save three and a half percent. And if you take that and you spread it over the entire economy, it’s very disinflationary. And it is extraordinary, in my mind, again, could be wrong, but it is extraordinary in my mind, a wonderful delayering mechanism. And I want to own a lot of it, and I want to be in it.

Maggie Lake 

You know, what do you think the biggest misconception about you is?

ANTHONY SCARAMUCCI

I think there’s a lot of misconceptions about me, but I mean, that’s another great thing about growing up Italian. Okay, like you actually do listen to your grandmother. Like my grandmother, “what other people think of you is none of your business.” Okay, so I actually don’t give a shit. Okay, but I think there’s a lot of misconceptions about me. The way I look, let me tell you, this is a terrible thing to say – you’ll probably edit it out of your podcast – but if I was bald, and I had super thick glasses and I looked like a 58 year old geezer, okay and you looked at my resume, you would think I’m really fucking smart. But because I talk the way I do and because I grew up the way I do, and because I look the way I do, people are like, “What the fuck?” You know, when I was in the White House, I mean, it was unbelievable. I was Tony Soprano on the Potomac, I was a Jersey Shore cast member, I’m like “What, so the Italians are the only ones you can still go after like this?” But I don’t care. You know, you can call me Mooch and call me anything you want. I don’t care. I’m just gonna live my life and do what I think is right for myself and my family. You see what I’m saying? So I don’t know what the misconceptions are. Maybe people think I’m so opinionated. They can piss off. They don’t like some of my opinions? They can piss off. It’s very polarizing, apparently. Whatever. Okay, get over yourself. I mean, I don’t give a shit what you think, you know, I’m fine. You could dislike everything I think ideologically. I’m totally fine. But let’s go have a beer. People get so upset with each other. I mean, like crazy.

Maggie Lake 

You know, are you on Twitter? How do you deal with the social media stuff?

ANTHONY SCARAMUCCI

Ignore it. I mean, one of the one of these Kellyanne Conway, when I got to the White House, I had two phones. She said, “Can I have your phones, please?” I said “sure.” And I gave her my password. She went into notifications to shut off my Twitter notifications. She said, “Trust me. Don’t look at these things.” Okay, and she was right. I don’t read what people write. When I send out a tweet, I don’t read what say. I don’t give a shit. They can write whatever they want. I don’t care. You know, I mean, if you care about that stuff, you’re wasting so much time and so much energy. You know, you were talking about authenticity. If you’re authentic, why do you care? I’m not walking into the room expecting someone to like me or dislike me. They have their own opinion. I usually find when people dislike me if they haven’t met me, it’s usually something that they have dealing with themselves, not me. You know, I was in a meeting once and somebody, we were pitching a piece of business, “you know, you’re not really well liked.” I said, “I’m not?” And the guy said, “No, not really.” I said, “Well, let me ask. The people you’re talking to, has any of them ever met me? Have they ever done business with me? Have they ever worked at Skybridge? Ever been a friend of mine? Ever been a client of mine? Okay, why don’t you ask them that?” Get your information from those people, as opposed to the ether. You’re asking that question, because, you know, you’re like, “Wow, this guy’s probably a lot smarter than people give him credit for.” That’s why you’re asking a question. And that’s a good question. But I don’t give a shit. I think that’s the most important part of the question. In terms of the way I’m answering it.

Maggie Lake

I do think that you probably are smarter than people give you credit for. But I actually asked, because I think that people are living in a world where they live online a lot. And, you know, I think it’s hard to navigate. Sometimes, and you’ve done a great job of doing that and kind of kept your roots about you and your center.

You give so much fantastic advice about sort of overcoming failure and kind of picking yourself back up again. What would you leave people with when it comes to sort of dealing with the stress around that? How do you stay so calm and carry on and reinvent yourself over and over?

ANTHONY SCARAMUCCI 

Leave yesterday behind. Leave it behind. Okay, the millstone of regret, you cannot get through life without making regrettable decisions. You can’t, you made a mistake in a relationship, you made a mistake in business, you made a misjudgment about a person that caused you grief on your job – you can’t do it. It’s too many decisions. And you’re guessing most of the time, you’re guessing. So you can’t you know, “oh, I should have done this, or I should have done that.” Okay. I don’t wake up in the morning and say, “Oh, I said something really stupid about Steve Bannon – very funny – but  I said something really stupid about him and got me fired from the White House. Let me kick myself in the pants. Jeeze.” No! You take the millstone of regret that’s on your neck, take it off your neck and leave it behind you. That’s on all things. And you got today and if the good Lord is good to you, maybe you’re going to have tomorrow. Let’s seize today, and let’s focus on how we’re going to grow for tomorrow and make ourselves a better person. That’s all we can do. Okay, that’s it. Okay. And if you put that in your brain, you’re going to be a happier, better disposed person. You’re going to have a better disposition. If you’re not capable of doing that you’re going to torture yourself. And why do you want to torture yourself? You’re going to be dead anyway. Okay, you just relax. You see what I mean? If you do that, I think it’s a sweeping mindset change that leads to more productivity and a better outcome. I just believe that. I’m far from perfect. I’m not as rich as Elon Musk, but I’m not poor. But you know what? I’m having a good time.

My Life in 4 Trades Podcast

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