Colin Barry

John Astor (CMC, Thursday, Week 1)


The Louisiana Purchase: possibly the best real estate deal in the history of the world
$10M for New Orleans + $5M for Louisiana Territory + ~$7M for extras = $22M ($450M in today's dollars)

How did Astor go from penniless to the tycoon of his era?
-- Organized; great talent manager (equity compensation for employees; management techniques that were hundreds of years ahead of his time)
-- Capital at a time when it was scarce
-- Close connection to U.S. government
-- "World without rules" (climate of the time)

Fur => merchant trading => real estate/infrastructure
Consistent radical innovation that changed industry structure: built monopolies and then destroyed monopolies.
See also: Schumpeter on creative destruction

Throughout his life, Astor's workday ended at 2pm. His net worth grew at about 50% CAGR for 48 years. What have you done lately, and how hard are you working?

Managing merchant ships on four-year voyages:
-- Get the best captains in the world
-- Give captains a stake in the venture
-- Give captains some guidance; trust their decision-making
-- Make sure captains have a wife and kids at home (so they don't run away with your merchandise)