- “To be successful in the global economy you need, first and foremost, to understand people.” No need to be a Nobel economist or a Harvard MBA. Learn to connect with people on a personal level—their interests, family, health. Learn to listen carefully and discern when people are honest or when they are lying, weigh people’s motives and hidden agendas.
- Money flows to where the opportunity is. “No wall, no law, can reverse the overwhelming power of people to pursue a livelihood.”
- When operating in a foreign country, always find someone who speaks the language and lives in the culture. They will solve problems faster and better than you can on your own.
- When there are abundant speculators, psychology and perception, more than economics and reality, will drive the price.
- In Turkey, Smith sold the letter “m” for half a million dollars. He created a superficial loan on the company Turam to be paid off by his competitor, instead of directly quoting him a price. He then subsequently created Turan. This made an otherwise unpalatable payment acceptable to his adversary. Use psychology in business!
- To be a successful middleman, always obscure and separate the buyer and the seller. Once introduced, they no longer need you.
- In Guatemala, Smith bought GSB bonds from Lloyds of London and sold then minutes later to Lloyds of Guatemala. In large organizations, often the right hand doesn’t know what the left hand is doing.
- Information is power and money. Nigeria wished to buy back its NPN bonds at a huge discount, but wished to do so in secrecy, so as to not drive up the market price. Smith made money buying with discretion on behalf of the Nigerian government. “Those who know don’t say, and those who say probably don’t know, or they’ve had too many drinks.”
- In the midst of chaos and violent transformation is often the best place to do business. Assess the trade-off between risk and reward. For Smith, being on the periphery of dramatic events, in the path of looming danger, with the opportunity to make big money, was his big adventure and adrenaline rush.
- Russia was unable to sustain its debt because wealth was being stolen faster than it was being produced.
- In business, trust should not be given easily. One can go a long way on a good bluff. Make a big impression and shape perception—others will assume there is a big corporation behind you.
- Although Smith made a fortune as a capitalist, he nevertheless believes that the concentration of wealth in the hands of a few, and the widening gap between the rich and the poor, will ultimately breed violence and cause societal destruction.
- As of the writing of the book (mid-2008), the U.S economy is in distress. The U.S. displays many characteristics of developing countries: high debt, budget deficits, wide income gaps, dilapidated infrastructure, heavily militarized, oil dependence, and weakening currency. However, it retains some of the best characteristics of developed countries: stable political system, rule of law, property rights, high literacy and education, innovative, and developed securities market.
- Globalization is inevitable. The wide income gap is perhaps the biggest threat to stability in the U.S. and in the world.
- How you make money is much more important than how much money you make! Smith’s riches came from a lifetime of unforgettable experiences in some of the most exotic and remote corners of the world.
Finished: 2-Apr-2010