In 1978, Monty Monkreef was 84 years old.
He was still very much the patriarch of his clan, the man who made the decisions in his
family and in his family's business.
Family and business were in fact the same thing with him.
The desire to found the one being inseparably tied to the desire to found the other.
When speaking of his business, he never mentioned himself specifically.
He would always say, we sign this deal.
We figured out what was best.
This is a we kind of business, he explained.
We don't tolerate any of that I stuff around here.
In Texas, in the oil business, one sees as nowhere else that the ideal of capitalism is the
ideal of founding a family and conferring the right of inheritance upon it, passing a
legacy on.
Were oil men?
Monty Monkreef would answer, would ask about ranching or about real estate or about anything
else?
Were oil men meant that anything which extended beyond the realm of oil was not a proper
Monkreef concern?
Were a hundred percent family owned, unincorporated and independent?
And we intend to stay that way.
In the world of oil promoters, one sometimes meets with independence who have bought and
sold their way through six or seven businesses.
Who indeed start those businesses with the aim of going public and selling out as soon
as possible?
To Monty Monkreef, such a strategy is unimaginable.
Monkreef oil is synonymous with himself, his dynasty.
Continuity is what his blood demands.
He was at the age of 84 as big and as strong as a bull.
He possessed a directness and the utter simplicity of the old and truly great.
He walked without a stoop and he carried his large frame without a trace of fat.
He seemed impervious to age or to changing times.
His unquestioning confidence in the worthiness of his enterprise made him seem impervious
as well to the doubts and the questions about motives and meanings that inevitably beset
the later generations of his family.
He kept his faith in the absolute value of building, of progress, of getting things done.
When he spoke of his belief in the enterprise of producing oil in America, one could almost
forget that he has made hundreds of millions of dollars doing so.
Such benefits sounded almost incidental to the task of settling the land and mining
its resources.
Perhaps this confidence is what set free the huge energies of this first generation of
giants.
The stories told about Monty Monkreef all reveal him as tough, canny, given to understatement,
a man of action who waste few words but can when he wishes move mountains.
That is an excerpt from the book we will talk about today which is Wildcatters, a story
of Texans, oil and money, and is written all the way back in 1981 by Sally Helgeson.
There's a bunch of characters in this book they talk about other oil families, but
once I got to that part, that's when I realized, oh no, what I want to talk to you about
is Monty Monkreef.
I think that excerpt gives you a good idea on why we should focus on Monty Monkreef.
The shadow that at the time the book is published, he's still alive, his son is still alive,
and his grandson is still alive.
I'm always curious, what are they up to now?
After I read the book, I started researching to see what I could find out about them.
There's a line in the book that I think is very fascinating because it's like, why is
this guy so interesting to me?
He reminds me Monty Monkreef.
He reminds me of a lot of other people we studied.
There's just this random sentence and it was talking about the fact that his grandson
was essentially measuring his life and his success based on his grandfather, which I
think is honestly a bad idea.
But it says, the shadow by which Dick Monkreef measured himself was cast by his grandfather,
Monty.
I think that word shadow was really important.
In fact, I went back and searched Founder's Notes for the word shadow because it's
like, this sounds very familiar to me.
There's two things that are fascinating here that I think you and I should spend some
time talking about.
It's one that an institution is the length and shadow of one man.
That's from Edwin Lans, one of Edwin Lans' biographies.
It's not only the Founder's the shadow of the company that they found, but you'll also
know that's true for Monty for the company he found.
His shadow also looms over his entire family.
Monty's shadow looms over his entire family where he's alive and it still hasn't effect
in present day.
I wound up looking up to characters in the book to see what, like if they were still alive.
Monty's son winds up living to 101.
He passed away relatively recently.
Now the whole family is essentially fighting over this fortune, this multiple billion dollar
fortune.
That really stems from the work that the grandfather did 60, 70 years ago.
And this usually ends one of two ways.
Most of the time, the future generations cannot obviously live up to the shadow or the example
that the founder of the family usually sets.
So I was thinking as I was going through searching Founder's notes for shadow, came across
an idea when you studied JP Morgan.
You realize I said this on the multiple JP Morgan podcasts that I've made.
He's very obviously an impressive figure, but I found his dad to be even more impressive.
And so there's a line from the House of Morgan written by Ron Churnow that talks about
this.
He says, the Morgan's always believe in absolute monarchy.
While Junius Morgan lived, that's JP's dad.
He ruled the family and the business until Junius died his massive shadow dominated his
son's life.
And so I think the importance of the family business aspect of this is really important.
So I want to read this section to you because this is what's part of what makes this story
unique is the setting in which it takes place and the belief that family is destiny.
So it says what makes Texas different is not so much its money as its blood.
And it's awareness of that blood.
Bloodlines, human bloodlines in Texas, there's always an awareness of exactly whose blood
runs through a man, man's or women's veins.
And what that blood demands.
And so I'm going to pause right there before I continue.
His grandson, which we'll talk a little bit about, but there's a lot more detail in the
book.
And I'd highly recommend getting the book.
It was a really fun book to read.
But I feel his, this pressure that he has where it's like, oh, your money's grandson.
Causes dick to maybe do things that like take risks that were unnecessary because he was
trying to not only match what his grandfather did, which is nearly impossible, but also try
to go one step further, basically supersede his achievement, which he obviously failed
to do.
So let's go back to this.
You understand the blood that runs through a man or woman's veins and what that blood
demands.
People in Texas are raised to be what others and their families have been.
Family is destiny here.
Success is measured by what one achieves beyond what those who went before achieved.
Other generations of the family feel the need to surpass them in order, meaning the founders
of family, surpass them in order to prove themselves worthy of their blood.
Okay, so with that background, I want to jump into Monty's life.
And really what's fascinating is because he's born in the 1800s, right?
He serves in World War I, then comes back and gets into the oil business.
And that's really important decision because he essentially picked an industry or field where
the opportunity before him was really without limit.
And that's not what his, that same opportunity was not open to his son and his grandson.
And so when I read the stories like this, what I'm obviously not trying to build a Neuropath
company, but I am very interested in finding these areas like where today, like what I want
to know is like today, where is opportunity without limits available today?
And I think reading history like this gives you insight into like what these opportunities
look like and what to look for.
And so this is a little bit about that.
The old bulls in this story, so people like Mighty Monkrieve said Richardson, there's a
bunch of oil, one why not becoming oil billionaires in the story, but the old bulls in the
story, the giants, the men of Monty Monkrieve generation came into the oil business in the
wild old days of the open frontier.
Everywhere they looked, they saw opportunity without limits.
The land itself was empty.
And so these men built cities upon it and they founded dynasties.
They left behind them a world made in their own image.
They gave shape to a business and to a way of life and their deeds made them legends.
The major oil companies, which one day would almost destroy the independence.
So think about that as like, they're going to talk about Exxon, Exxon was once an independent.
So these giant major oil companies, right?
And then the independence are like the startups are the family owned businesses.
Obviously the Monkrieve said this time are independence.
The major oil companies which one day destroyed the independence had not yet consolidated their
power.
Those companies were still independence themselves.
So they mentioned at this time in the story where Monty Monkrieve is setting out what
was going to one day turn into Exxon was just this company called Humble, Humble Oil.
And the way people were described at the time is like, oh, Humble is just a fly by night,
little rinky ding company.
And so one of the first takeaways there is, okay, if you want to look for opportunities
where there's essentially industries where there's opportunities for that limit, it can
already be consolidated.
Second thing, as front tears men, the old wild, wild caters had neither the time nor the
inclination to question their own purposes or to agonize about what the future consequences
of their efforts might be.
They just went out and did whatever there was to be done.
Teddy Roosevelt has this famous quote that he took from his dad as his life model.
It's called get action.
There's people in the book there were like life motto is make action.
They're at the very beginning of an industry.
So they're going to have to learn by doing.
That's another tell tell sign that you might be in an industry where it has essentially unlimited
opportunity.
The second is the opportunity has to be open to or the third, I guess.
The opportunity has to be open to small teams without a lot of money.
And so when they're drilling right now, in fact, you know what, let me pull this up real
quick.
This is one of my favorite lines ever.
I think I did another podcast and read another book around a similar time period.
In fact, some of the characters in that in this book are in that book.
It's called the big rich.
It's one of my favorite books I've ever read.
What was fascinating is there's a line in the book that I never forgot and I use it as
a metaphor of the time.
And they said the trouble with this business is that everybody expects to find oil on
the surface.
If it was near the top, it wouldn't be any trick to it.
You've got to drill deep for oil.
And my interpretation of that or how I applied to my own life is like, there's essentially
an inexhaustible supply of people that want to get the most for doing the least.
And there's a lot more competition for things that are easy.
And so in my own life, I want to get the most by doing the most.
And so what's fascinating is that that quote was about the oil business, you know, maybe
20 or 30 years in the future from where we're in this book.
But at this time, it was very possible for a young wildcatter.
And that's why the book is called Wildcatters essentially just like these little startup oil
companies to go out, raise some money and then try to drill some wells.
Over time, that ability comes cost prohibitive and the only people that would drill wells
are these giant oil companies that we see today.
So at the point at this time, you could buy it at this time, you could try to drill a
well.
The oil or the gas that you're looking for might be 5,000 feet underground, right?
So it would cost you, it would cost a wildcatter about $20,000 to drill.
And in Oklahoma and Texas at the time, there's a ton of oil at five, only 5,000 feet underneath
the ground.
And so that was the advantage that money had, right?
But it says 20 years later, everything near the top, right, is gone.
So now you have to go 30,000 feet underground to get the same amount of oil or gas out of
there.
So that's going to cost you, the cost goes from $20,000 to $750,000 if I did the math
correct, that is 37 times more costs, 37 times more investment required to do similar
work.
So if you're looking for fields with limitless opportunity, how they look in the very early
days is the opportunity has to be opened to small teams without a lot of money.
And eventually as that opportunity is exploited, it'll usually just be open to people with
a lot more resources and you'll see the cost of doing the same things, drastically skyrocket.
So something that's been on my mind for the last few months since I reread the new version
of Port Charlie's Dominac that straight press just republished, the episode's 329 if
you want to listen to it, was Charlie has this thing that he talks about a lot, which is
this model of surfing.
And he uses it to, when he's trying to examine, it's like, okay, well why was Sam Walton
so successful?
Why was Les Schwab so successful?
There's a bunch of factors and one of them he says, they had to surf some kind of wave.
And so as I was reading this book, I was like, okay, well, what wave?
I was looking for the wave.
I was like, okay, well, what wave did Monty surf?
And I'm going to read this.
This is fascinating.
Like, why this was available to, basically at this time in history and at this specific
place, the fact that he was lucky enough to be born in America because America is the
only country in the world in which the mineral rights underneath the ground, in which these
wildcatters need to buy or to lease are privately owned.
Everywhere else a state or a crown will hold the title.
And so it says, in America, mineral rights must be purchased from thousands of individual
landowners.
The big companies very naturally preferred to make their deals with a single chic or a
tyrant or whatever of the country for the wealth of entire nation instead of dicking
around with countless farmers in order to be to put together a field.
And this is the punch line right here.
The wildcatters' competitive individual way of working was compatible with the private
ownership of the land.
Okay, so for the fact that America is the only country in the world where such rights
are privately owned is the main wave.
And then the second thing is the fact that let's say he buys, you know, hundreds, or
hundreds, excuse me, a thousand acres.
There might be 50, 60, 200 different farmers or landowners that he has to go and negotiate
with.
So a larger oil company is like, I'm not going to do that.
I'll just go and see if like, let me go to the golf or let me go to Russia because if
I can sell that one person or if I can convince that one person to get access to essentially
sovereign level assets.
And then there's a second thing that Charlie Munger said about surfing that I think one is
useful to you and I, but also as you heard money in the opening and I have a bunch of other
highlights.
I'll most likely read to you where he was anti-diversification.
Remember, they're like, you ask him about cattle or real estate.
He's like, we're oil men.
His future generations are diversifying in all kinds of assets and he was very against
that.
Although it was good for him not to diversify, but you could argue that it was beneficial
for his descendants too because it was vastly changes in his lifetime.
But this is what Munger said about it.
Let me pull that up again.
It's from Portrait Island Act.
In fact, I found my note too that I'm going to read to you.
So he says there's huge advantages for the early birds.
So this is Charlie Munger talking about surfing, obviously applicable to way more people and
industries than money and oil.
There are huge advantages for the early birds.
When you're an early bird, there's a model that I call surfing.
When a surfer gets up and catches the wave and just stays there, he can go for a long,
long time.
But if he gets off the wave, he becomes mired in the shallows.
But people get long runs when they're right on the edge of the wave, whether it's Microsoft
or Intel or all kinds of people.
Something is very powerful and then I'm looking at the note that I left myself when I read
that in Portrait Island Act.
It says Charlie surfing model.
One thing I learned from having dinner with Charlie was the importance of getting into
a great business and staying in it.
There's a tendency and human nature to mess up a good thing because of an inability to
sit still.
So money understood that and was only interested in the oil business for his entire life.
Let's go back to this idea of what is limitless opportunity.
Look like limitless opportunity.
Usually found environments with little to no regulation at the time.
The money starts to almost nonexistent regulation.
By the third generation, it's becoming increasingly difficult.
So this is the difference between what money had, which is essentially little to no regulation
and what the third generation is having to deal with.
There was an increasing number of bureaucratic considerations governing everything from the
distance a well can be from an old Indian burial ground to the number of portable toilets
that must surround a rig site.
These regulations continue to increase as government agencies proliferated.
I want to continue with 84 year old Monty Monkry before he goes to his early life, which
is actually absolutely incredible.
And it's really, again, main part of the book is the fact that this guy's shadow is over
his entire family.
All these oil dynasties are controlled by one...
What do they call them?
Prickly individual.
I'll get there in one second.
But one of the reasons that their shadow looms so large is because they never exit.
He's doing oil deals until he dies, way past.
These decades passed the need to work for money.
And so he's not only...
He's entirely working in the business that he started, but he's physical presence is still
there.
And so it says, these grandfathers, so these patriarchs of these family dynasties, in Texas,
rarely abandon the towns where they raise their families.
And they don't venture forth into senior citizen communities in Florida or Arizona.
They live where they've always lived, and their daily presence keeps their legends alive.
The mystique of grandfather heroes exists partly because the grandfathers play a special
in-between role in this land of men that are impossibly hard.
All over Texas the story is the same.
My daddy was a tough old bull, but when he told me it was time to quit law school and come
to work for him, I did it.
Even though it was the hardest thing in the world for me, and even though he told me I'd
have to run him out of business before I could get my share, that's funny.
Because that's happening in Texas.
Also I don't think it's exclusive to Texas when I got to this, so none of that for myself
was, oh, this could be...
This quote could be from Ted Turner.
As you and I learned in episode 327 on Ted Turner's autobiography, he tried to rebel.
His dad started that company.
It was very successful, one of the largest, I think it was the most successful billboard
company in the southeast, and he took off running, but eventually exactly what they said.
He called them, he's like, you just...
Now's the time.
You have to come.
And even though Ted wasn't sure, he's like, you know, I'm going to go do this.
Back to this book.
This is also something that I've noticed that the entrepreneurs at UNI study are way
more similar to each other than the general population that are not entrepreneurial.
Traveling through oil country, one becomes aware of a similarity among the tales told
of grandfathers who first subdued the land and claimed its riches.
Like mythic heroes, the men of the first generation began to seem interchangeable after
a while.
Figures cut from the same rough, magnificent fabric.
They called them prickly...
They said they possessed prickly individuality.
That's a great line.
They possessed prickly individuality.
All the stories seem to be about the same prickly individual.
I said this over and over, it's like the same personality type that reappears over and
ever again throughout history, different industries, different parts of the world, different
times, basically the same shape, same shape.
More description of them.
These are giants.
They are successful predators, acute and astute, tamers of the untamable and defenders
of vast treasure.
That is a description of Monty Moncreefe, another thing where the second and third generation
they start to love luxury, they're making it rain, they're bawling out of control, they're
spending a ton of the family money.
Monty was not interested in that.
He lives in the same house that he lived in for his entire life.
Old wildcatters attitudes seem to be much like those of the original cattlemen who preferred
their familiar ranch homesteads to the palatial quarters that their heirs built in town.
The allegiance is not to pleasure or luxury, but to comfort one by sweat and handed down
with an understanding of the duties that entailed upon them.
What drove Monty was achievement, not money, knowing that if I chase achievement the money
comes with it, but it's also about being able to live up to your own ideals.
At this point in the story, Monty's obviously very, very wealthy, so he winds up knowing
a bunch of presidents.
This was a very fascinating insight into Monty Moncreefe, it's quick to tell the visitor
that he's usually got pictures in his office with Richard Nixon and Lyndon Johnson and all
the other people, right?
This is very fascinating.
Monty Moncreefe is quick to tell the visitor that Nixon was a weak man, destroyed by his
own avers.
He speaks of Lyndon Johnson as a compassionate man, but greedy like Nixon and much prouder
than he.
Such judgments are not political, but personal.
They are moral sentences passed upon men who were not large enough to live up to their
offices.
But at the same time, he still respects him because, for this reason, but to whom in measure
of respect is nonetheless owed simply because they won and held those offices.
They exhibit personal pantheons across which fall the shadows of men who shaped American
destiny.
And so I need to explain that a little further.
So it's talking about this first generation of frontier settlers, which is what Monty
Moncreefe was, right?
They have a sense of honor even for those who have disgraced themselves because even
when a great man falls from grace, there are actions they did before that help shape
America's destiny.
Okay, so then the book goes into his early life.
I think this is the way I think I can essentially tell the entire story in just two sentences.
And so this is not a direct quote from Monty Moncreefe, but this is my interpretation.
If we were to talk to him, this is what he would say.
My dad got to Texas and a covered wagon.
I made hundreds of millions of dollars in my lifetime.
And so when Monty is a young man, he serves in, he goes to Europe to fight in World War
One.
While he's doing that, he actually becomes friends with the son of an Oklahoma oil family.
And so after the war, when Monty gets back to America, he decides to head for Oklahoma and
he starts working for his friends, families, oil company.
And so his first job in the oil industry, he has a job called a land man.
So it says he worked first as a land man as many future independents often did.
Land man, land men do not buy land.
Rather, they lease the right to produce minerals upon it from the land's owner.
So this is what I mentioned earlier, a lot of larger companies, oil companies like
I'm not doing that.
I have to go negotiate an individual of 50 people, 25 people, 200 people.
I just rather go straight to the world of the country.
So this is how it works.
Rather, they lease the right to produce minerals upon it from the land's owner who takes a share.
A lease, which is what he's negotiating, right, gives the operator access to that tract
of land for five or ten years.
If oil is found before the lease expires, the operator may continue to produce it for
as long as that well lasts.
If not, the mineral rights revert back to the landholder who then may sell them to the
next bidder.
But if the land proves productive, the lease, the person who's doing the leasing, pays
a royalty to the land owner, right, which is a share of his profits before costs.
So share of his revenue before costs, rather.
The share is usually one eighth, and this is this is fascinating.
The share is usually one eighth, and it is called a royalty because it was once paid
to the crown.
So after a few years, Monty decides to strike out his own.
He wants to work for himself, and he's going to go from Oklahoma to West Texas.
Now a huge part of this early industry is like, well, where are they getting the money
from?
And so there's two interesting sources for funding here.
One is the oil industry at this point is completely dependent on the railroad industry.
Remember this for later because there's this huge dispute between two separate oil companies
and wait till you hear the name of the led of the actual governing body.
It's not named after oil.
Let me just tell you that.
So the earliest, some of the earliest American oil financiers were actually Easterners, right?
These are very far away from the frontier in Oklahoma and Texas.
They're actually Easterners who controlled the railroad lines.
And then the second source, which was uniquely Texan, is before oil came to Texas, they were
massive industry, which a lot of the richest families were actually cattle ranchers.
So this is guy named Papi Wagoner, for example.
He was Texas's first billionaire.
He obviously made his money in cattle ranching.
And then he takes that money and then actually founds a bank.
And then he would fund a bunch, it's kind of like angel investing.
If you ever think about what's going on here, it's a billionaire.
He's like, okay, I'm willing to go ahead and issue and invest these in these speculative,
like oil startups is the way to think about this.
And he does it through Fort Worth National Bank, which he founded.
And so one of the main things that jumps out is like, okay, well, why would you do that?
You have a good job, like why would you quit?
You move states.
And this is this idea where it's like he had unbelievable self-confidence.
I don't even know if that's the right word.
This, a lot of these early wild caters, they were default optimistic by far.
But they also believe that they were born lucky.
This is not a joke.
So he says, Monty Moncreeve believed that he had a gift, a special talent for finding
oil.
He believed that he had been born lucky.
When asked why he set himself up as an independent oil man, he said it, always had it in my
mind to better myself.
And to better himself has always been his quest in life.
And so these wild caters raise money and they start to start drilling holes.
Monty's first 29.
His first 29 wells all come up empty.
So at the beginning of his career, remember, he still thinks he's born lucky.
He was destined to it.
I have a gift.
This is the way he's talking about having a gift for finding oil.
Imagine believing that, right?
Making your job, moving states, raising money, first 29 times, they're all duds.
They start calling him dry hole Monty.
That was the situation right before he hits one of the largest oil discoveries ever.
There is actually, let me read this to you.
There's a great line I think about all the time in the book The Fish That Eight the
Whale, which is about Sam's a Murray.
And I talked about this, such that he goes and accumulates assets when he does not have
the money to do so because he believed if he did not get those assets, his business
in the future wouldn't work out anyways.
There is some degree of, for some reason, when I got to this section of the book, I was
thinking about this line, this paragraph that's in The Fish That Eight the Whale.
So let me read that paragraph to you first and then we'll get into this incredible discovery
that Monty is a young Monty, Moncreef.
His son is, I think, 11 years old when this is about to happen.
But this is the line from The Fish That Eight the Whale.
There are times when certain cards sit unclaimed in the common pile.
When certain properties become available that will never be available again, a good businessman
feels these moments like a fall in the barometric pressure.
A great businessman is dumb enough to act on them even when he cannot afford to.
And so when a real estate trader by the name of BA Skipper comes and asks Monty if he
wants to buy these leases, this is what happens.
So BA Skipper was trying to unload the leases that he held on 4,000 acres.
These 4,000 acres just happen to be near dad joiners as well.
So dad joiner is this guy that sold out to this other guy named HL Hunt.
HL Hunt is in that book I referenced earlier, which is the big rich.
Dad joiner site is the foundation of the HL Hunt family dynasty.
Should have went to dad joiner but he sold out.
I think that's a huge important thing to remember.
So BA Skipper comes and he's like, well, I got 4,000 acres.
He's under financial pressure.
They're kind of near joiners as well.
Do you want them?
No geological survey had been made in the land but the acreage was cheap because Skipper
hadn't paid off his leases.
He had taken them on an open draft from the bank instead hoping to get rid of them fast
and turn a profit by doing so.
So there's a bunch of these people where they'll get a lease and essentially they just
want to sell paper.
There you have no issue.
They're not wildcatters.
They're like, oh, we got these.
Let's say I paid.
I paid a thousand for them.
I will give you my rights for five X.
They're like short term traders.
I guess this is the way to think about them.
Very different than what Monty was interested in doing them.
Monty Monkreeve thought it was possible that this site may be sitting on top of the northeast
running trend and on impulse meaning that it's close to the dad joiner discovery and an
impulse he bought the leases.
And he bought the leases even though he didn't have the money.
So what does he do?
They do this over and over again.
They take on partners.
To save himself money, he went partners with a man named J.T.
Farrell who worked down the hall from him.
Monkreeve and Farrell didn't have enough money to permit them to expand their holdings
and undertake the expense of drilling at the same time.
So they did what independence have always done and then sold off pieces of their enterprise.
They gave up some of their interest to Getty.
That's Getty oil.
So think about what just happened there.
B.A.
Skipper comes to Monty with an opportunity.
Monty's like, okay, I'm going to take another flyer.
I've drilled 29 duds.
I don't have money for this.
What I'm going to do.
I'm going to walk down the hall and knock on some doors and see you once they go in on
this deal with me.
So now we're 50-50 partners.
We're like, all right, we got the leases.
We ain't got no money to drill.
What are we going to do here?
We'll go to a big oil company and say, hey, give us some money to drill.
And if it works out, we'll obviously give you some of the interest in a good well.
And then I love his relentless optimism here because of the first well that he drills
Gush Force 18,000 barrels of oil a day.
And then his response was hilarious, right?
Because it's like, it's like, to be delusually optimistic, you just go from one set back to
another set back without any loss of enthusiasm, which I love.
And it says, so all these struggle for years doesn't have the money.
He winds up figuring out how to do it.
The first well they drill on this other thing.
So this is what is 30th attempt.
The first well is 18,000 barrels a day.
And then it says this further convinced him that the good Lord must be looking out for
him.
In other words, that he was born lucky.
Now it's fascinating is how fast his fortunes change.
So it says, money and his partner held onto their leases until the end of 1931.
If I'm not mistaken, they actually hit it.
I can't find the exact year.
I'm pretty sure they hit it that same year.
I think they held onto it for a year, maybe two.
It was not the point whether it's a year or two years, something that it's not a
very long time.
But the value obviously increases dramatically.
And so it says they watch their worth increase many times over.
Finally, they sold out to a larger oil company for $2.5 million.
That would be the equivalent of something like 50 million today.
A few years later, the company that bought it for $2.5 million sold it for $37 million
to standard oil.
And so a bunch of other people like, oh, you sold too early wherever the case is.
But again, this is going to be the foundation of a, which present day is a multi-billion dollar
family fortune.
So a lot of other wildcatters are like, oh, you sold too early.
But I loved what Monty Monkreet said here.
He says, in the oil business, there's no what if.
There's only what happened.
And another interesting thing is one, he's sold.
So now he doesn't have to worry about any money.
He's going to keep, he's going to be in the same business for the rest of his life.
And he's going to keep having a lot of success in that business.
But also what was fascinating is because his wealth was based off like this tangible resource.
He was able to survive and thrive in the Great Depression.
So it says, unlike the oligarchs in New York, rich Texans were not necessarily forced into
diminished circumstances by the Depression.
Texas fortunes had been built upon the bounty of the earth.
This is their words.
And the memory of this advantage during a time of crisis has made many Texans mistrustful
of paper fortunes ever since.
Mistrustful of paper fortunes ever since.
Remember that sentence for later on when his grandson is essentially like peacocken.
Look what I did when this deal, he's drilling oil for Israel on like the Sputeland
industry in Israel and Egypt in the 1970s.
And we'll get to it later.
But his grandfather wasn't buying it.
He's like until the money's in the bank.
You know what?
It reminded me of something that Sam Zell said.
I think it was an autobiography where somebody had said to him during the original.com
boom in the late 90s.
It's like Sam, you know, he took you 40 years or something like that to be a billionaire.
Who do you think of this guy that, you know, started his company 18 months ago and he's
a billionaire.
You know, it's like 97 or 98.
And he goes, tell me when he has the money in the bank.
And I'm pretty sure if I remember the story correctly, that was always just a paper fortune.
It went up booming and then busting and then I think going bankrupt.
So before I move on, I want to go over some of the characteristics of these early wild
caters because I'm choosing to focus on money on grief.
There was a lot of other characters in there.
HL Hunt, Sid Richardson, Clint Merchison, in fact, what brought this book to my attention
is I've been doing research.
I want to do a podcast on Richard Reinhardt, a very influential investor and company builder.
And yet there's surprisingly as influential as this person was, there's no biography on
them.
And so I found this podcast and it's called Rainmaker's podcast.
I'll leave a link down below.
Turns out Reim who runs the Rainmaker's podcast has been listening to founders for a while.
And I sent him a message and he gave me all of his research.
He's saying that I'd recommend listening to that podcast because the level of research
that went into it's incredible.
I've been trying to find stuff on Richard Reinhardt all the time and Reim just came up with
and like his sources were just way better than mine.
And one of his sources was this book.
And so I immediately ordered all the books on that list and I started reading this like
this is actually incredible.
And so my interest in this was I was like, okay, I want to learn more about it's because
Richard Reinhardt, how he got his start was that there's an oil man.
And one is becoming I think the richest person in the United States for certain times more
like a gambler though.
Same stitch Richardson.
He passes away.
His fortune goes to he didn't have any children.
His forcing goes to his nephew.
It's the bass family.
And then the bass family hires Richard Reinhardt water.
And so the podcast I'm telling you about talks about how Richard I think turned 50 million
of the basses money into five billion.
But Sid Richardson just like Monty-Monkreif they were a big belief in luck.
In fact, Sid's credo says that he'd always been his credo had always been that he'd rather
be lucky than smart because a lot of smart guys go hungry.
Another trait that they had was they were not afraid of debt.
This is not advice by the way because there's a lot of people that did the exact same thing
they did but did not survive.
And so Sid Richardson's his partner was his guy named Clint Merchison who's also fascinating.
He's in the big rich.
I highly recommend I'm going to leave links for this book but I'd also go back and listen
to episode 150.
It's not 150 is it?
I don't know why I'm guessing.
I can just look it up.
It is episode 149, 150 sand walled.
So 149.
I'd listen to that episode but I'll also read the book.
The big rich is excellent.
I'm going to wind up rereading it and doing another podcast on it in the future because
I thought the book was fantastic.
So Clint Merchison's in there as well.
They were one time partners with Sid Richardson.
And you might find this interesting Clint Merchison's son.
It was actually the founder of the Dallas Cowboys.
So what they have in common, they believe in luck.
They have an absence of fear of disgrace as we just saw.
Like they're failing over and over again.
They just keep getting back up and going at it.
As we just saw with Monty, he was Owen 29 and he was still going at it and 30 was you
know, changed his life and really not only changed his life but changed the director
of many generations of his family.
They're also not scared of having tons of debt.
There's a great there's a great exchange between Sid Richardson and this and Clint Merchison
in the book and Sid tells Clint, I must be the richest one between us because I owe more
money than you do.
They've got paper of mine floating all the way to London.
Sid believed that this is crazy.
Sid had an attitude that there was no innate shamefulness in going broke or in barring
as long as there was a reason for it.
They all were delusional optimists.
They believe that optimism was the personal quality that nurtures luck.
They hated timidity.
They said you cannot.
Simply, an oil man simply could not afford to be timid and then they did not feel the
need to apologize for the occasional big losses.
They believe that if you were not having big losses, I mean you weren't trying enough.
And in many cases, they operated in legal, like gray areas.
They built concrete bunkers around wells and hired arm guards to defend their turf from
government inspectors.
They smuggled oil across state borders.
They operated unregistered refineries in backwards.
They processed crude in excess of what each operator was allowed.
This is later in the oil industry.
It says chaos and they believed in chaos and defiance and they refused to be controlled.
They were not afraid of risk.
They said the risk is always there and then Clint Merchinson has a great saying.
He says, so the risk is always there.
And as Clint Merchinson was fond of saying, after the first 100 million, what the hell?
And so what he's talking about there is like after 100 million dollars, you got 100
million or a billion, the difference in your lifestyles negligible.
So you should be building businesses going for risk.
In Clint's case, he would spread money all around.
He would own oil companies, railroads, cattle ranching, obviously his son eventually started
the Dallas Cowboys.
But really, this is the punchline for this entire section.
They were motivated to found dynasties to which their sons and their sons' sons could succeed.
This is more about their mindset.
West Texas where all these guys are operating was settled by optimism, by pure booster spirit,
by the willingness to go on faith and instinct to believe that hard work and the taking of
high risk must inevitably bring reward.
Only something as stubborn and unreasoning, remember this is not like an intellectual
thing.
In many cases, they're being irrational and people around them are telling them they are.
Only something as stubborn and unreasoning as faith could have inspired men and women
to settle and remain upon this harsh, unyielding land.
These Texas wildcatters were optimists without equal.
They had to be.
This was very fascinating.
So keep in mind, Clint, or not Clint, Monty gets in the business after World War I.
So we're talking late 19, 19 teens, right?
In the years before and after the First World War, the US Bureau of Minds had begun issuing
a series of pessimistic surveys.
They estimated, these are the quote unquote experts saying you're wasting your time here.
Why?
Because we estimate that 40% of America's patrolling reserves had already been exhausted.
That is insane.
That is an insane statement.
This is over 100 years ago, right?
So 100 years later, this report by these experts was issued, right?
Over 100 years later, there's more petroleum produced in America.
There's hundreds of thousands of barrels a day in the 1920s.
So at that time, let me be clear what I'm saying here.
In the 1920s or 19 teens, when this report is issued, it's like, hey, we're estimating
that you guys have already tapped 40% of America's patrolling reserves.
We're already producing hundreds of thousands of barrels a day, right?
They can't, like, we're going to run out.
A hundred years later, we're producing tens of millions of barrels a day.
This is why keep bringing up this, like, irrational optimism and the belief in luck that they
have because the industry reports, like, nope, we're 40% of the way through and the report
concluded, right, that the domestic oil business was not far from dead.
Yes, Texas oilmen refused to take these reports at their word.
And it was a good thing they did because when they started drilling, all of these findings
that's going to happen over the next 10, 20 years, right?
It was the greatest frontier gold rush of all time.
And they make a great point in the book that these discoveries in Texas in, you know, 20s,
30s, 40s were 10 times the size of the gold strike that brought the 49ers to Northern California
in 1800s.
And I think there's some needed context around this, right?
Like, why could you have this default optimism?
And it goes back to this theme that I was thinking about.
I was just reading this book.
It's like, okay, let's study this not to, like, try to start an oil company.
But I'm really curious, like, where is their opportunity without limits today?
And can we derive insights into, like, what does opportunities look like and what to look
for?
And part of this was that these are, there's a, actually, dual theme here.
It's like, these are poor men.
Monimon Creefe when he was doing this was not a rich man.
When his grandson or his son tried to do that, they are rich men.
And so I think the benefit that, like, a Clint Merchison or Sid Richardson or Monimon Creefe
had is the fact that they really, they really, they could speak as growth as an inevitability
because there's nowhere to go but up.
They had begun their lives and a lot of these wildcatters, they began their lives in
hovels and had nowhere to go.
And so they were willing to sleep intense.
They would pit, in some cases, they would pitch, they would pitch a tent right next to
a, a, a derrick, right?
And they're all in the open.
They describe this environment as ungoverned backlands with a climate that was predictable
only in its violence.
So you got, you're the freezing, there's storms, there's mud, then there's heat.
And the only thing pushing them through is one, they're broke and two, they're very optimistic.
Such harshness puts to the test the willingness of people to put aside all thoughts of present
comfort and pleasure and live exclusively upon hopes for the future.
This same stern ability to ignore their present circumstances and live upon their hopes.
As one descendant of a wildcatter said, my granddad, he was born in a hole in the ground.
You can't start life much lower than that.
And so I mentioned a surprising role that Railroads played in the, not only the growth of the
oil business, but also the regulation of it.
So it says, growth meant railroads.
Some West Texas fields had to be shut down after they were discovered because, so it means
they struck oil, because there was no means for hauling barrels of crude out of there to
the refineries.
And if the discovery was big enough, they would actually be able to influence railway,
railroads to lay track.
So it says they became a bananza for railroads schemers as much as for wildcatters.
So that's at the stage.
There's a kind of like symbiotic relationship between independent oil wildcatters like
Monty and these larger companies.
They're kind of doing deals with each other.
Their fields are next to each other.
They become partners for a little bit and they break up.
If an independent usually is going to eventually sell out, he's going to sell out to a major.
So this was fascinating.
This was really surprising.
I think it speaks to the influence that railroads had on the early American oil industry.
So independence like Monty McReefe, they're usually are rarely willing to jeopardize their
relationship with major companies by taking them before regulatory boards.
Monty McReefe had to do this because he feels that he thought that humble was decreasing
the value of his oil fields because they were draining.
Essentially, like, let's say he was on the outskirts, they on the middle, they were
draining things that were not in the middle.
And so if an independent wanted to file suit against the major, he would go through the
regulatory board of the oil industry at the time, which was called the railroad commission.
That was surprising.
Again, it's not the oil board.
Oil regulations, the railroad commission.
And in this case, this wind up making him over $100 million.
The railroad commission ordered a humble to compensate him for his fields.
They were forced to pay him $100 million along with percentages and residuals on those
percentages.
And so it said it was a victory for his dynasty and it means for its perpetuation.
And there's just a great line in the book about this, because you think it's nuts for essentially
suing a potential partner in the future.
Your nuts for doing all the behavior that the wild catters are doing seem nuts at the time.
And it says being crazy is something that majors just don't understand.
And being crazy and having imagination is actually a huge asset for the independence.
This, this stat blew my mind.
Independent wild catters find 80% of the oil and gas in America, despite the fact that
most of the mineral leases they acquire have been rejected by the big companies.
And so in the book ends, Monty is in his 80s and he's still at it.
And I think this is a good description of why.
Monimon Creef grew up amid the harshness of a developing frontier land and made hundreds
of millions of dollars over the course of his 80 odd years.
He had realized his ambitions in a town that he helped to settle and shape and make grow.
He had been able to trace his shadow, leave his mark upon an empty land and set a standard
for those who were to follow.
He created a dynasty.
For Monimon Creef and for men of this pioneer generation, achievement, not refinement is
the measure of all things.
And that is where I'll leave it for the full story, highly recommend reading the book.
If you buy the book using a link in your show notes are available at funderspracats.com.
You'll be supporting the podcast at the same time.
There's only a few limited copies of this.
So in case you can't get this, I will also leave a link below to read the big rich, which
tells a lot of similar stories and it's an excellent book.
That is 338 books down 1,000 go and I'll talk to you again soon.
Okay, there's just a few quick things.
In fact, a few quick new things before you go.
First one was asked for and requested for many, many months.
Founders now officially has merch.
If you go to shop.founderspracats.com, you can just go to finderspracats.com and click
on merch.
A few months ago, I did a live show in New York City with my friend Patrick Shionnese
from the Invest Like the Best Podcast.
And we sold for the first time ever like Founders merch, like sweatshirts, hats.
People seem to love it.
I've been wearing that.
I actually took like four of them for myself and I've been wearing them for the past few
months.
They are super, super comfortable.
I would definitely order the sweatshirt.
The hat that we have on there right now, I'm actually going to replace soon with a hat
that's because the Founders logo on the hat is big.
Some people like it.
I personally like it if it's a little smaller.
But if you happen to like the bigger logo, get the hat soon because eventually that
we replaced with the hat with the smaller logo.
So if you want to buy some Founders merch, go to shop.founderspracats.com or go to Founderspracats.com
and click on merch.
You can do that.
The second new thing, and this one is incredibly important.
Me and Patrick are looking for partners if you are building products.
If your company is building a product that makes somebody else's business better.
So B to B.
And you would be interested in becoming partners with me and Patrick Shionnese from
Invest Like the Best.
Email Partnerships at FoundersPodcast.com.
Find out his partnerships with NS.
At FoundersPodcast.com, tell us about the company you're building.
Obviously, any important links that we need to know and why you think we would be good
partners.
So we're able to obviously help with distribution.
We're looking for partners that we can actually partner with and then help advertise across
both of our podcasts.
We can also bring capital and then access to talent as well.
And one of the reasons this idea came to mind is because I keep having this experience
where whether I'm touring a company because I've been invited to or I'm giving a speech
or I meet somebody through like a friend of a friend that listens to the podcast.
I keep coming across these unbelievably talented and formidable founders that listen to founders.
And in some cases have been listening, like I just met one last week, he's incredible.
And he's like, yeah, listen to 200 episodes.
And so it's very apparent to me that I'm doing something wrong because these supremely
talented people.
There's no mechanism for which for them to like reveal themselves to me.
And that's important to the podcast because supremely talented people usually build supremely
impressive products.
Products that can make your business better.
And I would like to use the podcast to essentially highlight founder led companies from founders
that listen to founders that would benefit other listeners of founders.
And so Patrick and I don't know what shape this is going to take yet.
All we know is we have access to a lot of resources.
We have very unique assets and no one else probably on the planet has.
And if you're you think you're a right fit, just email partnerships at founderspodcast.com.
There'll be more details in the future.
I just want to put out put out there for now.
So if you're building something and you would want to partner with Patrick and I email partnerships
at founderspodcast.com.
And I think you'd be surprised about all the kind of unexpected benefits that could happen.
So this this actually just happened because I told you about this company, Vesto, Vizen
Victor ESTO, it's vesto.com.
And I partnered with them for a while.
I knew the founder, two of my close founder friends were both using Vesto to get higher
returns on their businesses idle cash.
And so I was like, oh, this is a new ban.
I'd spent a much time with them.
Went out to doing it a bunch of times.
And then I had two people I trust were and they were both in very opposite situations.
One was I had raised a bunch of venture capital.
And so he had a long run way and he was using Vesto to lengthen his runway.
And the other one had this giant bootstrap business with a bunch of companies.
And he was using it to get a higher rate of return than his bank was offering them.
And so there's a bunch of people that heard about Vesto from the ads I was doing on the
podcast.
But what was fascinating and this is an unexpected benefit, they actually pulled a product out
of Vesto that didn't exist and now exists because of that.
And this is also the benefit of founder led calls, sales calls, if you can do that in
your company, because Ben was taking all the calls, right, explaining, getting to know
who the prospects were, explaining the business, explaining why the business exists.
He built the from the ground up.
So he's the person in the best possible position to explain to explain its value to potential
customers.
But he was having a bunch of these conversations and was fascinating.
People didn't know that didn't even know each other.
We're asking for the same thing because I was like, yeah, I have excess cash and I would
like a higher return.
Obviously now they interest rates are higher.
But there's this other problem that I really want to find a solution for and a lot of people
have in many cases multiple bank accounts, spread across multiple banks, in some cases
multiple countries and in some cases multiple currencies and multiple entities.
And the only solution they could find and this is what they were asking Ben to build for
them was, hey, I have to hire somebody, right, they're paying somebody every morning or
every day to log into all their accounts.
In some cases there was like 10 to 30 different accounts, reconcile all the balances and in
some cases convert the currencies just to figure out how much cash is all my businesses have
right at this exact moment.
And so as a result of founders in the founder community, in the founders podcast community,
this product now exists.
If you have this problem, you can go to vesto.com, V-E-S-T-O.
Everybody says I slur my words.
I know I don't pronounce things correctly, so it's V is Invictor.
And obviously I will leave the links in the show notes and the links for everything I
talk about is at founderspodcast.com.
But if you want to see all of your company's financial accounts in one view, Vesto, this
version of Vesto will connect and control all of your global business accounts from one
dashboard.
And then if you choose to, they can automatically also hope you earn higher rates on your
businesses, idle cash.
And then when you go to Vesto and schedule demo, you actually talk to Ben, so just make
sure that you tell him that David from founders sent you.
So two more quick things I want to talk to you about.
Founders notes, founders notes is the best way, the single best way.
First I think it's the world's greatest, the world's greatest notebook for founders.
But it's also the best way to support the podcast.
I think last week, the Napoleon episode really honed in on the value proposition from just
reading and rereading all of my notes and highlights.
So what founders notes is is for, what is this now, six years since 2018.
I've been cataloging all of the notes and all the highlights I've been putting in this
app called Readwise, which allows me to search by book, search by keyword, consting review
my highlights.
There's a thing called the highlights feed, which I think is incredible, which is essentially
a random generated, it's like a smart Twitter feed.
But instead of reading the psychotic delusions of these crazy people that are, that hang on
on social media all day, you're reading notes and highlights from history's greatest founders.
And so I went to the team of Readwise, it's like, hey, people have been asking for a long
time to have access to my notes and highlights.
Is there any way we can build a product together where we can, we can essentially mirror
what I see.
So when you subscribe, when you go to founders notes, that's founders with an S, founders
notes.com, and you subscribe to this when you invest in the subscription, you see exactly,
you see a direct mirror, you see exactly what I see.
This is something that I use every day.
This is a product that I could not make the podcast without.
It is literally embedded in my workflow.
So if you had already had access to founders notes, you would have already seen the highlights
for the Wildcatters, the book that we just went over.
Because I'm updating it nearly every single day.
And the reason I thought that there was a lot of, there was a couple of things that people
emailed me that really resonated from last week is one, I talked about the fact that it's
only for people that are running already successful companies, right?
If you're not already running successful company, though, the people running its successful
company are going to get the most value out of founders notes because they already have
a mechanism which to turn that knowledge into a notebook into profit, right?
And if you're not, listen to the podcast.
I said like, founders notes does not have a free trial because the podcast is the free
trial.
So if you're not already running a successful company, it doesn't make any sense for you
to invest in this subscription.
Just go and listen to the 337 episodes whenever you want as much as you want and then use
those ideas to build a successful company.
Then this is in addition to, well, for people that are already running a successful company,
then it's a no-brainer.
You can invest in a year subscription, right?
At the end of the year, first of all, there's already, you know, I don't know, something
like 20,000 highlights in there.
I think the team of Readwitch just sent me my stats page.
I think they said there's 24,000 highlights, but I'd have to go back and double check that.
But anyways, my point being is like, if you sign up today, in the next year, I'm going
to add another, you know, 50 something books and, you know, probably 4,000, 5,000 highlights.
So the product literally gets better every day and then you can decide at the end of the
year.
Did you give value at it or not?
Well, I think it's a no-brainer to try for at least a year.
And the reason I say that I heard from a lot of people that the Napoleon episode resonate
with them and they realized, helped them realize the value of, you know, not just listening
to the podcast, but really going deep on this and reading and rereading over and over again,
because that's Napoleon's own words.
He said, read over and over again.
He didn't say, read once, listen to one episode and then keep them moving.
No, he said, read over and over again.
The campaigns of Alexander Hannibal, Caesar, Frederick the Great, make them your models.
This is the only way to become a great general to master secrets of the art of war with your
own genius enlightened by this study.
I truly believe that if you subscribe to Founders Notes and you read it every day, keep
it open to your browser.
What I would do is pick a new book every morning and just read the highlights.
You can see my notes too.
Search whatever comes to mind.
Use the highlights feed, which is that is a really cool thing.
If you can build the habit of just scrolling the highlights feed, take 10, this is what
you should do, take 10 minutes out of your social media scrolling.
Just take 10 minutes out of whatever how much time you're using and use that to read the
highlights feed for 10 minutes a day.
It's impossible that you're not going to get valuable information to make your business
better if you do that 10 minutes a day for the year.
It's just impossible.
That's not even including the crazy thing that I've been testing.
I might just release it soon.
It's essentially a Founders GPT, I can't call it that.
There's got to be a different name.
I got to figure out what I'm going to call it.
It's like chat GPT.
Is it being trained on the entire internet?
It's trained on all my notes and highlights and then now all my transcripts.
It's just, if you've ever heard, you hear it on the podcast, but if you've ever heard
me speak in person too, it's this thing where there are being interviewed on the podcast.
I don't know what that other person is going to ask me, but everything that I hear is filtered
through all the reading and research and the constant reading my highlights.
I'm like, oh, that reminds me of this and that reminds me of that.
You'll hear me do this over and over again.
The Founders GPT version does that and I'm like, it now is making connections that I
didn't even think about.
I'm like, this is interesting.
Here's a problem.
It's just like with any kind of these new chat models, 80% of it's amazing and then
some of it's like, that's not, you just made that up.
So we've got to figure out what to do with that, but that's super exciting.
This idea where it's like, Napoleon said multiple times in his maxims, the importance of
this.
It's profitable to study the campaigns of the great masters.
I don't know about you.
If you're reading notes and highlights from biographies of history, you're so curious,
what is that?
That is, you're studying the campaigns of the great masters.
Napoleon's saying that's profitable to do so.
He says that all great captains have been diligent students of history.
You and I talked about this every week.
That's one of the main reoccurring themes in this history of entrepreneurship that comes
up in these biographies over and over again.
And then Napoleon says experience must be supplemented by study.
No man's personal experience can be so inclusive as to warrant his disregarding the experience
of others.
Experience must be supplemented by study.
During the day, you're busy working on your company.
You're building your empire.
When you're not doing that, I think listening to founders, reading these biographies, investing
into subscription to founders.
No, that's just professional research.
You are supplementing your own experience by study.
So if you have not yet signed up for it, highly recommend you do, you go to foundersnotes.com.
After you sign up, you'll receive an email.
In that email, it goes into detail.
That welcoming to mail.
Make sure you read it.
It goes into the exact detail how I use this on a daily basis.
And even this morning, I was going and rereading highlights because one of my favorite books
that I've ever read was this, it's called Hard Drive.
It's episode 290.
It's a biography of Bill Gates, but what I love about it is it's the first 35 years
of his life because it ends at the Microsoft IPO.
And I was rereading the highlights because young Bill Gates had, there was this line,
it has this monomonial quality.
And essentially what I'm just brainwashing myself to make sure that I don't lose my focus.
And so I was reading through the highlights.
And I was also thinking about this idea that I'm thinking about my own business, the importance
of uncapped, limitless opportunity and his decision to insist on a royalty agreement
between him and IBM.
So all these weird things that maybe had forgotten or had thought about in a while, I'm
rereading.
And then it gets to this point.
It was like, oh, he consumed biographies to understand how the great figures of history
thought.
And I'm like, oh, there it is again.
Except he was doing that, you know, 30 years ago.
No, probably longer than that.
40 years ago.
But this idea, it's like, oh, this constant rereading and rereading and studying of the
great people that came before us.
And I really do, because I can tell you with my whole heart, like I made the product.
I used the product every day.
It would be impossible for me to endorse another product in the world to a greater degree
other than, you know, listening to the podcast.
So I truly believe it's valuable.
If you want to try it off for a year, go to FoundersNotes.com.
As always, thank you very much for listening and I'll talk to you again soon.
