2016 Salt Conference: Zell, Pickens Talk Opportunity and Politics in America

May 11 2016 | 2:07pm ET

Investment titans Sam Zell and T. Boone Pickens sat down for a conversation this morning at the 2016 Salt Conference with Bloomberg anchor David Westin. The two reflected on their careers, discussed opportunity in America, and argued about the need for political change in America.

Opportunity in America

Zell and Pickens dispelled the myth that there are not opportunities for entrepreneurs or would-be employees. Pickens cited the challenges for him and his classmates to find jobs as geologists when he graduated from school.

Zell agreed. “We live in an environment where there is unending opportunity. Anyone who says there is no opportunity, just talk to Mark Zuckerberg.”

That said, Zell believes that the opportunities are not as good as they were when he graduated from college. “The biggest issue is the regulation of our businesses has become so repressive that the ability to achieve has been brought down by regulatory burdens.” He argued that wealth redistribution and economic growth were incompatible.

In the Middle East

Oil was central to the conversation between the two investors. Pickens suggested that the United States does not necessarily need to rely on the Middle East for oil resources. He suggested that overtime the nation will not require its military presence in the region.

Zell urged caution about the U.S. miliary leaving the region.

“If we pulled out of the Middle East tomorrow, I think we would see chaos,” he said.

With regard to American energy policy, Zell said that no one is doing the numbers, raising the risks of subsidies. “You and I are subsidizing millionaires to buy Teslas,” he said. “There is no substitute for cost-benefit analysis. If we keep subsidizing people, we’re not going to solve the problems.”

Pickens and Zell said that alternative forms of energy should compete on the free market against traditional forms of energy.

Politics, Always Politics.

Does it matter who is President?

Zell says absolutely. “Building a business is like building a wall of bricks.” He explained that the need for a foundation is so critical. “Businesses are built on the confidence of their owners… that they believe in tomorrow, that they believe in new markets. [The owner] isn’t always right, but it’s that belief. You have to have confidence in leadership and your country. How can you make commitments when the rules change [regularly].”

“I’ve never thought about what a President would do for me,” said Zell. “Only what a President won’t do to me.”

Pickens told a story about a trip to Washington where he visited Washington to testify. “I have never asked Washington to do something for me,” he said.

He was quickly challenged by an Oklahoma Congressman who said that Pickens was in the office the previous day asking for the Congressman to do something for him. Pickens replied, “You’re misunderstanding. I wasn’t asking you to do something for me. I was asking you to not do something to me.”

On the election, Zell said that Americans are looking at the execution of the policies when making a decision for President. “I believe that the Trump phenomenon is about the revulsion regarding the government’s inability to execute.”

Pickens and Zell also argued that the government has failed to incentivize work and has increased the cost of employment in the nation, while increasing dependency on government.

In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...


CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...