#65 The Gambler How Penniless Dropout Kirk Kerkorian Became The Greatest Deal Maker In Capitalist History

Summary Notes


The episode delves into the remarkable life of Kirk Kerkorian, an enigmatic American billionaire who rose from humble beginnings to become a formidable force in various industries. Kerkorian, a child of immigrant parents, dropped out of school in the eighth grade and learned English on the tough streets of Los Angeles. Despite his aversion to the limelight, he became a heroic aviator during wartime, ferrying planes for the Royal Air Force, and later a savvy businessman with a penchant for high-stakes deals. He made a fortune by selling his charter airline and then ventured into Las Vegas, where he built the world's largest hotel and took over MGM studios, all while maintaining a reputation for integrity and philanthropy. His story, as recounted in the book "The Gambler," reveals a man who thrived on excitement and risk, yet remained grounded by his values and a deep sense of privacy.

Summary Notes

Early Life and Personality of Kirk Kerkorian

  • Kirk Kerkorian grew up in California's San Joaquin Valley and later moved to Los Angeles due to family financial issues.
  • He was known for being uncomfortable in crowds and avoided the attention of strangers.
  • Kerkorian was a private individual who remained one of the least known among America's richest men.
  • Despite his discomfort with fame, he burst onto the American business scene in the late 1960s.
  • He was a small businessman with a gambling habit and an 8th-grade education.
  • Kerkorian was also a wartime aviator for the Royal Air Force and ran a charter air service post-war.

"Kirk was uncomfortable in crowds and dreaded the attention of strangers."

This quote highlights Kerkorian's aversion to public attention and celebrity status, which was in contrast to his significant business achievements.

Business Ventures and Risk-Taking

  • Kerkorian was a daring businessman who took significant risks in various markets.
  • He gained control of America's oldest commercial airline, took over MGM studios, and built the largest hotel in Las Vegas.
  • His business moves were characterized by large bets, mirroring his gambling habits.
  • Kerkorian's approach to business was influenced by his admiration for Howard Hughes, despite Hughes' attempts to undermine him.

"Suddenly, he was on business. Newspapers across the country risking huge sums in a puzzling range of eclectic markets."

This quote describes Kerkorian's bold entry into diverse business ventures, often involving high-stakes financial risks.

Personal Traits and Business Ethics

  • Kerkorian was a deal junkie, thriving on the excitement of high-stakes negotiations.
  • He came from a humble background, with an immigrant father who struggled financially.
  • Kerkorian learned English and how to defend himself in Los Angeles.
  • Despite his success, he remained soft-spoken, feared public speaking, and valued trust and loyalty.
  • Kerkorian regarded a handshake as a binding contract and never defaulted on a loan.

"Friends would call him a deal junkie, addicted to financial thrills, whether at a craps table or at the negotiating table."

This quote emphasizes Kerkorian's love for the thrill of making deals, equating the excitement of business negotiations with gambling.

Philanthropy and Modesty

  • Kerkorian traveled modestly, without an entourage, and was known for his unassuming lifestyle.
  • He personally paid for his expenses, even at his own hotels, and drove modest vehicles.
  • Kerkorian was a generous philanthropist but insisted on keeping his charitable acts confidential.

"He gave away millions to charity and to people in need on the strict condition that his gifts were kept secret."

This quote reflects Kerkorian's philanthropic nature and his desire for privacy regarding his charitable contributions, highlighting his modesty and preference for anonymity in his good deeds.

Philanthropy and Public Perception

  • Donations by the individual in the transcript grew into tens of millions, leading to the formation of a charitable foundation.
  • The foundation donated over a billion dollars.
  • The individual believed in anonymous donations as the purest form of charity.
  • Public recognition for donations was viewed as a transaction rather than charity.
  • Despite his preference for anonymity, he faced negative press for not publicly donating to Armenia after an earthquake, leading to the establishment of a more public foundation.

"Donations made anonymously to an anonymous person was like the purest form of giving. And he's saying, if you wanted something in return, like you wanted your name on a building or you wanted a plaque or an award, or you wanted people to know, like, you're publicizing what you're doing, he's like, then it's not charity. It's a transaction."

The quote emphasizes the individual's belief that true charity is selfless and without the need for public acknowledgment or reward. It highlights the distinction between giving for the sake of helping and giving to receive something in return.

Life Philosophy

  • The individual views life as a "big craps game" and expresses that he found the journey enjoyable.
  • This perspective reflects a sense of risk-taking and adventure in his approach to life.

"Life is a big craps game. I've got to tell you, it's all been fun."

This quote captures the individual's attitude towards life, suggesting that he sees life as a game of chance filled with excitement and enjoyment.

The Emotional Journey of Reading

  • The act of reading a fantastic book is described as a significant emotional investment.
  • Finishing a book can leave a reader with a bittersweet feeling, as the first-time experience cannot be replicated.

"Like, you get to the end of a book you really enjoyed. It's a huge investment. This book is... I had that feeling when I finished this book because I enjoyed it so much."

This quote conveys the emotional attachment a reader can develop with a book and the unique sense of loss felt when the experience of reading it for the first time concludes.

Early Life and Career Shifts

  • Kirk Corian, the subject of the book, discovered his passion for flight while working a manual labor job.
  • Prior to this, he had aspired to be a professional boxer and had trained for it.
  • His discovery of flight led him to pursue a career as a pilot, which was his first passion.

"Kirk's senses were instantly assaulted by the deafening scream and forceful lurch of the piper's 50 hp engine... His big grin said it all. Kirk was smitten. It was love at first takeoff."

This quote vividly describes Kirk's first experience with flying, which was transformative and led to a major shift in his career aspirations, from boxing to aviation.

Overcoming Adversity

  • Kirk's family faced financial hardship and frequent relocations during the Great Depression.
  • He learned to box as a means of self-defense due to constant bullying.
  • Kirk contributed to the family income from a young age by working various jobs, including selling newspapers and oranges.

"By age nine, Kirk was hawking the Evening Express... making about fifty cents a day and turning over pocketfuls of pennies to help support the family."

The quote illustrates Kirk's early life challenges and his contributions to his family's survival during tough economic times.

Early Work Experiences

  • Kirk entered the job market during the Great Depression and took on odd jobs to make ends meet.
  • He participated in the Civilian Conservation Corps as part of the New Deal, which involved strenuous physical labor.

"It was especially demanding, high altitude work, digging, chopping, and clearing paths on terrain like the 14,500 foot face of Mount Whitney."

This quote details the difficult and physically demanding work Kirk undertook as a young man, which showcases his work ethic and determination.

Odd Jobs and Determination

  • Kirk took on various odd jobs, including moving boulders at MGM studios for an underwater film scene.
  • These jobs paid little but were significant achievements for him at the time.

"They made $2.60 each, personal best for a single day's work."

The quote highlights the modest beginnings of Kirk's work life and the value he placed on hard work, even when the financial rewards were minimal.

Early Life and Ambition of Kirk Kerkorian

  • Kirk Kerkorian began as a day laborer at MGA studios, earning $2.60 a day.
  • 30 years later, he owned MGM, with an investment return of $260,000 a day.
  • Kerkorian faced uncertainty with regular work being hard to come by in the mid-1930s.
  • He turned entrepreneurial, starting with a steam cleaning business for car engines and later buying and trading old cars.
  • Kerkorian's first businesses involved refurbishing, a trait common among successful entrepreneurs discussed in the podcast.
  • He demonstrated relentless resourcefulness, a key characteristic of successful entrepreneurs.

"He made $2.60 a day. 30 years later, he owned MGM, and his investment into MGM was returning $260,000 a day."

This quote highlights Kerkorian's humble beginnings and his remarkable journey to becoming a successful entrepreneur, owning a major studio.

Pursuit of Aviation

  • Kerkorian's passion for flying led him to seek ways to afford flight lessons.
  • He took a job as a bouncer and enrolled in night school to learn essential math for aviation.
  • Understanding the practical application of math in aviation motivated Kerkorian to excel in the subject.
  • Kerkorian aimed for a pilot's license and was determined to overcome financial and educational barriers.

"He needed more money to pay for $3 an hour flight lessons, so he took an extra job at a bowling alley bar as a bouncer."

This quote shows Kerkorian's dedication to his goal of becoming a pilot, as he worked extra jobs to fund his flight training.

Education and Training

  • Kerkorian hitchhiked to the Mojave Desert to attend a flight school run by aviatrix Florence "Pancho" Barnes.
  • He worked on the farm in exchange for flight lessons, demonstrating his willingness to work hard for his ambitions.
  • Kerkorian left the flight academy with a commercial pilot license and a job offer.

"He hitchhikes 85 miles to the Mojave and made Poncho a proposition. He was short on education and money for flight lessons, but he was willing to work hard."

This quote exemplifies Kerkorian's initiative and determination to achieve his goal of becoming a pilot, despite financial constraints.

Career as a Flight Instructor

  • Kerkorian became a civilian defense contractor teaching aviation cadets for the U.S. Army Air Force.
  • His strict approach to teaching reflected his low tolerance for mistakes and recklessness.
  • Kerkorian's mantra, "There are old pilots and there are bold pilots. There are no old, bold pilots," emphasized the importance of caution in aviation.

"His low tolerance for mistakes and recklessness made him a demanding instructor."

This quote reveals Kerkorian's serious and disciplined approach to flight instruction, valuing safety and precision.

Personal Traits and Professionalism

  • Kerkorian's demanding nature extended beyond his professional life; he was known for punctuality and had little patience for lateness.
  • His upbringing and life experiences shaped his strict and severe personality.
  • Kerkorian's philosophy was influenced by his "school of hard knocks" rather than formal education.

"He was never late for anything. And if anybody worked for him, if a meeting was going to start and you didn't show up, he would just leave."

This quote illustrates Kerkorian's strict adherence to punctuality and his expectation for others to do the same, reflecting his disciplined nature.

High-Risk, High-Reward Job

  • Kerkorian took a high-paying job flying new warplanes across the North Atlantic for the Royal Air Force ferry command.
  • The job paid $1,000 a month, a significant sum at the time, due to the high risk of death.
  • Kerkorian felt fortunate to be part of an elite unit that contributed to changing the balance of power in World War II.

"He gets a high paying job because almost everybody that does the job, or a lot of people that do the job, die."

This quote highlights the dangerous nature of Kerkorian's job as a pilot during the war, which came with high compensation due to the risks involved.

Kirk's Contract Pilot Career

  • Kirk worked as a contract pilot during the war, flying in dangerous conditions.
  • He lost friends to the harsh realities of war, with planes disappearing in cold waters.
  • Kirk himself had a near-death experience due to heavy fog over Scotland.
  • This period was crucial for Kirk as it provided the initial capital for his future business ventures.
  • By the end of his contract pilot stint, Kirk had accumulated significant flight hours, savings, and experience across multiple continents.

"He almost died. He almost died over. He lost contact somewhere over Scotland in heavy fog."

This quote highlights the perilous nature of Kirk's work as a contract pilot, contributing to his later success by providing him with the necessary skills and savings to start his own business.

Kirk's Transition to Entrepreneurship

  • After the war, Kirk returned to Los Angeles, eager to fly and determined to be his own boss.
  • He quickly established a pilot training school, which was his second business.
  • The demand for instrument-rated commercial pilots was high, ensuring a rapid and profitable influx of students.
  • Despite the success, Kirk found no thrill in teaching and sought to enter the charter business.

"So there's a point in all these little anecdotes."

This quote reflects the importance of Kirk's previous experiences and how they strategically led to his entrepreneurial ventures.

Kirk's First Fortune in the Charter Business

  • Kirk's charter business was catalyzed by his first customer, Jerry Williams, a scrap metal entrepreneur with a penchant for gambling.
  • Williams' regular flights to Las Vegas introduced Kirk to the city that would later play a significant role in his career.
  • The charter business thrived on the needs of gamblers and those seeking quick weddings in Nevada.
  • Kirk's goal was to expand beyond a small operation, eventually leading to the sale of his flight school and planes for a substantial profit.

"That charter business introduces into Las Vegas. Later on, he winds up building the largest hotel in Las Vegas three separate times."

This quote shows how Kirk's charter business was a stepping stone to his later, more significant achievements in Las Vegas, demonstrating his strategic vision and entrepreneurial acumen.

Surplus Military Plane Market and Risks

  • Kirk's business acumen extended to the surplus military plane market post-war.
  • He bought and refurbished old military planes, such as DC-3s and C-47s, which were left in various locations after the war.
  • His plan involved buying planes in Hawaii, modifying them to extend their range, and flying them to the mainland or further to Rio de Janeiro for substantial profits.
  • Kirk faced life-threatening risks during these flights, including a near-death experience on a trip from Hawaii to California.

"One way to build capital fast was in surplus military plane market."

This quote encapsulates Kirk's strategy to generate quick capital by tapping into the surplus military plane market, showcasing his willingness to take calculated risks for financial gain.

Founders Podcast Promotion

  • The Founders podcast offers full-length episodes on the life stories of remarkable individuals who have had books written about them.
  • Listeners can learn from historical figures and entrepreneurs through biographies, gaining insights into their experiences and lessons learned.
  • The podcast encourages upgrading to the misfit feed for complete access to all episodes.
  • Mark Andreessen is quoted to emphasize the value of learning from the past and the wealth of knowledge available in biographies.

"For very little money and a few hours of time, you can learn from someone's accumulated experience."

This quote from Mark Andreessen, shared in the podcast promotion, underlines the efficiency and value of learning from biographies, which is the essence of what the Founders podcast aims to provide to its listeners.

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