RENEE MONTAGNE, host:
The weekend financial disasters may prove to be opportunities for some investors. Consider the billionaire we'll meet next. His recent investments include a plunge into the mortgage services industry.
STEVE INSKEEP, host:
Wilbur Ross made a reputation turning around failing firms. He is our latest guest on "The Long View," our conversations with people of long experience. And his experience tells him that America's service economy is out of balance.
Mr. WILBUR ROSS (Investor; Bankruptcy Expert): I don't think you can really have our historic standard of living if what the economy consists of is flipping hamburgers, swapping pieces of paper on the stock market, and suing each other.
INSKEEP: Ross made his reputation and a lot of money restoring industries that still make something. He's never been as famous as Bill Gates or Michael Bloomberg, people who built their own companies, but investors know Wilbur Ross because he rebuilds companies in trouble - like Bethlehem Steel.
Mr. ROSS: We've got an enormous amount of good ideas from the blue-collar workers. That fellow who has been standing behind a machine for 10 years knows it better than the people who built it, really knows what to do.
INSKEEP: He bought American steel companies, improved them, sold them again. Many steelworkers ended up happy with Wilbur Ross, though unions and other industries were not. Rebuilding corporations is not the work that Ross aspired to do in college. Half a century ago, he took an English course that he hoped would prepare him for a career as a creative writer.
Mr. ROSS: Every single day, you had to submit 1,000 words of fiction or poetry that you had created.
INSKEEP: Every day?
Mr. ROSS: Every day, yes. And I found that after about two weeks, I didn't have any more material. So that convinced me this was the wrong calling.
(Soundbite of laughter)
Mr. ROSS: And it turns out it probably saved me from a life of poverty anyway.
INSKEEP: Well, granting that it may be hard after all these years to remember exactly what you wrote about, I'm still compelled to ask if you ever wrote about a steel mill or a railroad or...
(Soundbite of laughter)
Mr. ROSS: No. I didn't have the foresight to think about things like that at that point.
INSKEEP: Although - let me ask the reverse of that. Is there anything from that period when you had ambitions of being a creative writer, any part of your mind that you think you've been able to apply as a businessman? Is there something creative about the acts that you perform now?
Mr. ROSS: Well, I think one thing that thinking about writing and trying to get your thoughts together, particularly in a limited space like 1,000 words, is to organize your thought process, organize your questions, and think through what your observations were. So I think those are all good disciplines for any kind of analytical activity. And our activity in private equity is very much in the first instance analytical, trying to understand what's there and what's not there, trying to understand what can be done with it to make it better.
INSKEEP: That requires you, I guess, to look at a company and try to see something that even the current managers of that company don't see about how it could be organized.
Mr. ROSS: Well, I would say especially that the current managers don't see. One of the problems with industries that have been in relatively long-term declines is that very often, the managements in those industries develop a kind of loser mentality. And when you ask them what's wrong with the business, they'll point to extraneous forces. It'll be the fault of the unions, or it'll be the fault of China or the fault of the government or the fault of the class-action people. So rather than dealing with the things that may be within their own control, they kind of sit around sulking about things that are fundamentally out of their control.
INSKEEP: Let me ask about a couple of other industries that have been in trouble. I'm just curious if you've given thought to getting into them, or if you think that they have good prospects. Airlines are the first that come to mind.
Mr. ROSS: You know, well, we just made an investment in the low-cost carrier in India. It's a company called SpiceJet. We went into it when oil was in the 140s, but we have a theory that oil has peaked out, that it was irrational that it ever got to that exaggerated level, and that therefore since fuel is the largest single expense of a low-cost carrier - running something more than 40 percent of total - we had to take a point of view about what would happen to fuel. So our first thesis was fuel costs would come down, and happily they're down at least somewhat. My own belief is that there's no real justification. Absent some international interruption, there's no real justification for oil being more than $90 or $100 a barrel. So that's one thesis we have.
The second one was that India is a very large land mass, very large distances between the major population centers, but ground transportation is very, very difficult. They've not put enough into infrastructure for roads or even railroads to make that a very good means of transport. So air transport, we think, is uniquely important to India.
INSKEEP: As I listen to you, though, I come back to what you said at the beginning about having to organize and simplify your thoughts as a young, aspiring writer, because even though your analysis must be very complex, you seem to act in instances where it can be boiled down to something very simple. It's a big country. Somebody has to fly over it. It's a big - America with lots of houses, somebody has to service the mortgages, things like that.
Mr. ROSS: Well, I think good ideas really are simple ideas, at least in retrospective. We don't do things that are complicated that we can't understand or at least think we can understand. But the main thing isn't so much the idea. It's important to have a sound idea, but the really important thing is the implementation. I have a little pin cushion that says on it a very important saying, and that is, "I'd rather back a mediocre idea that was brilliantly executed than a brilliant idea that was poorly executed."
(Soundbite of laughter)
Mr. ROSS: So it's not just the idea. The idea is, in a sense, the easier part if you're careful. The harder part is implementation. And that's what really makes or breaks any of these things.
INSKEEP: Are bad times good for you?
Mr. ROSS: Well, all times are good. We were achieving high rates of return even in the last several years, when there weren't so many defaults and when the economy was relatively healthy, because there are always individual circumstances where something hits the wall for whatever reason. And therefore, you don't need to have a global recession in order to find things that make sense to do.
INSKEEP: One other thing. As you move on in your business career, do you ever think back at that early love of writing and think maybe you've still got a novel in you?
Mr. ROSS: I don't know. I'm having enough trouble dealing with facts, let alone trying to deal with fiction.
(Soundbite of laughter)
INSKEEP: That's "The Long View" from investor Wilbur Ross, the latest voice in our conversations with people of long experience. You can find a more detailed explanation of why Ross thinks that banks failed to make mortgages pay. Just go to our Web site. It's at npr.org. You heard him on Morning Edition from NPR News.
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