"It's better to sleep well than to eat well"

I’m wrapping up a book about the late billionaire, Marc Rich, called “The King of Oil.”

The guy escaped to America from the holocaust as a kid, invented the spot oil global trading market, and became a fugitive for 17 years after a 1983 American indictment for tax evasion, racketeering, and trading with Iran during the US hostage crisis — before an ultimate pardon by President Clinton.

I’m not going to pretend to understand his business, or whether he deserved all the controversy…

But as you’d hope to get from any book, I’m walking away with one big, helpful takeaway:

Before Marc struck out on his own, he was a senior trader for the Philipp Brothers commodity firm…

And the company’s motto for risk assessment was:

“It’s better to sleep well than to eat well.”

In other words, it’s better to take smaller, more controlled risks than to bet the farm on major gambles.

As I’m stepping into the world of small business acquisitions…

It’s good to keep these things in mind.

I’ve enjoyed learning from people like Jeremy Harbour and Roland Frasier about how to approach dealmaking in ways that cover your downside…

If you can make agreements that involve little-to-no money out of pocket, then any financial returns are bound to be asymmetric compared to the limited risk.

This stuff is easy in theory…

But when you come across “that perfect deal,” it’s also easy to throw out discipline out the window & justify bigger risks (taking out major loans, etc.).

It’s in those moments that I’ve got to remember a good night’s sleep after pasta is better than nightmares after steak.

Beyond this phrase’s usefulness in risk-taking, it’s also a good reminder when it comes to doing the right thing in business.

Sometimes, the right thing is black and white…

Other times, it’s grey…

And when you come to that fork in the road where it’s not 100% clear what the right thing to do is… or you want to make things right…

It’s unlikely you’ll ever regret choosing the side that lets you sleep better.

Echoes from my Catholic upbringing come to mind:

“Man shall not live on bread alone, but on every word that comes from the mouth of God.”

I’m not sure how Marc Rich slept at night while he was on the run…

But if he was at peace with his own decisions as a capitalist…

Then I imagine any sleeplessness came from the pure adrenaline of being chased — rather than an internal moral conflict.

Michael McGovern

The Wildman Path

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