Biography of T. Boone Pickens is an interesting one; he rose from humble beginnings to become one of America's most well-known oilmen. His fortune was made by starting his own company, investing in land, making wind power, starting a hedge fund, and more. Perhaps one of the most generous philanthropists in history, T. Boone Pickens is an amazing example of what is possible in America.
When he was just four years old, his family moved to Amarillo, Texas. It was there that he would later begin his career in the oil and gas industry. After graduating from high school, T. Boone Pickens attended Oklahoma State University on a basketball scholarship.
Upon graduating, T. Boone Pickens began working for Phillips Petroleum Company. In 1962, he left Phillips Petroleum and his wife was not happy about it. But he had to leave, people there were doing the same thing everyday and no one was trying to make the place better. They kept their heads down and did their job. He was not sure what to do next, but when his wife dared him to quit one night, he did. He spent time as a consultant in the oil industry by leveraging his knowledge in the, but knew this was not stable enough and a bigger opportunity was always on his mind. This is similar to Ken Langone, the founder of Home Depot.
Eventually an opportunity came his way and he seized it with two other investors. This company ended up being Mesa Petroleum. A company name that would follow him or the rest of his life. Mesa would go on to become one of the largest independent oil and gas companies in the United States. The Behance founder did a great job of seizing opportunity in his book The Messy Middle.
Pickens was very focused on his career and frequently avoided distractions and temptations. Once going to a bar after work only to leave a half a drink in realizing that this was not a productive use of time. He had massive self control, motivation, and focus on his objective. Ted Turner is another billionaire that avoided distractions and focused on his career.
When Mesa went public they had no debt and were very profitable, especially in the first year when they made over $13 million in profit. Though he was not experienced in leading a company, Picken’s work ethics, encouraging nature, and ability to make profit would make him a person to work for your entire career.
The biggest deal of his career was not the easiest and was widely publicized. It was his attempt to take over Gulf Oil. This more than $13 billion dollar deal would get Pickens a heavy amount of skepticism. Many thought it was impossible. Even Gulf Oil. After an initial offer was rejected, Pickens decided to buy shares of Gulf Oil. Eventually his company became the largest shareholder. Though these shares didn’t help him get the deal done, Mesa cleared a tighty $400+mm in the process. He obviously classified this as a win.
Mr Pickens made so many deals in his life. One in particular involved deep water oil drilling in Mexico and he lost more than $25 million. Details and lessons about these deals which should not be missed by reading the book. Terms that the master Pickens discusses like End Run, Reserves Earnings, Tender Offer, Bear Hug Offer, Asset Value Vs Stock Price. More about how to use these terms to your advantage can be found in the book Venture Deals.
His time at Mesa did come to an end at 68. But he didn’t retire, he moved on to a new company with a select few of his best people. He started an energy hedge fund. In the book he talks about how many times he has to take the licensing test. It was very humbling for him and an impressive show of humility to put it in the book. This is similar to Carl Icahn, who cannot and will not stop working. His biography King Icahn is full of similar stories of hostile takeovers.
With his fund off the ground, he hadn’t made any investments yet. Even getting some pressure from investors at times. Then opportunity stuck. He believed that the price of natural gas would increase. With prices peaking at $4.50 Pickens recognized that the supply was down and demand was rising and would continue to do so. He took a huge position long on Natural Gas and the price continued to rise. As it did, he continued to buy more. Hurricanes impacted his position positively and the company ended up realizing over $300mm in gains. This was perhaps one of the most impressive uses of industry expertise in his life. Pickens advocated focusing on your industry and learning more and more about it. Specializing on one topic is definitely a big part of the book The ONE Thing.
He was amazing about sharing credit. He constantly shared that he was not alone in achievements. Would listen to anyone’s thoughts and ideas. This led to high levels of trust and comfort in sharing information. Pickens saw himself as a coach in this way. It was obviously an effective strategy worth considering.
Another lesson that we can learn from T. Boone Pickens is the importance of specific knowledge. Pickens made his fortune by investing in energy. By diversifying your portfolio, you will never have the depth of knowledge required. With depth of knowledge in one subject you won’t have to weather many economic downturns because they will all be opportunities. This is a valuable lesson for all investors. Another titan of industry is Conrad Hilton in his book Be My Guest.
The next section of the book talks about the challenges facing the world in energy and natural resources. There is a finite amount of oil in the world and Pickens believes that we’ve identified most of the large oil fields. As global oil production goes down he points out that we must find new ways to source energy. Namely, Wind. He is committed to the idea that wind is the easiest way to make money in energy and moved forward with a $10b venture in it. This is another enormous accomplishment in an unbelievable list through his life.
Pickens made a $165mm donation to his college alma mater OSU for the athletic programs. This gift was the largest ever at the time. He was trying to get his beloved school to be competitive and even number 1. Boone has donated hundreds of millions towards other charitable causes as well, including medical research, as well as his support for Republican candidates who share many similar values on economic policies such as energy independence which he promotes heavily through campaign donations from companies employing thousands across Texas, where they are based too - this gives them more power when negotiating contracts because if there isn't demand then prices will drop disastrously low. Other very philanthropic billionaires include Kirk Kerkorian. You can read more about this in his biography The Gambler.
Boone Pickens is the model of an American success story. He was born into poverty in Oklahoma, but through his hard work, risk taking, and dedication to education found himself one of America's wealthiest men, with a net worth estimated at 5 billion dollars!
Pickens didn't become a billionaire overnight - it took him years of hard work and determination to get to where he is today. If you don’t have passion around what you are doing you will never be great. Pickens was passionate about energy and making money. He worked hard and started an energy investing hedge fund in his 70’s when most men/women are retiring.
T. Boone Pickens is on various social media. Check out the following links