Buy Low, Fix Fast, Exit Slow

“The Laurel-in-the-Pines deal, Larry Tisch’s first big deal, encom- passed two themes that would characterize practically all of his invest- ment decisions. First, he showed an unshakable confidence in his own instincts and a willingness to defy conventional wisdom that didn’t make sense. Second, he showed his inclination to avoid overpriced investments—such as Florida hotels—and their accompanying higher downside risk. The family resisted the temptation to be swept up in the speculative fever in Florida. Instead, they went into a far more conservative deal—one that left plenty of room for error—on terms that gave them a few years to make a go of it before committing to an outright purchase.”

“In Tisch’s view, if a business had no prospect for yielding the mag' nitude of returns he could get in the highly liquid stock and bond markets, then that business should be sold and the cash added to the investment portfolio until something better came along. The Tisches put Lorillard on a crash diet. Besides Bennett, six more top executives left. Their jobs “simply vaporized,” according to one executive, leav- ing behind “a residue of bitterness” that Tisch acknowledged. 1”