Laurence Tisch

"hob Tisch immediately launched a high-speed, hands-on analysis of Lorillard ’s inner workings. Fie toured cigarette factories and ware- houses throughout the South, and combed through the corporate headquarters in New York. Things were worse than the Tisch brothers had expected. Lorillard ’s strongest cigarette brand, Kent, which had been a winner in the 1950s, was losing market share to Marlboro and Winston. The company had no framework for developing new prod- ucts, and it nearly destroyed its mainstay menthol brand, Newport, by changing the blend, a move that cost it 20 percent of its volume. The candy company, Reed, which was earning $1 million a year when Lorillard acquired it, was now losing $1 million. Lorillard wasn’t a bad business; it was a badly run business. Larry was certain it had the po- tential for 10 percent annual profit growth."

"All in all, Laurence Tisch has earned his reputation for buying stocks at knockdown prices. He has done far more, however, than passively wait for the market to find its way back to the proper valuation. His signature tactic has been to achieve effective control of an underperforming com¬ pany, then force it to cut costs and shed money-losing operations. Both in the acquisition stage and in harvesting gains, he has played it close to the vest."

"Another key to Kerkorian’s success in trading aircraft was a tech¬ nique he called “keeping the back door open.”11 If he could not resell a new plane at a profit, he might be able to use it in his charter fleet. Fail¬ ing that, he would sell it back to the manufacturer at a previously agreed-upon price. This strategy of maintaining several different op¬ tions was evident in Kerkorian’s later dealings such as the Chrysler affair. It was reminiscent, too, of Laurence Tisch’s hedged approach of leasing the Laurel-in-the-Pines hotel before committing himself to buying it."

"To Tisch, the purpose of every business was to generate decent profits for its owners. That article of faith went without saying, and it applied to the mom-and-pop candy store on the corner as well as to his own sprawling conglomerate. This nugget of common sense had served him well in all his business ventures. But from the time Tisch first emerged CBS"

"In September 1960, Loew’s Theatres could no longer deny Tisch what he already had essentially paid for: the right, by virtue of being the largest shareholder, to the company’s top titles. Tisch was elected chairman, succeeding Leopold Friedman, and added the title of chief executive officer, which was ceded to him by Eugene Picker, who re- mained president and took on the title of chief operating officer."

"For Tisch, the stewardship of wealth—maintaining the delicate balance between protecting it and making it grow—was the point, not personal wealth. Stunning successes delighted him, and they hap- pened often enough that stunning failures failed to elicit much more than a shrug. His sense of self-worth wasn’t tied up in the bottom line of each and every deal, nor did he share his fellow billionaires’ ap- petites for lavish life-styles. Spending a fortune was anathema to his mission as the enemy of corporate waste. He and Billie lived well below their means. They seldom indulged in lavish vacations. They avoided the trappings of obvious wealth. No Rolls Royce. No personal aircraft. No trophy real estate or vacation villa. No South Sea islands. No high-priced decorating binges."

"on stocks in the Loews portfolio as well. Tisch’s style was not to take profits at the top of a market; it was to seek a haven—high-yielding bonds—before the whole world decided to do the same thing. Tisch had not achieved success by running with the herd."

"It wasn’t the first time he had more than made up for the lack of a plan by having acute radar for a rare investment opportunity, a ready load of cash, and the unshakable self-confidence to move swiftly. Those were the qualities that, in the span of 20 years, transformed Tisch the hotelier into Tisch the conglomerateur—all the while prov- ing himself one of Wall Street’s smartest smart-money investors and one of corporate America’s most sought-after board members."

"“There’s nobody in this business at ABC, NBC, or CBS who doesn’t know one thing,’’ Tisch said. “The show is the thing. But by the same token, if you carry that to extremes, it’s like the guy who drowned in an average of 12 inches of water. Sure the show is the thing. Everybody knows that; but do you sit around having the money pour out in waste while you go around saying the show is the thing?”"

"“When you’re running a business, you’ve got to run a business,” Tisch said. “You have to make sure that you can survive, whether business gets a little better or a little worse. Maybe Turner would have done the same things. I don’t know. But all three networks have done the same things. We were first was our only problem.”"

"The Tisch investment strategy was to acquire bargain-priced stock of publicly traded companies that held assets far more valuable than the average investor perceived. Some companies’ stock was cheap de- spite potentially valuable assets, because management hadn’t figured out how to transform those assets into ever-rising profits. In those sit- uations, the Tisches weren’t shy. They became activists. CBS was no"

"What worked for Tisch wasn’t having a plan but having a clear set of principles for determining when to buy an asset and when to sell, whether it was a business, a commodity, or a security. He looked for bargain-priced assets whose values were depressed only temporarily typically, because of mismanagement. His overriding requirement was that he would put no more into an investment than he could reason- ably expect to get out of it under a worst-case scenario. Once he owned an underperforming asset, he aggressively rooted out the cause of its stagnation and made the changes necessary to turn the tide, often by gaining ownership control and taking over management him- self. A key element was Tisch’s ability to quickly determine whether an investment met all his requirements and to act fast."

"In Tisch’s view, however, CBS no longer could afford a spare-no- expense approach to the network’s quality. “Survival was the issue,” Tisch said, “not the comfort of management.” CBS was throwing money into a pit where it had no chance to grow and return a reward to the all-important owners. There was no greater corporate sin."

"The Tiscbes believed a welbrun, renovated Laurel-in-the-Pines could easily generate $100,000 a year in profit. It was a strong, rep- utable business. At a purchase price of $375,000, the downside risk ap- peared minimal. Even if they had to settle for just $100,000 a year, the hotel would pay for itself quickly and remain the resort’s most salable property. With a little effort, the profit potential was even greater."

"In a good year, CBS might earn $150 million. “It’s nothing,” Tisch said. “If you don’t run it as a business, our fixed costs in a down year could destroy us, because when we start the season, say September 10, if our programs don’t work, there’s no cost to cut. I can lay off six peo- pie or eight people, but it’s not like a manufacturing plant where you have a cost of goods. Our costs are all preordained. It’s fascinating. It’s a very interesting business for that reason. There’s no leeway once you make the mistake.”"

"tion of the $6.14 billion it would be worth by mid' 1993. The family never sought to buy even a majority of the stock. After all, it was a New York Stock Exchange traded issue. As such, it gave them the flex- ibility to sell shares as needed to raise money for other opportunities, and to buy them back when the price was low. Besides, the goal was to manage the investment for a high return, not to own everything. The Tisches weren’t megalomaniacs."

"“I never lose sleep over business,” Tisch protested. “I’m a business- man. I have good days, bad days. But I tell you one thing, when I leave the office, my business day is over. I don’t lose sleep over it. I will lose sleep over important things, family things, health, but I don’t lose sleep over whether business is better or worse.”"

"At the time, the Tisches were placing heavy bets throughout the then-downtrodden banking sector; ultimately, their bets were unprof- itable in the New England regional banks. Wall Street pundits won- dered whether they were thinking about a wholesale shift of resources away from the fickle entertainment business and into the relatively sober logic of banking. Investors had been bailing out of bank stocks in droves, fearing a string of failures for a number of reasons—includ- es a growing cancer of bad loans to high-risk businesses like com- mercial real estate, among the first casualties of the Gulf War- induced recession, and to the tidal wave of companies that were taken private in the 1980s and were now collapsing under the weight of their buyout debts. Exacerbating the banks’ woes were increasingly zealous federal bank examiners intent on forcing bankers to come clean about the poor quality of their loan portfolios."

"was Tisch’s main public identity. His strategy, however, was still to be diversified, to buy low, and to hold on as long as the return was re- spectable."

"We have"

"Everybody in this building would like to have 20 diversions, all meaningless, so we could say we have a strategy,” said Tisch in an in- terview in his CBS office suite. “It reminds me of the hotel we owned, where the service and food were poor, and the manager’s solution was always the same—redecorate! I don’t believe in that. We have to con- centrate on our core business.” —"

"Some directors failed to see any strategy in Tisch’s decisions, but he was doing what the Tisches had always done: he was strengthening CBS’s finances so the company could survive in any kind of weather, and he was building a war chest that could be cracked open when as- sets that made sense for CBS could be had for bargain prices. In the meantime, the cash was invested for a safe, respectable yield. Tisch knew that, ultimately, as in any other business, CBS s appeal to the smartest investors would be an asset valuation that exceeded the com' pany’s stock-market value. CBS"

"“With my father, there is a sense of constantly accepting the world as it is, realizing there are certain things you can or can’t have an im- pact on,” Tommy said. “In adversity, he is among the most supportive people. He’ll never sell you out when you’re down, and whether it is in market terms or personal terms, when somebody has adversity, he is there.”"

"In fact, Tisch was running a network, but he was doing it by find- ing the right people and letting them do their jobs without second- guessing. That he was able to do so should come as no surprise. Throughout their careers, the Tisches let capable managers manage without hovering over them. They hovered only when things ap- peared to be going wrong, and they richly rewarded successful man- agers—not themselves. Sagansky, for example, was paid a total of $6.1 million in 1992, nearly four times Tisch’s compensation from CBS."

"As manager of the Tisches’ family and foundation money, Tommy frequently experienced his father’s strong tendency to be supportive, especially when the chips were down. “If a position is down, he en- courages you to trust your instincts and double the position,” he said, “and when things start running away on the upside, he’s less inclined to value that.” When Tommy’s bet on Boston bank stocks proved to be too early, “This is a major disaster,” he said. Larry’s response: “I came into the world poor. If I go out poor, what’s the difference?” Tommy was quick to remind his father that the same couldn’t be said for his sons."

"Whatever the directors feared, Tisch wasn’t interested in running CBS or any other company all by himself, nor was he a short-term in- vestor. He wanted to establish a culture of frugality and the best pos- sible team of managers to strengthen the company in a hostile economic environment. Tisch wanted to be free of the day-to-day."

"Expressions of “confidence” from Tisch were beginning to look like the kiss of death. Tisch himself asked rhetorically, “What is a vote of confidence?” The answer was open to interpretation. Did it mean he was confident of someone’s ability to continue doing what he or she had always done? It was surely not to be confused with an unqualified endorsement of the way things had always been done, nor with a life- time guarantee of employment."

"Tisch had no patience for bureaucracy. He wasn’t interested in written reports or organizational charts. Most of all, he wasn’t inter' ested in endless meetings and analysis. It didn’t take long for him to figure out what made sense, and, in his view, it shouldn’t take long for others to implement it."

"doing the opposite? Tisch’s modus operandi was to not follow the herd. He did what made sense, regardless of what was in fashion. To him, it made sense to close some of these asset sales now, before the end of the year, and take advantage of tax benefits that were set to expire at year- end under the Reagan Administration’s tax reform act."

"$10 later in 1986.) It was Tisch’s habit not to hold out for the highest possible price. He preferred making an offer work rather than dither- ing around while market forces conspired to undercut the benefit of waiting for a higher bid."

"A 1986 article in Fortune asserted “that Tisch’s unchallenged repu- tation as a man of his word depends partly on the lawyerly care with which he sometimes chooses his words. His commitments are often sharply limited. When he says he ‘isn’t considering’ something, he is expressing only a transient state of mind subject to infinite later change.” 3"

"Tisch was still maintaining the demeanor of an observer: asking questions, expressing puzzlement, and challenging old assumptions, but not telling anyone what to do. He made it clear, however, that CBS’s"

"Tisch disputed this often-repeated observation. “I’ll fight for a cause, but I don’t lose my temper over the cause,” he asserted. “I just believe in fighting for a cause. I’ll get exercised over a moral issue, never over a business issue. A business issue, you handle it. It’s not that important. But a moral issue is something you’ve got to fight for.”"

"He is a fascinating combination of a person who on one hand has very strongly held beliefs and at the same time sees that the world exists in various shades of gray. He tends to be a very good listener and at times a conciliator. He never pushed us. When any of us expressed a desire to do certain things, there was always an openness. There was always a sense that he was not a particularly judgmental man, and in that sense, it was very hard to rebel against him. He certainly is a strong figure in a number of ways. He would express his opinion, but it was always very clear he was not trying to impose his will on you.”"

"It wasn’t the first time Tisch and Yetnikoff clashed. Their styles were vastly different, though they were both tough fighters. Tisch may have had a warm, engaging manner in non-negotiating situa- tions, but as a boss, he was relentless and forceful in challenging his division managers. He wanted to be confident that their assumptions were conservative, that their projections weren’t overly optimistic. As Tom Tisch put it, “If you worry about the downside, the upside tends to take care of itself.”"

"Joyce was homing in on what he called “the Tisch factor.” It worked like this: Tisch wasn’t telling anyone what to do. He was merely asking questions, but the questions clearly indicated disap- proval. Who were all these people and what were they doing besides wasting money? Wyman and Jankowski saw which way Tisch was moving and sought to anticipate and please him. They had to figure that getting along with Tisch would enhance their own security. In that evolving environment, lower-level positions like Joyce’s had no more security than a summer job."

"Andrew summed up his father’s winning ways this way: “First, he has an uncanny ability to identify undervalued assets. He’s very self assured in his investment philosophy. Second, he can be a contrarian and really believe he is right. Third, he doesn’t let money burn a hole in his pocket. He’s content to let it sleep. He’s willing to wait. And if there’s no immediate return, he doesn’t lose his convictions.”"

"Said Tisch: “Your constituents are very simple. In America today, you have the public, the employees, and the shareholders. Those are your three constituencies. And if you do the right thing, you never have a problem. From time to time, the outside perception of what’s right may be different from mine. But I find that as long as I come to work in the morning and say I’m going to do the right thing, in the long run, my perception is the right thing. I can’t go by what every- body is criticizing that day, because they have no vested interest.”"

"A few days after Derow was fired, Tri-Star Pictures, the film ven- ture CBS had recently abandoned, bought Loew’s Theatre Manage- ment Corp. from Jerrold Perenchio for nearly twice what he had paid Loews a year earlier. Tisch’s critics later pointed to the deal as evi- dence that he frequently sold assets too cheaply. But whether selling stocks or corporate assets, it wasn’t Tisch’s aim necessarily to make a killing—he just wanted at least a return that made the investment suf- ficiently profitable. Better to sell something that turns out to be even more valuable than to have a buyer who ends up feeling cheated."

"The meeting went on until 1:35 A.M., and Tisch, whose reputation for integrity and Wall Street savvy had brought him to Getty’s atten- tion, began to wonder about Getty’s focus. Getty had met Tisch just a few weeks earlier and had already begun to rely on his commonsense approach to the situation, but it quickly became clear that Tisch wasn’t there to further Getty’s agenda. As always, Tisch was there to do the right thing for all the shareholders. The board reconvened at 1:45 a.m. Tisch told Getty he should de- mand that Pennzoil increase its bid to $120 a share. Pennzoil had to offer enough money to eliminate any lingering doubts about whether the price was a fair one. If the board approved a low bid, directors could face litigation by angry shareholders. On the other hand, Tisch saw no point to Sid Petersen’s proposal that the Getty company should buy back its own shares. If we’re voting for a self-tender just because we’re upset at Pennzoil and Mr. Getty, that’s not a valid reason,” Tisch told the board. Ad- dressing Getty, he said, “You may have suits if you do this by threat, and you should discuss this with your attorneys.” The threat was that, once the standstill was over, Getty and Williams would vote out op- posing directors, but the board couldn’t take the legal risk of accept- ing a deal that Goldman Sachs hadn’t deemed fair. “If someone challenges this transaction,” Tisch told him, “we will say you forced us, Mr. Getty.” “I have done nothing unethical!” Getty said. This is not ethics. You have not given the board the opportunity to seek a fair price, Tisch said. “A small ten-dollar sweetener. Some- thing to satisfy this board.”"

"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"

"As Tisch explained it, “We let people have authority, otherwise they lose their effectiveness.” But the Tisches weren’t known for pa- tience. They did not wait for problems to solve themselves. “A decline of any kind concerns us,” Bob said. “We go in immediately to see how we can do better.”"

"Life insurers sell individuals the ultimate conservative invest- ment: personal-wealth protection. They don’t promise to make the policyholder rich, only to protect his or her wealth from the vagaries of inflation and taxes and to guard the family against ruin because of the sudden loss of its breadwinner. The appeal is to the security-con- scious, not to the aggressive investor. Success depends on solid mar- keting and solid financial strength to ensure that the money will be there when policyholders cash in their policies or annuities. Property/casualty insurers sell risk protection to businesses and in- dividuals. They need to show superior financial strength to make sales, but their success depends on solid underwriting—that is, mak- ing sure the property or business being insured isn’t exposed to inor- dinate risk of destruction or loss. Businesses and homeowners have to buy insurance; without it, they don’t do business or borrow to buy a home. Underwriting commercial insurance requires understanding a business’s vulnerabilities. Having that kind of insight on businesses appealed to Tisch."

"Tisch would be criticized from time to time for being too cautious about the stock market, but his conservative nature wouldn’t permit him to risk getting out too late to avoid a downdraft. “Everybody thinks they’re going to get out in time,” he said. The comment was as true about the market in general as it was about an individual com- pany’s stock like Equity Funding. Despite that misstep, Tisch was still cash rich, and the economy was about to create lots of stock market bargains."

"Tisch was disciplined in his approach to interest rates and the economy: these were investment variables he could analyze and adjust to. In the beginning of 1994, for example, when the Dow Jones Indus- trial Average was flirting with the 4000 level, Tisch was selling stocks and bonds and moving money into cash equivalents—short-term Treasury debt."

"“There are a lot of geniuses after the fact,” Tisch said. “But there’s no way to adjust for massive fraud in analyzing a stock. There’s just no answer to it. Either you believe the whole system of investing is based on fraud or you do business on the basis of audits, insurance regular tion, and other safeguards. The idea of massive fraud never entered our minds.” Perhaps it would have, were it not for an investment strategy that put so much emphasis on identifying stock-market buying opportuni- ties by screening for low price/earnings ratios. The assumption is that if an investor can’t identify a fundamental business reason—as op- posed to something having to do with stock market dynamics—for a company’s low stock price, then the stock is artificially depressed and is bound to recover to a more appropriate level. The Equity Funding case was a perfect example of what this strat- egy fails to detect: that the sellers pounding a stock know something a value investor like Tisch doesn’t know—something that doesn’t amount to insider information. Indeed, it was rare that the market the vast majority of investors not privy to inside information—knew 0 something about a company he didn’t know. Were Tisch more open to that possibility, he might not have gotten burned."

"Insurance, Tisch had decided, was the next land of opportunity. The business offered access to huge sums of capital and provided a ve- hide for Tisch to exercise his considerable prowess in the stock and bond markets. Insurance also opened windows on other businesses. It was a natural for Tisch. Both life insurers and property/casualty in- surers are by nature conservative investors, because their assets are pledged against future claims. The money can’t be tied up in hard-to- liquidate or high-risk investments like real estate, below- investment- grade bonds, or volatile stocks."

"“Insurance is one of the best businesses around,” he said. “The as- sets are immediately convertible into capital.” Tisch loved having capital; it beat having good credit. Asked whether any deals were iim minent, he said, “There is always a chance. You can do anything in America.”"

"“We’ve lost the concept that the stockholders own the company,” Tisch said. He was the corporate equivalent of the student radical chanting, “Power to the people!” And he knew it. “If you want to change management,” he continued, “you’re labeled a raider, and the next thing to a criminal is a raider. We leave rebellion to the youth; maybe that’s our problem.”"

"Individually, none of these deals necessarily reflected macroeco- nomic considerations. Decisions were based more on whether Tisch perceived the successful convergence of local factors: good location, good market, good real estate prices, and good financing arrange- ments. As always, the idea was to keep risk at a minimum by using cheap money to buy low-priced, high-quality assets. Tisch applied his investment rules as stringently and dispassionately to hotels as he did to stocks and entire conglomerates."

"The key to the Tisches’ success was hands-on-management. As one former executive put it: “Loews people usually know within a week if anything happens in any of their companies. They have taken away all bureaucracy, all impedimenta.”"

"Tisch’s winning investments had more to do with day-to-day man- agement of finances and operations than with economic foresight. In 1979, Tisch was asked what he would buy to hold for 20 years. Four' teen years later, many of his picks would look like dogs. For example, he liked savings-and-loan associations, which turned out to be one of the most prominent national economic disasters of the early 1990s, because of high-risk lending and investing. Federated Department Stores, another Tisch pick, would get gobbled up by a reckless Campeau Corp. in the late 1980s, only to be plunged into bankruptcy by too much debt. He liked Tosco, wrongly betting that its oil shale business would boom because of problems with the traditional sources of oil. Savin Business Machines would end up in bankruptcy court in 1992, Studebaker-Worthington Inc. would be bought out later that year by McGraw-Edison Co., and Northwest Industries was the sub- ject of a crippling, debt-laden buyout in the mid-1980s. But Tisch wasn’t one to make bets himself on the basis of a 20-year forecast. “We’re pragmatic,” he said. “Our philosophy could change from one day to the next.”"

"Tisch’s bid had an added problem: it was perhaps a little too clever. He had invented a way to reduce takeover cost by building in a sub' stantial tax benefit, thereby turning the tax laws to shareholders’ ben- efit. He weighed a broad range of financial factors when he assessed risks, and he structured a deal with the worst-case scenario in mind."

"this latest target’s assets. The criticism was understandable. Tisch fre^ quently sought to convert assets into cash, but his purpose wasn’t siim ply to raise cash. The assets earmarked for sale were always those that didn’t yield a decent return and held little potential for doing so in the near future without a costly overhaul. Lorillard was no different. The candy and petTood lines didn’t meet Tisch’s requirements for cash flow. Ultimately, they would go. In time, Loews would come to depend heavily on the cigarette business for much of its earnings."

"Even before the World’s Fair opened, the Tisches enjoyed a 15 pen cent higher occupancy rate than their rivals in the city’s hotel bush ness. Why? Bob Tisch attributed it to having newer properties and bigger rooms. Also, unlike their competitors, the Tisches were pro- moting their hotels at their 74 movie theaters and were even taking hotel reservations at the theaters. One former executive pegged their success in large part to having assembled the finest hotel sales force in the world. More important, Bob suggested, was having management housed just a few blocks away. “We are sitting on top of our operations and are not absentee owners,” he said."

"profit. That worked out to a paltry 2.5 percent return on assets, about what the money would earn in a passbook savings account, and 10 percentage points below what Tisch viewed as a minimum acceptable level. Loew’s had the perfect investment profile: lots of hidden value hampered by poor management. But a stock isn’t a lot- tery ticket; it’s a business. Once an investor like Tisch gets his foot in the door, he aims to see it run like a business and will happily do it himself, if necessary."

"“More and more, a big company has to go on spending money just to maintain its existing earnings stream. Isn’t that really an expense, rather than something that should be considered as a true increase in value?” Tisch said. “In what we call ‘smokestack America’ there often isn’t any accumulated free cash after capital outlays. The companies in many cases aren’t really making money.”"

"Tisch took the candy store approach. How much money was left over that didn’t have to be reinvested in the store to keep the cuS' tomers coming and the money rolling in? He called it free cash flow. “Profits that have to be reinvested in more capital outlays may not re- ally be profits at all,” he said. Companies routinely list as an asset money spent on upgrading factories and equipment—sO'Called capital spending. They call it reinvesting profit. The rationale is that if the owner decides to sell the candy store, the expanded shop will fetch that much more because it’s bigger and better. But Tisch believed such expenses were part of the cost of generating sales."

"frequently gets what he wants by virtue of holding so many of the marbles. Fortified by the self-confidence that comes from sitting atop a mountain of cash, Tisch was an overwhelming adversary not just because of his financial strength, but because of his ability to rapidly grasp the complex details of any transaction and identify the weak- nesses in a seller’s pitch about value."

"It was right out of Graham and Dodd, as was the notion of evaluat' ing a company’s underlying assets. Tisch liked insurance companies and banks, for example, because their asset values—in the form of cash, stocks, bonds, mortgages, and real estate—were simple to assess and fairly easy to access. A steel company is different; its value depends"

"The Tisch investment formula was coming into sharp focus: Avoid risk, which included avoiding debt. Exploit hidden tax benefits. Buy low, or don’t buy at all. If the price is too high, rent it; owning the cash flow is good enough. Hire top-quality professional managers, and"

"Tisch eventually became one of a group that joined Buffett every two years on a one-week trip for business leaders and investors. Oth- ers included the likes of Tom Murphy of newspaper publisher Capital Cities, Katharine Graham of The Washington Post, and William Ruane, whose investment fund focused on media stocks; they met in places such as Aspen, Colorado, or en route to Britain via the Queen Elizabeth II. “Half the time we discuss the media and media stocks and investments,” Tisch said of these trips. “Certain things in the investor world when you don’t have a working knowledge, you sort of shy away. When you get a familiarity with the subject, it makes it easier to take a position.”"

"Word of repeated successes travels fast within any industry. The hotel business is no exception. The Tisches already were building a reputation as highly effective managers with deep pockets. It made them automatic targets for pitches by owners of poorly performing ho- tels who wanted to either sell or lease them to someone who could do a better job operating them and would improve their resale value. The"

"The cash was piling up fast, and the pile—now measurable in mil- lions—was outgrowing their immediate personal and business needs, an entrepreneur’s dream come true. A1 Tisch, however, wanted to"

"After the Tisches’ first year in the Traymore, Gravatt agreed to sell them the hotel for $4,350,000. The deal called for a total down pay- ment of $700,000, including the $500,000 he’d already received. The $200,000 balance was a fraction of the first year’s expected profit. Adding to the transaction’s appeal was the tax benefit of a $420,000 annual depreciation allowance the buyers could take over 12 years. Identifying potential tax benefits in such deals would become a hall- mark of Tisch’s approach to minimizing investment risk. Such bene- fits would become even more useful in later years as he diversified his holdings (the most stunning example of this was CBS, where Tisch essentially recouped his entire initial investment and still held more than 18 percent of the company). A favorable tax treatment often could convert what might seem a gamble—buying a distressed busi- ness—into an investment in which the worst-case scenario was break- ing even."

"The Tisch family now was worth about $30 million, more money than the entire family would ever need. No longer did Bob and Larry feel compelled to check out every proposal that met their requirement for a 12 percent pretax return on their investment. Larry Tisch was carving out a reputation as a persuasive negotiator—the kind who"