In the first part of the show, Jason Hartman shares his revelations while playing Monopoly and looking at his Facebook posts. In the second part of the show, he interviews the Chairman and CEO of Big Wig Games, Gary Hoover. He shares the count of his book collection, the value of Book Stop, and gives his thoughts on books in digital format. They also talk about more experimentation in education and using all North American assets to continue the United States’ great heritage.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Announcer 0:13
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in 1000s of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day, you really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.
Jason Hartman 1:04
Welcome to the creating wealth show. This is your host, Jason Hartman. And this is episode number 551 551. Our guest today will be Gary Hoover. And Gary Hoover, if you haven’t heard his name, he is an incredible entrepreneur and just kind of an intellectual, I guess I should say. He’s an avid reader. He sold his first company many years ago, in the days before the internet when valuations weren’t just nutty, and crazy and weird, like they are nowadays, and made a very handsome profit on that and has done some some amazing things. He’s also the name behind Hoover’s he founded that company. And you may have heard of it. That’s a company that supplied all sorts of data on other companies, to investors, and vendors and so forth. And he sold that company as well. That was a very big organization. And anyway, I just think you’ll find them to be very interesting. I first met him in New Orleans, at a young entrepreneurs organization, why eo now called eo conference, he gave a very interesting keynote speech there. And then I saw him keynote at another conference and hung out with him both times quite extensively. So I always wanted to have him on the show for you. So we’re finally going to put them on again, this won’t be totally on topic with real estate investing per se. But I think you’ll still find it interesting.
And before we get to Gary, I want to tell you about an amazing revelation I had last night. Now you may have heard the story that when I was young, I was playing Monopoly with my mother. And I don’t know, I must have been about maybe seven years old. And we were playing the good old Monopoly board game. And I often give out the monopoly cards, the it’s called, I think it’s called monopoly deal, which is a card game that you can play pretty quickly, instead of three hours at the board, you can do this one in about 15 minutes. And it’s real portable. And I gave those out at our meet the Masters event in January and have occasionally given them out at some other events. But my amazing revelation with mom, it may be age seven, is I remember, I was playing Monopoly with her and she was just killing me that she was winning. And and I was whining about it as kids do. And I remember her saying, look, Jason, you have to buy more properties. Because when I land on your on your different properties, if you can have all three and a half a monopoly and put houses on hotels on them, I’m going to be paying you rent every time. And as a kid, I guess what I didn’t realize is I was just accumulating cash, rather than buying properties. So last night, I had another revelation. I’m up here in orange, California staying with some friends who live near Chapman University. And last night, we went out to dinner and one is actually a client. I was actually two. They’re both clients. What am I thinking? One is actually a former employee of my company. Their names are both Andrew By the way, Drew and Andrew. And so we go out to dinner last night. And then I said hey, why don’t we play Monopoly, and drew just bought this gorgeous new motorhome? And so I said, well, let’s play it in the motorhome just for fun. And so we go into his his beautiful, stunning motorhome. And we’re playing the Monopoly game. And I hadn’t played that card game for a long time for maybe I don’t know, since it first came out maybe four or five years. I really liked it. And what I noticed I sort of forgotten about the strategy. I was a little tired. I wasn’t really paying attention. But both drew and Andrew were doing well with the game and I noticed a pattern that they had, whenever a fine would be imposed, or it would be someone’s birthday, which means or The when you get the birthday card, all the other players have to give you like $2 million, or something like that. And if they had cash down in their bank, and they had some properties, and say the property card was valued at 3 million or 2 million, say the property card was valued at $2 million, they might have a $5 million card. And instead of giving up the property, both drew and Andrew would give up the cash. And what was interesting about playing the monopoly deal game is that even if they had, say, only a $5 million bill, and a $2 million property, which would have satisfied the the fine, the levee, they would give up the $5 million cash and not take change, because the properties were so much more valuable than the cache. And what’s interesting about that, as I started to think, why are they so much more valuable? Now, this may be, you know, blatantly obvious to all of you listening. And I don’t know. But I had a bit of a revelation thinking this. Because of course, if you get three monopolies, you win the game. But not only that, the properties are flexible, you can do things with them. If you don’t have a monopoly, you can get a wild card and you can add to it, you can get a card that allows you to put a house or a hotel on on the property and increase the rent. Of course, the properties produce income, the cash doesn’t. There were just so many interesting revelations about that, that I just wanted to kind of share that with you this morning. You know, again, maybe no big deal, but, but really, it is such an incredible asset class. And there’s my revolution from a monopoly at age seven and monopoly last night, and the new version.
The other thing is, I noticed on my Facebook memories this morning, and so a 2010, posts came up where I happen to post a property performer, and it was a performer at 38% annualized return. And what was interesting about that is that was back in the dark days of the Great Recession. And back then, we would limit our our local market specialists allowance on what they could project in terms of appreciation. And this property was projecting a 38% overall return. And for those of you regular listeners who understand that income property is a multi dimensional asset class, you know that that return is not just from appreciation, it’s from leverage, it’s from tax benefits, it’s from inflation into step destruction, it’s from the income the cash on cash return on the property, or the cap rate. So what was interesting about this is looking at that return, I thought, you know, the performance on our website today, generally will show somewhere between a 25 or 30% annualized return in terms of the first year of projection, and maybe up to 40 45%. And now, we are allowing our local market specialists to use 6% as the appreciation metric. And that’s sort of the historical number nationwide that so many people agree on. And I you know, I don’t want to call it the industry standard, but it almost is, if you just look around and, you know, see the various studies, they’ll say, six to 6.7% over the course of several decades. And so now, you know, we do allow them, especially with the inflation fears coming to a project 6% again, and the returns are somewhere around the same. And so of course, what is the reason for that? Are you thinking about it? Do you know what I’m going to say? Well, the reason is that, of course, the prices were so much lower than and the cash flow in terms of a rent to value ratio was so much better. So you could have a an RV ratio of say, 1.4%, that was not totally uncommon. And now today, you’re probably going to get anywhere between point nine and 1.1, or maybe even 1.2%. If you do well. And you know, of course, these vary by market and so forth. And and these are only in our markets, God forbid, if you’re investing in expensive markets like California, South Florida, and those markets, your RV ratios will be terrible. There’ll be maybe, point 4.5%. So again, interesting revelation that the returns, the projected returns haven’t changed much, even though the market has changed dramatically. Just kind of an interesting thing to point out especially for those of you clients who’ve been investing with us for a long time. Of course, you had to go against the grain and you know, have a lot of courage in 2008 2000 And nine 2010. But now, you know the news is so positive. And I think it will be for a while longer. We’re not in the point, in my opinion of any really extremely frothy bubble territory. But we’ll probably get there because we never seem to learn from history.
Anyway, let’s go to Gary Hoover, our guest today. And be sure to register for our San Diego event. We’re on the second tier of early bird pricing. So that’s still a very good deal. Again, that’s an all new event. jgu Live, it’s a very hands on practical workshop style event. And it’s in the Mission Valley area of San Diego, we got a great venue and a great hotel. So I think you’ll really enjoy that event. So we’ll look forward to seeing you there at the end of August. And do that at Jason hartman.com. Here’s our guest, Gary Hooper. It’s my pleasure to welcome a very fascinating man to the show. It is Gary Hoover, and he is chairman and CEO of big wig games. Former founder of book stop and the reference pass, which became Hoover’s and you’ve probably heard of Hoover’s maybe that was his biggest venture. I’m not sure. But he’s always into something. He’s got over 50,000 books. Just an amazing guy. Very interesting to talk to you, Gary, welcome. It’s a pleasure to have you on the show.
Gary Hoover 11:20
It’s great being here, Jason. Thank you.
Jason Hartman 11:22
So give us the count on your book collection.
Gary Hoover 11:25
Yeah, well, my best estimate, which is probably pretty accurate is about 56,000 books. I also collect different kinds of historical memorabilia like World’s Fair stuff. So that’s not even in the account, and transportation information, railroad and airline stuff. But yeah, about about 56,000 books, I bought my first one when I guess I was seven or eight and I still have it. I’ve never looked back at it really is an addiction. I always joke that if I was I was addicted to anything else. They put me in jail, you know, but I’ve never tried to stop or regret the addiction. I’ve just I love knowledge. I love information. So it says nonfiction I set out to create the great reference library when I was a little kid and I’m I’m getting there, you know, I have a fairly I’ll end up with a lot more than 56,000 books when I’m dead.
Jason Hartman 12:16
Now you’re on your sixth start-up, right?
Gary Hoover 12:19
The sixth one, since I moved to Austin 33 years ago, I did another three with friends, three little ones in college. So either six or nine, depending on how you count them.
Jason Hartman 12:29
Amazing. You are always into something and it’s just fascinating to talk to you. We hung out a couple of times at different conferences and spend some time together. And I was just always fascinated by your your breadth of knowledge. It’s really amazing. I have to ask you, though, Gary, do you have something against you know, they have these books on digital format nowadays, right?
Gary Hoover 12:49
Yeah, no, no, no, no, I get talks about that too. And I’m the entrepreneur in residence at the School of Information at the University of Texas here in Austin. And that’s the smallest school at the University of Texas to graduate school one of only a few rated top 10 in the nation and and they’re about information, how people use it Information Science and librarianship and all that. So we talked a lot about the rise of ebooks and and the rise of Amazon, which of course, is affected my old industry, the bookstore industry that I love so much. No, I guess I have a system for digesting the information in books I, I guess I’ve come to realize in the last few years, it’s very important to me to be very efficient in my learning. And at the same time, that doesn’t mean I believe in scanning or speed reading, you really have to allow for serendipity and browsing. But same time, I don’t want to waste my time. And you know, most business books, you know, there’s two tables, or two charts in there that really tell the story. Or maybe the first chapter, the last chapter called conclusions. Often they make a point. And then I take 300 pages to give you 120 examples, if I don’t get it by the second or third example. So So I cannot use I have a system. And it’s the most downloaded thing on my website, how I digest a book in 15 to 30 minutes. And it’s impossible to use that with digital books. They’re just way too slow. So I just took Kindle off of my a tablet, and I love my tablet, or browsing the web, but every single book I own is paper and ink, because it’s so much faster.
Jason Hartman 14:26
Very interesting. Very interesting. Okay, so tell us a little bit about I mean, everybody listening is into knowledge. That’s why they’re listening to my shows. They want to learn more, they’re curious about the world, you know, give us maybe a little just drill down on how you digest a book so quickly.
Gary Hoover 14:42
Yeah, you know, it’s it’s really you know, a book has it has and it’s been more for fiction, this is for getting information and it varies by the type of book. But you know, most nonfiction books, they’ve got a message a point so the first thing is to get that point and and understand the author and where they’re coming. From and will often I can get that in a few paragraphs with the first chapter, the last chapter, I spent a lot of time looking at the table of contents. Because if the books constructed Well, that’s an outline of the book. And if there’s a bunch of chapters, and it says, I didn’t know that 10 reasons General Motors went bankrupt, and one is Japanese competition. And two is a United Auto Workers. Well, I understand those, you know, I probably don’t need to read those chapters, because of prior knowledge. But the third one is something I never heard of. So I read that and understand what they’re doing. I look at every illustration, photograph table and chart in the book before I look at anything else, it’s a good book, those are listed at the front otherwise are going to flip through and find them, because they are more concise and efficient deliverers of information. And then I spent a huge amount of time in the index. And I’m looking for things that I already know about. Because my ability to remember things goes up dramatically if it links to something I already know. So for example, I’ve studied Alfred P. Sloan, the great man about General Motors since I was, well, 12, or 13, I guess, 12 when his book came out, and and i know less about Henry Ford, I grew up in a General Motors factory town, which is what got me interested in business in the first place. So when a biography of Ford comes out, there are many more of those. I go to the index, and I look up Sloan. And then I read those paragraphs. And that way, I remember it all because it’s continuing my education. Just like if I get an economics book I had for my teachers in college later won Nobel prizes. So you take one, Milton Friedman 90% of any book about economics, they refer to Friedman, they love him, they hate him, whatever
Jason Hartman 16:40
Was Friedman one of your professors?
Gary Hoover 16:42
I yeah, yeah. He had four teachers who’ve won Nobel Prizes since I graduated. I would say, as I sit there class that I was set in class to start companies,
Jason Hartman 16:52
You had Friedman as your professor, that is just awesome. I’m a huge fan of his work.
Gary Hoover 16:58
And my favorite teacher was George Stigler who also won the Nobel and I actually, I didn’t have him in class, but later defended Gary Becker, who I believe may go down as the greatest of all those economists, even though he’s not as well known by the general public today, but given 100 years, and perspective that they are all wonderful as well as not Robert Fogle and Eugene Fama. That’s also window bells
Jason Hartman 17:21
Was Gary Becker an Austrian School guy, or what’s his deal,
Gary Hoover 17:24
You know, all of them are either Chicago or Austrian School gets complex, where the borderline is the Chicago School, Stigler and Friedman, Stigler and then Friedman’s teachers. So they were really very key to it. But Becker believes the same things. Bogle is more iconic plastic, and Fama was a finance guy, and still is. He’s the only one still living
Jason Hartman 17:46
Very interesting stuff. Okay, so just wrap it up on you know, digesting the books. This is this is interesting stuff. Because, you know, Gary, I completely agree, you know, why is it that I guess the book industry? And I mean, you you had a chain of bookstores, so you could probably speak to this pretty well. But why is it that, you know, the industry just evolved to where you got to take, you know, 222 pages to explain something. It’s just such a waste of time. You know, I had Ken Blanchard on the show a couple of times, and, and maybe that’s why he became so popular, because, you know, he published these really short books, and, you know, people, I guess they don’t feel they’re getting value unless they buy pages by the pound, it’s just a terrible evolution of that industry, I
Gary Hoover 18:27
think, yeah, the main thing is just, you can’t, you can’t find a book that doesn’t have a spine, you know, when you display books are either face out or their spine out. And it has to be thick enough to show so that’s why I say cliffsnotes with one of the I have about 320 business ideas in my little pocket tablets, started keeping a list 51 years ago when I was 12. And, and one of them was to create a line of books was 20 to 100 pages. But if you study like push notes is the same kind of thing. And there’s no way they had to create their own lack, because their books would never sell if they went on a bookshelf, because they’re too thin. So that’s that’s actually the physical reality of the book, full move, if they’re too thin. So
Jason Hartman 19:13
But nowadays, nowadays, I mean, I know you just said you can’t do what you do with digital, but the fact is, a lot of people read Kindle books and so forth. And, and I do you know, I’m going the opposite direction. You are my friend. I was up to about 4000 books, and I just couldn’t stand moving them anymore every time I move. And so I gave a bunch of them away. I I kind of considered selling them. I had my assistant going through scanning them on an iPhone app that helps you sell books, but they’re not they don’t sell for anything. So I just kept giving them away and got down to maybe I don’t know, I probably have 1200 or something. Now, with the ebooks. They could be short. I mean, I guess well, there are Kindle shorts and there are shorter books. But why is it that a mainstream book by a you know a relatively famous or famous author You know, why does it have to be so long anymore? Because the physical reality ain’t what it used to be right? I mean, you know, are any New York Times bestsellers? 40 pages long? Probably never right?
Gary Hoover 20:12
Yeah, no, no, I mean, that really goes back to the spine thing. And you know, at this stage of the game, you know, everything is evolving that at this stage of the game, they’re still selling most books sell more copies as physical copies than, you know, digital copies, you know, they 30 or 40%, maybe digital copies. And, and there are more books coming out that are Kindle only. You know, so if I can get them in a PDF, I download them and print them out. There’s probably a business model there. So you know, a lot of is still run by that. I mean, a lot. I’ll say no, this is more maybe like 100 page books. But Oxford University Press has this amazing series called a short introduction to negative everything, capitalism, philosophy, religion, man, I, they must have 1000 of those little guys. No, no, I, you know, hey, we always can use creativity, and new things. I I hope for my sake, in my reading style sake, that I can get every ebook in the paper form. Otherwise, I’ll just be doing a lot of printing, I guess. But yeah, no, no, I mean, I totally understand the appeal of ebooks, you know, I can have all, well, I gotta have maybe a third of my books, you know, in one tablet, most of my books are not available as ebooks. And I also have to say that in the books that I buy, I haven’t done a hard look, and maybe about four months, but I ever shot my survey just to see, and probably 60% of all the books I buy are not available as ebooks, the categories I’m most interested in have been slower to move over there. And the other thing, my reference books, because, yeah, I was complaining that you and I both complained about 400 page business books, it should have been 50 pages. On the other hand book, like the Biographical Dictionary, and American business leaders, which I keep beside my bed, you know, with Chuck has got to be 1500 pages, or you don’t get it. I mean, you know, so a lot of I do have our 500 up to 3000 pages, as a reference. And
Jason Hartman 22:16
I’ll tell you, by the way listeners, this show is not about books, okay, so we’ll get to some other really interesting stuff here in a moment, about Gary’s thoughts on business and the economy and so forth. And, you know, some of the great innovations going on nowadays, but, you know, on the book topic, it’s also really annoying, that if you look at any group of contemporary books, maybe you know, the top 100 best selling books, and, you know, I’m, I’m trying to get through as many of these things as I could, as far as I can, you know, throughout the year, and, and really dive in. And, and they use a lot of the same examples. And sometimes I get really confused, I might listen to them on Audible. We have the founder of audible on the show, too. And I love audible. You know, I’m hearing the same example I just heard in a book I was listening to a few days ago, and I’m thinking which book am I listening to? You know, they use the same example. So they, you know, it’s very incestuous to
Gary Hoover 23:09
the lemming effect when I first was starting my first company, book stop. And, and you know, 1982, and entrepreneurship was not quite as hot then as it is now in general. But, and, and I remember I got so frustrated, because every journalist, every magazine, every general interest newspaper, when they wrote a story about entrepreneurship, and how cool entrepreneurs were, they all wrote the same company over and over. And, and it was something I was not overly impressed with. And it was Ben and Jerry’s, and you just couldn’t get an inch face, because it seemed like it was the only company on Earth,
Jason Hartman 23:46
Ben and Jerry’s, the company that could do the most for the environment, which is their big cause, if they would just go out of business. I mean, Ben and Jerry’s the biggest environmental hypocrites, you know, out there, right.
Gary Hoover 24:00
And they know, they had an unorthodox way of picking their successor, and the guy didn’t work out, it blew up in their face, and then they ended up selling out, I think, to Unilever,
Jason Hartman 24:09
I’ve just never understood how making ice cream could help the environment. I mean, I could help increase the rate of diabetes. And I bet you know, being diabetic, there’s a lot of environmental cost, certainly obesity, all kinds of health problems. I don’t know, maybe if they want to just have people die off. So the environment can be better. Maybe that’s the plan, but population control. Why not? Yeah, exactly. Which, which is the ultimate scheme of a lot of these left movements. But we don’t need to go into that. Very interesting. So your first company was booked stop. And I think you sold that for like $42 million or something, didn’t you?
Gary Hoover 24:45
Yeah, yeah. Well, I’m a venture capitalist and my investors that I sold it for 41 and a half million in 1989. Barnes and Noble bought it. We were seven years old. We were coast to coast. We were, I guess maybe fourth biggest bookstore chain, but we Were really the first book superstore chain. So that was really my most successful business. Even though Barnes and Noble over time renamed the stores we were book stopping bookstore from Miami to San Diego. And they closed most all of them and open new Barnes and Noble or rebranded and which I think was a smart thing to do. But that went on to become a multi billion dollar thing. And, and, and a key part of functional success. Now, actually, they also they were the ones that have the coffee shops, and then wood and library fields. So very interesting.
Jason Hartman 25:30
I mean, if you if you adjust that for inflation, you know, nowadays, people are so spoiled with numbers in the internet era, and these companies selling for a billion dollars a year and a half after they started typing. But you know, $42 million back then was a lot of money, you know, not just because you’d adjust for inflation, but you’d also adjust for craziness, you know, crazy valuations.
Gary Hoover 25:51
That’s all a bunch of nonsense. And a bunch of nonsense, a friend of mine was working for someone else on a new project to start up. And the other fella instead of kind of mine, as an entrepreneur is build a successful company is turned over to some people in lnd. And, and, and they were talking about their, their kind of, you know, in the sell stage, or whatever it is that they got things out to and customers and, and I said, Well, the customers are asking for this. And the head person said, well, that’s not that’s not where the unicorn is, we got to go do this instead. And you know, this idea that what we’re pursuing is a unicorn company is going to be worth a billion dollars. Plus, it’s crazy. You can’t know which ones the unicorns are gonna be. Even a doctor named like that and getting all obsessive about it’s like, what are you going to do? Go shoot yourself in a closet? If you have my 980 9 million? And and and, and, and you know, so why not aim for 10 billion why mess around, you know, you can live a pretty good life in this country. Certainly, here in Texas, Austin, a little less so than a San Antonio, Dallas or Houston, you can live a really good life on 100,000 pounds a year, and you probably buy everything you want, if you had two to 3 million, and you might do something that’s better for the world. And if you do something, it’s great for the world and, and makes billions. Absolutely, you know, but it’s gotten crazy.
Jason Hartman 27:10
Yeah, you know, it really has, it really has, but the scale of internet related technologies and businesses is is obviously amazing. You know, the reach we have, what do you think’s going on in the world nowadays? You know, Gary, the first time I ever met, you was in New Orleans, at a young entrepreneurs organization. Ye Oh, it’s now called eo conference. And you you I remember your speech very well, you talked about these eight key things, you know, that we have to have a sense of a sense of geography, a sense of history. And and, you know, that was just a fascinating talk. What’s your outlook on today’s world? What do you think, you know, in whatever category you want, whatever area?
Gary Hoover 27:49
Yeah, well, you know, I mean, the basic thing, I mean, I’ve always got to look at the long term, I’m only doing startups, you got to think 15 to 20 years out in the future, five to 10 years to get her up and cooking. And then it’s going to have legs and it’s going to have value, whether that sell it or take it public or keep it for your grandkids or whatever. And you know, when I look at the long term, I’m not looking at Oh, short term like, you know, just since the recession of oh eight or something. You know, the world is rising and rising. I’ve never been to 44 countries I just got from Austin in Mexico City. Couple years I’ve been a couple years ago, I’ve been in 17 3037 States and Mexico. Travel again made it added Peru and Panama last year, the whole world is rising and mixed, you know how the countries compete and what they do to make them less or more effective competitors. But the world our lives are getting longer or getting healthier, or getting more apple in. Health care globally is getting better infant mortality is dropping, literacy is rising. Even Africa, Sub Saharan Africa, which 15 years ago, I was I was the only place a world I wasn’t real optimistic about and now we have several countries, they’re coming on strong. So you know, I’m honest, I’ve never been a better time in history to be an entrepreneur. I’m not being a Pollyanna. We have issues and challenges every country does and always has. You know, I think our competitors, you know, when I hear people say, Oh, you know, why aren’t we like Europe where everybody gets eight weeks off all your competition competitions, Asia, or nobody takes any time off. And
Jason Hartman 29:22
Hey, I you know what I want to I want to just address that if I may, for a moment, Gary. So I’ve traveled extensively. I’m up to 78 countries now, but I haven’t done it in depth like you have. And let me tell you, I was born in Europe, and the standard of living in Europe is dramatically lower than the US and that’s the first world. Okay, I mean, people, these leftist people in America that think America should be more like Europe are crazy. They’re absolutely nuts. Europeans live in by and large, cheap little houses. They drive cheap little cars, their health care ain’t that great. Okay, so, let’s get past that one, the selection, you walk into any store in Europe, and, you know, do it to a comparable store in the States. And it’s dramatically different. I mean, the selection here of the choice of products, the choice of opportunities, and every European friend of mine, I asked them the question, you know, where would you rather live? Without exception? They say, I’d rather live in the US. Where’s there more opportunity without exception, they say in the US. I mean, it’s just, it’s just not even a contest. I mean, people have got to give up this, we need to be more like Europe crap. Now. I mean, I love Europe. I love visiting Europe. I was born in Europe. It’s spectacular. No one would doubt that. But it’s also a continent caught up in its history. America is caught up in its future, you know, and maybe not as much as it used to be, unfortunately. But, you know, Europe is caught up in the past. And it’s just the level of opportunity here is dramatically better.
Gary Hoover 30:58
If I can pile on. I was just in conversation with a friend the other day, and it came up the state of Illinois, I went to college and a wonderful state wonderful people. And I like it not from Indiana, originally myself next door. And I’ve been in Texas 33 years, and it came out something about I mentioned stuff like for Illinois, a basket case. Again, now they’re broke, they’re in debt, the same Chicago’s bankrupt, they’re not going to be able to pay all their government pensions or even close. A bunch of the politicians are in prison, including Governor’s, it’s just very sad,
Jason Hartman 31:28
But they have gun control. I’m joking, of course.
Gary Hoover 31:30
Well. Yeah. Yeah. Well, I sent and then my friend who I think might vote the way I vote, I said, Well, yeah, the text has gotten a lot of issues, too. You know, we’re 41st in our, you know, payments for aid to dependent children or whatever I you know, there’s a series of things people don’t want to go get down in Texas. And as I said, I said, I said, Maybe that’s it. I said, Yeah. Okay. I said, but I look at what the people do. And so the people vote with their feet, nobody is moving to Illinois, from the rest of us, or from around the world not not met and not on a big basis, that Texas cannot they’re flooding in here. A documented undocumented in a Midwestern California, from Mexico, from Europe. And you know, if you’re unemployed Look, if you’re a low income, Hispanic family, what they call the working poor out in Chicago, would you rather live up there where you have these extra benefits, and there are no jobs, or when you’re in a kind of Texas where we have more jobs than we can fill? And and you don’t have to go along those benefits.
Jason Hartman 32:33
But Gary, that’s exactly the thing. You know, when everybody talks about, you know, raising the minimum wage is such a cruel idea. It’s so cruel to people. Because what it does is it creates higher unemployment. It creates, you know, it pushes these companies faster toward robots to replace human beings. I mean, you know, in Seattle now, there’s a whole movement in Seattle. And it’s like a pretty big movement of people who do not tip servers anymore. Because they figure Look, you’re making 15 bucks an hour. The point of the point of tips was because you have a low wage job, right? And so this this stuff, it always backfires. It never works. And the cruelest thing about this talk about raising minimum wage is that it affects minorities the most, if you want to see black youth unemployment, and crime skyrocket, just make the minimum wage 15 bucks an hour everywhere, and it’ll skyrocket.
Gary Hoover 33:33
Now, I I tried to sort through that myself, and I really think it’s kind of it’s a matter of people using emotions versus people using logic. And it is it sad? Yeah. Sounds like you and I are both capitalist.
Jason Hartman 33:48
Capitalism, what a terrible thing. Well, hey, so So do you think like, you know, take a look at this country, for example, you know, looking at the US, we’ve got this massive amount of debt. We’ve got all these unfunded mandates coming at us in the future, these unfunded entitlements, these promises the government has made that it cannot possibly keep, even with, you know, raising the tax rate to 100% it can’t keep those promises. But at the same time, there’s all this innovation, this technology, and it’s kind of an amazing time to be alive. I, where, what’s your take on it?
Gary Hoover 34:21
Well, you know, I’d say I I am an optimist, and and probably incurably and genetically, you know, so can’t do much about that. I found that optimism and pessimism are a you know, they’re they’re a friend of mine, because they aren’t totally based on facts. They’re really your attitude and they make all the difference. You know, as I think Henry Ford said, If you believe you can do it or you believe you can’t, either way, you’re right, you know, so, you know, if you’re pessimistic about the world and get up in the morning, we’re going to shoot yourself in the head or sell all your property go live in a cave. So you know my thing on the debt and all that certainly not dreaming and all those people Whenever is concerned about the debt now it’s a lot higher now. But even so his he said over and over, the main thing to watch is government as a share of the total GDP. And and that’s, you know, gone gone up but but there have been very point it’s kind of trying to stabilize the Clinton years are pretty good if I recall. And and then there’s you got to include state and local and federal because they can go different directions. But then my bottom line my my gut thing on the debt is amazing what a strong economy can do, you know, I’m studying how we came out of world war two and some people that we go into depression, unemployed soldiers, you know, our economy took off, even how New York City rebounded from September 11. And a strong economy is my dad, he used to have a was a grocer earlier in his career and grocery store. And one of their sayings was a volume or revenue will cover a multitude of sins, you know, so you can run a sloppy store, but if you crank it up by him, you can live through it and and we can pay down a lot of debt. You know, we need to restructure, so security may take hard look at Medicare, I I hope that sometime and then in the coming four, 812 or 16 years, we have, you know, a government leadership of President and the Congress, who take attitudes more like you and I have, but we’ve we’ve survived a lot of people who don’t, and country’s still here, you know, it’s still the greatest country on Earth. You know, a lot of our issues are, we’re an older society, our infrastructures getting older, or populations getting older, you know, we’re gonna have so many retired people, not enough people paying into the system to cover them. Whereas you want to study Mexico, you know, it’s gonna have all these it is and we’ll have all these people working age. So you know, we really, if you combine Mexico, Canada and the United States, you really have a powerful engine that can compete with with Europe or Asia or anywhere in the world, because of the mix of those three societies. So no, I can’t I can’t be pessimistic but and hey, we could talk about regulation too, which is what I majored in, in college and within economics, and I trust, and there’s all kinds of sad and stupid stuff coming out of Washington and the Justice Department will survive. Entrepreneurs are by nature, persistent, and durable, and pigheaded. And hard, hard to put down. You find entrepreneurs even under rocks in Cuba, you know, and that, but it does concern me because hey, Mexico, and Colombia are one of my big constraints is our school system. Until we do something about the monopoly held, and I hey, I believe in public schools, my educational is public schools, but they are very different. My home High School used to be 70% of the students went on to more education after high school today, it’s 30%. And I went and spoke to the class back there, economics classes, and so on. And you can tell the Curiosity has been driven out of the kids heads, because it’s become a babysitting program and a discipline program. And nobody can complain because the parents are big fireless was when I was down at Columbia the week before and many, there’s no way those Indiana kids are going to be able to compete with those kids from South America, they’re going to school six days a week, they’re wearing uniforms, they really got to learn. It’s a more human, less mechanical, less rule driven thing. We need, we need experimentation and education, we need people to try new things. We need parents, especially minority parents to have the freedom to send their kids to the best school they want instead of being think about it if you had to buy all your groceries at the close, closest grocery store to your house. And if so, all the grocery stores in America were operated by the same outfit, government or non government and all had to follow the same rules. You know, life would be awful.
Jason Hartman 38:55
Gary, your your, your speaker to entrepreneurs and educator of entrepreneurs. And I would call you a at least a bit of a futurist. Okay. I don’t know if you ever take that title. But here’s something I’m really struggling with. And I cannot make heads or tails of it, you know, and I’m not too bad at making predictions. And I’ve been right on a lot of them. And the only one I’ve really been sort of wrong in a big way on is interest rates. I thought they’d be quite a bit higher by now. But that’s, that’s, that’s, you know, if you asked me 10 years ago, would rates be higher? Now? I would have said Most definitely. Right.
Gary Hoover 39:29
I probably would have too. Yeah, yeah. It’s hard to stay at zero forever. Yeah,
Jason Hartman 39:33
I know. It’s I got that one sort of famously
Gary Hoover 39:36
not the iron sooner or later.
Jason Hartman 39:37
Let me tell you one that I’m really struggling with, though. And that is robotics. You know, I have read many articles and books and you know, seen various videos floating around the internet on the robotics revolution, saying that within maybe five to seven years. I mean, this is right here. This is not some distant future. Thing 47% of the workforce could be replaced by robots. Certainly the, you know, Uber is going to have self driving cars and Lyft will have self driving cars soon. And, you know, maybe people won’t even much need to own their own car. So there, there’s going to be a lot of change just in the transportation business, which is a giant industry. Maybe we’re going to have Amazon delivery drones, and UPS will do that, too. And so will FedEx and displacing all of those drivers. So that just the transportation industry alone is a giant industry. But there are so many others. I mean, computers can write poetry, compose music, you know, write books now. Now they’re writing articles. computers can write articles on sports games and, and financial news. And, and you don’t need a human. I mean, on one side, I think, Oh, my God, 47% additional unemployment, you know, depending on if whether you believe the government stats or not, that push us up to like, what, 50 53% unemployment or so that would be terrible. Okay. But maybe, really, it’s not the jobs we need. We just want the things they produce the wealth, the services, the products, and maybe we’re all headed toward some sort of utopian society. Maybe that’s really upon us. I don’t know. I don’t know if this is going to be an epic disaster of unemployment, or an epically wonderful time in which to live. What do you think?
Gary Hoover 41:28
Yeah, well, I hey, I like robots. My new venture, the spark is going to be the first museum and America real serious Museum, for profit museum about innovation. And we’re gonna have a robot ring and a drone film, and a place where the customers and public can trial and stuff and everything. So I was just, yeah, I was watching battlebots. You and I? Well, gosh, I mean, my basic reactions in the series are, first of all, it’s no way 47% of people are going to lose their jobs and manufacturing in the next five or even 10 or 15 years. Due to robotics, I’d have to study it. That’s why I draw a curve on it. But you know, hey, in general motors country that I remember when they built the big Oklahoma plant, maybe 1985 it was totally robotic. We have I was just reading it. I can’t remember which book it was but like the way they make Twinkies I made in the fortune article but the Twinkies guy or fortune article, but Twinkies they produce whatever 25 million in one plant and has three workers US Steel and Gary Indiana biggest steel mill in the United States. Something I was shocked I thought it all kind of died away and then I find out Oh, no, they’re the biggest provider steel to Detroit and there’s they’re producing I forget but like the same amount they did 20 years ago or maybe more Well, they’ve gone from whatever I’m inventing these numbers 2000 workers to 50 so you know my own talent for 27,000 General Motors workers to zero now because the robotics is another factor so we’re already way way way down that curve. And and watch left is going to attend to me things well, that’s robotically organized and on the other end is manufacturing I’m pretty sure doesn’t even employs many people’s retailing now, and people not retailing as low wage. But I believe Walmart has created more $50,000 a year in up jobs than any other company in America has created total jobs in the last 30 years. You know, as a truck drivers aren’t going to go away the idea that everything’s gonna be an automated car real soon. No, someday maybe. But I just saw a few minutes ago a you know, 18 Wheeler going down a road with a bulldozer on his back and I don’t want that thing automated with assistance get hacked. And if you saw Chrysler got hacked the system, you know, it’s an extremely high risk scary thing. And I live out in the country outside Austin. I don’t think I’m gonna be robotic cars on my curvy country road for at least 10 years or 15 years. It’s hard to say but
Jason Hartman 44:00
Gary, I don’t know. I think this is coming faster than that.
Gary Hoover 44:03
Nobody knows for sure. But it’s things you know, sometimes things move faster, anything sometimes they move slower. technology’s always hard to predict. Aye Aye aye, you know, so so I overall it’s going to move more slowly manufacturing specially United States is not as many jobs but but there’s also going to be a rise in craft manufacturing. It’s a it’s just like retailing, now people are getting down on the big chain stores and everything is only because we’re rich. Only because we’re an apple in society. Can we really afford to say, Oh, I’d rather like to go to a nice little mom and pop store and I’m willing to pay a little more money for my hammer, then go to Home Depot, and you know, and give me mom and pop antique stores and interesting little shops and all kinds of cool stuff. It’s really dueling in this country is gonna do well the same way right here. My house is a custom guitar maker for guys. Not the limited ones, you know, and that’s gonna rise. I will It also said the whole thing, I mean, I don’t want any robotic surgeons, I don’t want any robotic lawyers around me. And there’s gonna be a backlash against some of this. And, and to be frank, I you and I might not like it. But to be frank, a lot of countries and governments and things will will slow it down and try to stop it. And a lot of labor organizations, you know, I’m maybe not in favor of all that. But those are other reasons that we’ll, it’ll be more gradual. And I mean, the whole thing, okay. The United States, if you moved here in 18 190%, of people in America were in agriculture. Well, today, it’s like two or 3%. And we’re better fed than we’ve ever been. And we feel healthy, the whole world know, when it happens fast, it’s tougher, because it happened in that understanding, like 20 years to lose all those jobs. So that was very high speed, really. But nevertheless, I you know, I guess what I would say is, are we training and educating our young people to live in a world like that, we turn it out people out of even trade schools for jobs from the 50s. But man, they’re still man, as the average plumber is, in Texas, like 55 years old, we have a shortage of carpenters. we’re importing welders from Mexico, because we don’t have them. Those are not things, you know, complex recognition system, and it’s going to be automated that quickly and that easily. So the main thing is like agriculture, do we have the time to make the transition? I guess, you know, Why was I so great quote, Mark Twain? I think it was Mark Twain said, losing sleep worrying about something is like making payments on a debt that you don’t know that you owed. And now I know you know, we didn’t do what we can I hate. My concerns about our education system is why last week taught six classes and spent whenever I spent 14 hours of lectures at every level, university,
Jason Hartman 46:52
yeah, would it be fair to say then that you believe that just like with all technologies in the past that threaten various jobs, that society will just recalibrate and readjust as the robots come online? People? You know, we I remember the predictions in the 70s. Of You know, we’re only going to work three days a week because of computers. Well, that didn’t happen more than ever, and in some ways,
Gary Hoover 47:17
Well, and we’d be, we’d be in a paperless society, with no printers and no inkjet ink. No. And the thing is the idea of what you just described as a society, well, that has always happened. And that’s happened since cavemen and
Jason Hartman 47:34
I just wonder if, you know, I always wonder if you know, those famous last words, if this time, it’s different. Because of the technology is so extreme, you know,
Gary Hoover 47:45
It’s almost never true. And all the people believe our whole environment with Google and everything, everything’s different now. And he really steady I just did my newsletter, you can see it on Hoover’s world, six key steps to building great companies. And I really believe that Google’s gonna be a great company. It’ll be the built the way john deere was, which is 178 years old, and on its CEO, if you can believe it’s only nine, a book, if you want to really look at that hard get to fourth grade awakening by Robert Fogle. He’s one of those Nobel Prize winning economists I studied under and under, he has a table, which I repeated in my book, because it’s so powerful, and he had and he really is the guy that could see the future was he passed away. He, I think he was talking 100 years from now, he really believed the entire world would be well fed, and have everything we need, our material needs to be met. And the real thing would be, we would have a global spiritual shortage. And it would really be a quest for meaning and spirituality. And hey, it is not impossible. I don’t know if I call it utopia, but it’s not impossible. But you know, 100 or 200 years from now. Now, we all will work, you know, 15 hours a week, and then we’ll have to figure out what to do with our lives to make them worthwhile. So, you know, you know, that’s the way we’ve been, and we work Lastly, ever having history. His numbers show that we, you know, especially in America, the number of hours the average person puts into nonprofits and charitable activities, not in the money too. That’s gone way, way up. Look at Hey, where I live, you know, he’s church going populations with giant, massive churches that cost millions and millions of dollars. And those people are in those churches, you know, three, four days a week and doing all kinds of cool stuff. No, no, I just, I there’s just no evidence in human history to be long term pessimistic. That doesn’t mean we didn’t have Hitler. It doesn’t mean Detroit didn’t die, you know, because it’s really sad. They couldn’t have done a better job of managing that, you know, the auto industry, US auto industry and the city leaders in Detroit. Didn’t have to be quite as awful as it is. And I’m very sad because it’s a wonder historic city
Jason Hartman 50:01
Oh yeah, I was I was just there last week literally and it’s an amazing story. I mean population cutting less than half you know, the government’s model cities program and disaster. You know, the union’s push too hard, I think and you take all those crooked politicians too and it’s just been a disaster but but very interesting. Gary, give out your website. Tell people where they can find you. Is it is it just Hoover’s or where? Tell people
Gary Hoover 50:23
Uh yes, Hoover’s was coming, I started I don’t have anything to do with anymore except my name on the door that was public and got sold. But yeah, Hoover’s world is my website. my newsletter is there, there’s a way to contact me. They can also email me directly Gary Hoov, my name without the [email protected]. And there’s information on Hoover’s world about the spark my new venture. I have a YouTube channel if you go to YouTube, if you’re ever in Austin and want to take one of my live courses, those are on Eventbrite. But Hoover’s world generally is the right place to start.
Jason Hartman 51:03
Fantastic. Good stuff. So that’s Hooversworld.com. And Gary Hoover, thank you so much for joining us. Just any quick closing thought to wrap it all up.
Gary Hoover 51:11
Oh, yeah. Hey, keep the chin up, fight the good fight a title, read my piece on Hoover’s world about six, six simple steps to create a great enterprise. I mean, find things the world really needs, find things that really make life better for someone, go after it, make them better every day, continually listen to your customers, Wall Street doesn’t matter Washington and matter all that it’s all secondary compared to your customers. And, and believe in yourself. And and I mean, those are, nothing’s ever stopped those you know, and I’m not guaranteeing any success, man it is. It’s tough. When people say why is Michael Dell, the richest guy in Texas or whatever, I need you to go out and we’ll become billionaires like him. I said, Well, he’s a billionaire. Because he took chances and they’re about 100,000 people who have tried to do what he did, and universe to them. Oh, so that stuck out to that that long you know if you got the right ideas and hey, I’d winners and losers. I lost all my money for my first two and my third venture at a travel superstore, which did great revenue, but the airlines don’t pay commission on airline tickets and, and you know, either, you know, shoot yourself in the head and give up or else you. You know, you go on to the next thing me, I’m really unemployable. I got to do startups.
Jason Hartman 52:27
Right, exactly. Exactly. Good stuff. Gary Hoover again, thanks for joining us.
Gary Hoover 52:32
Thank you.
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