David Luhnow shares The Secrets of the World’s Richest Man, Mexico’s Mr. Monopoly, Carlos Slim:
The fifth of six children, Mr. Slim was born wealthy. His father, Julian Slim, made his fortune on a general store in downtown Mexico City called “The Orient Star.” His father died when Mr. Slim was only 13.Early on, Mr. Slim showed an aptitude for numbers that would help his career. He taught algebra at Mexico’s largest public university while finishing his thesis, titled “Applications of Linear Theory in Civil Engineering.” His love of numbers also drew him to baseball, a lifelong hobby. “In baseball…numbers talk,” he once wrote. Even today, he enjoys discussing baseball, telling a reporter that slugger Barry Bonds should be remembered more for his walk ratio than his home runs.
After college, Mr. Slim and some friends became stockbrokers in the country’s fledgling market. Trading by day and playing dominoes by night, the clique became known as “Los Casabolseros,” or “The Stock Market Boys.” Despite the success, friends say Mr. Slim, less of a party boy and more private than the rest, wanted to run companies rather than trade. “He never liked money as much as the rest of us. He just wanted to be a good businessman,” says Enrique Trigueros, one of the casabolseros.
Mr. Slim soon got his chance. After turning around a soft-drink company and a printing firm in the late 1960s and mid 1970s, he made his first big move in 1981, buying a big stake in Mexico’s second-biggest tobacco company, Cigatam, maker of Marlboro cigarettes in Mexico. The company generated the cash Mr. Slim needed to go on a buying spree.
A good time to buy came in 1982, a year that would shape Mr. Slim’s destiny. That year, the collapsing price of oil threw Mexico into a tailspin. When departing president José López Portillo nationalized Mexico’s banks, the traditional business elite feared the country was becoming socialist, and ran for the exits. Companies were selling for as little as 5% of their book value. Mr. Slim picked up dozens of leading firms for bargain-basement prices, a move that paid off when the economy recovered in the following years. He bought Mexico’s largest insurer, Seguros de México, for $44 million. Today, the company is worth at least $2.5 billion.
“Countries don’t go broke,” an unflappable Mr. Slim told friends at the time. Indeed, Mr. Slim always says his inspiration to invest during the downturn came from his father, who bought out his partner in their general store during the worst days of the 1910-1917 Mexican revolution — a bet that made his father a fortune when the fighting ended.