Larry Fink: The Biggest Mistake I Ever Made Was Doubting My Own Sheer Fucking Awesomeness

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As previously discussed, CNBC has been running a new series of interviews in which Becky Quick sits down with some financial heavyweight and asks him to discuss the "worst trade" he ever made. While seemingly the stuff of tedious job interviews, wherein applicants are asked to name their worst quality, such as being a workaholic, so far they've actually been quite interesting and shined a light on aspects of the subjects' personalities that have helped shaped their storied careers but may not have been known to the outside world. For instance, Warren Buffett has a love of buxom milkmaids and this morning we learned that Larry Fink would not have gotten to where he is today without a serious stumble that resulted in making the conscious decision to stop second-guessing just how much ass he kicks.

"My worst trade was really a function of me," Fink told Becky. "Back when I was leaving my job at First Boston, I was going through a lot of turmoil...about what I wanted to do and where I wanted to do it...it was pretty clear to me that the buyers of securities didn't understand the risk of the securities that they were buying, that Wall Street was manufacturing..and so I came up with this idea that we should start an investment management firm that focused on risk management."

Brilliant idea, right? Unfortunately, Fink "didn't have the confidence" in himself to start the company. "It was huge self-doubt," he said pausing for emphasis. "So I went to see Steve Schwarzman and Pete Peterson at Blackstone and they loved the idea," because who wouldn't? Wall Street had never seen anything so awesome. "Within 3 days we came to terms of a partnership. They gave us a 5 million line of credit to start this company and I in turn gave them 40% stake," Big Lar said, getting choked up at the thought. "They believed in me more than I believed in myself. They made the right investment decision. I didn't."

For making the decision to look in the mirror and not see the Golden God staring back at him everyone else saw, Fink paid dearly.

"It was the 35th day of our new company that we got a client on risk management. We started making money about 35 days after that. Within 4 months we started making a profit. And within 6 months we tore up the $5 million line of credit because I didn't need it. And Blackstone had a 40% interest in a company for free."

This, Fink says "was the most costly trade I've ever done in my life." He's not bitter about it, though, nor does he bear any ill-will toward Schwarzman and Peterson and in fact gives credit where credit is due. "It was a great trade for Steve and Pete," owing to the intel they had that Larry Fink = genius.

Well. Live and learn. And remember: never again. [whispers] Never.

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