the following program is paid for and presented by skye bridge media, llc. anthony: i am anthony scar amucci with the legendary investor can langone -- ken lango ne, part 2. >> this show has never been solely about investments. we have talked about anything that affected people and their money. >> from times square in new york city, the new "wall street week ." anthony: we are pleased to welcome ken langone. it is a pleasure to have you

one. i love that you get the great pronoun usage to you always use "we" and "our," when describing your company' s. i have seen you with the apron on. gary: everybody knows you have been affiliated from the beginning but one thing i have that you got on starting home depot. >> the concept was we will take a business that everybody knows but we will scale it up. it was outrageous. there was an opportunity to do a lot more. ken: first of all, you had wriggle and channel here. >> many monopolies. >> these to get together at the hardware store in chicago and swap ideas.

gary: the basic premise was we have scale --. ken: somebody had to find a way to get the margins down to 2728. that is a huge compression. we said low prices, wide assortment. you think you could start home depot today? ken: i think we could. we were generous, aggressively, with stock options. we thought if we want to have employees. we always called them an associate. the thing that matters more to home depot -- more to me about home depot, we have 3000 people today that are still working today that started working in the parking lots, pushing carts in, helping you load your car. they are multimillionaires. we had options and a restricted stock unit. a savings plan.

people treat something better if they own it. if you are on an airplane, you will be a lot kinder than a charter. gary: the initial investment you made was what? ken: the total deal was $2 million. anthony: 1978. ken: bernie and arthur -- the deal was, they got 45% of the company, but they had to use those shares to bring people and until we went public. you want it bad enough it is coming out of your hide. i got 5% which i promptly construe beaded to my coat -- distributed to my co-owners. then we raced $2 million for 50% of the company. i put in $100,000, 5% of the $2 million.

with 40 other investors. we had people for $25,000. if you invested that, it is about $140 million today. anthony: a compounded annual rate of return. ken: not even counting the dividend. gary: any idea? 1500? ken: the key to the company is the people. these wonderful associates of hours -- our, they are not among the best -- they are the very best. anthony: talk about what matters when you first started in management. you have an unbelievable eye for talent. ken: listen, if i have an open mind -- i have 380,000 pairs of eyes, 380,000 brains and people with common sense that see and understand what the customer

needs and wants, and they will be the advocate for the customer. you need to be fair and to reward people for a job well done. as you know, i am known as a serial over payer, and i plead guilty. great companies need great people. gary: you pay for quality. ken: absolutely. you want to buy a maserati or a bentley, expects to pay more. ken: or a ferrari, even better. gary: what are the three things that have worked at home depot, the three things that make it a great company? ken: the people -- number one. that is top of the list. your customer. are you giving your customer real value? are you giving them enough to know that if the customer wants their money back, they get it back no questions asked.

it is a bond. everything that you do, is this great for the associates and the customer? gary: combining number one and two. ken: number one is the associate. gary: and the customer. anthony: it sounds like a lot of stuff you have learned from your mom and dad. ken: sam walton has four five and dime stores. kmart opened their first one in troy michigan. sam spent more time in that

store than he did or anybody else . walmart is the biggest company in the world today. what is the difference? the people. the management and the board concluded -- they have the digital photography. we don' t want to do that because that will cannibalize our boxes. anthony: it is culture, too. ken: if i am kind to my associate and if my associate knows he can be treated fair, there is a process in place that allows him to be rewarded and rebecca -- and recognizes his effort. it is contagious. gary: you read his analyst reports.

the talk of these opportunities and the cash flow. they' re actually meeting the people and analyzing the people. you think the greatest long-term investments can see it. forget the numbers and focus on the people. ken: he says this about companies that he buys. there is no exotic science. truth. does he know how to reach his customer and is he going to take good care of his people. people will walk through a wall for you if they know you will treat them with respect. they know that they will do best. >> "wall street

week" will be right back. ken: hillary clinton makes more per hour than i do. >> sign up for the "wall street week" letter. you' ll get freaked -- featured articles and investment primers. go to wallstreetweek.com and a sign up today. "wall street week" is sponsored in part by hightower. >> imagine, a business built on the premise that delivering straightforward financial advice is the right thing to do. rising above the discord of an industry compromise by conflict of interest. hightower is the new blueprint for financial advice. we go by the fiduciary standard to put our clients first. not because fiduciary is the latest fad, that because it is what we were built to do. >> i used to dread getting up to go to work.

>> i was tired of being a starving artist. >> i started looking for a business that i believed in. >> he helped me create a business plan, and helped me implement it. >> they really taught me how to think big. >> i am here, because of score. >> get your free business mentor at score.org. >> if you are watching in new york, chicago or washington dc, make sure to tune in for "wall street week," starting at its new time next week. anthony: we' re back with ken langone. gary: let' s turn to the markets and the economy and the fed. your overall thoughts in terms of the stock market? ken: i wish i was 21 again. the opportunities in america today are better than they were when i was 21. gary: that'

s about some of the politics, which we can get into. ken: the fact of the matter is, as i look at the world -- america owns the world for at least another 25 years. there will be all kinds of people doing with the can to screw it up. particularly the politicians. look at dodd frank, don' t own the stock of a small bank. regulated the way it is now it is a regressive tax. the little bank -- you have to pay for regulation whether you make money or not. if i are running jpmorgan or wells fargo or bank of america -- i have scope i have sky. citibank -- the tragedy is how the banks were made the scapegoats. look at barney frank on a tape. see him preaching to the world, and inherent right for every

american to own a house, whether they can afford it -- these guys are pushing it at the banks. barney frank probably now has amnesia. i might have been there, i thought i was there. the banks to me are being beaten up mercilessly unfairly. gary: do you think that will change after 2016? ken: you tell me who will be the next president. if it is hillary clinton it will not change. gary: you mentioned your support for governor christie, anthony has mentioned your support for governor walker. ken: i would vote for walker like that as a nominee. gary: there are so many republican candidates right now. when we get through the primary season, will both of you and other leaders like yourself get behind one candidate? ken: yes.

gary: that was an issue in -- ken: let' s be honest. if the republican voting goes kaflooey, a lot of people will stay home. we need to have definition. we need to clearly express what we will do. gary: are you optimistic that will happen? ken: i am optimistic, but there are people who have announced they couldn' t get elected dogcatcher in a town with 100 people. they' re just running for their speaking fees. anthony: jeb bush, christie, scott walker. ken: k sick -- kasich does it. gary: rubio? ken: no way. he is spinning himself pretty

good now, but i would argue that if we have issues with people of no experience as we do with the sitting president, what the hell is the difference with rubio? same thing. anthony: go to hillary clinton for a second. ken: she is like the clinton with nine lives. you cannot bet against them because they are politically savvy. anthony: and the polls are there. ken: i truly hope the american people have a good, hard look. i am very worried when i hear a father being a politician, and the sun or the daughter -- son or the daughter once of you politician. now the third bush in the next. the clintons. are we a nation that is so narrow in terms of quality and capabilities, that we have to go to just a few families? and paul.

gary: barbara bush originally agreed with you. ken: barbara bush said we had enough bushes. gary: go back to 2008, the idea of president obama was getting away from that. we will bring somebody from the outside, who is not one of these monarchies. ken: when barack obama got elected, he spoke at grant park. i watched it. before i put the light out, i said, thank god the kids in my daughter asked her school have a hero who is president of the united states. barack obama knows the numbers on education. had he said i will be a one trick pony -- education. anthony: schumer tried to push him in that direction but he wanted to go to health care. ken: the point i am making, america felt good about electing barack obama. and i did, too. gary: i went to law school with him.

guy. he was the editor of the harvard law review. ken: he never wrote a piece. gary: he was the editor. ken: how many editors never review. school there were 500 kids. he was one of the top five. their. i supported him, and i am now in st. peter' act of confession and i am a lifelong republican. ken: anthony, you have an opening on your staff, the kid your resume? he says, you can' t see my resume. you won' t get the job. this guy wouldn' resume. i sit here to tell you -- i almost flunked out -- talking

candor. t know and he will not share us? help me out. you would not considered to be a bad guy if you said to the kid t let the know what you are all about -- period. i got hired from oldman and failed the bar exam. ken: it is reasonable to say show me your resume. i have no trouble admitting that i almost blew the greatest opportunity in my life to get a college education. gary: despite everything that has happened in washington, you said earlier that you wish you were 21. america has great decades ahead of it. if i came into capital tomorrow, and i wanted to invest for the long term, give me a roadmap.

ken: first of all -- leadership. i' m convinced that there will be another harry truman, another ronald reagan. there will be another nixon. anthony: define those guys for us. ken: harry truman? when harry truman retired, somebody asked him to make a speech. he said i' m sorry you are only offering this to me because i was president of the united states, and that is not for sale. hillary clinton and bill clinton -- a billion dollars. they are not alone. republican presidents have done the same thing. statistically, there will be another harry truman, another nixon without paranoia. another george h.w. bush, who by the way, would recognize that a promise is a promise. for as many times as i in person heard him say -- no new taxes,

to me i made a commitment to the american people, and if it meant congress, i' is my bond. and he paid for it. he had a 90% approval rating. ken: perot is the guy that said -- rightfully so. ross perot would have been a superb president. there are a lot of things going on that don' t make sense, but the fact of the matter is, i do believe that ross in good part cost george h.w. bush the presidency. he got 20% of the vote. gary: "wall street week" will be right back. >> do you use for -- facebook? ken: hell no. >> "wall street week" is sponsored in part by betterman. >> what should i do with my money? whether you are a multimillion dollar investor or just turning

out, the answer is betterment. it is the smartest way to invest in the largest automated investing in the u.s.. if you' re building wealth or preparing for retirement, we provide a personalized recommendation and your money is put to work. experience smarter investing, and secure your financial future. investing made better. >> welcome to smarter investing.

at better met -- betterment, we have created automated investing to help people reach their goals. we make your life better by helping you manage her money, invest in your personal goals and stay on track for retirement. the revolution of smarter, straightforward, personalized investing has started and we are leading the way. >> i am ricky sandler, i am watching "wall street week," and you should, too. anthony: if you are on a college campus that had to define the word integrity, what would you say? ken: there are two parts. the obvious part -- don' t lie. the bigger part is make sure you don' t leave anybody with mud -- with misunderstandings about what you are doing. conversation in the green room?

ken: i go to see a guy, and get an order to buy a stock, i am happy. but if there are things about that stock he should know that he doesn' t, and shame on me. i hope i made enough commission on the first sale, because there will be many more after that. the essence of life to me -- whether with your wife or your kids -- the parent who says of the kids, they were to go see a movie, you just say yes. you say i think about it. when you and your mind you know you are not going to let them go. anthony: i learned from my professor. his number one thing was, honesty, promptness, integrity but also the we word, that we are in it together. share with our viewers where you are now and what your position is on ceo compensation? ken: you need a great person to

run a great business and you cannot pay them enough money. are there abuses of ceo positions and pay? absolutely. i don' t back away from the fact that i am a serial over payer. all of the money i have made is off the ability and talent of other people. god didn' t have a machine that makes great managers. you have a great manager. a fabulous manager. you have to figure a for that manager and his team to share in the goodies. gary: didn' t u.s. me earlier today, why doesn' t management understand the talent is in the house? and i said they sometimes just don' t pay attention. anthony: you have to pay people. gary: people hear about the sexy, high-tech, multiple names yet your wealth is built on creating products that make a difference.

ken: howard schultz did a great job with starbucks. home depot right now. gary: you mentioned facebook. ken: i own facebook. gary: do you use facebook? ken: hell no. i have people around me that say -- you should own the stock. i say why? they say it will continue to do well and grow. i said fine. gary: you mentioned facebook and the stock on the show. ken: i like was zuckerberg is doing with education. gary: he is aligned very closely with --. anthony: $100 million to the new jersey schools. gary: he has become very close with chris christie. ken: the gift he gave to newark schools came with a match, and i' m happy to say, me and other people who don' t want their

names known, participated in the match. gary: what are your thoughts on social media? ken: i like the phone. picking up the phone. [laughter] how you doing? you can say nice things -- you could say something in an e-mail you' s no chance. you pick up a phone and type. gary: you send a text or an e-mail. anthony: "wall street week" will be right back. >> it is sponsored in part by coke industries -- koch industries. >> every day you are getting things done, we are right there with you. we are helping farmers feed the world. put a roof over your head. fuel in your tank. the shirt on your back.

our 60,000 american workers are exploring new ways to keep you moving forward every day. we are koch. >> you can join millions of americans turning off the old media for newsmax tv . plus, you can watch us anywhere in the world. just download the free newsmax tv app from your iphone or android. for real news, better talk. >> it is sponsored in part by morgan stanley. >> we have this time-honored tradition, we play word association. gary: new york times. ken: foolish. anthony: hurricane sandy.

ken: a great opportunity for all of us to do our best. gary: facebook. ken: we don' t seize the opportunities that lie before us as americans. anthony: dick grosso. ken: the best. anthony: elaborate a little bit. ken: he got the worst schooling a human being could get. look at the exchange today? it is gone. they could argue it wouldn' t have happened, but i would push back. he understood that listings were critical. he spent his life on the road getting listings. he was 1200 when he took over, to 2800 when he was fired. anthony: on september 17, 2001, he got the exchange open. ken: that monday morning and not a glitch. y2k? everybody was terrified that it would blow up?

he had dry run after dry run after dry run, and the first day of the new year of the new millennium -- nothing. anthony: we want to think ken langone for spending time with "wall street week." that is it for today. you can check in with us all week on wallstreetweek.com. until next week, have a prosperous week.

we work weekends here. because it works for our patients. here, at cancer treatment centers of america in philadelphia, we give our patients the freedom to make appointments that fit their schedules, even on weekends. because we believe in being here when our patients need us, so they can keep living their busy lives. weekend appointments are now available here. learn more at cancercenter.com/eastern.