Some Lessons From Andrew Mellon

Operate from a position of strength. Following his father’s wisdom, Mellon always maintained excess reserves to move quickly and decisively. This allowed him to capitalize on opportunities others couldn’t pursue during the inevitable downturns.

Keep your head, when others are losing theirs . During the 1929 crash—history’s worst financial panic (to that point)—Mellon maintained his composure. He didn’t panic or make emotional decisions, demonstrating that clear thinking during a crisis separates the extraordinary from the ordinary.

Play to win. Panics, crashes, and dislocations allowed the strong to “overwhelm the weak, and such opportunities did not come around often.”

Embrace long-term thinking. Mellon’s patience—built on emotional stability and financial strength—enabled the compounding that created his fortune. He never reached for a deal, instead he patiently waited.

Never go for the last dollar. With the 1930s financial crisis underway, Mellon tried to leverage his strength to extract the last dollar from the Bank of Pittsburgh, putting himself in a position to acquire it for nothing or have a competitor go bankrupt, either way increasing his financial dominance in the city. This win-lose approach generated “bitter local criticism at the time, from which his reputation would never recover, despite the money he was spending on building and the substantial donations he would soon be giving to the unemployed.”

Move in silence. Mellon intentionally stayed out of the headlines, which gave him more flexibility. As my friend Peter D. Kaufmann says, “The whale that surfaces gets harpooned.”

Invest in increments. Mellon often invested a little at the start and rapidly expanded into it once an idea started to work.

Vertical integration. The Mellons were the OGs at integrating. They sold land to people, financed the transaction, then sold them the materials to build their houses, the coal to heat them, etc.

Gain an information advantage. Mellon and his brother sat on well over 30 boards. They had more information AND better information.

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