ISSUE # 74
26th September 2008

From Dan Peña – Executive Coach and Mentor to the High Performer.

Dear High Performance Person and Visionary:

Capitalism on the way up!
Socialism on the way down!
You only get hurt on a roller coaster
when you get off in the middle of the ride!

Yes I know it feels like we have gone off the rails,
 but we haven’t!
 Stay on!

We can avert a Depression if we act intelligently!
Praise the Lord and pass the ammunition!
It is financial WAR with out the guns,

for now!


I never knew how much good my training as an infantry officer at Fort Benning, Georgia, USA would be for me! Dodging live bullets keeps you focused! And believe me this financial crisis is not a drill! This is for real.


AIG gets $85 billion from U.S. Government, Lehman Brothers goes BK, Merrill Lynch gets taken over by Bank of America, Bear Stearns bailed out by JP Morgan, and Freddie Mac and Fannie Mae taken over by the U.S. Government!  And as if this wasn’t enough, Goldman Sachs and Morgan Stanley take refuge under the Fed banking laws by becoming commercial banks and are no longer the venerable power house investment banks they once were. Plus the recent darling of the Nuevo Rich, hedge funds, are now unwinding! And it wasn’t just greedy America! The Bank of Scotland, founded in 1695, and others are now gone! I assure you many more will follow! If you are not having fun yet, wait there will be much more to come! I guarantee it!

I take no solace in saying, I told you so!

It could take a generation to fix this mess!


A $700 billion bail out from the FED, which will easily go over a trillion and more. I would like to be optimistic, but when was the last time one of these estimates was even close to being accurate or truthful? NEVER!


My seminar in November will address in detail how to take advantage of this crisis in your individual business, as I did to build a $445 million empire in the worse energy market decline in 50 years.


It is unbelievable to live as long as I have, because if you live long enough you see it all!


I have been saying for several years; the giant debt we had world wide would bite us sooner than later; Real Estate would eventually bring us down because the fantasy of “God” isn’t making anymore land; the kids now managing most of the money in the world would cause us great hardship; and the U.S. Government would have to bail us out or go out of business as we know it!


As many of you know I watch CNN, CNBC and other financial news shows all day long, as I answer emails and talk on the phone, when I am not in meetings. The financial roller coaster I witnessed recently was remarkable. In two days more than $700 billion (each day) was wiped off the USA markets. I really don’t know how much other markets declined world wide but India, Brazil, and China to name a few all have suffered and the Russian stock exchanges were shut down completely after a 45% decline – and short selling was banned in the USA markets.


Now the U.S. Government will bail out the financial system to the tune of $700 billion that is estimated to run easily well over a trillion dollars. What a absolute catastrophic total meltdown! These are unprecedented actions to say the least! It makes the 1987 crash and dot com fiasco look mild!


As I have said for many years cash is a better alternative for most people, because they don’t understand what risk they are taking. For example, money market funds are not insured, contrary to what people may have thought.  This is only one small example of how risk assessment is not understood. Most people outside the financial centers of the world just don’t appreciate how close the U.S. financial model came to total collapse and mayhem!


For many years I have told people nothing goes in one direction forever! Many of you made, on paper, tons of money in real estate and the stock market, continuing to leverage up getting bigger and more expense properties and larger stock portfolios. But leverage goes both ways and is a vicious two edge knife. What has exacerbated the situation even more are the countless hedge funds that use all kinds of financial instruments, including shorting the markets to enhance their yields.  People that should not be involved in such dealings are up to their eyes in a big way. These hedge funds are not regulated and virtually anyone with the minimum investment is allowed in the game. This is a recipe for disaster!


The week before the financial debacle I was privileged to be a key note speaker at a large world wide real estate exposition:

. I was the opening speaker to get them jacked up. I also spoke 60 minutes on how I dealt with building my own empire in a collapsing market, but I had no idea what would follow the very next week. I was scheduled to speak another 60 minutes in the grave yard slot the last day. My presentation went 125 minutes, they listened with baited breathe an extra 65 minutes, before I shut the convention down. It was all filmed and to say I was terrific is an understatement. I really enjoyed my self. It had been a long time since I spoke in the USA.


I was honored in receiving two awards at the expo: “2008 AIREEC Man of the Year” and “2008 AIREEC Inspirational Leadership Award”. I was humbled to say the least. I believe my humble beginnings from an East LA barrio, only a few miles from the expo, boded well for my being chosen as an example of rag to riches.


Interestingly I was initially invited before the financial meltdown to pump up the expo attendees, because I had made quantum leaps in a collapsing market. Of course I was prepared to do this easily. What I didn’t know or appreciate was the very next week the financial world would be in such trouble it would be beyond comprehension! Hence, my timing was almost perfect!


Hence, my message was even more germane the very next week to those that attended. Of course those that have read my book and or attended my seminars know that attaining significant success is easier by modeling those who have done it before. Finding a mentor who is where you want to be. This is even more important in these treacherous markets. There are still countless ways to get screwed trying to attain and fulfill your dreams. So having a mentor is even more important now than ever!


At the expo I had a large private office to listen to the many attendees from all over the world. Outside I was screaming on a huge screen showing me doing a seminar. For those brave enough to make an appointment I spent time with each and every one that wanted time with me.  I heard some very sad stories and people that were looking for some direction. I heard a few success stories, but they were in the minority. I also heard one potential suicide story. Some stories were shocking how they lost their money, for the second or third time doing the exact same thing as they did the time(s) before.


I enjoyed talking to many people, but it never ceases to amaze me how people never understand it is not their genius that made money in a raging bull market! They always give little or no recognition to the market conditions. And they NEVER understand markets move in two directions and nothing goes up for ever! NOTHING! NOTHING!


As I discussed their individual situations, virtually all knew they were in a mess, but few of them emotionally could make the tough decisions going for ward. You have heard me say we have two bank accounts in life: emotional and financial. And we almost always run out on our emotional side of the personal ledger – not the financial. We all use our positions as a parent, son/daughter, mortgage holder, etc, to say we can’t do what ever is necessary. We use these as excuses for  not doing the correct thing to fulfill our goals and dreams. We fall prey to conventional wisdom and common consensus.


If I have done one thing consistently all my adult life it was to go against the grain.  Most of the time it stood me in good stead.  My detractors would point out the times I was wrong, but I would not trade my life with anyone who ever has attended any of my seminars since May 1993! We are in a classic “suck up your panty hose” time for the entire world! Who prevails will depend on emotional bank accounts going for word.

Will you be one of the few that prospers from the new financial parameters?


I spent my birthday last month enjoying the sun and playing golf with friends!  Yes I did work as well, but not as hard as usual. It was very nice and I want to thank all of you that acknowledged my birthday. I appreciated the many nice gestures.


More importantly I was with my dad to celebrate his 90th early this month.  He appears to be on his way to many more such days. I certainly hope so! I will post some photos on my site soon.


My new book, the 2nd edition of “Your First Hundred Million” will be out around Christmas. It will be updated to 2008 with new examples and insights. And since it was originally written for a down market scenario it is absolutely on key for present market conditions! Its cost will be $477 per copy. This insures me you will read it, but more importantly it has the critical information to change your lives now! If you want a signed copy notify my office through,



I have said for many years you only need three books to read to achieve your dreams! Think and grow Rich; Release Your Brakes, by my mentor Jim Newman who invented the “comfort zone;” and my own “Your First Hundred Million!”


My kids are doing well. Derrick my youngest son is a second year MBA candidate and was relating how his fellow candidates were in shock vis-à-vis the recent financial collapse. He told me offers made to the students were being cut dramatically and of course kids that were going to Lehman were out of luck.  Of course Merrill Lynch being absorbed by Bank of America, amongst many other situations, means countless jobs will be lost. And our mortgage business is being socialized by the FED. The world has changed forever! Again, I guarantee it! Are you ready?

To Your Quantum Leap

Daniel S Peña, Sr.

P.S.   Agreeing, by not saying what you really think or feel, is a massive disservice to whom you are dealing with! All too often we are in a position listening to a colleague, friend or loved one, and that’s all we do – listen! (And I understand how we are supposed to give support to loved ones, but that is not the point here.) We have our own thoughts but we keep quite! We often know what they are saying makes no sense based on our own experience, age, wisdom, etc., but we still say nothing! Why? Well, conventional wisdom tells us to keep our own opinions to ourselves, least we affront the other person, etc. Or we don’t want to say anything that may give the other person reason not to like us, etc. This is extremely common with kids. They keep their mouths closed and this is how peer pressure can have a very detrimental effect on the less vocal.


How many times in life do you dutifully listen to someone and say little or nothing? Countless! Well I am here to tell you, you do a geometric disservice by allowing them to believe you are supporting their goofy idea. And by being silent you give them your tacit approval! This only reinforces foggy thinking and does them no good whatsoever. In fact in most cases it is harmful!


Jack Welsh, arguably, the best CEO   of the last 50 years says the biggest draw back and challenge in business today is the lack of candor! He contends, and I agree, this is our main challenge to be better managers, leaders and businesses. He, nor I, and many other high performance people could never be accused of lack of candor! How about you?


PPS I had the great pleasure of being at dinner two nights with a billionaire “true” venture capitalist who made his money before dot com, hedge funds and fancy financial instruments. When I told him I was considering not working as hard in a few years – he went nuts! He told me he still works seven days a week; gets up early; has no real hobbies other than his work; is involved in many charities; and has not figured out how to retire! He is 10 years my senior!


PPS As this news letter goes out: Washington Mutual goes down and is absorbed by JP Morgan; there is total chaos in Washington DC in terms of little agreement in the $700 billion bail out in the US; the two presidential candidates are trying to act Presidential; the congressional meeting at the White House turned into a screaming match. Obviously this doesn’t add much confidence to anyone, let alone Wall Street and other financial centers. I know based on my own 37 years experience through some extremely bad and difficult times when there was no light at the end of the tunnel, the US financial system will survive, albeit in a different form with apparently more government controls. As I have preached for many many years, TOUGH TIMES DON’T LAST- TOUGH PEOPLE DO! HANG TOUGH AND PRAISE THE LORD AND PASS THE AMMUNITION!