Sahil Bloom Profile picture
Sep 28, 2020 17 tweets 6 min read Read on X
In the early 20th century, a Swedish businessman built an awe-inspiring global empire on the back of a simple item: the safety match.

They called him The Match King. But one day, he played with fire, and his entire empire went up in flames.

Who's up for a story?

👇👇👇 Image
1/ Ivar Kreuger was born in 1880 in Kalmar, Sweden to a wealthy family of industrialists.

In his youth, he showed prodigious intelligence, entering the Royal Institute of Technology at age 16 and completing a dual master's degree in mechanical and civil engineering by age 20. Image
2/ Upon graduation, rather than working for his father's business, Ivar set sail for New York.

Working as an engineer, he was involved in building several landmarks such as The Plaza Hotel.

In 1908, he returned to Sweden, ready to take the business world by storm. Image
3/ He partnered with a friend and formed Kreuger & Toll, a construction firm, which quickly became a leading player in Sweden.

In 1914, they took the business public. He had achieved a level of success that would be enough for most people.

For Ivar Kreuger, it was not.
4/ Kreuger had grown up around the safety match industry. His father owned two small match factories in Sweden.

But the industry was highly-fragmented, filled with small players with small contracts making even smaller profits.

Ivar Kreuger saw an opportunity. Image
5/ Leveraging his relationships from his success to date, he began to consolidate the industry, starting with his family's operation.

In 1917, he capitalized on the struggles of Sweden's largest producer and forced a merger.

So it was that the Swedish Match Company was born. Image
6/ With a frenzy of activity, he rolled up raw material suppliers and manufacturers all across Europe.

In 1923, Kreuger established a US holding company for his interests - International Match Corporation - which would come to own ~75% of the world's match production.
7/ An expert marketer, in a short span, he was able to raise ~$150 million (~$2.3 billion today) from American investors for this venture.

But in an era of great monopolists, Ivar Kreuger sought to blaze his own trail. So when it came to building a monopoly, he got creative. Image
8/ He struck secret deals with many countries.

He would lend them money in exchange for a monopoly on match production and sales.

With this powerful position, he could drive up sales AND secure his loans, which were backed by tax revenues collected on match sales.

Genius...
9/ With this scheme, Kreuger came to fancy himself as a great businessman and a great statesman.

In his mind, he was loaning money to poor countries in an effort to rebuild the world following World War I.

But under the surface, his highly-levered empire was on fragile footing. Image
10/ He began employing an array of dazzling financial tricks - some legal, some maybe not - to portray strength to his investors.

He even invented the dual class share structure - famous today in Silicon Valley - which enabled him to maintain control of his companies over time.
11/ While his companies appeared to weather the early years of the Great Depression quite well, they were beginning to unravel.

In 1931, it appeared as though International Match's dividend, once believed to be rock solid, would not be paid.

Short sellers emerged. Panic ensued.
12/ Rumors began to swirl about financial impropriety at Kreuger's companies.

In March 1932, after a last-ditch attempt at a rescue failed, Ivar Kreuger was found dead in his Paris hotel room with a single gunshot wound to the chest.

The reign of The Match King was over. Image
13/ While it was assumed to be suicide, Kreuger's family believed he was murdered.

Ivar Kreuger's death led to a broad, sweeping crash in many global markets, particularly after a Price Waterhouse autopsy of his empire revealed a multitude of falsifications and manipulations. Image
14/ The legacy of Ivar Kreuger is a complicated one.

He was neither a pure business genius nor an evil manipulative swindler.

He built a vast empire, but took some improper liberties. He paved the way for many financial innovators (and swindlers) in the years to come.
15/ Ivar Kreuger was, in a sense, the tragic hero of his own story. Ambitious, innovative, and fearless to a fault, but also prone to overreach and poor judgement.

@FrankPartnoy covered this story well in his fantastic book, The Match King. amzn.to/36hl8vg
16/ For more educational threads on money, finance, and economics, check out my meta-thread below!

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More from @SahilBloom

Jul 26
John Wooden was a treasure trove of wisdom.

My favorite piece of Wooden wisdom: 9 promises for a life well-lived.

These 9 promises create the foundation for happiness and success: Image
1. I promise to talk health, happiness, and prosperity as often as possible.

Your thoughts and language shape your reality. Choose them wisely.
2. I promise to make all my friends know there is something in them that is special and that I value.

It's a shame that we wait until a person's funeral to say all of the nice things we thought about them.

When you think something nice about someone, tell them.
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The silent productivity killer you've never heard of...

Attention Residue (and 4 strategies to fight back): Image
The concept of "attention residue" was identified by Dr. Sophie Leroy in 2009.

The idea is simple:

There is a cognitive cost to shifting your attention from one task to another. When our attention is shifted, a "residue" remains and impairs our performance on the new task.
It's relatively easy to find examples of this effect in your own life:

You get on a call but are still thinking about the prior call.

An email pops up during meeting and derails your focus.

You check your phone during a lecture and can't refocus afterwards.
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In 1958, a 20-year-old Hunter S. Thompson wrote a letter to a friend with his advice on finding his life purpose.

It is a work of art.

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Lesson 1: Avoid the Perils of Advice

Using someone else's map of reality to navigate your terrain is risky.

My advice (ironic, I know): When giving or receiving advice, focus on the general, not the specific.

Take the general, wrestle with it, and make it specific to you. Image
Lesson 2: Seek Perspective-Altering Experiences

The concept of neuroplasticity says that experiences can actually change the structure and function of your brain.

Seek out the perspective-altering experiences.

Every single one contributes to your growth and change. Image
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May 24
This is the best thing you will read all week...

A beautiful true story, written by a woman named Pam Kearney, on the impact of even the most tiny, inconsequential actions... Image
Teddy Roosevelt once said, "Do what you can, with what you have, where you are."

Every single day, you will face moments when you'll feel completely helpless—unable to move or create the necessary momentum to improve the situation.

In these moments, you have a decision to make:
A. You can freeze, paralyzed by the imperfection of your options...

OR

B. You can act. You can do what you can, with what you have, where you are. You can make the coffee.

It is the most important decision of your life.
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Ok, random interesting experience yesterday that I want to share:

Playing in the backyard with my son, when I notice some bees flying around a tree.

Take my son inside and get closer to investigate.

Here's what I saw (and what I learned):
Let me preface this by saying two things:

1. I hate bees. Got stung by too many wasps and hornets while playing barefoot as a kid.

2. I know nothing about the different types of bees.

Worried about my kid getting stung, so I start looking for exterminators.
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Go figure.

I get one on the phone who is willing to do it.

Asks for a picture, so I send him one.

He replies:
Image
Image
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May 18
10 differences between amateurs and professionals:

1. Amateurs make it look effortful, Professionals make it look effortless.

Effortless, elegant performances are the result of a large volume of effortful, gritty practice. Small things become big things.

(thread)
2. Amateurs love the prize, Professionals love the process.

You’ll never make it if the view at the summit is the only thing motivating you to climb. The hunt has to be just as exciting as the meal at the end.

Professionals truly fall in love with the process.
3. Amateurs blame others, Professionals are accountable.

The Amateur looks outward: Bad luck, unfair circumstances, a cheating opponent.

The Professional looks inward: Lack of preparation, gaps in routine, uneven intensity.

Accountability breeds progress.
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