The Knowledge Project with Shane Parrish
The incredible story of Jim Clayton and the counterintuitive strategies he used to build Clayton Homes into a juggernaut.
When the bank forced him into bankruptcy at 27, they literally seized everything, including his accountant’s calculator.
He started over and rebuilt following an unconventional playbook. He refused bad loans, vertically integrated everything, and played relentless offense during downturns.
While the home industry collapsed in the 1970s, 1990s, and 2000s, Clayton stayed disciplined. Competitors chased growth with loose credit and failed. He survived every downturn and bought their pieces.
When Warren Buffett read his autobiography, he called days later and paid $1.7 billion in cash.
The lesson: discipline beats hype, vertical integration beats vulnerability, and recessions are buying opportunities.
It’s time to listen and learn.
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Some of the lessons in this episode:
1. If you have to swallow a frog, don’t look at it too long.
2. Choose not to participate in recessions.
3. Don’t fight the flow.
4. The best legal department is happy customers.
5. Turn your adversary into an advisor.
6. Bad loans are a virus.
7. There is profit in precision.
8. Own the ecosystem.
9. When you’re lost, trust your instruments.
10. Plant seeds, don’t chase the toy.
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