The Toast You’ll Never Hear at a Real Estate Closing Charlie Munger used to tell a story from the 1970s oil boom. ARCO had just struck it rich on Alaska’s North Slope. Huge profits. Big celebration. Everyone congratulating themselves. “Aren’t we brilliant?” Then the company’s Irish general counsel stood up to give a toast. He said, I’d like to toast the man who really caused our success. King Faisal. King Faisal was the ruler of Saudi Arabia. During the 1973 oil embargo, OPEC restricted supply and oil prices exploded. The lawyer continued: Every internal calculation we made was off by 200%. Costs were higher. The challenges were worse. Our projections were nonsense at the oil prices we assumed. But then King Faisal and the oil cartel drove prices so high that we all looked like geniuses. Let’s honor the proper man tonight. That’s the toast you rarely hear in corporate life. In real estate, the parallel is obvious. You bought at a 5 cap and rates fell. You underwrote 3% rent growth and got 8%. Liquidity flooded the system. You looked smart. Was it skill? Or was it the environment? Bull markets inflate self-image. Cycles eventually correct it. The dangerous investor is the one who confuses luck with ability. The rare one is willing to toast King Faisal.