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Business and Investing Lessons from Caddyshack


There are certainly some people who don’t know that Caddyshack is a 1980 comedy movie directed by Harold Ramis and written by Brian Doyle-Murray, Douglas Kenney and the director Ramis. These people also may not know that the four biggest stars in the movie are Bill Murray (Carl Spackler), Chevy Chase (TyWebb), Rodney Dangerfield (Al Czervik) and Ted Knight (Judge Smails).


  1. Carl Spackler:  This crowd has gone deadly silent, a Cinderella story outta nowhere. Former greenskeeper and now about to become the masters champion. It looks like a mirac… It’s in the hole! It’s in the hole! It’s in the hole!

This scene was almost completely improvised by Bill Murray,  like many other key parts of Caddyshack. Ramis openly encouraged what he called: “guided improvisation, not just ad-libbing. Ad-libbing with a purpose.” The scene was filmed in one take as a profile of Ramis in The New Yorker describes here:


The Cinderella story scene in the movie represents a reminder to viewers about the value of dreaming big. Have a north star to maintain your motivation during tough times is a very valuable thing. Taking this big dream approach one step further, there are some people, including a number of famous investors, who believe in the power of visualization. The visualization approach leaves me a bit cold, but if acting like Bill Murray in the Cinderella story scene about something important to you works for you, well, just do it.

One of the other lessons someone can take away from watching Caddyshack is that the movie itself is a Cinderella story. It was panned by critics when it came out. And yet it has become a cultural icon for some people over time.

“Caddyshack isn’t a bad movie per se, and it wasn’t a flop — it grossed nearly $40 million (U.S.) at the North American box office, not a bad return on a $6 million budget. It ranked 17th for ticket receipts for the year, and 1980 was the year that also saw the release of Star Wars: The Empire Strikes Back and Stanley Kubrick’s The Shining.” The Washington Post called Caddyshack the “latest misbegotten spawn of National Lampoon’s Animal House,” The Hollywood Reporter compared it to “the aesthetic qualities of an outhouse” and Variety damned it with the faint praise of being a “vaguely likable, too-tame comedy” that — you guessed it — fell short of Animal House’s hilarity.”

The movie demonstrates that can take a really long time for something to become an overnight success.



Tony D’Annunzio: A looper?


CADDYSHACK, Bill Murray, 1980. (c) Orion Pictures/ Courtesy: Everett Collection.

The “big hitter the Lama” scene in the movie took seven hours to film. Chris Nashawaty in his book about the making of Caddyshack writes:

“Before he would find himself on the business end of a rusty pitchfork courtesy of Bill Murray in the film’s indelible Dalai Lama scene, Peter Berkrot, cast as caddie Angie D’Annunzio, was a 19-year-old wannabe theater actor from Queens. He wasn’t sheltered, exactly, but he certainly had never been exposed to the sort of Hollywood decadence he was about to discover in Florida.”

“Bill was standing there with this huge, rusty scythe, like Death,” says Berkrot. “He points it at me and I said, ‘Absolutely not! Are you crazy?’ This thing looked like it would have taken off my head. So Bill goes, ‘O.K.,’ and picks up a pitchfork. And that’s what he held at my neck during the whole scene. It was sharp.”

During each take Murray would toss in new things to keep it fresh and unpredictable. And each time, he would press the rusty tines of his pitchfork a little harder on Berkrot’s neck. “I said to Bill, ‘Can you take it easy with the pitchfork? It really hurts,’ ” says Berkrot. “And he said, ‘Quit whining, Berkrot!’ He was totally in character between takes.” Shooting that scene, Murray was “like a wild animal, you don’t know what he’s going to do,” recalls Trevor Albert, Ramis’s assistant. “I’d never seen anyone with that unpredictable power. He made me nervous.”

A number of very small parts of the dialogue in Lama scene have become a shorthand for the full scene itself. One of the hardest things to do in business is to create strong word-of-mouth that inexpensively creates brand value. Caddyshack was the beneficiary of some favorable tailwinds that kicked off a powerful positive feedback loop. Because the movie was available for home viewing before streaming services like Netflix, people often watched it multiple times. These people naturally started quoting lines from the movie and the more people did it the more people wanted to do it. This is just one example of feedback creating a self-reinforcing phenomenon. The more people say: “which is nice, the Lama” the more people say it. Of course, stories get embellished with time which further spreads the brand or meme:

On a visit to the United States, the Dalai Lama was asked by Minnesota Governor Jesse Ventura if he’d seen ‘Caddyshack.’ He said no; but according to Ventura, before he left, he turned to the governor and said, “Gunga, gunga la-gunga.”

When asked about whether he had seen Caddyshack by ABC’s Jonathan Karl the Dali Lama said that he does not play golf, but he can play an excellent game of ping pong. So the Ventura story is probably fabricated, but humorous nevertheless.   

  1. Carl Spackler: I have to laugh, because I’ve outsmarted even myself. My enemy, my foe, is an animal. In order to conquer the animal, I have to learn to think like an animal. And, whenever possible, to look like one. I’ve gotta get inside this guy’s pelt and crawl around for a few days.

As you probably know, this portion of the script is quite a controversial part of the movie since it brings up the fundamental schism between: (1) the followers of Andy Grove’s “Only The Paranoid Survive” dictum and (2) people like Reed Hastings who believe that worrying about competitors is a bad idea. The Hasting’s views is:

“We need more sophisticated metaphors than ‘only the paranoid survive.’ Paranoid people are delusional.” “We spend almost no time [at Netflix] thinking about competitors. We spend almost all our time thinking about customers.”

The Andy Grove said believed: 

Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” “I believe in the value of paranoia. Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left.”

Grove believed that some degree of fear is healthy for any business, especially if the businesses has been successful. Two business school professors who have studied Grove point out: “A touch of paranoia—a suspicion that the world is changing against you — is what Grove prescribes.” Can one be slightly paranoid and yet very focused on customer needs? I ran a poll last night on Twitter and clearly people think Murphy was an advocate of the customer focused approach and I agree.

4. Al Czervik: “Buy, buy, buy! Oh, everyone is buying? Then sell, sell,sell!” 

Al Czervik is a devotee of the contrarian investing “stylings” of business people and investors like Howard Marks. Most of the time being contrarian is suicidal but occasionally you can acquire an edge of some kind (analytical, informational or behavioral) and make a contrarian bet. The key to out-performance of an investing or business benchmark is having a variant perception that eventually is proven right soon enough that the investment pays off. Andy Rachleff puts it this way: “Investment can be explained with a 2×2 matrix. On one axis you can be right or wrong. And on the other axis you can be consensus or non-consensus. Now obviously if you’re wrong you don’t make money. The only way as an investor and as an entrepreneur to make outsized returns is by being right and non-consensus.”


If you have views which always reflect the consensus of the crowd you will not outperform a market since a market by definition reflects the consensus view. Sometimes waves of social proof and other dysfunctional heuristics create a significant gap between price and value, which creates an opportunity for a patient investor who is at the same time aggressive about making the investment when the time is right.

  1. Carl Spackler: “Well, I got a lot of stuff on order. You know… credit trouble.” 

Spackler knows, like you do, that the only unforgivable sin in business is to run out of cash. Inventory can tie up a lot of capital in a business which can create significant problems in terms of cash flow and credit. If the business is viewed as a credit risk the struggle to operate the business can get worse. Charlie Munger has talked about the dangers of contracts “full of clauses that say if one party’s credit gets downgraded, then they have to put up collateral. It’s like margin – you can go broke.” Munger has also said that leverage is as dangerous as liquor when taken to excess,


Danny Noonan: I haven’t even told my father about the scholarship I didn’t get. I’m gonna end up working in a lumberyard the rest of my life.

Ty Webb: What’s wrong with lumber? I own two lumberyards.

Danny Noonan: I notice you don’t spend too much time there.

Ty Webb: I’m not quite sure where they are.

Owning a business which earns a significant profit while you are doing something like playing golf (or whatever else makes you happy), is a very good thing. I have a friend who leases commercial properties for a percentage of revenue of the business. He literally is earning money while he plays golf.

As an aside, Ty Webb was modeled to some degree on Chevy Chase himself. One of the three writers (Kenny):  “described the character of Ty Webb to Chase as being ‘of the establishment, but not in it.’ According to Murray, it was Douglas Kenney’s idea to have Chase make the mystical “Na-na-na-na-na” sound—channeling the bionic sound-effect from The Six Million Dollar Man—when he was putting.”


Tony D’Annunzio: Give me a coke.

Danny Noonan: One coke.

[gives Tony a bottle of Coke and 50 cents]

Tony D’Annunzio: Hey wait a minute. That’s only 50 cents.

Danny Noonan: Yeah well Lou raised the price of coke he’s been losing at the track.

Tony D’Annunzio: Well I ain’t paying no 50 cents for no coke.

Danny Noonan: Oh then you ain’t getting no coke. Know what I’m talking about? 

Lou has pricing power on Coke sales only in a very small geography, which is a big problem since that gives people relatively easy access to alternative source of supply. When people have alternative suppliers of a product pricing power disappears. Warren Buffett (a big fan of Coke obviously) believes:


On the subject of his favorite beverage, Buffett has said: “I have three Cokes during the day and two at night. I’ll have one at breakfast,” he explains, noting that he loves to drink Coke with potato sticks, adding: “I checked the actuarial tables, and the lowest death rate is among six-year-olds. So I decided to eat like a six-year-old It’s the safest course I can take.”


I planned to write a blog post on mentoring, but it seemed awkward so I never finished it. Telling someone you are mentoring to “be the ball” sounds silly enough to make for great comedy.  Unfortunately, a lot of great advice sounds corny. Charlie Munger said once: “I love spreading this stuff around. Just because it’s trite doesn’t mean it isn’t right. In fact, I like to say, ‘If it’s trite, it’s right.’” 


Web is telling Noonan that there is a lot of power in a focused approach to business and investing. Stories about a topic like the power of focus can be a wonderful way to teach a lesson. But they can be interpreted in different ways. For example, there is a famous koan:


Is this story about enjoying the present moment or is it about not getting distracted by pleasure in a moment of crisis? You decide. Some of the most popular stories allow the reader to insert wherever message appeals to them.



[looks at Judge Smails, who’s wearing the same hat]

Al Czervik: Oh, it looks good on you though. 

When you are buying something, be careful when someone offers you a free product like a bowl of soup as part of a bundle. People have an irrational attraction to anything that is free. Using one product to sell another is a sales technique as old as time. Using one product to sell another is used in many different ways such as freemium as I have written about before, but not all such appoaches are bundles.

The movie itself created opportunities for actors to use one product to promote another. For example: Rodney Dangerfield took at pay cut to get in the movie but that resulted in other more profitable business opportunities:

“Dangerfield would end up getting $35,000 for his role. And though he would always credit Caddyshack for launching his movie career, he would often do so while complaining that he actually lost $150,000 on the film, having given up a month of headlining in Vegas to shoot it.”

Bill Murray took a small role in Caddyshack and via scene stealing and creative improvisation turned that into a starring role. That created big paydays for Murray later in movies like Ghostbusters, Groundhog Day etc.

Judge Smails: Ty, what did you shoot today?

Ty Webb: Oh, Judge, I don’t keep score. 

Webb understands that the best way to measure your progress is not by comparing yourself to other people. Charlie Munger has said “Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?” as just one example, in one scene Mrs. Haverkamp swings and hits the ball about 20 feet into a pond. Her husband responds by saying “That’s a peach, hun.” While Mrs. Haverkamp can’t hit the ball as far and accurately as Tiger Woods, she is not competing against him. BTW, Caddyshack is Tiger Wood’s favorite movie.

Caddyshack also includes an example illustrating the value of optionality. At a key point in the movie Danny had already been told that “the world needs ditch diggers too” by the Judge and knew he was not going to win the scholarship given out by the golf club. A blogger named Bob, who claims to have watched the movie 600 times, writes:

Czervik is golfing horribly so he fakes an injury, and Ty Webb asks Danny to golf with them.  Danny stops and thinks for a moment,  and Czervik adds, “We’ll make it worth your while!”Danny chooses to golf with Ty and wins the round, thus achieving his goal and making enough money to pay for college. Opportunity knocked, and he answered the door. He took a calculated risk, and it paid off for him big time.

  1. Al Czervik: Hey MooseRocco, help the Judge find his check book, will ya… 

The ability to enforce of contracts is a key success factor in many businesses. That is why letters of credit and guarantors were invented. That is a boring topic which is why I have nothing to add. However, I can tell you about this story about a solution that was similar to a letter of credit from a book I co-authored entitled The Global Negotiator (available for free at he link): GN


End Notes:

Caddyshack: The Making of a Hollywood Cinderella Story, by Chris Nashawaty. Published by Flatiron Books. Chris Nashawaty. https://www.amazon.com/Caddyshack-Making-Hollywood-Cinderella-Story/dp/1250105951/ref=sr_1_fkmr0_1?ie=UTF8&qid=1537055825&sr=8-1-fkmr0&keywords=Caddyshack%3A+The+Making+of+a+Hollywood+Cinderella+Story%2C+by+Chris+Nashawaty.+Published+by+Flatiron+Books.+Copyright+%28C%29+2018+by+Chris+Nashawaty. 













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